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Wallingford PA Real Estate

By Clark Kendus

FHA Relaxes Condominum Rules

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Strath Haven Condominiums

More condominium projects are expected to gain eligibility for FHA financing under new guidelines issued by the Federal Housing Administration this month. The revised guidelines, set to take effect Oct. 19, are expected to qualify 20,000 to 60,000 more condo units annually for government-insured FHA loans.

FHA loans, which require a 3.5% down payment and have generally looser credit requirements than conventional loans, are popular with first-time home buyers. Condos, too, are popular with first-time buyers because they often offer an affordable price to enter the housing market and require less home maintenance. Yet only about 6.5% of all condo projects in the country are approved for FHA financing because of restrictive policies in place for more than a decade.

Highlights of the new guidelines that should boost condo sales:

· Spot approvals: If an entire condo building wasn’t on the approved FHA list, it was nearly impossible for an individual buyer to obtain FHA financing in the past. The new guidelines allow an individual unit to be approved for FHA financing in a building of 10 or more units, as long as no more than 10% of the units in the building have an FHA-insured loan. In smaller buildings, with less than 10 units, no more than two units can have an FHA-insured loan.

· Mixed–use developments: The amount of commercial space allowed in a condo has been increased, which means more condo units in mixed-use developments will be eligible for FHA loans.

· Certifications: The length of time a certification lasts has been extended from two years to three years, and recertification has been streamlined.

· Owner/occupant ratios: The required ratio of owners vs. renters has been dropped from 50% to 35% to be eligible for an FHA approval.

· FHA loans: Up to 75% of all units in a condo project can now have an FHA loan.

Through July 31 of this year condo sales in Wallingford comprise 9.5% of total sales. The average selling price of the 14 condos sold was $126,561.

These changes take effect in October and will make FHA financing easier for condominium buyers.

Wallingford PA Real Estate – Wallingford,, PA 19086

What Is Title Insurance?

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One of the large numbers you see on your ALTA closing statement sheet at the closing table is title insurance. Many people ask just what is title insurance and why do I have to have it?

Title insurance is an insurance policy that protects the insured against financial loss rising through defects in the title to real property. Before a home is purchased it most likely has gone through several ownership changes, and the land on which it is built went through many more. At any point in that ownership chain there may have been a situation that occurred which can cause a title issue. For example, an owner may have forged a signature in the transfer of title, or there may be unpaid tax or mechanic liens against the property. Title insurance covers the insured party for economic loss that is the  result of such title issues, which are known as title “defects”. When the title for a property has been verified as insurable, the title company will guarantee against loss due to any title defects, and pay expenses incurred in defense of any lawsuit which challenges the title.

The premium for title insurance is paid once at the time of closing, and is based upon the purchase price of the property. The insurance protects the insured for as long as they or their heirs maintain an interest in the property. Coverage  protects against losses that arose prior to the issuance date of the policy, and ends on the day the policy is issued and extends backwards in time for an indefinite period of time. This is a marked departure from most insurance policies, which protect the insured against future events that occur after the policy is issued.

Insurance is mandatory and required by the lender when purchasing a home that involves a mortgage. The purchase of title insurance is not required when purchasing a property with cash, but it is strongly recommended that the buyer do so.

Title insurance rates are set by the Pennsylvania Insurance Commission, and all policy pricing is uniform across the state. For example, a Wallingford home that is being purchased for the average 2d Quarter 2019 quarter price of $358,286, the price of a standard title insurance policy would be $2,501.30

Wallingford PA Real Estate – Wallingford, PA 19086

Home Sales Are On The Decline – But Not For The Usual Reasons

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Yes interest rates are on the rise, and yes there is concern about the effect of new tax legislation on the market but those factors are not the primary reason that existing homes sales have been dropping.

Existing home sales dropped for the second consecutive month in January, and experienced their largest annual decline in over three years, according to the National Association of Realtors (NAR). It is not because of a lack of buyers but there just are not enough houses. A serious inventory shortage is slowing U.S. housing markets.

Sales of existing homes fell by 3.2% in January to 5.38 million, with sales 4.8% down versus a year ago, the largest annual decline since August 2014.

The NAR cited the lack of inventory as the primary reason for the drop in sales.

NAR chief economist Lawrence Yun said.

It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth

The median existing-home price for all housing types in January was $240,500, up 5.8% from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.

The problem of inventory may however ease in coming months.

January saw new home construction at its highest for almost a year.  Housing starts jumped 9.7% to a seasonally adjusted annual rate of 1.326 million units, the highest level since October 2016.

Inventory in Wallingford is down 3.2% from the same time last year.

Wallingford PA Real Estate – Wallingford PA 19086

A Profile Of Buyers In 2017

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The following infographic is derived from the National Association Of Realtors (NAR) 2017 Profile Of Home Buyers And Sellers.

