Tampa Mortgage Company Offers True No Fee Loans To Low Income Homebuyers

Tampa median home prices rise and buying a home in Tampa becomes more difficult for the average resident. Tampa mortgage company offers no fee loans to borrowers earning less than 75% of the MSA's median income and reduced fees to anyone else under the median income for the MSA.

Tampa, FL (PRWEB) April 30, 2006 -- With the soaring home values in the Tampa Bay area, residents are finding the dream of homeownership more difficult to realize.

According to the Office of Federal Housing Enterprise Oversight, 2003 was the last year of single digit home appreciation rates, ending a decade with an average annual increase in home values in the bay area of under 6%. Since then home increased in value 15.25% in 2004 and 22.73% in 2005. While the Tampa-St. Petersburg-Clearwater MSA enjoys a median home price under the state’s value, it is 8% higher than the national average at just over $224,000 according to Enterprise Florida.

Many factors are affecting the sharp increase in home prices in what used to be considered a relatively inexpensive place to live. The list is long, but includes an influx of retiring Baby-Boomers to our warm and recreation friendly area, a fairly complete build-out of the metro areas and close-by suburbs, and record low interest rates over the last five years. Since the real estate finance market began to change significantly last year, the resulting problems have started to appear and gain media attention. All of the sudden some residents of the area are finding it nearly impossible to qualify for mortgage loans that were once so easy to get.

While the general consensus is that this rapid appreciation can’t last forever, it seems that Florida metro areas are just now catching up with the rest of the region and the country as a whole. Yes, they are expensive, but our home prices are still below the national average and our appreciation rates have trailed the national appreciation rate by around 1.5% for the last five years according to the National Association of Home Builder’s and Wells Fargo’s Housing Opportunity Index. Of course, that doesn’t change the fact that regular people are having trouble getting into a home they can afford in Tampa Bay.

Conventional wisdom (and the GSEs Fannie Mae and Freddie Mac) recommend a housing to income ratio of no more that 28%, meaning that a family of four in Tampa Bay earning the area’s median income should only be spending $1,219 per month on their home, including taxes and insurance. That will get you a $168,000 home with 5% down, plus closing costs. If you’ve been shopping for a home lately, then you know that a decent home with that price tag is nearly impossible to find, hence our dilemma.

Our local government officials have recognized that there is a problem that is not going to go away anytime soon, and they are starting to take some action to address the situation. However, it will take some time for any meaningful impact they may have to materialize, if any. The federal government is playing its role in supporting affordable housing initiatives of the GSEs and HUD, but their focus is on the similar problems nationwide and Tampa will play only a supporting role in how things play out in the next few years. What the residents of the bay area need is for the private sector to chip in and do what they can to ease the burden on local homebuyers.

First, there are several ways things you can do to help purchase a more expensive home or to reduce the monthly expense of any home. Claim as many exemptions as possible for your real estate taxes. Homestead, widow/widower, disability, and exemptions for persons over 65 may be available. Additionally, some county and even municipal governments offer exemptions. Check with your state, county, and local government for more information. You can also avoid paying PMI (Private Mortgage Insurance) which is required on many loans when you put less that 20% down by getting a combo loan. This first and second mortgage program close together and can finance up to 100% of the purchase price without incurring costly PMI.

You may even gain additional mortgage interest tax deductions, further reducing your monthly housing expenditures. Work with a knowledgeable and experienced mortgage broker. Going through a broker may reduce your “total cost of money” by allowing you to buy the loan rate down. There are also generally many more loan programs available from brokers than are from a bank. Most importantly, if you have any past credit issues, you can do better finding a loan through a broker. Finally, work with a seasoned real estate agent. As our mortgage money markets worsen, housing inventory will be more readily available, and at better prices. We are already seeing a slowdown in existing home sales and your real estate agent may have better luck finding an affordable home or getting sellers to contribute to your loan costs.

You may also find assistance, sometimes in the form of a grant or zero interest loan, sometime with affordable repayment options, from many organizations across the state. Check the Florida Housing Coalition, local agencies, and community organizations for assistance. In addition, you can work with a home finance professional willing to donate time or reduce fees for individuals and/or families with lower income levels. There are some companies willing to reduce normal fees to help low-income families, but they are hard to find. You real estate agent may also have the power to lower their fees in exchange for a seller concession in your favor. A seller concession of 2% used to buy down your interest rate would add $17,000 to the purchase price mentioned above and still keep your payment the same. We live in a wonderful place and in a great country and the old adage should still ring true, where there’s a will, there’s a way. Don’t be afraid to go look for a home, there are smart ways to get it done, just make sure you are working with professionals who are willing to do their part as well.

Titan Lending, Inc. feels the need to contribute to the solution to this problem. There is plenty of opportunity for our company to earn revenue on normal deals, says Chris Musso, the vice-president. We feel that there can be a real benefit to borrowers with our reduced cost or no fee loans in allowing them to buy more home or save a few bucks on monthly payments. The big bonus is that there will be less cash for borrowers to come up with for closing costs. We are really charging nothing [for borrowers under the 75% bracket] and we’ll even pass on any revenue from the wholesale lender involved to the buyer to further reduce the upfront costs. This could save homebuyers thousands of dollars. Titan can be reached at (813) 926-6136 or at www.flamoney.com.

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