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More and more retirees looking to obtain a home loan may find that solid retirement accounts and a sterling credit rating are not enough.

Lenders increasingly are looking for a consistent monthly income in line with their usual debt-to-income standards. When they look at dividends, most lenders want to see a regular annual amount on the tax return paid out over at least the past couple of years.
In terms of part-time employment, borrowers need to prove they are actually working at the moment of application. In some cases, a two-year work history is required.

Social Security income is always counted, of course.
Borrowers, though, need to be informed that current Fannie Mae guidelines permit lenders to increase that income by 25 percent if the beneficiary is not paying taxes on it.

A handful of portfolio lenders are still issuing loans without verifying income.  However, their interest rates are higher and their down payment requirements — which are in the range of 30 to 40 percent.

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http://www.nytimes.com/2013/05/05/realestate/qualifying-for-a-loan-after-retirement.html?_r=3&adxnnl=1&emc=eta1&adxnnlx=1367926932-w94kghfEFawAW2B9GoN9JA&

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SOURCE: The New York Times

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Mortgage giants Fannie Mae and Freddie Mac will begin next year to  purchase only loans that meet new “qualified mortgage” requirements, the Federal Housing Finance Agency announced May 6, 2013.

In January 2013, the Consumer Financial Protection Bureau finalized new rules that would require lenders to verify borrowers’ ability to repay their loans. It capped loan terms and fees and the bureau said that qualified mortgages are borrowers whose debt does not exceed 43 percent of their income.

The requirements are to go into effect January 2014.

“Adoption of these new limitations by Fannie Mae and Freddie Mac is in keeping with [the] FHFA’s goal of gradually contracting their market footprint and protecting borrowers and taxpayers,” the FHFA, which regulates Fannie and Freddie, said in a statement.

The two mortgage giants, which do not issue loans, provide financing to banks and other lenders by purchasing mortgages that are often repackaged as securities that are sold to investors. Fannie and Freddie back about half of home loans today.

Following the 2007-2009 financial crisis, the Dodd-Frank law created the Consumer Financial Protection Bureau, which issued rules that would force lenders to make sure borrowers could pay back loans to avoid the steep losses that banks experienced before. “The law also called for a category of safer, lower-priced loans that lenders could make in exchange for some protection from lawsuits arising from ability-to-repay disputes,” Reuters reports.

The CFPB is creating a temporary qualified mortgage status, which the FHFA said Fannie Mae and Freddie Mac would be permitted to purchase loans that fit under that status to ease the transition.
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http://www.reuters.com/article/2013/05/06/us-usa-housing-mortgages-idUSBRE9450K920130506

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SOURCE: REALTOR Magazine, Reuters

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Here is an excellent article about wood floors from REALTOR Magazine. I hope you’ll find it helpful:

“Just as with ties and hem lengths, wood flooring styles change. Colors get darker or lighter; planks get narrower or wider; woods with more or less grain show swings in popularity; softer or harder species gain or lose fans; and the wood itself may be older, newer, or even pre-engineered with a top layer or veneer-glued to a substrate to decrease expansion and contraction from moisture.

Here are key categories for consideration:

Solid Plank

This is what some refer to as “real” wood because the wood usually ranges from three-eighths to three-quarters of an inch in total thickness to permit refinishing and sanding. Thicker floors have a thicker wear layer to allow for more frequent refinishing and sanding, so they can withstand decades of use, says architect Julie Hacker of Stuart Cohen and Julie Hacker Architects. It also can be stained, come from different species of tree, and be sold in numerous widths and lengths:

  • Width and length: Designer Steven Gurowitz, owner of Interiors by Steven G., is among those who prefers solid flooring for many installations because of its rich, warm look. Like other design professionals, he’s seeing greater interest in boards wider than the once-standard 2 ¾ to 3 ¾ inches — typically 5 to 6 inches now but even beyond 10 inches. And he’s also seeing corresponding interest in longer lengths, depending on the species. Width and length should be in proportion. “The wider a board gets, the longer the planks need to be, too, and in proportion,” says Chris Sy, vice president with Carlisle Wide Plank Floors. These oversized dimensions reflect the same trend toward bigger stone and ceramic slabs. The downside is greater cost.
  • Palette: Gurowitz and others are also hearing more requests for darker hues among clients in the northeastern United States, while those in the South and West still gravitate toward lighter colors. But Sprigg Lynn, on the board of the National Wood Flooring Association and with Universal Floors, says the hottest trend is toward a gray or driftwood. Handscraped, antique boards that look aged and have texture, sometimes beveled edges, are also become more popular, even in modern interiors, though they may cost much more.
  • Species and price: Depending on the preference of the stain color, Gurowitz favors mostly mahogany, hickory, walnut, oak, and pine boards. Oak may be the industry’s bread and butter because of the ease of staining it and a relatively low price point. A basic 2 ¼-inch red oak might, for instance, run $6.50 a square foot while a 2 ¼-inch red oak that’s rift and quartered might sell for a slightly higher $8.50 a square foot.
  • Maintenance: How much care home owners want to invest in their floors should also factor in their decision. Pine is quite soft and will show more wear than a harder wood like mahogany or walnut, but it’s less expensive. In certain regions such as the South, pine comes in a harder version known as heart pine that’s popular, says Georgia-based designer Mary Lafevers of Inscape Design Studio. Home owners should understand the different choices because they affect how often they need to refinish the wood, which could be every four to five years, says Susan Brunstrum of Sweet Peas Design-Inspired Interior. Also, Sy says that solid planks can be installed over radiant heating, but they demand expert installation.