The profile also highlighted the following buyer and home characteristics:

  • The typical home that was recently purchased was 1,870 square feet, had three bedrooms and two bathrooms, and was built in 1991
  • Home prices increased slightly this year to a median of $235,000 among all buyers
  • Buyers typically purchased their homes for 98% of the asking price
  • The typical buyer was 45 years old, and the median household income was $88,800
  • 65% of recent buyers were married couples, 18% were single females, 7% were single males, and 8% were unmarried couples
  • Detached single-family homes continue to be the most common home type for recent buyers at 83%, followed by 7% of buyers choosing townhomes or row houses
  • Overall, buyers expect to live in their homes for a median of 15 years -18% say that they are never moving
  • Buyers typically searched for 10 weeks and looked at a median of 10 homes
  • First time buyers made up 34% of all home buyers, a decrease from last year’s 35%
  • New homes made up 15% of purchases and 85% of buyers bought previously owned homes
  • A median of 15 miles separated the homes that recent buyers purchased and the homes that they moved from

Wallingford PA Real Estate – Wallingford, PA 19086

Planning To Buy A House in 2018? – Get Your Finances In Order Now

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Proper preparation is key if you are planning to buy a house in 2018. Start with these steps in order to get your finances in shape.

Check Your Credit Score

Probably the most important step you need to undertake is to do a credit check up. If you have not checked your credit report in the past year, you definitely want to take a look now. You are entitled to receive three free credit reports a year, one from each of the main credit-reporting bureaus, on AnnualCreditReport.com. Make sure that all of the loans and accounts listed under your name actually belong to you and that the account balances are accurate. It can take several months to have an error removed from your credit report. So the earlier you look, the more time you give yourself to fix the problem before you start applying for loans.

A credit score is a numerical representation of your credit report. FICO scores range from 300 to 850, and the higher your score, the better. You will get the best interest rate on a loan if your score is 740 and above and a higher credit score should net you a lower mortgage rate.

Pay your bills on time, since payment history is the primary factor that goes into a person’s FICO score. It also helps to bring down the balances on credit cards to below 30% of the available credit.

Make sure you have enough credit. Conventional loans require at least three credit tradelines -any combination of credit cards, student loans, car loans – that have been active within the past 12-24 months. FHA loans require two tradelines. It is fine to have more, but if you have fewer, you will find it difficult to obtain a mortgage.

Practice Fiscal Restraint

Resist the urge to take credit card companies up on the latest low interest deals. Opening new credit may hurt your chances of getting a mortgage, or at least of getting the best rate on a loan. By opening additional lines you can change the change your credit score and it could jeopardize your shot at getting the best interest rates on your loan.

Tighten your spending in the months before you apply for the mortgage so that you can have as much cash available as possible for your purchase. Do not purchase big ticket items in the months leading up to the start of your home search. Do not overspend on during the Holiday shopping season and squelch your impulse purchases.

Build Up Your Cash Reserves

You will need money for a down payment, closing costs, lender application fess, and a host of other costs.  Beef up your cash reserves over the next several months. Instead of asking for gifts for the holidays suggest cash that can be put toward your new home. Getting a year end bonus? Earmark  that for your home purchase too, along with any tax refund that you might be getting.

Get any cash that you may have on hand into your bank account at least 3 months prior to applying for a mortgage. Lenders will want a paper trail for any money that is deposited into your accounts that is not derived from your normal means of income. Unexpected cash appearing in accounts during your application process can be a loan killer.

If you are expecting any gifts that will be used for your home purchase get them into your accounts ahead of time. This will eliminate the need to go through the documentation process required for gifts.

Research Mortgage Lenders

Start researching mortgage lenders. Ask friends and family for any lender references that they may be able to give. If you have a bank you have been with for years try them as well.  Your real estate can also be a source of lenders for you. Compare lenders against each other. Look at what they offer, costs, points, and how long to close. Also inquire to their availability to you during the process and whether or not they will attend your closing.

You should prepare your financial documents that you will need several months in advance of the actual purchase. This is a list of the documentation that you will  to apply for a mortgage:

– Tax returns for the past two years
– W-2 forms for the past two years
– Paycheck stubs from the past few months
– Proof of mortgage or rent payments for the past year
– An accounting of all of your debts, including credit cards, student loans, auto loans, and alimony
– An accounting of all your assets, including bank statements, auto titles, real estate, and any investment accounts

Wallingford PA Real Estate – Wallingford, PA 19086

S. Clark Kendus

Sales Associate

Cavanagh Real Estate
112 West Front Street
Media, PA 19063
Cell: (610)-322-6734
Office: (610) 565-4100

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