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Archive for May, 2010

Rebates Help You Save Money When Upgrading Appliances

In the market for a new appliance? Then think Energy Star. Not only will you be helping the environment by purchasing an energy-efficient appliance, but you’ll be helping your budget as well, thanks to a $300 million “cash for appliances” program funded by the U.S. government and being rolled out state by state.

The Energy Star program is a partnership between the U.S. Environmental Protection Agency and the U.S. Department of Energy. According to the Department of Energy, by using Energy Star, Americans saved enough energy in 2008 alone to avoid greenhouse gas emissions equivalent to those from 29 million cars–and also saved $19 billion on their utility bills.

The appliance rebate program differs in each state, but the basics are this: Buy an Energy Star appliance and receive a rebate of between $50 and $250. You must be replacing an existing appliance to qualify. Depending by state, the program covers boilers, air conditioners, washers, dishwashers, freezers, furnaces, heat pumps, refrigerators and water heaters.

Each state runs its own program with funding from the Department of Energy. Dates and program details vary by state. Check out http://www.EnergySavers.gov for details on your state’s program.

One piece of advice: Act quickly. The rebate program will continue only as long as each state has the funds to support it. Once the funds are exhausted, so is the rebate program.

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Categories: Finance

FHA Changes Rules for Buyers

Planning to get an FHA loan? Then you need to be aware of some upcoming changes that may make your FHA loan more costly.

In January, the Federal Housing Administration announced a set of policy changes intended to strengthen its capital reserves. While the changes help FHA better manage its risk, they also have the effect of making FHA mortgages more expensive. That may make it more difficult for some buyers to afford a home.

The announced changes are:

• Mortgage insurance premiums will be increased to 2.25%. This will go into effect in the spring.

• New borrowers will need a FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 will have to put down at least 10%. This will go into effect in the early summer.

• Allowable seller concessions will be reduced from 6% to 3%, effective in the early summer.

“The FHA’s delinquency rate has been spiraling higher, and they’re trying to take some steps to tighten qualifying standards,” says Mike Larson, a real estate analyst with Weiss Research. “For a buyer at the margin, it will make it tougher to qualify for an FHA loan. You may have to have a better credit score or come up with more money.”

Since FHA loans are particularly popular with first-time buyers due to their low down payment, buyers need to be acutely aware of these impending changes and take appropriate steps to ensure they will qualify.

Categories: Finance
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