4 Tampa Home Down Payment Gift Rules you should Know

If the purchase of your Tampa home will include a gift as part of the down payment, you should be aware of the rules regarding this money. Lenders have certain requirements that must be followed to allow the use of gift money. With new rules set forth by lenders regarding down payments, this is often the only way buyers with limited funds may be able to afford the purchase of their Tampa home.

Percentage of the Gift

The amount that may be gifted on a yearly basis is $11,000 without notifying the IRS. In addition, some lenders require the purchaser of the Tampa home to contribute 5% of the down payment from their own money. This shows the lender that the buyer is more apt to protect the investment. The FHA is an exception to this rule, allowing the entire amount to be gifted, since their program is for first-time homebuyers and low income.

Source of the Gift

Lenders will often allow only close family members to gift the money. If it is from a parent or a sibling, the money is more likely to be a gift - at least in their way of thinking. This is to try and ensure the money is not actually a loan.

The Gift Letter

When using a gift of money for part of the down payment for the Tampa home, the lender will require a letter from the person gifting the money stating this fact. The letter will need to be notarized and show the agreement between the recipient and the person gifting the money. It must be signed and dated and the amount must be shown.

The Financial Documentation

The lender will also require documentation from the gift givers bank showing the amount of money withdrawn. A financial statement or teller’s receipt will suffice. The recipient will also have to produce proof that they deposited that amount into their bank account.

The rules have changed for many who want to purchase a Tampa home and each lending institutions will have their own requirements. Check with the one you will be using to see what they require when using a gift for the down payment on the home.  

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

How to get Pre-Qualified for your Tampa Home Purchase

What does pre-qualified for a Tampa home mean? Is this necessary? Times have changed and pre-qualification is necessary for today’s buyers. Pre-qualifying for a home can provide many benefits for those who are considering buying a Tampa home. The following information will explain how and why this is necessary today.

1. The first thing pre-qualifying for a home loan does is to allow you to know how much you can afford to pay for a Tampa home. Instead of running around looking at homes that are out of your price range, you can choose to see the ones you can afford. This saves your time, your realtor’s time and home seller’s time. It also lets you know if you can pre-qualify for a loan at all.
2. How do you get pre-qualified for a loan in the first place? Choosing a lender is the first step. This will involve carefully interviewing several and asking for advice from others who have purchased a home. Your bank may be a choice. Whatever you decide, it is a good idea not to allow the lender to run your credit unless this is the one that will be providing your loan. Too many credit checks can lower your credit score.
3. Once you have made the decision on a lender for your Tampa home, make certain you bring all the required information for the pre-qualification process. They will need financial information, job information and current rental and tax information. Bringing all the required paperwork the first time will allow your pre-qualification to be processed much faster. Since this is pre-qualification, you will still need to be qualified, so do not make any major purchases and pay your bills on time so your credit does not suffer.
4. One of the advantages of pre-qualification is letting sellers know that you are a serious buyer. The pre-qualification process is not difficult, but it is not simple either. The seller and your real estate agent know that you would not have gotten pre-qualified if you were not seriously considering buying a home.
5. When you have been pre-qualified to purchase a Tampa home, your lender will write a letter stating that you are qualified to buy a home up to a certain amount. You should keep this amount to yourself. This allows you more leverage in the purchase of a home. The seller does not know how much you can pay so they will not reject an offer based on the fact that they know you can pay more.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Buying or Selling a Tampa Bay Property? Get the Score on your Credit Score!

The Tampa Bay property you are interested in purchasing will generally require a lender. Do you know what impact your credit score has on obtaining this loan? Many Americans do not. A study recently conducted determined less than half of consumers do not know that their credit score can mean paying less or more for the money they borrow to buy Tampa Bay property.

The survey, which included test questions, was asked of 1000 people in America. The average score on this test/survey was a D-. Americans know that a credit score is used to determine the loan approval, but they do not know that it can mean they will often pay tens of thousands of dollars more for credit. If you are considered a high credit risk the amount you borrow to purchase Tampa Bay property can be considerably higher than someone who has good credit.

In addition, they did not know that certain information was not used to figure the credit score. Many believed that their age, marital status and income was used to arrive at the final score given them by the credit companies. Only 33% knew that their age was not used in deciding their credit score. Only 40% knew that their marital status did not matter when the credit score was figured.

When purchasing Tampa Bay property, the number of credit scoring systems is also confusing. A good score with one system may be a bad score on another system. The criteria used to figure the scores is different, therefore a 700 on FICO is good and on Vantage it is not considered good. In addition, the number of people who do not understand how their credit is affected by their score is high as well. 48% do not understand this aspect.

The Tampa Bay property you want to buy may cost you more than you realize if your credit score is low according to FICO and Vantage. Educating yourself about credit is important and can save you money. Go to www.freecreditquiz.org and see how much you know about your credit.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

2011 is the Year for Affordable Tampa Bay Real Estate

Tampa Bay real estate may be becoming affordable again. According to sources, such as Mood’s Analytic’s, housing today is more affordable than it has been in years. The WSJ, the S&P/Case-Shiller home-price index says that for the first time in 35 years, the cost of a home is approximately the same as 19 months of pay. The good news is Tampa Bay real estate as well as other markets across the country are becoming more affordable to buy than they are to rent.

