Even though the long-awaited September 30 date is almost here and Shawnee County’s new FEMA flood zone maps will soon be in effect, uncertainty still persists for new buyers of homes in flood zone areas.

First, the Senate has yet to extend the authority of the National Flood Insurance Program to underwrite flood insurance policies after September 30, 2011. The US House of Representatives has extended the program for five years, but still no action in the Senate. Last year a one-year extension was approved after 60 days of no authority. Thousands of home sales were delayed or cancelled because the buyers had no affordable market to buy the flood insurance required by their lender, so it looks like we could be in for the same political embarrassment again.

A new political battle will be harming residents of North Topeka after September 30th…this time a battle between federal agencies. FEMA has declared the levees protecting North Topeka in need of repair and has set September 30th as the date the work must be accomplished by the City of Topeka and the Corps of Engineers. The City has saved up its $9 million share of the cost, but the Corps doesn’t have its share of the renovation cost. FEMA is unwilling to extend the date for repairs to be complete, so effective October 1, the residents of some undefined area North of the Kansas River are officially ineffectively protected from the dangers of flooding.

So, I thought these areas would be required by the terms of their mortgages to obtain flood insurance on October 1, 2011. (Kind of ironic since Congress has yet to extend the authority of the National Flood Insurance Program.) However, FEMA commented last week that the Flood Insurance Rate Maps are what controls that requirement, so those residents north of the river can rely on the new map to avoid the requirement to obtain coverage. (They didn’t comment on the wisdom to self-insure against the risk of flooding.) They asserted it would take at least two years for new flood zone maps to be drawn and approved, so they think they aren’t doing any harm.

Well the harm is the uncertainty. Won’t all home sellers have to disclose that flood damage is likely without improved levees? Won’t all appraisers have to take into consideration that FEMA believes the area to be at risk? Won’t all home buyers have to be made aware of the risk that some day flood insurance might be required by their lender…or by common sense? And, what area north of the river is really at risk? I’m guessing it wouldn’t be any more than the land area that was covered in the 1951 flood, but there is no map from FEMA to tell us. Maybe we could get another government agency to help us.

Many prospective homeowners find out the hard way the importance of a good credit score when they apply for a home mortgage, especially after the subprime loan crisis. If you are considering buying a home in the near future, it is a good idea to give your credit score a check-up and then take positive steps to improve your credit score if you find problems. Ideally, it is best to begin working on improving your credit score at least six months before you plan to start shopping for a home.

According to the experts at Buy-and-Sell-House-Fast.com, the following tips will help you improve your credit and should be taken before you begin your home search.

The first critical step in taking care of your credit is to check your credit report. Unfortunately, many people fail to take this all important first step. Instead, they wait until they have applied for a mortgage loan to find out from the lender that there are problems with their credit scores.

By checking your credit score before you apply for a mortgage loan, you gain the opportunity to find out if there are problems which you can correct and discrepancies that need to be removed. When you check your credit report, make sure you check all three of the national credit reporting agencies: Experian, Trans-Union and EquiFax.

Review your credit report carefully for items that may be erroneous. If you believe that an item on your credit report is reported in error, you have the right to contest it. To do so, you will need to contact the credit reporting agency and explain why you believe the item is inaccurate. Supporting documentation such as receipts and cancelled checks can help your claim. Alternatively, you can engage a credit report repair services firm to fix your credit report.

If there are derogatory items on your credit report that are accurate but which could cause problems in your loan application, you cannot have them removed; however, you can take positive steps to counteract them. In the event that you have missed payments in the past, take steps now to get your bills current. Even if it means tapping into money that you might be planning to use for a down payment, it is essential that you get your accounts current and keep them that way. Begin by immediately making your payments on time. There is nothing which can lower your credit score more quickly than late payments. Ideally, make an attempt to begin sending in your payments a few days ahead of time to make sure they arrive on time and you do not have any more late payments on your record. If necessary, begin taking advantage of electronic payments in order to make sure your payments are made on time. Over time, this can make significant difference.

Keep in mind that eradicating all of your credit balances is really not the solution. In fact, credit can be your friend when you are looking to make a big purchase such as a home. The key is to make sure your credit is positive, not negative. Toward that end, avoid actually closing out your accounts. Instead, make an effort to pay down your balances and keep them paid down well below the minimum or completely paid off, but do not close the account. When your lender runs your credit to make a decision on your mortgage application, he or she will want to see that you have had a long credit management history.

