Have you ever thought about flipping houses? Most people who flip houses buy those homes with cash, and renovate them with cash. The issue has been lately that a lot of the buyers do not have enough cash. That means they must finance the home they want to flip, which still requires 20% down when buying as an investment property. That also means there is a 90% chance that the buyer of your property will need to do an FHA loan when purchasing your newly renovated house.
For a period of time FHA made that extremely difficult with strict rules against property flipping when using their loan product. FHA used to not allow homes that were purchased in the previous 90 days to be sold within that same 90 day period for a higher price. Also, if you bought the home within the last 12 months, and were selling it for 25% more than you bought it for,you would have to show receipts to prove that you made improvements to the house. Thus, an anti flipping rule. FHA has announced this week that they are waiving the 90 day rule for the next 12 months. This is set to expire in January 2012. what does this mean?? You can now buy a house with an FHA loan, pay to fix it up, and now sell it to someone using an FHA loan to buy.
I am not sure how many more people this will bring into the market place, but it can definitely give real estate agents another avenue to market their properties. I can see the tagline already..."Buy this house with 20% down and make 50% on a flip!" HMMMMM...my wheels are spinning.
So what else is happening in our mortgage market? Interest rates are continuing a slow climb to who knows where. It is time for buyers who are thinking about buying to stop worrying about rates when it is your time to buy. The rates will be what they are, and from a historical perspective, still very good. Buying a house should not be put on hold because you can only get a 5.25% instead of a 4.75%. Stay on top of rate trends buy signing up for this blog to be emailed to you. You can do this at www.CrystalClearMortgage.com.
Current purchase rates for well qualified buyers are 4.75% to 4.875% with no points or origination fees. If you are getting quoted a higher rate ask your loan officer why your situation is not considered ideal. It could be your credit, loan amount, loan to sales price value, etc. There are many factors that effect a rate that can be offered. Take the time to know why your rate is what it is.
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My Dad purchased (cash) a home for me today while I am still in the process of selling my original home that is currently on the market. When my house sells, I plan on giving the net proceeds directly to my Dad, but I will need to finance the rest of the money to pay him the remainder. My Dad and I are both on the title. I have been told by three mortgage lenders that we must wait three months before I can get a loan to buy my Dad out because of flipping rules. I want to do a 15-year fixed.
ReplyDeleteI'm sorry, correction, I have been told we must wait 6 months.
ReplyDelete""real chance that a buyer take your at that time,but most of them have not money at that time.so he can't take your house yet so first he goes to the bank and take the loan from the bank and then he take your home.
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