The signs are all in place that indicates that home buying is a good choice at the present time. The prices have decreased approximately 31% from the 2006 high. What does this mean for prospective purchasers of Tampa Bay real estate? If you were one of the many that were waiting for the right opportunity to purchase a home, this is probably the best time.

The best way of doing so is to keep a tab on resources. Even though this is a good time to buy, a home is going to be the biggest investment you make and you do not want to get in over your head. The best method is to get together a substantial down payment before deciding on a home. Work with an agent and see what they have available. While you may have been keeping track of Tampa Bay real estate, they will have the details about all the area homes for sale.

Plan to stay in the home you purchase for a few years at least. This will allow you the opportunity to build equity. The more you consider the options you have before making any decisions, the better the chance of making the right choice. When considering Tampa Bay real estate, make certain you consider needs, such as number of bedrooms and bathrooms, location and neighborhood. Make a list of the necessary features and take it with you when you go to look at properties.

If you are in the market for Tampa Bay real estate as a home rather than an investment, this is a good time to consider properties. However, do not make the mistake of choosing a property that will be difficult to keep up with the payments and maintain. There are also stricter borrowing guidelines that have been going into effect regarding down payments and interest rates, so keep abreast of these as well.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Tampa FL Homes - 5 Signs That Says 'Buy'

What do you need to know if you are considering the purchase of Tampa FL homes? Is the housing market improving? The following signs may help you to make a decision. The housing market may still seem a bit unstable, but certain areas are more stable than others. Look at the signs if you are considering Tampa FL homes.

The construction industry is one method. Although it may not be as reliable as other methods, using this criterion can help you to evaluate the future housing that may be coming to the area. Are new Tampa FL homes being built? Check the local building departments and see if new permits have been issued. The National Association of Home Builders is another venue to check. It can be found at www.nahb.com.

The jobs in the area are another way of judging how deeply an area was affected by the recession. The information from the U.S. Bureau of Labor Statistics is recent (only about a month old) and can be found at www.bls.gov. The National Association of Home Builders posts information regarding employment as well. This is available at NAHB.com.  

When you want to know if Tampa FL homes are a good buy presently, another investigative tool is the recent sales activity. The prices, sales volume and housing inventory should be considered in this niche. A negative indication would be a very large inventory of Tampa FL homes with few transactions taking place. If the inventory seems to be decreasing and transactions are increasing, this can be taken as a good sign.

Availability of mortgages in an area is another sign. Many lenders have drastically changed their lending standards, making obtaining a loan much more difficult. However, some banks have not been affected by the recession quite as significantly as others have. Therefore, their lending standards are not as strict.

Last, but not least, when deciding if the purchase of Tampa FL homes is a good idea presently, take a ride through the neighborhood and see what is going on in the way of open houses and sales. Talking to agents that work in the local area and attending a few open houses are still good ways to determine the condition of the local market. This combined with the other research you have done will allow you to make an informed choice when deciding if Tampa FL homes are a good investment presently.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Tampa Property Sales are still Low, but less Low

Tampa property sales were down 4.6% over the last quarter even though the national index showed a more positive trend beginning in 2011. According to Clear Capital’s monthly Home Data Index Market Report, Tampa property ranked number 11 out of the 15 that performed the worst. The numbers also show they were down by 10.2% for 2010. However, Clear Capital said the lows are “less low.”

The city of Jacksonville was up 3.5% in the last quarter allowing this city to rank number 4 in the highest performing markets. The markets are showing an improvement as three-fifths of the markets with the lowest performers showed an improvement last month of quarter-over-quarter results. Detroit was the only market with a double-digit decline in prices.

The data available from Clear Capital show that nationally U.S. home prices are not currently declining and have not been since early in January. The first small increase since August 2010 has been posted by many. Tampa property numbers may show a decrease, but the upward swing is an indication that the decrease will taper off as the year progresses.

Tampa property as well as the other fourteen ’worst performers’ are still under a lot of pressure from the distressed sale activities. This is weighing down the home prices in the area although the sale of foreclosures will help clear out the oversupply of home on the market.

Florida is one of the states with the highest foreclosure sales by percentage at 36%. Only two other states have higher percentages - Arizona at 49% and California at 44%. Even excluding foreclosures, in September 2010, Tampa property was down as were the St. Petersburg and Clearwater areas. However, the number in this area were still better than the rest of the state where a 4% decrease was noted, according to figures from CoreLogic.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Obama Sets Stage for Tampa Mortgage Reform

Do you have a Tampa mortgage? If so, you should be aware of the new plans that are in progress. As of last week, the Obama administration presented their new plans to reshape the mortgage market and to decrease the role the government has in the housing finance market. The plan calls for the eventual dissolution of Fannie Mae and Freddie Mac. Many who currently have a Tampa mortgage may be backed by one of these institutions as they back a greater part of the mortgages in the U.S.

