US Credit Downgraded, Fed Holds the Line on Interest Rates

The S&P downgraded the US credit to AA+. It is a bump from the sterling AAA rating we used to enjoy and it could mean more costly mortgages. But the Fed said it will keep interest rates extraordinarily low until 2013. What does this mean? Well, it might turn out to be a wash. That is, the Fed might successfully counteract the effects of the S&P's downgrade from a consumer borrower's perspective. Mortgages may be getting harder to get as Fannie and Freddie feel a new pinch. Then, the programs available to teachers and other special mortgage programs may be more important. The goal will not be to get a great rate. Great rates will abound until 2013. The goal will simply to get a mortgage at all. Special teacher mortgage programs can help with availability. Search the site to see what your area offers.

Is Teacher's Advantage Home Mortgage Loan Program worth it?

Home Finance of America offers a program called the Teacher's Advantage Home Mortgage Loan Program. The benefits seem pretty slim, so is ultimately worth it?


The benefits are a small fee reductions, a few $100 here a few $100 there, and the vague promise of future benefits, though no specifics are offered. So, the answer is, it is worth a few $100, but only if they are already offering the best rate. It would not make any sense to use them, get a worse rate and save a few dollars up front. The difference in rates would equal thousands of dollars over time. 


This program brings up an important theme in real estate deals or mortgage deals for teachers: go with the best rate. While this theme might seem obvious, it is natural and unfortunately common to be lured by "Free" deals or other gimmicks. If the gimmicks didn't work on someone, they wouldn't exist. Always calculate the numbers yourself and see what deal makes the most sense in the long run. 


While in general, the deals I highlight on this site are good deals, in some cases it makes sense to skip one deal to make the next one available. Or, more commonly, it makes sense to skip a deal to leave yourself in a more flexible position.

Changes at HUD's Good Neighbor Next Door (GNND)

Change is afoot at the GNND website. It seems HUD has dropped the contracted website managers who used to maintain listings for them. There used to be a complicated system in which there were multiple websites each serving a different region. Now, there is one website for the whole US. It has been re-branded the HUD Homestore. The website is great it is sortable by category, including price and there are drop down menus where one can select GNND or any other type of sale. The website is fully searchable by county, price range, and number of bedrooms.

http://hudhomestore.com/HudHome/Index.aspx

The Mortgage Morass

In the midst of the high flying housing bubble, mortgage companies sold at such a volume that many didn't or couldn't keep up with all the paperwork. What that means for the nation's housing market now is that there are many houses that should be foreclosed but can't because no one can prove that there's a mortgage. Or worse, companies are trying to foreclose on houses on which there is no mortgage.

What this means long term is that the bottom of the housing market still may be ahead. If banks can't foreclose and move their inventory then housing prices will stay low as these houses trickle onto the market over the next many years. Read more about it here in Paul Krugman's column from the New York Times.

What do low mortgage rates mean for teachers?

The Fed recently announced that borrowing rates will remain at record low levels. What does this mean for teachers? It that everyone will continue to get great rates on their mortgages, but that many of the mortgage deals for teachers will be irrelevant or discontinued.

Some real estate deals are even better with low rates. For example, deals that offer interest free loans are still worth the trouble. Interest free always beats low interest. The Good Neighbor Next Door program is now an incredible deal. Teacher who buy now, not only buy a house for 50% off, they also get a good rate on their mortgage.

Search the deals above or browse the deals within to find out more.

Good Neighbor Next Door Sees a Resurgence

I posted a while ago that I was worried that the GNND program from HUD that gives teachers, firefighters, and police officers the opportunity to buy homes at a 50% discount was drying up. At that time, while the market was flooded with foreclosures, I saw only 3 come to market in 8 months in the Twin Cities market. Recently, however, I have seen a resurgence. There have been nearly a dozen in the last two months. Perhaps HUD was waiting for the market to bottom out before putting more GNND houses out there.

As Homebuyer's Tax Credit Ends, Mortgage Help for Teachers Becomes More Important

The new homebuyer's tax credit will end soon. It doesn't look like Congress has the wherewithal to renew it a second time. While this means that people will be missing out on the $8,000 tax credit, it means that home prices might dip again on the other side of April as there is a lull in buying following the rush of last minute buyers.

Once the tax credit disappears, it will become easier and more important to take advantage of deals listed on this site that are especially geared toward teachers.

First-time Home Buyer Drying Up

The $8,000 first-time home buyer credit is going to end soon, but many of the real estate deals for teachers will continue. While we won't be able to take advantage of this credit, it might free up houses for teachers looking to utilize special programs like the Good Neighbor Next Door program. Also, expect prices to to drop after the credit goes away.

Good Neighbor Next Door dying out?

I've noticed a decline in this real estate deal in which teachers (and police officers and firefighters) get a house for 50% of the appraised value. Other blogs have mentioned similar declines in other markets. Is it possible that HUD is quietly letting this program die out? It is a horrible mistake.

Increase your buying power with loan forgiveness

When a mortgage officer calculates a first-time home buyer's buying power. The officer calculates how much buying power based on the buyers current debt load.

Teachers can increase their home buying power by reducing their debt load with student loan forgiveness. Learn about teacher Stafford and Perkins loan forgiveness.

See the difference when a teacher reduces his or her debt level by having a 17,500 Stafford loan forgiven and a 6,000 PLUS loan forgiven.