REMAX 440/Central Blog

7 Facts about FHA Loans All Borrowers Should Know

January 19, 2011 2:31 pm

RISMEDIA, January 19, 2011FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87% today, said Christopher Gardner, founder and president of FHA Pros, LLC. Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe its time to change that.

1. FHA loans are not only for lower-income borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans, but 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 home buyers, but 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 though.

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 traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup 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%.

6. FHA-approved condo developments are more desirable to buyers. With 87% of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of todays lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders dont mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not risky loans, due in large part to the strict full documentation requirements placed on borrowers. Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply.

7. 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.

Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home, continued Gardner. Professionals need to work with HOAs, attorneys and individuals to easily and efficiently navigate the historically tricky FHA-approval process.

For more information, visit

Tips for Upgrading to a Master Bedroom

January 18, 2011 10:31 am

RISMEDIA, January 18, 2011--If you just bought a home or are looking to spice things up, renovate your room into a full-blown master bedroom. A master bedroom provides luxuries both big and small to help you fully utilize your space for rest and relaxation. With these tips, you can customize your rooms lighting, windows and more, to open up the room and turn it into a real sanctuary.

In-suite Bathrooms Its always nice to have your own bathroom away from the kids or other household members. His and hers sinks and vanities are popular, as are separate tubs or showers. Incorporate some fun by adding things like a jetted tub or heated towel racks. If you plan to take the shower route, consider adding a shower bench or making it a steam shower. If you have the space to spare, the possibilities are endless.

Add a Balcony or Patio If your bedroom is on the end of the house or on a higher floor, adding a balcony or patio could really add some flavor to the room. French doors add an intense amount of natural light to the room and can open up to your balcony. If big enough, add a small patio set so you can read, tan or eat outdoors. Outside electrical outlets are perfect for music. A private patio is a great way to escape stress and have some alone time.

Attach a Library or Living Room Creating your own library or living room may be easier said than done, but if youre building from scratch its an option you should definitely consider. A library can also side as an office for working at home. If a living room is what you desire, consider mounting a small flat screen television on the wall. A small loveseat and ottoman would provide you with the chance to catch some of your favorite shows in your own space without having to lie on the bed.

Create a Nook Turning a corner of your bedroom into a reading area can be great to help you relax, especially if you dont have the room for an attached living room. Add a fireplace next to your reclining chair or ottoman to add ambiance in the winter time. A bedside fireplace would definitely add to your homes resale value.

Walk-in Closets Are a Must A walk-in closet is essential for any master bedroom suite. The bigger you can expand it, the better. Not only will you have extra storage space for your belongings, but you can customize the shelving and drawers to suit your personal style. Add full-length mirrors and maybe even add a window for some natural light. Creating your own closet will also add to the resale value of the home.

With a little bit of money and the proper time and space, you could transform your modest bedroom into a relaxation haven. As youre enjoying the fruits of your labor, youll be glad you did.


Homeowners Insurance: Four Need-to-Know Items for Unoccupied Homes

January 18, 2011 10:31 am

RISMEDIA, January 18, 2011--Many people looking for unoccupied homeowners insurance for an empty residence will find that the process can be difficult. Many companies will not cover such a dwelling or charge high premiums because of the increased risk associated with vacant properties. The chance of burglary and vandalism are higher. The potential of unnoticed damage, which can compound problems and costs, also increases. There may also be an issue with squatters.

If a residence is vacant for more than 30 days, a standard policy may become invalid. In order to find homeowners insurance that will cover this type of property for a reasonable price, here are four things that should be known to reduce risk and help lower rates:

1. Make the home look occupied. There are many things that can be done, such as asking a neighbor to park their car in the driveways and putting lights on a timer. It is also recommended to leave furniture in the home when securing your home. Be sure to also have newspapers and other mail stopped.

2. Prepare the central heating and water. If a house will be empty during winter months, the risk of frozen pipes and water damage increase. By keeping the heat on at a low setting, this risk is reduced.

