Lawrence's Maui Real Estate BLOG
Welcome to my LahainaMaui.com blog. Here you will find updates as to what is going on in the Maui Real Estate marketplace. Sometimes that will be full of Real Estate facts and statistics via the Maui Board of Realtors and sometimes it will be my feelings or gut instincts as to what is going with Maui Real Estate. Either way I will be checking in with you often and hope that you find this to be an interesting and useful tool. Please sign up and get instant updates!!!
Mahalo,
Lawrence P. Carnicelli, Broker
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Friday Rates
Friday Rate quotes | | September 19, 2008 | | Aloha Friday,
The good news is the stock market is up 350 points as I write this BUT the bond market is down 1 24/32. What does this mean? The investors are fleeing from the comfort of the US treasury bills and have gone back into stocks. Can you believe the ride this week? The stock market last Friday closed at 11,421 and today it looks as if it will close around 11,360 or so. During that time, it closed down at 10,609 on Wednesday. It just goes to show you, if you have stocks as investments, you must have an iron stomach.
The interest rates have basically gone up about a .25% from last Friday’s rates due to the swap of money from bonds back to stocks.
Let’s talk about mortgages as there is a BIG change to the conforming rules this week. Fannie and Freddie now require that a person who lives in their current home who wants to rent the property out and move into a new home must have 30% equity in their home!!! Yes, 30% equity. The only way around that is if they have 12 months reserves in the bank on the property they are leasing out and 2 months reserves after close of escrow on the new house. So, basically 14 months worth of mortgage payments in reserves. If you do not have that amount or do not have 30% equity in the home you are going to rent, you must qualify at BOTH payments. Ouch.
What the agencies are trying to prevent from happening is a “buy and bail” type of scenario. This coined term means that the owner buys a new house, tells the bank he will be renting the old house, and then walks from the old house and lets it go into foreclosure. Not good for the economy nor the mortgage markets. Yes, they are looking out for the “industry” now versus just their own loans. You can read the actual guideline at the bottom of this email.
I hope that you have a great weekend planned. Please feel free to call me with any questions as we always look forward to earning your business and helping in any way.
Effective September 15, 2008 Real Estate Obligations
When the current principal residence is being converted to an Investment Property
If there is documented equity of at least 30% in the existing property (derived from an appraisal, AVM, or BPO) then 75% of the rental income can be used to offset the mortgage payment in qualifying. The rental income must be documented with: A copy of the fully executed lease agreement; and The receipt of a security deposit from the tenant and deposit into the borrowers account
If the 30% equity in the property cannot be documented, rental income may not be used to offset the mortgage payment. Both the current and the proposed mortgage payments must be used to qualify the borrower for the new transaction; and 6 Months of PITI for both properties is required to be in reserves
Maximum # of properties allowed
If the subject property is a second home or NOO the maximum # of properties owned is 4 per borrower
If the subject property is a primary residence there is no limit on the # of properties owned per borrower
Note: Properties that are held in an LLC on title and no mortgage reporting on credit are not included in the REO section and are not factored into the total # of financed properties. | Posted in categories: [Hawaii Real Estate] [Mortgages and Financing] [National Real Estate] | Comments | |
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