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Different Types of Mortgage Loans (not an exhaustive list)

In the market to buy a home? It can sometimes be overwhelming and confusing to determine which loan program is right for you. This will vary based on the individual, the property intended to purchase, and even the overall purchase price. The most common loan programs will be available through most mortgage providers, but the terms or aspects may be different depending on that bank’s programs.

One of the most common loan programs is an FHA loan. The Federal Housing Administration, or FHA, is an agency of the Department of Housing and Urban Development. FHA loans are insured by the federal government which provides additional security. This is a very attractive program for many first-time homebuyers. FHA loans offer low down payments, can work for lower credit scores, offer more flexible debt-to-income ratios, and even offer the option for rehab loans that take into account future work for your new home (for this to happen, lenders must offer the FHA 203K program).

Another common type of loans are Veteran Affairs, or VA loans. VA loans are offered to active duty service members, veterans, and surviving spouses who meet a minimum of 90 continuous days of active duty. The majority of VA loans do not require a down payment, do not require mortgage insurance, and have capped closing costs. The home you purchase with a VA home must be your primary residence, and there are other factors that come into play, so it may not always be the best option based on the property. VA loans are also government insured.

Conventional loans are not government backed; they are offered by private institutions. These loans will vary by mortgage company in terms of rates and programs. Conventional loans can be used for any type of property and offer the option to cancel your mortgage insurance after you’ve reached 20% equity. There are strict requirements for conventional loans, and private mortgage insurance (PMI) is required if 20% equity is not met.

If conventional loans are out of the question, another government insured loan available in our area is the USDA loan. The U.S. Department of Agriculture (USDA) created this nationwide program to offer financing options for moderate to low-income individuals in mostly rural areas. USDA loans do not require a down payment, but the property and the purchaser must both be eligible. USDA loans can also be used for refinancing if you currently have a USDA loan. There are strict guidelines for the property location and the home must be used as a primary residence.

While these are the most common programs, there are more out there! If you’re interested in purchasing a home and trying to decide which program is best for you, reach out to your local lending institutions! They can provide valuable guidance based on your income, current financial situation, and property in mind. 

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Federal Home Loan Banks Grants Increased for 2023

The Federal Home Loan Banks (FHLB) program has increased their offered grants for 2023, offering down payment assistance for qualified buyers. Nationwide, housing prices and mortgage rates have risen, straining many homebuyers’ already tight budget. The FHLB products offered for first time homebuyers and other qualified home buyers have been adjusted to meet the current market trends. The Federal Home Loan Banks offer two affordable housing programs through affiliated lending institutions: The Competitive Application Program and The Homeownership Set-Aside Program. The Homeownership Set-Aside Program offers lenders funds that can be used as down payments, closing costs, or counseling assistance to homebuyers, or rehab assistance to current homeowners. The funds designated for these programs are only applicable to purchasers who meet low to moderate-income ranges for their area income.

For 2023, the FHLB Affordable Housing Homeownership Set-aside Program products were enhanced to add funding where it’s needed most. The first-time homebuyer product subsidy increased from $7,500 to $12,500 and the Community Partners product subsidy increased from $10,000 to $15,000. The subsidy for the community restore and rebuild program stayed at $10,000. First-time homebuyers must meet certain criteria, but can include victims of catastrophic loss or natural disaster. Community partners are defined as currently employed or retired law enforcement officers, educators, health care workers, fire fighters, first-responders, veteran, active-duty military, and essential workers.

These funds can be used for reducing principal as well as assisting down payments, closing costs, or rehabilitation costs. In addition to income parameters, borrowers may have to complete a homebuyer counseling program and sign agreements that they will own and occupy the home for at least five years. The homebuyer must contribute at least $1,000 toward the transaction, and can receive no more than $250 back at closing. To view all of the requirements and find a qualified lender for these programs, visit www.fhfa.gov.

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Take Advantage of Maryland First-Time Home Buyers Programs

Take Advantage of Maryland First-Time Home Buyers Programs

Did you know that Maryland offers many programs and incentives when purchasing a home? For first-time homebuyers looking for a primary residence, the programs offer a wide array of support, from down-payment assistance to modified interest rates. One of the best local programs a first-time home buyer can take is through the Maryland Mortgage Program (MMP).