3. Set up regular inspections. The majority of problems with vacant properties are simply because of unnoticed issues and compounding damage and costs. By having a trusted third party make regular visits, this can be avoided and add peace of mind.

4. Secure the property and remove valuables. All entry points should be secure with an alarm set. Valuables should be removed so they do not attract attention that could lead to burglary.

By following these tips, you can reduce the risk and hopefully use it as leverage to receive lower insurance rates.

For more information, visit

Housing Moving to Higher Ground in 2011

January 18, 2011 10:31 am

RISMEDIA, January 18, 2011--Housing will see gradual improvements in activity this year as the nations economy and job market continue to move to higher ground, establishing momentum that will produce more considerable gains in 2012, according to economists who appeared at the NAHB International Builders Show in Orlando on Jan. 12.

"This years spring selling season will be better than last years," says NAHB chief economist David Crowe, with job growth providing a stronger stimulus in the housing market than last years tax credits for home buyers.

Crowe forecasted 575,000 single-family home starts in 2011, a 21% climb over an estimated 475,000 units started in 2010, which in turn showed a 7% gain from the 442,000 homes started in 2009.

Multifamily, which is poised to profit from a disproportionate number of Gen Y members moving into the housing market, has seen the bottom of the cycle, he said, and will see its starts rise 16% this year to 133,000 units, with a further 53% increase in 2012 to 203,000 units.

Builders access to the credit they need to start new homes remains the fragile component of the NAHB forecast, Crowe says. So far, small builders have experienced extreme difficulty in obtaining financing, and rectifying the situation as soon as possible is the top priority of the association.

More encouraging is a rebound in the confidence of consumers, who mid-2010 "froze in place, faced with a lot of uncertainty," he says. A recent pickup in durable purchases for such items as automobiles and furniture indicates that consumers are less afraid today of losing jobs and income.

The U.S. economy will receive a boost from the massive tax package enacted at the end of last year, he says, including more income going into the pockets of wage earners thanks to a one-year 2% reduction in Social Security taxes. This will contribute to the gross domestic product strengthening from the 2.5% range to 3.5% to 3.8% by years end.

New-home sales, Crowe projected, "will struggle" but begin following employment gains, reaching 405,000 for the year, up from an estimate of about 320,000 for 2010.

The housing recovery will start up slowly this year, he says, because it will be driven by the relatively low housing production Plains states, with Texas the most powerful of the bunch. In addition to stimulative fiscal and monetary policy, Freddie Mac chief economist Frank Nothaft said that housing affordability and demographic trends will help support growing housing demand.

Citing research from the Harvard Joint Center for Housing Studies, Nothaft says that households should be growing at an average annual rate of 1.2 million to 1.5 million over the next five to 10 years, suggesting the need for a sharp increase in housing production; half of the 500,000 to 600,000 starts of the past two years were needed just to replace the number of homes being removed from the housing stock.

While there will continue to be supply overhangs in some important large markets, by and large the housing price slump should bottom out by the middle of this year, he says, and price increases are already occurring in some local areas. That should attract prospective buyers who have been procrastinating until they see prices hit bottom.

"Potential buyers who have resources to buy but want to buy at the bottom are likely to start coming into the market in the springtime," he said, which for fence sitters will be "the time to come into the market."

Fixed-rate mortgages will move up from their current 4.75% to the 5.75% range by the end of this year, he forecasted. This will push total single-family mortgage originations down about 30% below the 2010 level as refinancings fall sharply in the face of rising mortgage rates.

Do-It-Yourself Preventative Plumbing Tips

January 17, 2011 10:31 am

RISMEDIA, January 17, 2010Dealing with the plumbing is a chore no one enjoys, however, there are ways to prevent plumbing disasters in your home. If you're having a small plumbing problem, follow these simple steps to prevent further crisis later down the road.

