Foreclosures Turn Into Rentals

If you started to notice that vacant neighborhoods around have become a little more full, it may be due to the turn of foreclosures into rentals. Many of the homes that have been foreclosed on have been bought by investors who have realized it is much more lucrative and better for the industry to rent them out than to fix them and let them sit on the market.

Even though affordability is up for buying homes, the number of people going through with purchases or even being able to be approved for financing is still low. Experienced investors are able to purchase these homes at a low cost and interest rate and, in return, rent them out to borrower's instead of leaving them vacant.

Ideally, it will be best when the trust in the market comes back full swing and borrower's are more interested in purchasing their own homes than renting, but at least this is a step in the right direction for property values as the more vacant homes an area has, the lower the other homes will be worth when appraised.

New USDA Guidelines

The USDA program is a great one. It allows borrowers who are purchasing a home in a rural area to get 100% financing, that is if their income falls within USDA guidelines. Many of the "rural" area are actually very close to city settings and hardly rural at all. Some new guidelines have gone into effect on October 1st, 2011 to take note of:

USDA mortgage insurance rates have now changed due to the infrastructure of how USDA loans are funded. They are now self funded and do not use tax payer funds anymore causing the mortgage insurance changes as followed:

Purchases: 2.00% upfront fee paid at closing, based on the loan size.
Refinances: 1.00% upfront fee paid at closing, based on the loan size.
For all loans: 0.30% annual fee, based on the remaining principal balance.

If you are interested in seeing if a home you or one of your client's is interested in, please call Aapex Financial Solutions at 704-892-5211 and we can provide you with the look-up tool to see if you can get 100% financing.

Mortgage Scams Still Getting Hit Hard

A former real estate agent will spend 20 months in jail and must pay more than $5.6 million in restitution for a mortgage fraud scheme that had lenders holding bad loans. The scam had inflated loans which cause homes to be sitting vacant for extended periods of times causing property values to drtop tremendously.

Angela R. Clark, was one of 19 who plead guilty and been sentenced for their roles in the $12.6 million scheme spanning the housing bubble time. Clark started the scheme, in which 15 buyers took out loans for more than the actual sale price of the homes, then kept the additional loan proceeds. The sent fake invoices to Title Companies that showed payment was due to business entities that were made up to hide fact that buyers were keeping fundings.

Cut Your Mortgage Term in Half

The mortgage industry has typically been driven by the 30 year loan. Due to borrower's needs to get rid of debt and the current low interest rates, borrowers are now leaning more towards the 15 year mortgage loan.
This August, applications for 15-year refinancing loans submitted nationwide through one of the largest online lenders was up 29 percent compared to August 2010. This is compared to a mere 12 percent rise in 30 year refinancing loans.
This comes to no surprise as choosing a 15 year refinancing plan compared to a 30 year can have huge beneifts for borrowers. This cuts their term in half, getting them out of debt faster so they can plan for their future easier without having to worry about another 30 years hanging over their heads.
Although there are many benefits to a 15 year refinance plan, there are a few things to think about as well. Not all borrowers will qualify as a shorter term will create a larger monthly payment and will effect their monthly debt-to-income ratio. The larger payment will of course vary depending on how good of an interest rate the borrower can get.
A good candiate for a 15 year refinance plan would be a borrower who has been paying off their current loan for at least five years, has good credit, and is financially stable and able to make a higher payment each month. If this sounds like you or someone you know, give us a call at Aapex, 704-892-5211, and check out how you stand for cutting your mortgage term in half.

Alternative for a Beach House Rental?

Here is an interesting alternative to the classic beach vacation rental. A tree rental? Yep, there are luxurious homes in the tress now. Take a look at some of these and perhaps your next vacation home could be in the woods, literally.

Wow, quit a turn around from the forts we used to make as kids! More of these Tree homes can be found at www.treehousepoint.com