Funded by The Maryland Department of Housing and Community Development, the MMP program offers unique qualifying criteria that allow first-time buyers to purchase with no down payment. The general conditions to qualify include: purchasing a home in Maryland, choosing a verified DHCD lender, taking a home buyer education course, have a household income at or below the local income limit, not own any other real estate, and live in the home you’re purchasing (primary residence). The first-time home buyer course is taught locally by Garrett County Board of REALTORS members through Community Action. Other grants that can be combined with MMP include low fixed-rate mortgages and flex loans and grants, which offer a percentage or your mortgage or a set amount as an additional grant.

This program is specific to Maryland residents and provides an alternative to traditional mortgage routes.

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Call For Action: Let Your Legislator Know You

Currently, the House is about to vote on legislation to register property managers who do NOT have a real estate license.  Maryland REALTORS® supports HB 239 which requires certain property managers to be either registered with the Maryland Real Estate Commission OR licensed by the Maryland Real Estate Commission.  This bill passed the House unanimously last year, 134-0 (HB 929/’20).

Please urge your legislator to SUPPORT HB 239 as amended below. 
Support HB 239 as amended – Property Managers Registration of Non-Licensees
 
BACKGROUND

HB 239 seeks to close an enforcement hole within the Real Estate Commission’s powers.  Many real estate licensees currently conduct property management activities but are NOT required to have a license under Maryland law or even be registered with the Commission to conduct such activities.  As a result, if a real estate practitioner’s license is terminated/suspended by the MDREC because of a property management law violation, that licensee could simply re-open for property management business activities the very next day and only be prohibited from conducting sales/licensing activities.

HB 239 levels the playing field to provide consumers better protections and financial recourse with registration.  Currently, harmed consumers who use a licensee for property management activities have access to the real estate Guaranty Fund whereas consumers who use a property manager without a real estate license do not.  HB 239 gives the Real Estate Commission the authority to register certain property managers — if those individuals are NOT already licensed — requiring new registrants to hold a surety bond for better consumer protections.

The amendments below were added to improve the bill to address any opponents concerns for HB 239 or last year’s bill, which, again, was passed by the House unanimously.

Specifically, the amendments clarify:

    • That an entity may register rather than an individual property manager for larger property manager companies;
    • That subsidiary businesses also do NOT need to register for larger companies;
    • That quasi-governmental business improvement districts are exempt; and
    • Any owner who personally manages their own property is exempt.

Maryland REALTORS® strongly urges a favorable report of HB 239 as amended, which ensures better consumer protections to the public.  As always, many thanks for your consideration.

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Renovation Startup Curbio Wins NAR Pitch Battle

August 22, 2019 – Curbio, a technology startup company aimed at revolutionizing presale home renovations, has been named the “pitch battle” winner at the National Association of REALTORS®’ second annual Innovation, Opportunity & Investment (iOi) Summit.

Second Century Ventures, NAR’s strategic investment arm, hosted the pitch battle, which featured a select group of startups bringing innovative solutions to commercial and residential real estate. Contestants presented four-minute pitches before venture capitalists, technology executives, innovators, brokers, and real estate professionals attending the summit. The pitches were also broadcast via livestream to thousands of virtual attendees.

Curbio’s renovation solution empowers real estate agents to drive the return on investment, with the goal of helping homeowners sell quickly and for the best price possible. In fact, the service is available only through a real estate agent, and Curbio isn’t paid for renovations until the property is sold, explained the company’s vice president of marketing, Rikki Rogers, one of eight women in the battle.

Read the full article.

 
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Take Action Today! Contact the County Commissioners letting them know you do NOT want them to increase the accommodations tax.

Currently, the Garrett County Commissioners are exploring methods to balance the FY2020 budget that has an approximate $10.5 million shortfall as is. The County requested and just received authority from the MD General Assembly this past session to raise the Accommodations Tax by up to another 2%, from 6% to 8%. Let the Commissioners know that the budget cannot be balanced on the back of Garrett County’s main economic driver, tourism.