Engineered Wood

Also referred to as prefabricated wood, this genre has become popular because the top layer or veneer is glued to wood beneath to reduce expansion and contraction that happens with solid boards due to climatic effects, says Sy, whose firm sells both types. He recommends engineered, depending on the amount of humidity. If home owners go with a prefabricated floor, he advises a veneer of at least one-quarter inch. “If it’s too thin, you won’t have enough surface to sand,” he says. And he suggests a thick enough substrate for a stable underlayment that won’t move as moisture levels in a home shift.

His company’s offerings include an 11-ply marine-grade birch. The myth that engineered boards only come prestained is untrue. “They can be bought unfinished,” he says. Engineered boards are also a good choice for home owners planning to age in place, since there are fewer gaps between boards for a stable surface, says Aaron D. Murphy, an architect with ADM Architecture Inc. and a certified Aging in Place specialist with the National Association of Home Builders.

Reclaimed Wood

Typically defined as recycled wood — perhaps from an old barn or factory — reclaimed wood has gained fans because of its aged, imperfect patina and sustainability; you’re reusing something rather than cutting down more trees. Though less plentiful and more expensive because of the time required to locate and renew samples, it offers a solid surface underfoot since it’s from old-growth trees, says Lynn. Some companies have come to specialize in rescuing logs that have been underwater for decades, even a century. West Branch Heritage Timber,for instance, removes “forgotten” native pine and spruce from swamps, cuts them to desired widths and lengths, and lays them atop ½-inch birch to combine the best of engineered and reclaimed. “The advantage is that it can be resanded after wear since it’s thicker than most prefabricated floors, can be laid atop radiant mats, and doesn’t include toxins,” Managing Partner Tom Shafer says. A downside is a higher price of about $12 to $17 a square foot.

Porcelain “Wood”

A new competitor that closely resembles wood, Gurowitz saysporcelain wood offers advantages: indestructibility, varied colors, “graining” that mimics old wood, wide and long lengths, quickness in installation, and no maintenance. “You can spill red wine on it and nothing happens; if there’s a leak in an apartment above, it won’t be destroyed,” he says. Average prices run an affordable $3.50 to $8 a square foot. The biggest downside? It doesn’t feel like wood since it’s colder to the touch, Lynn says.

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Bottom line: When home owners are making a choice or comparing floors, they should ask these questions:

1. Do you want engineered or solid-based floors, depending on your home’s conditions?

2. Do you want a floor with more natural character, or less?

3. What board width do you want?

4. How critical is length to you in reducing the overall number of seams?

5. What color range do you want — light, medium, or dark?

6. Do you want more aggressive graining like oak or a mellower grain like walnut?

7. Do you want flooring prefinished or unfinished?

8. How thick is the wear layer in the floor you’re considering, which will affect your ability to refinish it over time?

9. What type of finish are you going to use? Can it be refinished and, if so, how?

10. For wider planks that provide greater stability: Where is the wood coming from, how is it dried, what is its moisture content, and what type of substrate is used in the engineered platform?

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SOURCE: REALTOR Magazine

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The Federal Housing Administration plans to raise its mortgage fees in 2013 in order to help avoid a taxpayer bailout, the Obama administration announced on Friday, November 16, 2012. (more…)

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Mortgage rates held steady for the most part the week ending October 11, 2012, remaining near all-time record lows set the previous week, Freddie Mac reported in its weekly market survey.
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American people favor home ownership over renting.

The U.S. home ownership rate continues to remain around 65.5 percent, the U.S. Census Bureau reported in October 2012. The home ownership rate is nearly the same as it was in the second quarter of 2011 at 65.9 percent.

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30-year Fixed-Rate loans are at historically low interest rates. However, some home buyers and home owners choose adjustable-rate mortgages, or ARMs.


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Lets look at the risks and rewards of using ARM mortgage: 

REWARDS:
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