Utah Mortgage Pro

USDA Rural Development Increases Income Limits for 2012

I found this City sign for Coquille Oregan on line today while I was searching for a picture that went along with rural development and USDA mortgages.  I do believe a town with a population of 4275 would fit the criteria as long as it is rural or not wedged in between two big cities.

USDA snuck up on us yesterday and released the new income limits for 2012.  Click on the income limits link here in my post to go to your state and see what the income limits to qualify for a USDA rural development mortgage are where  you live.

For those of us in Utah click on the Utah link.  It appears for Utah County with a family of 4 you can make up to $77,200 of household income and still qualify.  If your household is 5+ people you can earn up to $101,904 and still qualify for a rural development loan.

As always you can not currently own another home within 100 miles of where you are going to buy, your spouse and childrens income are counted as well for the "household income".

The USDA is going to continue to offer 100% financing to those that fit this criteria in a qualified rural area.  This means NO DOWN PAYMENT and with most of the sellers willing to pay closing costs these days this means you can get into a home with almost nothing out of pocket.  There is an upfront guarantee fee that goes to USDA to guarantee your loan to the investors.  The guarantee fee for purchases in 2012 is still at 2% and can be financed into the loan.

640 is the minimum fico score we require for USDA rural development loans.  

See if you qualify apply today at www.applywithstetson.com or call 801-318-4996

Rent vs. Own - Right Now The Answer is Easy

 

I am sure their will come a day again soon where the proverbial question should I rent a home or buy a home will actually be a difficult one.  Fortunately for most right now the answer is easy, BUY!!

Here are a few reasons why I personally feel its not even a question (at least for the next few months).

1.  FREE MONEY.  With the feds handing out $8,000 big ones for the next few weeks and possibly months depending on your contract why not take old Uncle Sam up on a big hand out.  It's kind of like having the rich uncle I never had, except Uncle Sam is not rich but he acts like it and he has a money printer so whats the diff?

2.  Lowest average interest rates in nearly 40 years.  Yes there have been a few dips where rates were a few 10th's of a percentage point lower then they are today but on average there never has been and never will be a time where you will pay The Man less interest on your loan.

3.  Low Home Prices.  With bank owned REO properties dotting the landscape and short sales starting to pour in it has brought all of the home prices here in Utah back down to a manageable price range.  You can pick up a great starter home built in the last 10 years with everything you NEED for less then $200,000.  Need being the key word there.  Sure you can still spend as much as your heart desires on a home but at least the entry level homes have come back down to earth.  When the banks finally churn through their foreclosures watch out as the cost of building a home has not come down as much as the prices have so I expect the price of new home's to jump back up in the next 2 years.

4.  Tax breaks.  In a time where there is no where to go but up for our taxes you need to have every tax advantage you can.  The 1098 tax form from my mortgage company is the only letter they send me every year that I am happy to see in the mail box.  It will literally increase your tax return by $1000's of dollars every year.  Not to mention energy saving tax credits you qualify for when you do energy improvements to your home like adding insulation to the basement, attic and air ducts.

5.  Having something you can call your own.  Can you even put a price tag on being able to paint a wall any color you want any time you want with out having to call your landlord for approval.  How about if you want to switch from cable to direct tv, you wont be at the mercy of your landlord who may put the kibosh on any satellites on the roof.

6.  Building equity for you not your landlord.  I actually am a landlord and do own rental property so in the essence of full disclosure I have to admit that I do benefit from tenants who help build my equity.  If they ask me I always tell them that we need to get them on the road to home ownership.  It's everyones right to own their own piece of property, a place they can call their own.  For some the road to home ownership is longer then for others do to credit issues, income limitations and for other very valid reasons.  There are those that could be buying a home right now, those are the ones I am talking to when I say stop building your landlords equity and start building your own.

7.  Neighborhood, schools for your kids, growing your own garden.....

 

The list could literally go on and on but I think you catch my drift.  Right now with the financing options that still allow some to get into a home with little or NO down payment there is really no reason (if you qualify) you should be renting over buying a home.

