Conforming Loan Limits Will Remain at 2012 Levels

On Thursday, November 29, 2012, the Federal Housing Finance Agency announced that the maximum dollar limits for conforming loans will remain at 2012 levels for Freddie Mac and Fannie Mae in 2013. This applies to one unit properties across the country, however some "high cost" areas may have limits as high as $625,000. Multi-unit loan limits will also remain the same, as these are "simply multiples of the one-unit limits."

How are loan limits established?

Loan limits are determined by the median home values in local areas, and are established annually under the terms of Housing and Economic Recovery Act of 2008.

This method applies to both the determination of conforming limits and limits for higher cost areas.

Why did 2013 loan limits remain unchanged from 2012?

While recent Home Price Index numbers have increased, they have not fully offset the "cumulative decline in prior years." For example, the U.S. home price fell "more than 19 percent through mid-2011," and under the rules of HERA, the prior declines in price must be "fully offset before loan limits can increase."

What is the bottom line?

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows.

Find out How Much Mortgage Can You Afford

You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out.) You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you'll be able to afford.

I can help focus your attention on homes that are realistically within your budget. Better yet, I can help you find the hottest values as they come to market, so that you get more for your money.

Why Should I Buy, Instead of Rent?

You'll love the feeling of having something that's all yours - a home where your own personal style will tell the world who you are. A thriving vegetable garden in the backyard, a tiled entryway, a yellow kitchen...when you own, you can do it all your way! But there's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too. And interest will compose nearly all of your monthly payment , for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the proven possibility its value will go up through the years.

I can help you make a wise business investment by finding the perfect first home for you. Just tell me what you are looking for and I'll make sure you'll be aware of every possible new listing in the area that matches your needs.

Home buying tip: Moving Funds in and out of bank accounts during and right before your home buying transaction

There is so much to remember when purchasing a home. One very important tip when it comes to buying your home is to be sure NOT to make any deposits into your bank accounts that can not be explained or sourced with documentation.

My advice to my clients is to always check with me before moving any funds in or out of a bank account. Unfortunately a move like this can compromise your home loan if it is not done correctly or talked over first with your mortgage lender. A simple task to discuss, which will create a much smoother closing on your home buying journey.

Why is it the right time to buy a home now?

With the lowest home prices and great interest rates together at the same time, it really is a perfect time to buy a home! Get pre-qualified and get started on looking for your home!

What Are Recurring and Non-Recurring Closing Costs?

Lenders use a Good Faith Estimate to explain closing costs to a home buyer. These estimates contain recurring and non-recurring closing costs.

Definition of Closing Costs
Some home buyers are shocked when they discover it costs more than the price of a home to buy it. When you buy a car, for example, dealers don’t tack on fees and charge extra (except for sales tax) when buyers finance that vehicle. But buying a home is different.

While a buyer doesn’t pay sales tax on a single-family residence or condo, a buyer does incur additional fees to get the loan and for processing the paperwork to buy a home. The closing costs run about 3% of the sales price when the home is priced over $200,000, and a higher percentage applies when the price of a home is less than $200,000.

• Impound / Escrow Accounts -
Lenders may require that a buyer establish a reserve account held by the lender for future payment of taxes and insurance.

• Closing Agents - The individuals who prepare the closing documents and deed charge a fee.

• Title Policies - Title companies charge to issue title insurance that protects the borrower and the lender.

Definition of Non - Recurring Closing Costs
Fees that are paid once and never again are called non-recurring. These fees are one-time charges for such items as:

• Escrow or closing

• Appraisal

• Credit Report

• Title Policy

• Notary

• Wire fees

• Courier / Delivery

• Attorney fees

• Endorsements

• Recording

• State, County or City Transfer Taxes

• Home Protection Plan

• Natural Hazard Disclosure

• Home Inspection

• Fees paid to the lender in conjunction with the loan on the HUD-1, line 800.

Definition of Recurring Closing Costs
Recurring fees are those charges that you will pay again and again. They include such fees as:

• Fire Insurance Premium

• Flood insurance

• Property Taxes

• Mutual or Private Mortgage Insurance Premiums

• Prepaid Interest