Home Value

The FHA (Federal Housing Administration) Short Refinance Program, an initiative to help qualifying underwater US home owners, came into effect on September 7, 2010, and is set to run until December 31, 2012. The program will help home owners who owe more on their mortgage than the worth of their home. To qualify, borrowers must be current with their monthly payments.

Low Demand

Many home owners find themselves 'underwater' as sale prices in some areas have fallen more than fifty per cent. Within some US counties, more than half of home owners find themselves 'underwater' and in danger of losing their homes. Yet despite the number of financially-strapped families, lenders are not noticing a huge demand for this program. Of course, the FHA Short Refinance Program is a voluntary program but still a greater response was expected to the initiative.

Big Benefits

Taking part in this program can result in a considerable drop in one's monthly mortgage payment. Participating lieu holders must write down a borrower's mortgage – at least by ten per cent. Yet to date, there are few takers for the FHA Short Refinance Program – at least compared to the number of home owners who owe more than their home value.

Borrowers

Maybe all home owners are not aware of the benefits. The program has just gone into effect in recent weeks. As well, it targets a specific group – not all 'underwater' home owners.

The lack of response may also be attributed to the specific guidelines of the program. Many home owners are, however, eligible for help. Yet if individuals are delinquent on their mortgages, they do not qualify for assistance.

"…This group is in a "less serious" situation than borrowers who are already delinquent on their loans. But there's no question eligible homeowners would benefit from assistance," says Jill Perry, Northern Nevada director of Consumer Credit Affiliates.

Eligibility

To be eligible for the FHA Short Refinance Program, homeowners must be able to refinance under FHA. They must be current on their existing non-FHA-insured loan payments, use the home as their primary residence, and have a FICO credit score of 500 or above, as well as meet standard FHA underwriting requirements.

Lenders

In addition to hesitant home owners, not all lenders are embracing the program. Keep in mind that this initiative is also voluntary for lenders. Banks may not be ready for a while to refinance loans through this program.

Yet it makes sense for lenders to be participants. The hope behind the initiative is to stop foreclosures and help home owners stay in their homes. Obviously, this program will cost lenders but the expense is insignificant compared to the cost of foreclosures.

"…Servicers ought to be motivated by their best interest," says Bob Ryan, chief risk officer for the Federal Housing Administration.

Goal 

There is divided opinion about the level of assistance that this program will provide to US home owners. The government hoped that 500,000-1.5 million homeowners could be helped by the FHA Short Refinance Program. Yet industry analysts think that the program will assist only 200,000-300,000 home owners. Since the program is not yet even a month in operation, it is difficult to make an accurate prediction about the end result. Hopefully, all eligible home owners become aware of this new plan and are able to receive relief from it.

The FHA’s ‘Short Refinance’ Program: Frequently Asked Questions

Do You Think That The FHA Short Refinance Program Provides Enough Relief?

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Buying a home should not start on the day that you begin looking at houses. Surprisingly, some home buyers go that route and do not prepare to make the purchase. If individuals don't get ready for a home purchase, they will find home buying much more stressful than the prepared buyer.

Buying A Home = Hopes and Dreams

Everyone recognizes home buying as a major commitment. Yet purchasing is a home is also tied in with emotions and hopes and dreams. Some potential home buyers let their emotions get the better of them. They do not focus on the financial and other practical details involved in buying a home.

The unprepared buyer can end up finding the perfect home and then realizing that nothing is in place for the purchase. When the prepared buyer finds the perfect home, everything that needs to be in order is organized at that point. The prepared buyer can enjoy the experience of finding their dream home and will proceed with relative ease through the home buying process.

Preparing to Buy a Home

1. Down Payment

Most home buyers cannot put together a down payment at a moment's notice. A down payment is a substantial expense. The amount varies according to the loan, lender, and loan program. It can be as low as 3.5% of the home's purchase price for FHA (Federal Housing Administration) loans. Down payments, however, can also be as high as 20% of the purchase price. Wherever the amount falls, the down payment reflects a percentage of the sale price of a house so home buyers have to be prepared to pay a hefty sum.

2. Closing Costs

Often first-time home buyers are surprised by the closing costs. Of course, sometimes the seller will offer to help with this expense but this scenario happens mostly in a buyer's market. Home buyers are advised to include closing costs in their budget. They can expect to pay in the range of $2700 in the US market.

3. Credit Rating

Home buyers should enter into the process with the best possible credit rating. If an individual is thinking about buying a home in the near future, they should check their credit rating – preferably, a few months in advance. Being prepared with that information means that a potential buyer has the chance to improve their credit rating.

4. Pre-approval

Pre-approvals for loans give a positive edge to home buyers. Having a pre-approved loan makes it easier to negotiate and arrive at a deal. Home sellers respond well to potential buyers with pre-approvals in hand.

