Archive for May, 2011

Can You Qualify for a Loan in Today’s Market?

by Maria Hass – Realtor, HomeSmart Real Estate
With very low interest rates and historically low prices, look no further — it is a great time to buy. I constantly receive calls from buyers who are interested in either buying their first home or buying an investment property. Buying a home is not just about location, it is certainly also about financing. To find out if you are qualified for a loan, below are current information about loan qualification requirements and changes.

1. FHA changed its Mortgage Insurance premiums on October 4, 2010. The upfront MI goes down from 2.25 percent to 1 percent of loan amount (still added to principal at close). The monthly MI increases to $75/month per 100K of loan amount. The net change is that FHA loans will have payments that are roughly $22/month higher per $100K of loan amount.

2. USDA loans are now available again. The USDA “Rural” housing program allows 100 percent financing. Some of the cities in Arizona that have access to this program are Queen Creek, Buckeye, Maricopa City, Payson, Prescott Valley, Kingman and parts of Anthem to name a few. To find out more on this program and view a map of eligible areas you can go to Http://

3. FHA announced that they are waiving their 90 day flip rule . There have been many “false alarms” but this time it is for real – any seller, even private parties, can sell to FHA buyers with no waiting period. Many lenders have internal rules that will not allow more than a 20 percent increase from the precious sales price. Smart Financial allows more than a 20 percent increase sales price along with the FHA requirement of 2 appraisals for this type of transaction.

4. The minimum down payment for an FHA loan is now 3.5 percent down. A borrower can get this down payment from their own funds, a gift from a family member or employer or by borrowing from their 401K or IRA. The maximum FHA loan amount is now at $346,250 and a 640 fico score is required.

5. Conventional loans for a Primary residence now allow a 5 percent down payment with a 720 Fico score. The maximum loan amount is $417K for conventional loans.

6. Second/Vacation home purchases are now allowed with a 10 percent down payment with 720 Fico score.

7. Investor loans now require a minimum of 20 percent down payment

8. Jumbo loans now require a minimum 20 percent down payment.

9. The only true 100 percent loan available in all of Maricopa County is a VA loan. VA loans have great rates and carry no monthly Private Mortgage Insurance even at 100 percent up to a maximum loan amount of 417K. VA loans can go up to $1.5M but they require a down payment if the loan is abouve 417K.

10. Fannie Mae and Freddie Mac have recently relaxed their refinance rules for mortgages that they have backed and that do not currently carry private mortgage insurance. They now allow a refinance upto 105 percent of appraised value. Here is the website to see if your loan is backed by Fannie Mae: — and the website to find out if your loan is with Freddie Mac:

Many have asked me if it is harder to qualify for a loan nowadays. My answer is “Not Really.” It should have been this way to begin with when people who are financially responsible are the only ones who can qualify for a loan. During the crazy real estate euphoria experienced in 2005 through 2007, anyone who could breathe could get a loan. So, loose lending practices resulted in a real estate market crash. Home ownership in America is very easy. You don’t have to work hard or to be financially prepared or responsible to own a home. And if the homeowner defaults on his payments, he does not go to jail or have other possessions taken away from him as would happen in many other countries. Instead, the homeowner can buy another home in 2 to 3 years after short sale or foreclosure. America is forgiving and indeed, the land of opportunities.

Interest Rates as of 5/12/2011
Rates based on a 200k Primary Residence Purchase (or a no cash out refinance), 740+ Credit, assuming 0% loan origination fee and 0% in buydown “points” (you can also choose to pay “points” and get a lower interest rate). Please note, this information is intended for Real Estate Professionals.

80% 30 Year Fixed = 4.75%
95% 30 Year Fixed = 4.75% (Requires PMI)
80% 15 Year Fixed = 4.125%
90% 2nd/Vacation Hm 30 Yr = 4.875% (Requires PMI)
96.5% FHA 30 Year Fixed = 4.5% (Requires MI)
100% USDA/Rural 30 Yr Fixed = 4.75% (No PMI required)
100% VA 30 Year Fixed = 4.75% (No PMI required)
80% 5 Yr ARM = 3.5%
75% 5 Yr Jumbo ARM up to $850k = 3.875%
70% 5 Yr Jumbo I/O ARM up to $850k = 4.25%
80% 30 Year Fixed Jumbo up to $1M = 5.75%
Refinances up to 105% of appraised value are available

*Information provided by Ryan Halldorson of Smart Financial Mortgage (602) 793-7204, Interest rates and loan requirements may change. Ask your loan officer for details.

May 23, 2011 at 7:05 am 2 comments


The question “Why rent when you can buy?” seems to be a popular thing to ask renters about their puzzling decision to rent instead of buy. With the current real estate market defined by low interest rates and home prices at 45 to 85 percent off from the peak, it seems foolish to rent. Yet, the reality is, many former homeowners are not in the position to buy a home due to a foreclosure or short sale. In such cases, they have to wait two to three years to buy a new home.
The wave of short sales and foreclosures has resulted in the “Rental Era.” Many homes at heavily-discounted prices are snatched up by investors to rent out. Displaced former homeowners are scurrying to rent. Due to the rental demand, rents are increasing and many rental single family homes and apartments are at zero vacancy.
The Arizona Republic reports that the rental market is dominating the real estate market. This is true, but contrary to the article’s opinion, the rental surge was expected and not a surprise. Where else will displaced homeowners go but rent. Also, the article makes mention that investors are buying foreclosed homes at bargain prices and renting them back to the original owners. I don’t find this type of transaction easy to find.
In a short sale, the seller’s lender prohibits the buyer to rent out the house to the homeowner under the “arm’s length disclosure.” If an investor buys a foreclosure, usually the homeowner has found a new place by the time the house is sold to a buyer — it usually takes four to six months to complete the sale. It would make sense for investors to rent out to the homeowner if the home was bought at a trustee sale. At this point, the homeowner may not have left the house when the turstee sale is completed.
For the full Republic article, go to:

May 20, 2011 at 10:24 pm Leave a comment


by: Maria Hass* reported today (May 2, 2011) that Phoenix based Realty Executives is filing for Chapter 11 bankruptcy to give itself protection from creditors and time to pay its debts.

This announcement came after agents where assured that Realty Executives’ finances are stable. Earlier, many agents were locked out of the Phoenix office for non-payment of rent. President Rich Rector said the move will help Realty Executives in Phoenix reorganize its debts and get back on its feet following the reorganization.

As a former Realty Executives agent, I always wondered why the company insisted on charging high fees even after the real estate market had tanked by as much as 50 to 85 percent. It just does not make business sense to pay the same exorbitant fees while the agents’ earnings are droppings by at least 50 percent. As a result, many agents were forced to leave Realty Executives in favor of rival HomeSmart Real Estate and others to stay in business.

Also while at Realty Executives, I often wondered where the fee money was going and who was getting most of it? While there, I asked Dominic Scapattini, CEO of Realty Executives, to help us agents by reducing our fees so we could stay with the company. President Rick Rector and Scapattini quickly responded to this request by modifying the fee structure for agents. However, the new fee structure was still too high and did not help many agents — and many opted to pack their bags for other real estate companies.

For the full story go to:

May 2, 2011 at 12:40 pm Leave a comment