Unclog the showerhead. Cleaning the showerhead is a simple way to ensure that your water pressure is working at its best. The easiest method to clean a shower head is to get a plastic sandwich bag and fill it with white distilled vinegar.Tie the bag to the shower head with a rubber band and let it soak overnight.Vinegar is a natural disinfectant and cleaner and will work wonders for your shower and pressure. If youre ready to retire your old showerhead, trade it in for a low-flow one to conserve your water usage.

Use a safe drain cleaner. If you have a clogged drain that needs fixing, avoid chemical drain cleaners. Past testing has proved manual types safer than chemical versions, which have been known to damage pipes or splash onto you during use. Some options to try include Drain King VIP1, CLR Power Plumber Pressurized Drain Opener Plunger Kit, and Ridgid Auto-Spin. All were found to be more effective than their chemical counterparts.

Add a water filter. If youre questioning the quality of the water at your home or want to save your hard-earned money on bottled drinking water, adding a water filter can help. There are plenty of routes you can take with thiscountertop filters, faucet-mounted purifiers, carafe-style, etcand all of these options will increase the quality of your drinking water. In addition, dont drink from the garden hose when working outside. Many hoses contain plastic and brass parts that can accumulate high levels of lead.

By paying attention to these issues, you may be able to prevent plumbing problems from ever occurring in your home.

Source: Consumer Reports

How to Safely Buy a Foreclosed Property

January 17, 2011 10:31 am

RISMEDIA, January 17, 2011--When the real estate market is in flux, buying a foreclosed home can be one of the best deals around. And while now is a great time to buy a home, especially for first-time buyers, HouseMaster, a North American home inspection franchise, is encouraging homebuyers to remain cautious of the many issues that lurk below the surface.

According to HouseMaster, not all foreclosures are a great buy and if consumers are not fully educated on the property or the process, a buyer could potentially make a poor investment decision.

"Properties in different stages of foreclosure represent opportunity but also danger for the unwary buyer," said Kathleen Kuhn, president of HouseMaster. "While potentially lower asking prices draw possible buyers to these homes, each property has its own challenges that can come from abuse, neglect or deferred maintenance from the previous owner. Consumers must do their homework to help them know whether a property is truly a 'good deal.'"

Prospective investors should be familiar with three main types of foreclosure properties and their respective structural and physical attributes. They are:

  • Short sales -- A homesold shortly before foreclosure proceedings, a short sale closing can takemonths to materialize during which upkeep of the property may beneglected.
  • Real Estate Owned (REO) -- A foreclosed home is now owned by a bank. These homes are prone toissues not prevalent in other resale homes, generally due to lack of useand vacancy. Often sold "as is,"a professional home inspection report that lists defects can leverage alower price from the bank.
  • Auctions -- One ofthe riskiest ways to purchase a home, auctioned properties are sold "asis" and auctioneers offer little time for either personal orprofessional inspection. Access to the attic and crawlspace, among otherareas, is often restricted.

"Education is key when buying a foreclosed property," added Kuhn. "It helps the buyer understand their options allowing them to ensure their dream doesn't become a financial nightmare."

According to a recent study conducted by HouseMaster, there are five main physical conditions that are often found in a foreclosed property. They are:

  • Moisture-related problems
  • Defective gaskets, valves and hoses that are leaking or have the potential to cause destruction
  • Vandalism, especially if the property has been vacant
  • Insect and rodent infestations
  • Blocked or damaged waste and sewer lines

"Now is a great time to buy a home, especially for first-time buyers," added Kuhn. "But, if buyers are considering properties in various stages of foreclosure, the necessary inspections are very critical in making a good investment and getting the best deal."

For more information, visit

HUD Awards 127 Million Dollars in Grants to Protect Thousands of Children from Lead and Other Home Hazards

January 17, 2011 10:31 am

RISMEDIA, January 17, 2011The U.S. Dept. of Housing and Urban Development awarded nearly $127 million in grants to 48 local projects to conduct a wide range of activities intended to protect children and families from potentially dangerous lead-based paint and other home health and safety hazards.