Here is a link to a great Rent vs Buy Calculator you can go to and plug in your own numbers or those of a client if you are an agent and have a client that needs a little more proof that renting is better then buying.  With this Rent vs Buy Calculator you can see if a dollar amount how much of an advantage it would be to buy a home right now over continuing to rent. 

So if you live in Lehi, American Fork, Pleasant Grove, Lindon, Orem, Provo, Springville, Spanish Fork, Payson, Santiquin, Saratoga Springs, Eagle Mountain or  even Ogden to St. George you should really take a closer look at buying rather then continuing to flush your rent money down the toilet every month.

Take the plunge get pre-qualified today!

Stetson Lowe - Security Home Mortgage

Security Home Mortgage is a correspondent lender.  We are a leader in Utah in FHA, Utah Housing, USDA Rural Development, Conventional Fannie Mae and Freddie Mac Mortgages.

Utah Housing a wonderful 0 down payment option

 

There is a lot to be said of the great mortgage program administered through the Utah Housing Corporation.  This 0 money down mortgage option is a fantastic way for home buyers to make the dream of home ownership become a reality. 

Here's how it works for you if you are looking to buy a home and down payment is standing in your way.  First contact a lender who is approved to do Utah Housing loans.  Obviously I am partial to Security Home Mortgage and our great UH loans.

Second you need to fill out an application either on line www.applywithstetson.comor in person.  Some helpful information to have handy while filling out your application would be your W2's and or pay stubs so you know your gross income, your personal information such as your social security # and date of birth and your employment and residence history for the last 2 years.

Third check to see if you qualify for a Utah Housing 0 down Mortgage.  Currently UH requires a 660 fico and a standard FHA automated approval through FHA scorecard Fannie Mae's FHA automated underwriting engine.

Once you are pre-approved this is what you can expect.  You will have a 1st mortgage which is a standard FHA loan.  You will also have a 2nd mortgage which will be for up to 6% of the 1st mortgage amount.  The proceeds from this loan can go towards down payment requirements (currently 3.5% of the purchase price on an fha loan) and closing costs.  As of the time of this post the current Utah Housing interest rate is 4.75% on the 1st mortgage and 7% on the second mortgage.

You will be required to pay upfront and monthly mortgage insurance just like you would with a standard FHA loan.

Utah housing mortgage loans may not be for everyone, if you have down payment saved or if you are able to have down payment funds gifted to you, you might be better off with a Conventional loan or an FHA loan, if you are buying a home in a rural area you may even want to look into the USDA Rural Development loan as well.

If down payment is holding you back I would definitely recommend checking into the Utah Housing loan, especially for the next couple of months while you can still take advantage of the $8000 tax credit being offered from the IRS, the $8000 can be used to pay back the Utah housing 2nd mortgage although there are limitations to how quickly you can pay off the loans with out incurring a penalty.

Click on this link for a list of frequently asked questions about on Utah Housing Mortgage Loans

You can also view the income limits in your county.

Or to find out more give me a call.

Stetson Lowe - Security Home Mortgage - 801-318-4996
  

$8000 - $6500 Tax Credit - Tick Tock, Tick Tock

 

Somewhere In, UT

Tick tock, tick tock, the clock is ticking on the tax credit currently available to first time home buyers and those that have lived in their homes for 5 years who are looking to buy.  The program comes to a close on April 30, 2010.   First time home buyers in Utah have the most to gain as the government by way of the IRS is going to line your pockets with $8000 big ones just for signing on the dotted line(s) at closing.  Yes line(s) is plural because there are hundreds of lines you will be signing on.

Where was my $8000 handout when I bought my first home?  No where to be found I can tell you that.  All I got was a crappy 2/228 arm from Long Beach mortgage with a 7.25% rate and a cheap welcome package from our builder.  Man o man what I would have given to get the $8000 bucks that these kids are getting today.  I have some clients that are using it to buy furniture, some are planning to landscape and still some others are paying off their car loans.  No matter how you use it, you can't really lose as long as you don't miss out.