After reviewing your credit history, if you see that most, if not all of your credit cards are maxed out or nearly maxed out, it is time to sit down and plan an aggressive strategy for paying some of them down. One of the critical factors that often determine your ability to be approved for a mortgage loan is your debt to income ratio. In addition, high credit card balances can drag down your credit score. Therefore, it is important to look at paying off some of your balances.

It is generally better to begin with your highest-rate balances first. Many consumers are tempted to move around balances when they receive an offer from another bank that is good; however, before you do this, remember that the worst thing you can do when you are trying to make a major purchase is to open new accounts.

By following these guidelines, you can improve your credit score and improve your chances of being approved for your home mortgage loan.

Originally Posted by Lowes/RisMedia

Nearly 87% of all home mortgages are obtained with an FHA loan in today’s real estate market.  The popularity comes from low interest rates, a lower down payment and being able to secure a mortgage with a lower credit score than a conventional loan.  Here are some thing you may not know about FHA loans that may convince you (or not) that an FHA loan is the right loan for you.

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. In fact, even Bill Gates can get one. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans; In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program.While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most local lenders, including Bank of America, Capital Federal and BNC National Bank are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

The Coldwell Banker® Network Offers 10 Tips to Making the American Dream Come True

Buying a first home is one of the most important decisions a person can make, but it can be a complex process. Coldwell Banker Real Estate LLC offers tips for first-time homebuyers with a checklist of the 10 essential steps to help make the process smooth and successful.

Step #1—Ask Your Lender About Available Mortgage Programs: An experienced mortgage company should be able to work with you one-on-one to determine exactly which mortgage programs will meet your individual needs and what you can qualify for based on your personal information. Applicants with higher credit ratings and/or higher levels of financial reserves generally receive more competitive mortgage rates. But with hundreds of available mortgage programs, there is usually one to meet the needs of almost any homebuyer. For those with excellent credit, there is even a way to get a mortgage with 0% down. (For more information on this and other mortgage programs, check out http://www.coldwellbankermortgage.com.)

Step #2—Research the Terms of the Mortgage: Different mortgage lenders have varying price structures that can affect the amount that you pay for your home. An annual percentage rate (APR) includes the actual interest rate on the loan, as well as certain fees and costs associated with the loan. Because a customer may be paying points and other closing costs, the APR disclosed may appear to be higher than the actual interest rate quoted for the loan. Not all lenders calculate APR identically; however, it does give customers a relatively fair method of comparing price on their potential loans.

Step #3—Get a Pre-Qualified Loan Commitment: Even before the house hunting begins, homebuyers need to determine how much they can afford. Mortgage companies or other lending institutions provide pre-qualified loan commitments. Sellers often don’t take an offer seriously unless the prospective first-time buyer has some assurance of creditworthiness from a mortgage company. Coldwell Banker® Mortgage goes one step further, offering qualified consumers pre-approvals, which carry more weight than a pre-qualification. A pre-approval with Coldwell Banker Mortgage means more because a full credit report is ordered on the customer so that a true loan decision can be made the same day a customer applies. Shopping for a home with a pre-approved mortgage enables a customer to negotiate as a cash buyer and submit an offer on a home with confidence that the mortgage will be issued and the sale will be completed.

Step #4—Do Your “Homework”: Be sure to go online to sites such as coldwellbanker.com to check for listings, neighborhood information, current mortgage information and home ownership services. The right amount of research will help you to better understand the marketplace and homes available in your price range when you’re ready to work with a real estate professional.

Step #5—Make a Checklist: To help make the home buying process a little easier, homebuyers should create a checklist of the important features they want in a home. Location and the number of bedrooms and bathrooms are usually important. Other important questions to answer: What will the commute to work be like? Are there shopping centers, parks, and schools located near the home?

Step #6—Find a Buyer’s Broker: A buyer’s broker or agent represents the buyer’s interests and helps identify homes that are for sale and in the right price range. The brok er also can help with such tasks as writing contracts, negotiating the asking price, and closing the purchase.

Step #7—Make an Offer: Once you find the right house, make an offer. Make sure that your offer is contingent on two items: 1) You’re able to obtain adequate financing (if you haven’t done so already), and 2) you can pull out if the property doesn’t pass the home inspection, and the owner can’t come to terms about how to fix the problem. Be prepared for counter-offers from other buyers and some negotiation with the seller. Make an earnest money deposit, which is a check that you’ll give your agent to indicate that you’re serious about buying the house. The check will apply toward the sales price if the deal goes through; if not, you get it back. You should also set a time limit with your agent that the offer you’ve made is good for three days. If an offer is accepted, it goes to the contract phase.