The grant funding will clean up lead and other health hazards in more than 11,000 homes, train workers in lead safety methods, and increase public awareness about childhood lead poisoning. Lead is a known toxin that can impair childrens development and have effects lasting into adulthood. Other materials in the home can trigger allergic responses and asthma.

Protecting the health, and indeed the futures, of our children is a top priority for HUD. We cannot allow children to be poisoned in their own homes, said HUD Secretary Shaun Donovan.These grants will help communities around the nation to protect families from lead exposure and other significant health and safety hazards.

HUD Deputy Secretary Ron Sims added: With these grant awards, HUD makes it clear that providing healthy and safe homes for families and children is a priority. Its simple: you cant be healthy if your home is sick. There are far too many sick homes in our communities, and these funds will target the worst of those homes.HUD is committed to protecting children from these hazards, as part of the Departments effort to help make the nations housing healthy and sustainable.

Through these grant programs, HUDs Office of Healthy Homes and Lead Hazard Control promotes local efforts to eliminate dangerous lead hazards from lower income homes; stimulates private sector investment in lead hazard control; and educates the public about the dangers of lead-based paint.

Healthy Homes and Lead Hazard Control Grant Programs Even though lead-based paint was banned for residential use in 1978, HUD estimates that approximately 24 million homes still have significant lead-based paint hazards today. Lead-contaminated dust is the primary cause of lead exposure and can lead to a variety of health problems in young children, including reduced IQ, learning disabilities, developmental delays, reduced height, and impaired hearing. At higher levels, lead can damage a child's kidneys and central nervous system and cause anemia, coma, convulsions and even death.

The funding includes more than $114 million to cities, counties and states to eliminate dangerous lead paint hazards in thousands of privately-owned, low-income housing units.These funds are provided through HUDs Lead-Based Paint Hazard Control and Lead Hazard Reduction Demonstration grant programs.To expand the reach of HUDs Lead Hazard Control Program, more than $13 million of this funding will support new grantees.HUD is also providing nearly $2.3 million to help communities transform their lead hazard control programs to address multiple housing-related hazards. Finally, HUD will award $10 million in Healthy Homes Production grant funds to address housing-related health hazards, such as accidental injury, mold and moisture, and carbon monoxide poisoning, through direct improvements that affect the health of children and elderly adults.

For more information, visit

Important Tips for Seeking Senior Housing

January 14, 2011 10:31 am

RISMEDIA, January 14, 2011People are living longer today. The century-long expansion in the worlds population that is 65 and older is the product of dramatic advances in medical science and healthy lifestyles. Currently, 13% of the U.S. population is 65 and older, up from 4% in 1900. As Baby Boomers turn 65 in high and higher annual numbers, it is estimated that one in five Americans will be over age 65 and about 5% over 85. All this calls for growing care and services for the elderly population and pre-planning for lifestyles in the future.

The senior housing industry has been growing dramatically over the last 15 years as many adult children are now in the workforce and unable to provide the attention to their parents needs, whether physical or social. There are a number of things to be considered when choosing lifestyle alternatives.

-Location. Keeping your parents close to home should not be the number one consideration. Although it is important that the community be convenient for family and friends to visit, being close to amenities they need and trust will make their senior living experience rewarding and more fulfilling.

-Type of community. Visiting to make sure the current residents have similar interests, backgrounds and values will allow for a more enriching life in the golden years. Many communities invite prospective residents to tour their community and enjoy lunch with the community, which is a wonderful way to ascertain if the culture is a fit. Many communities offer a weekend stay to experience more fully what the community has to offer.

-Staff. Is the staff appropriately dressed, personable and outgoing? Do the staff members treat each other in a professional manner? Does the staff call residents by name and interact warmly? The answers to these questions will determine quite a bit toward whether the community is right for your loved one.

-Medical needs. Does the community have on-site medical supervision? If not, is there an agency that is associated with the community that can help when needed?

Finding and choosing a housing option for an aging loved one can be a difficult process. Be sure to keep seniors' needs as your top priority in order to find a community that properly suits them.