Slightly less enticing but still amazing is the $6500 available to those that have lived in their current home consecutively for the last 5 years or more.  Although not quite the $8000 being shoveled out to the greenies $6500 seems to be enough to get some of the fence sitters off the fence and into the game.  I have several clients out looking right now so they can cash in just in time to claim their prize.  One lovely lady I explained this move up credit to was attentively writing down notes so that she could go back to her husband with exactly what they qualified for and see if she could use her best methods of persuasion on her husband to get him to leave their home of 26 years and cash in on one of the many bank owned deals of a century that are to be had right now in Utah County.   I didn't ask what her method was.....moving on.

The moral of the story folks is to make sure you understand the time lines and deadlines to this program.  As much as I would like to see it extended over and over again, I tend to think that all good things must come to an end, at least that's what my Mom used to tell me when we were leaving Lagoon after our annual Questar family day, boy how I hated to see those days end.

We can get mortgage's done start to finish in as little as 7 days but why wait till the last tick of the clock?

For more useful information and frequently asked questions on the federal tax credit go to http://www.federalhousingtaxcredit.com/ I found this site to have some great information on the topic.

Your comments are always welcomed.  Stetson Lowe is a expert in the mortgage industry specializing in FHA, Conventional, USDA and Utah Housing Loans.  Don't attempt to blog like this at home:)

 

Saratoga Springs, UT - Rural Devlopment Loans - USDA

 
(A view from Saratoga Springs looking back over Utah Lake at Mt. Timpanogos)

Saratoga Springs, UT

What is the USDA Rural Development Loan?  Many of you have been asking the same question.  It sounds like a loan that an egg farmer would take from the government to improve his chicken coops, and in some cases that may happen on the commercial side.  What many people are now finding out is that the USDA also lends on residential homes located in what is deemed to be rural areas.

Many Utah residents can benefit from these loans as over 2/3rds of Utah is deemed to be "rural".  If you are looking to buy a home in Utah county in one of the following cities then pay close attention as this loan may be your very best option.

Saratoga Springs, Eagle Mountain, Payson, Elk Ridge and Santaquin are all found in the eligible areas for USDA home financing.  Click this link to view the map and read more details on USDA loan programs.

The USDA mortgage is much like FHA in that it does require an upfront fee.  In the case of the USDA loan it is called a guarantee fee instead of FHA's terminology which call's it upfront mortgage insurance.  Ultimately it is the same thing.  The upfront fee from both loans is essentially pooled in a fund that is used to guarantee the lender/investor against any future losses on the loan in case of default by the borrower.

The guarantee fee for new USDA loans is 2% of the loan amount.  In the case of a $200,000 loan the borrower would pay a $4000 one time upfront fee to the USDA to guarantee their loan.  The nice thing about the USDA loan is that much like FHA you are allowed to finance the fee into your loan.  This loan already allows for 100% financing for credit qualifying borrowers whose job history and debt and income are in line with the underwriting requirements.  This is a true 102% loan to value loan when you take in to account the fact that you can finance the 2% guarantee fee above and beyond the price of the home.

What an amazing option for those that have little or no down payment.  If you can save enough money for an earnest money deposit you can be on your way to home ownership.  Debt to income ratios on this loan are lower then conventional and fha loans so you may not qualify for quite as much home with the USDA loan but the USDA loan does not have monthly mortgage insurance so your monthly payment is also lower then it would be on a conventional or fha loan which does require 3.5% or 5% down respectively.

If you are looking to buy a home in Utah County and down payment is an issue, consider the USDA rural development loan, it just might be the ticket you are looking for.

Remember the USDA loan can be used in parts of if not all of Saratoga Springs, Eagle Mountain, Spanish Fork, Payson, Elk Ridge and Santaquin.  If you don't have a down payment, don't give up looking all together tell your agent you would like to expand your search into one of these beautiful cities.  Then lets get you pre-approved for a USDA Rural Development loan today.

Stetson Lowe - www.utahloantips.com