Buyer Information

Higher FHA Insurance Premiums In Effect

April 19, 2011 by admin

New FHA Insurance Premiums Now In Effect

The Federal Housing Administration – FHA – has increased the annual mortgage insurance premium .25% effective Monday April 18, 2011. The increase is based upon one quarter of one percent of the total loan value.

This increase is in response to the congressional mandate that the agency must maintain a 2% capital reserve in it’s Mutual Mortgage Insurance – MNI – fund. The action will help replenish the agency’s capital reserves which have been shrinking over the past several years due to losses on defaulted loans. It is estimated that the agency’s current capital reserves amount to 1/2 percent of outstanding loan balances.

This increase will raise the monthly cost of a $150,000 FHA insured loan by approximately $375 annually, or about $31 per month.

FHA loans have become increasingly popular in the past several years, requiring a minimum of a 3.5% down payment which has proven very attractive to home buyers. A FHA Mortgage Insurance Premium – MIP – is comprised of two elements – an upfront premium which can be rolled into the loan, and a monthly premium.

Wallingford Home Financing

For Wallingford homes sold this year through April 15, FHA financing was used in 15% of the reported sales – 3 out of 20 homes sold. Conventional financing was the method of financing for 12 home buyers, followed by 4 cash transactions, and 1 deal was privately financed.

Lead Paint Remediation Options

April 18, 2011 by admin

Lead Paint At Your Home?

If you home was built prior to 1978 chances are there will be some lead paint products in or outside of your home.

If testing reveals the presence of lead-based paint in your pre-1978 home, here are a few of the options at your disposal for removing it.

What does it cost?

According to the EPA, professional lead-based paint removal for the following three options costs about $8 to $15 per square foot or about $9,600 to $30,000 for a 1,200- to 2,000-sq. ft. house. The average removal project costs about $10,000.

Lead Paint Removal Options:

Encapsulation. Typically the least complicated and most affordable method, encapsulation involves brushing or rolling on a specially made paint-like coating that creates a watertight bond and seals in the lead-based paint. However, opening and closing your doors and windows eventually may wear off the coating.

Encapsulation products start at about $35 per gallon. Expect to pay $600 to $1,000 to cover surfaces in a 1,200- to 2,000-sq. ft. home (not including labor).

Enclosure. With this method, the old surface is covered with a new one, such as putting up new drywall or covering windowsills with aluminum or vinyl cladding. If the enclosed surface is ever removed, you’ll have to deal with the exposed lead-containing surfaces underneath.

Removal. A variety of approaches are used to remove lead-based paints, such as wire brushing or wet hand scraping with liquid paint removers. Your contractor may opt to wet sand surfaces, and must use an electric sander equipped with a high-efficiency particulate air (HEPA) filtered vacuum. Another option is stripping off paint with a low-temperature heat gun, and hand scraping.

Removal options including open flame burning or torching, machine sanding without a HEPA attachment, abrasive blasting, and power washing without a means to trap water and paint chips, are forbidden.

Replacement. This more radical strategy calls for taking out the offending surfaces or features and installing new windows, doors, woodwork, and other surfaces.

The do-nothing option

If lead-based paint in your home is in good condition–no chipping or other damage – and no children under the age of 6 live there or visit regularly, you may safely opt to leave the paint untouched. You will need to disclose the presence of the paint if you decide to sell.

However, if the paint is peeling or chipping, or if intact lead-based paint is on window sills and stair rails and children under 6 are present, begin with a cleanup and find out how lead-based paint is regulated by your regional EPA office.

DIY cleanup

Even before lead paint removal occurs, minimize your family’s exposure:

– Clean up paint chips immediately.

– Clean floors, window frames and sills, and other surfaces weekly with warm water and all-purpose cleaner. Thoroughly rinse sponges and mop heads.

– Wash children’s hands often, especially before meals, naps, and bedtime.

– Prevent children from chewing painted surfaces, such as window sills.

– Remove shoes to avoid tracking lead-contaminated soil inside.

For additional information, contact the National Lead Information Center

PHFA Offering Below Market Mortgage Rates

January 17, 2011 by admin

PHFA – Pennsylvania Housing FinanceAgency is continuing to offer first time home buyers below market mortgage rates. The current rate is 4.75% with 0 points. Income limits for a 1 or 2 member household have increased to $93,900 and for a 3 or more member household the income limit has been increased to $109,600 For Delaware County the maximum purchase price limit is capped at $378,000.

First time home buyers have the opportunity to take advantage of below market rates and plentiful inventory!

Basics of Private Mortgage Insurance – PMI

December 21, 2010 by admin

This week I would like to discuss mortgage insurance basics. Mortgage insurance is an insurance policy which compensates lenders for losses due to the default of a mortgage loan. A borrower is required to have mortgage insurance on a home purchase when they put less than 20% down. Mortgage insurance can be either public or private depending on the type of loan. There is also (LPMI) Lender paid private mortgage insurance, where the insurance premium is paid by the lender, who in turn charges the customer a slightly higher interest rate.

Mortgage insurance allows people to buy houses with down payments as low as 3%, and the monthly payment is tax deductible. The US Homeowners Protection Act of 1998 requires PMI to be cancelled when the amount owed reaches a certain level, particularly when the loan balance is 78 percent of the home’s purchase price.

For further information contact:

Steve Madonna

Weichert Financial Services

610-566-2045

Buyers – Do and Don’t

November 12, 2010 by admin

DO’S

Get a home inspection. It’s important to hire a trusted home inspector to check out the house’s potential issues and problems. Don’t skip a home inspection because you’re afraid of what you might hear—many issues sound more serious than they actually are, and can be fixed easily. And if something deal-breakingly serious is turned up, as disappointing as that is, it can save years of heartache and financial outlay. Better to walk away from a clunker.

List your place before you look for another. If you’re truly serious about looking for a home, list your place first. In the current economy, banks want to make sales as uncomplicated as possible—and contingency sales, which can be very complicated, are often rejected.

Talk before you act. Don’t ever start a home search without a firm budget not only in mind, but literally written down. Mutually agree with yourself—or with your partner, if you’re buying with someone else-long before you start seriously searching. Going out of that zone because of a place you just “gotta have,” or are emotional about, could put you in dire financial straits later. You don’t want to buy a house that isn’t affordable for you, and then be worried about paying for dinner and a movie on Saturday night.

DON’TS

Don’t be a design snob. If someone’s enormous bathroom has wallpaper border containing frolicking kittens and pastel flowers, or a wall that’s a nuclear shade of green, we understand this can send you into style shock. But stand fast and ignore bad décor. Instead, try to envision the space raw. Besides, you can always redecorate once the home is yours.

Don’t make a ridicilous offer. There’s nothing wrong with making an offer below asking price—it’s no secret that today, many homes are selling for under the asking price. But going 40% below the asking price may anger the seller. Some sellers, especially more emotional ones, won’t even bother counter offering an outrageously low offer. Feel free to make a deal—just don’t make an offer so low that you’ll be kicked off the table.

Wallingford PA Real Estate – Wallingford, PA 19086

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Wallingford Home Financing

Lead Paint Removal Options:

S. Clark Kendus