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There are many changes in FHA loans due to the passage of HR3221. One of the biggest is the demise of the Down Payment Assistance Grant. This was a donation from the seller of the home to a non-profit agency such as Neiamiah. The non-profit agency would then be sure the buyer has the down payment money at the closing. It is documented as a grant which the buyer does not have to pay back. This has been a great way for those wanting to get the great rates and low PMI associated with an FHA loan but did not have the required 3% down payment.

Fico 08 was supposed to begin almost 1 month ago but it sounds like it is not too far behind. For many people applying for loans using credit scores derived by getting themselves added as an authorized user on someone elses credit cards, this is a wonderful thing!

VA Mortgage Loans are one of the few types of mortgages left which require no down payment. If you are a qualified veteran and have your VA Eligibility Certificate you can buy a home with nothing down. The VA Mortgage also allows the seller of the home you are buying to cover your closing costs. It is a Great loan for a deserving group of people! Thank you to all who have served The United States of America!

A few things to be prepard for;

1. VA loans take considerably more time to underwrite compared to a conventional mortgage loan.

PMI or Private Mortgage Insurance is a policy which protects the lender who loans money, at a high loan to value, in case you default. Whenever you borrow more than 80% of the price of a home that you are purchasing or refinancing lenders will usually require a PMI policy. The policy is usually paid by you when you make your monthly mortgage payment. The monthly PMI cost is determined by:

1. The type of loan you receive

2. How much of the value of your home you finance above 80%

3. Your loan amount

How much money should I put down on a house. This depends on several factors:

1. Are you looking for the lowest payment possible (usually trying to eliminate PMI)

2. Do you have reserve funds available after your purchase

3. Do you intend to sell in the next few years

One of the biggest criteria an underwriter uses to approve your loan is your ability to repay that loan. They will always check the amount of monthly debt obligations you have (your monthly bill payments that show on your credit report) and compare that with your gross monthly income. Depending on the loan you have applied for the percent of your income allowed to pay your mortgage, taxes, insurance and PMI (if it applies to you) along with your regular monthly debts is your debt ratio. There are actually 2 different debt ratios they use but that is for a different blog entry.

Your Exit Strategy ties directly into why invest in real estate.

Many would be investors say I want the property to generate cashflow. Others say I am looking for appreciation and still others say I'm interested in flipping the property.

Everyone of these types of investors need an exit strategy.

Why invest in real estate?

To answering question one from our last blog entry you have to ask yourself what investment vehicle can I get into and what kind of a return can I earn?

Three of the most popular investment vehicle available to almost everyone are:

1. Invest by putting your money into a cd or moneymarket account

2. Stocks or mutual funds

3. Real estate

When you choose to invest in real estate it is critcle that you first formulate your goals. In order to create your real estate game plan you need to have planned objectives.

Real Estate offers potential appreciation, monthly and sometimes weekly cashflow, great tax advantages and my favorite, the ability to use other peoples money for my investments. Step 1 to begin investing in Real Estate is to answer these 10 questions.

When I visit with local REALTORS who work with investors or with the investors themselves everyone is on the same page. This is a fantastic time to buy real estate. I have many investors who are pre-approved just searching for their next aquisition. This past Saturday I turned on the television in the afternoon and I saw an infomercial saying the same thing. The infomercial was done by Dean Graziosi. I guess he has been on telivision for years but this is the first I heard of him. Don't spend alot of time watching TV. Anyway,this is a Great time to buy real estate!