Consumers: TAKE ACTION

Any member of the public can use this link to TAKE ACTION.

REALTORS: TAKE ACTION

This link is only valid for GCBR REALTORS.

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FIRST QUARTER 2019 WAS A GOOD TIME FOR SELLERS

The first quarter of 2019 started out slow with only 17 homes sold in January but then took a sharp upswing with a 76.5% increase in February and closed out with 35 homes sold in March for just a 4.7% drop from the same time last year. The average sold price and average median price of a home in Garrett County increased by 30.0% and 11.5% respectively as compared to same period in 2018.

“Pending sales have increased 31.4% from January to March while during that same time months of inventory have dropped, from a high of 19.7 in January to 8.9 in March,” noted GCBR President Larry Smith. “We are seeing a more balanced market as we move into the spring selling season.”

Below is a summary of the Garrett County Real Estate Market

  • Homes Sold in 1st quarter 2019 – 82, down 4.7% from previous year
  • Average Sold Price in 1st quarter 2019 – $359,075, up 30.0% from previous year
  • Average Median Price in 1st quarter 2019 – $261,884, up 11.5% from previous year
  • Average Sales Pending Units in 1st quarter 2019 – 40, up 0.8% from previous year
  • Average Active Inventory in 1st quarter 2019 – 323, down 1.4% from previous year
  • Average Months of Inventory in 1st quarter 2019 – 13.1, up 9.2% from previous year

Monthly housing statistics for Garrett County are compiled by data as reported by Bright MLS. For the purposes of this report, “units” are defined as the closed sales and “pending units” are properties under contract. Months of inventory are based on the current active inventory and monthly sales for the corresponding month.

The Garrett County Association of REALTORS® is an affiliate of the Maryland REALTORS® and National Association of REALTORS®. We are proud to serve our members and our community and work to ensure professionalism in the industry. Our volunteers and staff work to offer services to real estate professionals and to provide avenues for our members to become more successful.  We proudly work to promote and protect home ownership and private property rights.

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Can You Spot Phishing Emails? New Quiz Builds Skills

Email scams are common, such as fake messages that tell you to reset your password, spam, and phishing attempts that try to winnow their way into your real estate transactions. How good are you at telling a phishing email from a real one?

A masked man working at a laptop computer

rawpixel – Unsplash

Google subsidiary Jigsaw is trying to educate internet users on how to spot fraudulent emails with a quiz. The quiz gives you eight email examples and allows you to choose between “legitimate” and “phishing.”

Some of the red flags could include suspicious email addresses or spoofed URLs. After you take the quiz, you’ll receive some tips on how to better spot phishing attempts that may come to your inbox.

Take the quiz >

Source: 
“Quiz: Google Tests Your Ability to Spot Phishing Attempts,” Techspot.com (Jan. 22, 2019)

Other Resources

More Real Estate Phishing Scams Reported: Here’s What You Can Do

Real Estate’s Wire Fraud Vulnerability

Study: Half of Phishing Websites Use Padlock Security Icon

9 Ways to Keep Data Secure

Article obtained from
https://magazine.realtor/daily-news/2019/01/23/can-you-spot-phishing-emails-new-quiz-builds-skills

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Agent vs REALTOR®

When Is a Real Estate Agent a REALTOR®?

A real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate®, the world’s largest professional association. The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.

Founded in 1908, NAR has grown from its original nucleus of 120 members to more than 1 million today. NAR is composed of REALTORS® who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors, and others who are engaged in all aspects of the real estate industry.

Members belong to one or more of 1,700 local associations/boards and 54 state and territory associations of REALTORS® and can join one of our many institutes, societies, and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

Working for America’s property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research, and exchange of information among its members. From their voluntary adherence to a Code of Ethics to their incomparable knowledge of real estate processes, REALTORS® are the experts of residential and commercial property transactions.

This information is from the National Association of REALTORS® website and has been edited for use in our site. The original may be found here: Who Is a REALTOR?