Real Estate Information Archive

"Laissez les bon temps rouler!" (Let the good times roll!). Time for two weeks of celebration...great food, music, parades, and of course King Cakes! The floats are decorated, thousands of king cakes have been baked and now it's time to party! If you live in Louisiana, you just have to make it to at least one parade! Whether you live in Prairieville, Baton Rouge, Gonzales, or anywhere else in Louisiana there is a parade nearby. Be sure to check one out!

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Prairieville buyers have plenty of reasons to buy a great house in Ascension Parish or anywhere in the Greater Baton Rouge areas. After all, homes are plentiful and well priced, the interest rates are low, and of course, the home buyer’s tax credit is in effect through April 30.  Yesterday, the FHA made an announcement that impacts anyone who buys after the tax credit has expired. The best advice to potential home buyers is to buy now, if you can can to beat the FHA clock.

FHA has always been a good financing option if you less downpayment in hand and if your credit score was a bit lower than what some banks liked.  Over the last few years, FHA has written almost 30% of the loans (up from 3% back in 2006) and has suffered from rising delinquencies.  The agency now must build its reserves and keep FHA-insured financing alive and well for homeowners.  HUD Secretary wants borrowers to “have more skin in the game” as a way to reduce future defaults.

Some of the new rules apply to lenders who must now increase their reserves and practice more responsible lending practices.  These are effective immediately. So what are the new rules that affect buyers?

Mortgage Insurance Payment (MIIP) will increase from 1.75% to 2.25% of the one and be added to the balance at closing. This will go into effect April 5, 2010.

Credits scores must now be at least 580 if you want to qualify for a 3.5% down payment.  If your credit score is lower, you must come up with 10%.

Sellers will only be able to contribute 3% to the closing costs, as compared to 6% now.

These changes are reasonable, but they will cost new buyers more.  All three changes will be effective by late spring-early summer which means those who buy before April 30 will reap some benefits of the tax credit and be able to go by the old rules (except for the MIP increase effective 4/5/10.)  Currently, interest rates are low but expected to rise by late spring, so buyers will benefit from that as well.  After that, if your credit score is low, you may have to save longer to get your downpayment in order, while all FHA borrowers will pay more MIP and closing costs.

If you are ready to buy a home, call Sandy’s Team to discuss your home buying plans.  Sandy and her team can find you the perfect place to call home in the new year in Greater Baton Rouge area, including Baton Rouge, Prairieville, Gonzales, Denham Springs, Watson, Walker, Central, Greenwell Springs, Zachary, Baker, Port Allen, Brusly, Geismar, and St Amant.  We can also you answer any questions you might have about the home buyer's tax credit - $8,000 for first time buyers or $6,500 for repeat buyers.

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This is a proud October for the 21 schools of Ascension Parish.  As a whole the district was named the fourth best school system out of 70 in the state, while 17 of the 21 schools improved their individual performance. 

The Ascension Parish district scored 105.09 in state performance scores.   This score was the district’s highest score ever and represents a 6.1% increase over last year.  Superintendent Donald Songy praised the “exceptional commitment and expertise of … teachers, administrators, and of staff” that resulted in this year’s success and laid the groundwork for “a pattern of steady growth from year to year.”  

Further, he noted the “the level of growth this year.provides us with reassurance that the strategic initiatives set in place are producing results and fostering an improved education for all our students.”  Assistant Superintendent Patrice Pujol added that Ascension had moved to the top due to high level assessments aligned with the Districts’ curriculum and teachers’ instructional practices.

Particularly noteworthy are the achievements of these schools:

12.6 point increase- Lowery Intermediate School.  For the second straight year, this school showed the larger improvement in the district and now has moved into the academically acceptable range.

12.5 points – Dutchttown High School

11.2 points - G.W. Carver Primary School

9.7 points – St. Amant Middle School

8.7 points – Galvez Primary

8.2 points – Donaldsonville High

7.6 points – St. Amant High

6.6 points – East Ascension High

6.3 points - Prairievile Middle

6.0 points – Dutchtown Middle

Seven other schools also shows great improvement, which qualified 17 schools to receive a Growth School Performance Score of 100 or more.  For more information on the progress of the Ascension School District over the years, see www.apsb.org/schoolscores.

As noted in our previous blog Top Schools Districts Attract Buyers to Greater Baton Rouge Area, 10 years ago, the State of Louisiana set out to improve school performance state-wide.  In 2009, nearly 80% of schools showed gains in their scores, while 43% met their growth targets this year vs. only 25% last year.  Twenty eight percent of schools exceeded an SPS of 100; the percentage of schools with scores under 100 decreased from previous years. Additionally, the number of Academically Unacceptable Schools (AUS) fell from 90 to 55, or 4.3 percent.

This good news on school performance is one more reason why buying a home in Ascension parish is a great investment for your family. When buying real estate in Louisiana., contact Sandy's Team  for the best properties in East Baton Rouge  and Ascension Parishes. 

There was a time when a prospective homebuyer could be pre-qualified to purchase a home and everyone involved - the buyer, the seller, and the real estate agent - was confident that the deal would sail through the bank.  The buyer and seller planned for a closing date.  Since the passage of HERA, the Housing and Economic Recovery Act of 2008, obtaining a mortgage involves full pre-approval. 

What's the difference between pre-qualification and pre-approval?  With pre-qualification, the homebuyer would state their income and assets and advised if they were likely to qualify for a loan and for how much.  Pre-approval requires the applicant to submit documents such as a photo ID, most recent W-2's, current pay stub (possibly for the last 6 months),statements from savings or investment accounts, and maybe even information on any other outstanding loans and credit card balances.  The lender will pull a credit report and submit the information through an automated pre-approval process to obtain a maximum amount you can borrow.

Once the would-be buyer finds the home of his dreams - or the one he can afford according to the bank - he has to then wait for the lender to process a final approval.  At that point the application comes before a human underwriter who can approve or even deny the loan based on the information, the appraisal on the home, or any changes that have occurred.

This tougher approach is a reaction to the sub-prime mortgage crisis and the lending practices that precipitated it.  Much of the HERA regulation was an attempt to help homeowners whose payments had increased beyond their ability to pay, perhaps due to deceptive lending practices.  For new borrowers, the act added more steps

What does all of this mean to you as a buyer?  The intended effect is that you will get a loan you can afford on a home you can afford. However, getting the loan will be harder as the requirements to qualify have escalated, while the process will take longer.  In theory, a greater awareness of your loan terms and home value is a positive thing.  However, the new standards for being approved might throw you off track in a couple ways. If you have a good but not great credit score per the new guidelines, you are likely to get a mortgage but will have to pay more for it.  You might even be denied your loan at the last minute, especially if your appraisal comes in too low or something has changed since you were pre-approved.  

If you are thinking about buying a home, now is the time to confer with your agent and set into motion your plans to be homeowner.  Sandy Ogburn-Sandlin and her team of agents can walk through the loan process and help you find your new home in Baton Rouge and other communities in East Baton Rouge, Ascension, and Livingston counties.