The Federal Housing Administration (FHA) is a government agency whose main objective is to help people who do not qualify for conventional lending programs obtain home loans. The FHA is not in itself a lender; rather it insures a loan, thus making banks/lenders more willing to grant a home loan on Virginia Beach VA real estate to those in underserved groups.

Because of the economic downfall and the increased number of foreclosures, the FHA, in an effort to strengthen its capital reserves, as made significant changes to its policies, effective this summer. Basically, the changes involve insurance premiums, FICO scores (credit rating), seller concessions, and increased enforcement of lenders.

Mortgage insurance premiums: The previous upfront premium payment of 1.75% of the loan amount has been raised to 2.25% . The option of financing this amount into the loan is still available. In addition, the FHA has requested the authority to increase the annual MIP from its current .55% in an effort to reduce the upfront MIP costs.

FICO scores: The new minimum score for those with a 3.5% down payment has increased to 580 (up from 500). For those with a score of less than 580, a 10% down payment is required.

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Given the current high demand for rental residences and the poor return on stock investments, it is no wonder that so many homeowners are considering buying Virginia Beach real estate as a rental investment. While potentially a lucrative move, being a landlord is an active job, albeit a part-time one, and you, as a would-be investor, need to be aware of the responsibilities of such.

In essence, by becoming a landlord you are operating a business, making major decisions which can affect your family, setting and adhering to a budget, and spending time overseeing and maintaining the property. For a period of years, at least two and more likely five, you will be employed as your own property manager. You must then find a steady flow of good tenants, draw up leases, collect rents, make repairs, keep accurate records re: income and expenses, file taxes, obtain permits, find suitable insurance, and establish a workable relationship with your tenants.

You must also know–and follow–federal, state, and municipal health and safety codes and landlord/tenant rights and responsibilities. Simply put, your responsibilities as a landlord include the following:

• Make and keep property habitable

• Make and pay for repairs arising from ordinary wear-and-tear.

• Refrain from turning off utilities

• Provide written notice in the case of transfer of ownership

• Comply with statutes involving discrimination

Basic tips for becoming a successful landlord include:

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The coming of spring often brings about a need to refresh, renew, and clean out unwanted items from your Virginia Beach real estate. During the winter months you have most likely accumulated a wealth of merchandise that no longer fits your decorating taste or your digital needs—-or your body, for that matter. While the temptation to simply toss these products into the trash may be a strong one, do take a few minutes to consider both the hazards of doing so and the rewards of recycling instead.

As you are purging your home, you will most likely also be giving it a thorough, old-fashioned cleaning, and that’s good–except for the “old-fashioned” part. Because of the recent emphasis on greening the planet, eco-friendly cleaning products are now widely available and should be used whenever possible. How do you know if a product is environmentally safe? Read on…

• Read labels: The fewer the chemicals listed in the ingredients, the better.

• Look for the DfE logo: Products bearing this seal have been deemed safe by the EPA.

• Seventh Generation products: Haven’t sought the DfE seal, but products are eco-friendly. In addition, the company is pushing Congress for tougher regulations on toxic chemicals.

• Use common household cleaners: These are effective cleansers–and much less expensive, too. Baking soda, lemon juice, and white vinegar are generally good all-purpose cleaners. Note: vinegar should NOT be used on marble!

Another aspect of the spring clean-up is the identifying and clearing out of unwanted items and disposing of them in a “green” way.

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Nearly everyone has heard of someone who has bought a fixer-upper or near-foreclosure house, renovated it, and then sold it at a hefty profit. Sound fairly simple and lucrative? Perhaps, but a word of caution: Don’t quit your day job just yet!

Those who earn an income, either part-time or full-time, by flipping Virginia Beach VA real estate, caution would-be flippers to understand the basics before beginning such a venture, they definitely need to:

• Assess their financial situation

• Have time available to renovate the property

• Possess good negotiation skills

• Have knowledge of what renovation entails and of building codes

• Have a practiced eye for evaluating potential value

• Do a great deal of research to learn about the industry

• Have a good sense of timing

Find trustworthy advisors, such as an agent, a loan officer, and a reliable subcontractor.

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Why would you refinance your Virginia Beach home mortgage at this time?  For many reasons.  Refinancing now can allow you to:

1. Lock in a lower interest rate

2. Reduce your monthly mortgage payment

3. Extend (or reduce) your repayment time

4. Help you pay off high interest debts

5. Free up money for investments, home repairs, or making your home more energy efficient

Since interest rates hover around all-time lows, anyone carrying a higher rate interest loan or an ARM will benefit from refinancing; just a .5 or 1 point drop in rate constitutes worthwhile savings. Even if the ARM on your Virginia Beach home is lower than the current rate, when rates rise again, your costs will certainly go up, perhaps dramatically. Refinancing to a fixed-rate mortgage now allows you to lock in a low rate for the duration of your loan. Do be aware, though, that lenders generally charge a risk premium for fixed mortgages.

If you, as a Virginia Beach home owner, want to shorten the length of time required to pay off your loan, you may want to consider refinancing to a 15-year fixed-rate mortgage with even lower interest rates. This move will increase your monthly payment, but you may save hundreds of thousands of dollars in the long run.

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At a time when house foreclosures are on the rise, beleaguered and vulnerable property owners who are at risk of losing their Virginia Beach homes are increasingly the targets of unscrupulous con-artists offering fast and false solutions.

These individuals/companies contact their unsuspecting prey in person or by mail, phone, or email. They advertise their services in all forms of media and far too often appear legitimate. They promise foreclosure prevention/rescue programs and sometimes seem to have government connections. At-risk owners of a Virginia Beach home must beware of the following scams as set forth by the Office of the Comptroller of the Currency:

• Foreclosure “rescue” and refinance fraud. The scam artist offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure. You may be told to make mortgage payments to the scammer directly — along with significant, up-front fees — and be told that the scammer will forward the payments to your lender. In reality, the scammer may pocket your money and leave you in worse shape on your loan. The scam artist also may tell you to stop making payments or stop communicating with your lender. Don’t follow that advice.

• Bankruptcy scams. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case. Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure. In addition, bankruptcy will negatively impact your credit score and will remain on your credit report for 10 years.
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Choosing between a 15-year mortgage and a 30-year mortgage can be a difficult decision, one which will have a major financial impact on your life. On the one hand, the 30-year mortgage will have lower monthly payments, but you will pay a higher rate of interest. On the other hand, a 15-year mortgage requires higher monthly payments (at a lower interest rate), but your Virginia Beach real estate will be paid off in half the time.

In order to decide which of the two is better for you, you need to carefully analyze your life situation in the following areas:

1. Current Financial Situation

Can you presently afford to pay the higher monthly payment of a 15-year loan on your                 Virginia Beach real estate? In addition to income, factor in other expenses such as credit card debt, car payments, food, clothing, and entertainment. As a guiding principle, your total housing expense should not exceed 40% of your gross monthly income minus taxes. Beware of becoming house poor and having few liquid assets. It is essential that you have a hefty nest egg to rely on I n case you lose your job or are unable to work.

2. Spending Habits

If you choose a 30-year mortgage, what will you do with the money you save each month?

Will you save/invest it? Put it in a retirement or college fund? Can you live on a budget, avoid credit card debt, and save regularly? If so, then the 30-year loan may work well for you. If, however, you can afford the higher payment and will most likely “fritter away” any extra money, you just may be better off borrowing for 15 years.

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