Monthly Archives: December 2014

First-time homebuyers given more options to buy a home by FannieMae and FreddieMac:

closing, Home Ownership, NFLPA, real estate law, Uncategorized,

Earlier this week new lending guidelines for first-time homebuyers were released in a statement by the FHFA Director Melvin L. Watt . Watt wrote “The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3 percent down.

The lower down-payment requirement will allow more first-time homebuyers the opportunity to buy a home. Often the greatest hurdle for the first-time homebuyer is saving enough for a down payment. Many first-timers would try to save 20% of the purchase price that many lenders required. It can take a significant period of time to save that large amount of a down-payment forcing first-timers to wait to buy a home. Right now with rates as low as they are it very well may be cheaper to buy than rent.

FannieMae in its statement regarding its My Community Mortgage® “announced an option for qualified first-time homebuyers that will allow for a down payment as low as three percent. …the 97 percent loan-to-value ratio (LTV) option will expand access to credit for qualified first-time homebuyers that may not have the resources for a larger down payment.” Other requirements will still have to be met by the first-timer. These include “the usual underwriting, income documentation and risk management standards. These loans will require private mortgage insurance or other risk sharing, as is required on purchase loans acquired by the company with greater than 80 percent LTV.”

FannieMae expressed its hope that “Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage. We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”

FannieMae will require for this program that at least one of the borrowers be a first-time homebuyer.

FreddieMac also provided its guidelines for the low down-payment program. The program is entitled “Home Possible Advantage”

FreddieMac also set forth its Key Facts:

  • Home Possible Advantage offers qualified low- and moderate-income borrowers a conforming conventional mortgage with a maximum loan-to-value ratio of 97 percent.
  • Home Possible Advantage mortgages can be used to buy a single unit property or for a “no cash out” refinance of an existing mortgage.
  • First time homebuyers must participate in an acceptable borrower education program, like Freddie Mac’s CreditSmart®, to qualify for Home Possible Advantage.
  • Home Possible Advantage mortgages are available as 15-, 20-, and 30-year fixed rate mortgages.

These programs are seeking to allow the first-time homebuyer the ability to buy a home with less of a down payment but also limit the risk that the loan will go bad or default. They are focusing on the borrowers’ credit worthiness as opposed to the size of their down-payment. There is always an element of risk with requiring a lower down-payment; the homeowner has less of their own money at risk. But when you balance this against the economic drag of so many potential buyers sitting on the sidelines the benefit of pulling pull them into the real estate market may outweigh that risk.

We offer reduced rates for first-time homebuyers. Contact if you are thinking about buying a home. We will provide you with over a century of experience in dealing with real estate.

Estate Planning Essentials: Your Age Doesn’t Matter

Estate Planning, Health Care Proxy/HIPPA, trusts, Uncategorized, , ,

 

The current pace of our lives makes finding time to develop an Estate Plan more and more difficult. Please find below some moves you can make which are not complicated, or expensive, but which can improve your position, and let you sleep at night.

  1. Create or Update Your Will or Revocable Trust

    These documents are the cornerstone of your Estate Plan. They insure that your assets will be distributed exactly as you would like. Failure to keep these documents current may result in disinheritance or financial hardship for loved ones who depend on you.


  2. Review Beneficiary Designations. When you established life insurance or retirement plans, you were asked to name beneficiaries of these accounts who will receive the assets upon your death. It is important to review these designations regularly to ensure that your assets pass to the appropriate loved ones.
  3. Create or Update Your Health Care Proxy and Living Will You need a health care proxy to appoint your spouse, a trusted friend or family member to make medical decisions on your behalf in the event you are unable to make those decisions yourself. Your health care agent will work with your doctors and other health care providers to make sure you get the medical care which is best for you. A living will is a type of advance directive that gives you the opportunity to formalize your wishes as to prolonged health care in the event that your condition is terminal. NOTE: Living Wills give direction but are not legally binding
  4. Create a Durable Power of Attorney. Regardless of the size of your estate or your family circumstances, you should have a durable power of attorney. You may appoint your spouse, a trusted family member or friend to handle all of your financial affairs on your behalf in the event you are not able to do so, yourself.
  5. Establish Guardianships for Minor Children. Have you considered who would take care of your minor children in the event of the untimely passing of you and your spouse? If you do not finalize your wishes in your Will, a court will decide who will care for your children. Do not leave your children’s well-being in the hands of a court. Appoint a Guardian for you minor children in your Will.
  6. Encourage Your Adult Children to Create an Estate Plan. Whether your son or daughter is going off to college or beginning a career, encourage your child to set up an Estate Plan. If your adult child requires medical attention, you have no legal right to their medical records, nor can you participate in health care decision, without a duly executed health care proxy.
  7. Encourage Your Aging Parents to Create, or Update, Their Estate Plans. It becomes increasingly more difficult to discuss finances and health care decisions with your parents as they age. Encourage your parents to put an Estate Plans in place, or review their existing Estate Plans.