5. Moving-in Expenses

Obviously, home buyers have to factor moving-in expenses into their budget. These costs can include the actual 'moving' as well as new furniture expenses or necessary renovations. Some shopping for furnishings and changes to a house can be deferred until after a home buyer settles into their new home. Yet some things have to be taken care of before a buyer moves into a new property. If basic furniture is needed or renovations are necessary to accommodate young children, these concerns have to be looked after before the move.

What Do You Think Is The Most Important Step In Preparing To Buy A Home?

With the official start of autumn shortly upon us, home fall shows are showing up everywhere and these annual events draw huge crowds. Some things about fall home shows always stay the same. You are bound to see warm touches and shades of pumpkin. Yet every fall season brings a new and bountiful crop of home décor trends. Surprisingly, some fall home shows even emphasize spring designs.

Spring in Fall

People who look at home furnishings in fall might be preparing to build a home in the coming spring. Therefore, it is not that unusual to see fall home shows include some spring-like styles. Maybe a few pale pastels might find themselves in the company of autumn orange.

Autumn Green

Yes, green is the color of renewal and rebirth, but fall home shows are going 'green' in more ways than one. Of course, shades of green remind those future home owners about the joys of spring. As well, autumn shows are becoming friendlier to the environment.

More stores like "ReStore' in Vancouver have booths at these events. 'ReStore' sells high-quality used (and new) building supplies such as kitchen and bathroom counters, lighting, and appliances. Home owners can find similar 'green' outlets at home shows all across Canada and the US. You will always find the latest green cleaning supplies like AspenClean - the first cleaning product in Canada to be certified by Ecocert (the European regulator of organic cosmetics and food).

Prices at home shows can be more than 50% lower than department store prices. Yet the merchandise can include top quality materials. Shoppers might pick up a cool and classic black granite countertop because someone preferred a lighter shade of granite.

If 'used product' stores did not exist, these building supplies would end up in the landfill. Since more and more people are adopting a green lifestyle, these outlets can now take their rightful place at the fanciest fall home show. 'Used' outlets are becoming the new 'cool' shopping experience with the 'green' crowd.

Design Books

Design books are now the darling of home shows. The design book booths cater to those who 'want' to learn more about design as well as those who 'need' to learn more about design. If you can't afford the designer pillows, you can buy a good interior design book that tells you how to make your own autumn pillows.

Designer books offer support and ideas to home owners. These books are an invaluable resource especially for people on a limited budget. A good quality design book is worth the investment because they offer tons of ideas for every season. Sometimes using the latest trendy colors or fabric can do wonders in recreating a designer look.

Customized Design

Home shows shine the spotlight on local artisans who produce one-of-a-kind products. Custom orders are part of the thrill of home shows. Shoppers can choose from a wide selection of unique items. Customize your home for fall and show off your harvest colors.

What Did You Fall For At Your Local Autumn Home Show?

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Every home owner should keep up-to-date regarding the value of their home. Today's worth is not necessarily last year's value or even last month's worth. Whether home owners have moved in recently or are planning to move out soon, they should be aware of home value.

The market - in the immediate neighbourhood and the marketplace at large - affects home value. A home owner is stuck with that reality to a point. Yet home owners can take things into their own hands and try to increase the worth of their home.

It helps to work with a skilled professional to determine home value. Home owners should review strategies that will improve their home's worth. They should understand about the current market – especially in their neighbourhood. Home owners should decipher the factors that impact the worth of their home. Although all renovations are not equal as to how they affect home value, certain home improvements can make a big difference to home value.

Adding Value To Your Home

. Spruce Up The Exterior

First impressions apply to homes as well as home owners. The house that makes a good impression will be a fast seller. It is just common sense that potential home buyers are affected by the state of a home's exterior and the outdoor setting.

Home buyers are looking for a house to suit their needs. If the exterior and surroundings are a disappointment, the stage is set for this house to stay on the market for a longer period. The home's exterior has to look its best for the "open house." The outdoor area and entryway has to be safe and the location has to look appealing to buyers.

. Remodel The Kitchen

Remodelling a kitchen is a major investment ($15,000-$80,000) as well as a true hassle and definite source of stress. Yet a kitchen renovation is one of the best things you can do to add to a home's worth. The intense effort and hefty expense can translate into a high return on a home sale.

Of course, home owners can impress home buyers without having to spend huge sums of money. Most importantly, the kitchen must have a friendly atmosphere and safety has to be a priority. Even a fresh coat of paint or a clean-up and 'declutter' session can make a dramatic improvement to a kitchen.

. Redo The Bathroom

Redoing the bathroom to reflect more comfort and extra style is a wise move for every home owner. Redecorating a bathroom can come with a substantial cost. Keep in mind that an extensive bathroom renovation is a time-consuming project.

Redoing a bathroom can involve plumbing – a costly and labour-intensive process. Yet a bathroom renovation can get a home seller a return equal to or greater than the cost of remodelling. If a major project is beyond your budget, a thorough cleaning and new coat of paint can work wonders for your home. Even simple things can help to add a slight value to your home. The difference might be the deciding factor for a home buyer.

How Do You Plan To Add Value To Your Home?