Step #8—Hire A Home Inspector: Making an offer contingent on an inspection by a registered home inspector can save thousands of dollars by avoiding unseen problems. Inspectors will check the house for any structural damage. In the contract with the seller, it should state any necessary repairs that must be made before closing on the house. Prior to closing, walk through the house and check that such repairs have been completed.

Step #9—Buy Homeowners Insurance: Lenders require homeowners insurance to protect the new homebuyer’s interests as well as their own. There are many providers so shop around for the best rates.

Step #10—The Closing: This is where the seller and buyer sign settlement-closing papers to transfer the ownership of the home and all transactions are finalized. Congratulations, you achieved the American dream and you are now a homeowner!

Well, if you got dressed this morning (December 23, 2008) based on the California, Arizona or Florida weather forecast, you would be very cold.
Our temperatures were around ZERO, but in those states it was much warmer.
And if you are not selling or buying a home because of the dire reports of the housing market based on reports from those states, you might just as well be “out in the cold.”

Thirty year fixed rate mortgage costs have hovered around 5% per annum this month, so the opportunity to find a buyer for your home is greater than ever. Likewise, the monthly cost to own a home has rarely been less than right now.

So, what’s holding people back?

News stories report declining home prices, in some markets by as much as 25% since the bubble burst.
News stories report massive inventories of homes increased by bank owned foreclosure properties.
News stories report that there is a shortage of money to loan.

BUT IN OUR AREA OF KANSAS, none of these things is true. There were 1,217 single family homes listed for sale in the Multiple Listing Service of the Topeka Area Association of REALTORS(R) on November 30th. That is about 7.5% fewer homes than have been for sale on November 30 of the three prior years, and 11.2% fewer single family homes for sale than last year.

While the number of homes sold this year is down compared to the past few years, the Topeka are reports an average of 222 homes sold each month this year. That means that the 1,217 single family homes on the market only constitute a 5.5 month supply for buyers based on sales this year! That’s what most real estate professionals would classify as a “Sellers’ Market.”

So, what about values? Those 1,217 homes for sale on November 30 this year had an average asking price of $155,976, while the 1,370 homes on the market a year ago had an average asking price of $150,139. And, of the homes sold this year, the Multiple Listing Service data shows that the selling prices were about 97% of the asking price. So, this is not a bad market for sellers either.

Financing? If you have reasonable good credit scores, 97% FHA financing is still available as well as 15 and 30 year conventional financing from a host of honorable local lenders.

So, this is not the time to sit on the sidelines. In our area, it is a great time to sell and/or buy a home. Call one of our well-trained Coldwell Banker REALTORS(R) today and find out what is waiting for you. (And don’t forget if you haven’t owned a home for the past three years, you may qualify for up to a $7,500 interest free loan if you buy a home by June 30, 2009.)

Bryon R. Schlosser, CEO Griffith & Blair American Home Services

Uncle Sam to the rescue? The government is here to help us? Frankly, both of those statements cause me pause. But I think the move by our federal government to take over the operations of these two companies was the correct option, given that the government has been watching Rome burn for the past couple of years. The feds allowed both companies ample opportunity to fix their own problems. There is no doubt lending standards have been too lax for markets that are not appreciating at 20% annually. Both Fannie and Freddie failed to adjust when those coastal and desert regions could not sustain that level of appreciation. With Uncle Sam to the rescue, I think we will see a continued tightening of eligibility standards for borrowers…but the pendulum had swung too far, SO THIS IS A GOOD THING.

More restrictive standards for borrowers (anticipated as a result of the government takeover) means mortgage holders and investors will be more secure when they invest in mortgages for the housing market. A more secure investment means that investors will not demand as high of a return. THAT IS WHY INTEREST RATES DROPPED THE WEEK following the takeover.

Topeka area real estate values remain stable as they have been for the past decade. The issues creating problems for the mortgage industry were not issues created in Topeka; we just get lumped in with the rest of the national sound bites. What will be most helpful for our market resulting from this takeover is that the investment community is more confident in the mortgage industry this week than they have been since May of last year. Buyers with good credit and a modest down payment can still get a GREAT loan and a fair price for home in our area.

What about the future? I have no crystal ball here. If the housing markets in the California, Arizona, Nevada, Florida markets begin to stabilize, Matt Lauer’s sound bites will get better. The confidence in the security of a home mortgage will strengthen and interest rates will continue at these great levels for qualified buyers. If investors believe we are not reaching the bottom of the market, rates will probably start inching upward along with down payment requirements. I have run out of lipstick…

Bryon R. Schlosser, CEO
Griffith & Blair American Home Services