For more information, visit

Agent Ratings and Reviews Now Available for Consumers on Zillow

January 14, 2011 10:31 am

RISMEDIA, January 14, 2011--Real estate website launched the ability for home buyers and sellers to search for and find local real estate agents based on ratings and reviews from former clients. Thousands of consumers have rated and reviewed their agents since Zillow launched the ability to review agents in December. Now, Zillow has made these reviews discoverable, enabling consumers to search for local agents in the Zillow Directory, and compare ratings and reviews to find the agent that's best for them.

Over 13 million people visit Zillow each month, and many have not yet found a real estate agent to help them buy or sell their home. Knowing others' experiences with a particular agent is valuable information for potential home buyers and sellers to have before selecting a real estate agent.

"Zillow was created to help people make smarter real estate decisions, and choosing an agent is one of the most important decisions a buyer or seller can make," said Zillow CEO Spencer Rascoff. "Agent Reviews are another huge step towards transparency for buyers and sellers. For good agents, it's a terrific way to stand out from the crowd--the next best thing to a referral. "

When visitors use the Zillow Directory to search for a real estate agent in their area, results are sorted by local agents with the highest overall ratings and greatest number of reviews. Overall ratings are based on a consumer's likelihood to recommend, running on a scale of 1 to 5, with 5 being "very likely" and 1 "very unlikely". Consumers can compare agents' overall ratings, as well as ratings across several categories of service including: process expertise, local knowledge, responsiveness and negotiation skills. Along with ratings, qualitative reviews further help consumers understand a former client's experience with that agent.

Consumers can access ratings and reviews everywhere they interact with agents on as for-sale listings, or when agents answer questions in Zillow Advice--since reviews are connected to an agent's Zillow profile. Current and former clients can also rate and review their agents who have profiles on Zillow by searching for the agent in the Zillow Directory found at

Institute Unveils Tips to Help Homeowners and Buyers Avoid Appraisal Problems

January 14, 2011 10:31 am

RISMEDIA, January 14, 2011The Appraisal Institute has released helpful tips for consumers, providing guidance for homeowners and buyers seeking to ensure their sales are completed in a timely manner.

As one of the nations largest professional associations of real estate appraisers, the Appraisal Institute created these tips to let consumers know how to protect themselves and how to avoid unnecessary frustration when selling or buying a home. The document is available at:

"Too many consumers in this struggling real estate market face problems with appraisals when attempting to buy or sell a home," said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. "But rather than passively endure delays in closing a sale, homeowners and buyers can take proactive steps to avoid pitfalls."

The Appraisal Institutes tips encourage homeowners and buyers to:

  • Understand the role of appraisals.
  • Make sure their lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute).
  • Accompany the appraiser during the inspection of the property, if possible.
  • Request a copy of the appraisal report from the lender.
  • Examine the appraisal report and ask questions.
  • Appeal the appraisal if appropriate.
  • Ask the lender to order a second appraisal by a qualified and designated appraiser.
  • File legitimate complaints with appropriate state board or professional appraisal organizations.

"Credible opinions of value can help to stabilize the real estate market," Magdziarz said. "Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."

Magdziarz noted that normal declines in the real estate market have led to increased caution by lenders. That caution has led to delays in completing some real estate transactions.

"Appraisers today are doing the same thorough, fact-based research and analysis they have always done," Magdziarz said. "Nothing has changed in that regard."

Magdziarz added that appraisers have been wrongly accused of prolonging the nations real estate downturn by developing value opinions that are below proposed sale prices. Specifically, he said, theyve been unfairly criticized for including comparable sales in the valuation process that provide opinions that are below the cost to build.

It serves neither the lender nor the consumer to enter into an upside-down mortgage, he noted. Some real estate agents, mortgage brokers and home builders have used the Home Valuation Code of Conduct and Interagency Appraisal and Evaluation Guidelines as a scapegoat for current declines in the real estate market caused by the weak economy and the general oversupply of homes in the market, Magdziarz said.

For more information, visit

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