The plan had been anticipated for some time and contains plans that the Obama administration says will bring private capital back to the mortgage market, provide borrowers with more targeted federal support and control unfair lending practices. The plan would not immediately begin making changes for Tampa mortgage holders. It would create the changes in phases over the next few years and the most marked changes could not take effect without Congressional approval.

According to Treasury Secretary, Tim Geithner, the plan would begin now but it would be a slow process so that the recovery of the housing market would be supported. Freddie Mac and Fannie Mae are two enterprises that are sponsored by the government and were rescued in 2008 by the government as they tethered on the brink of bankruptcy due to bad loans. Taxpayers have paid about $150 billion in aid to these two companies since 2008.

Tampa mortgage holders would not see the dissolution of these two companies for about five to seven years according to Geithner. There are a few steps outlined in the plan that would be implemented now such as an overhaul by the government on the way money is borrowed in the U.S. for homes. The recommendation is that Freddie Mac and Fannie Mae change their loan guarantees to the standards that private banks currently require.

The temporary increase allowing Freddie Mac and Fannie Mae to purchase loans that are worth up to $729,000 should be allowed to expire. This would reset the limit to $625,000. The gradual increase of down payments when purchasing loan backed by these two firms is another proposed change for Tampa mortgage seekers.

Other options include guaranteeing only Tampa mortgages and others that are backed by the Federal Housing Administration as well as other programs geared targeted for borrowers with low and moderate incomes.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Should you Quit Paying your Tampa Home Mortgage?

What would happen if you quit paying the mortgage on your Tampa home? This is what many homeowners are doing, even though they can afford to make the payments. Strategic defaults are increasing as many homeowners facing the possibility of waiting five, seven or even ten years for a return on the equity in their homes, are opting to stop making payments. Even though they are staying current with other debts including credit card payments and auto loans, the numbers say about 12% of the mortgage defaults in February 2010 were strategic defaults. Tampa home owners as well as many others across the U.S. are deciding the wait is too long.

The percentages mentioned previously are a result of a study conducted by Morgan Stanley. In addition, research from Chicago Booth/Kellogg School Financial Trust Index confirms the trend. Their report found that 31% of foreclosures in March 2010 were strategic defaults. Compared to the number in March 2009, which accounted for 22% of foreclosures shows a rising number of Tampa home owners and others are beginning to choose this option.

The reasons for the increasing number of Tampa home owners and many others deciding that this is the best option also is attributed to the ‘contagion effect.’ When homeowners see their neighbors, friends and family strategically defaulting, they begin to consider this as a more feasible route than waiting for many years to regain equity. Default is more widely accepted today than ever before and this may be caused by the high number of foreclosures.

What does this mean for future home buyers? The loan companies will have no choice but to figure this factor into their loan criteria if the trend continues. This could add up to higher interest rates in the future as well as higher down payments. Those who may want to purchase a Tampa home in the future or any home, for that matter, may find that strategic default ends up costing them more money.

In areas of the country where the home prices are already suffering from extremely depressed values, strategic default could become an accepted solution. A recovery in the price of homes may provide Tampa home owners as well as others with the hope needed to keep making payments. If the prices of homes drop any more, the hope is going to drop as well. The estimates currently place the time frame at five to seven years before homeowners will regain lost equity.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925

Making 2011 the Year to Successfully Sell your Tampa Home

If you want to sell your Tampa home in 2011, now is the time to start preparing the home. The much-anticipated new year has arrived and the first few months of the year are often the time most people begin to look for their new home. They anticipate getting everything taken care of so they can be in their new home by the fall when school starts and the holidays are just around the corner. Therefore, it is important to get your Tampa home ready and accessible to those who are looking now if you plan to sell.

Prepare to be flexible if a prospective buyer shows an interest in your Tampa home. This is a buyer’s market currently and buyers are sometimes making unusual requests. They may want certain items left with the home when they purchase it or they might want to look at the home at odd hours. Being flexible is important.

Getting your Tampa home ready to sell is just as important. Make certain all essential items are packed away. Storage areas should be cleaned out. Any repairs that need to be made should be taken care of before advertising the home. The outside should project a well-kempt look as well as the inside. First impressions will often be what allows your home to sell or not.

Pricing your Tampa home is another area in which you will need to be extremely careful. If you overprice it and it sits on the market for a long time, you will end up reducing the price - maybe more than once - and this sends out a bad signal. Buyers will wonder what is wrong with the home. Homeowners tend to believe their homes are worth more than they actually are, so this is an area where you may need help to get it right the first time.

Providing good information when advertising your Tampa home is extremely important, especially today. Buyers want to know about updates, energy consumption, schools in the area and even crime statistics for the neighborhood. Make certain you provide as much information as possible when advertising the home.

Allow your Tampa home to be easily shown no matter what day of the week or hour a buyer wants to see it. This may be the person who will buy your home; therefore, you need to allow easy access to the home through the realtor. Keeping it in show condition as well will be a plus since first impressions are very important.

Nathan Bangs

Nathan Bangs & Associates – Seller Line 813.739.5965/ Buyer Line 813.739.5925