1ST-TIME BUYER TAX CREDIT

Borrowers still have time to get in on the tax credit of up to $8,000 if they close on a home by 12/1/09.

Definition of 1st-time buyer: Someone who has not owned a home in the past 3 years.

You can get the money AFTER you buy the home by either amending your 2008 tax return to get it right after you close, or you can get it when you file your 2009 tax return.

Loan programs now want a borrower to invest their own funds for the down payment. A majority of the loans that are being foreclosed on are loans where a borrower had zero down, so lending guidelines have changed to require a borrower invest something into a home. There are 2 loans in our area with zero down. Federal VA where you need to be a qualified Veteran to get the loan, and the Guaranteed Rural Housing (GRH) or Rural Development loan, which has income limits that must be met. All other programs require a down payment from the borrowers funds. FHA or HUD required 3.5% down, but that down payment can be a gift from a parent, grandparent, brother or sister.

So, if you or someone you know is a 1st-time buyer and would like to take advantage of this potential tax credit (there are maximum income requirements for this credit) time is of the essence! It's taking 45-60 days to close a home loan these days, so you've only got 4 months to get into that new home!

Call me for details, 608-498-1959

delays in closing dates if any changes are made

There's a new law in effect effective NOW that all banks, credit unions and lenders must follow. If anything changes on a loan (rate, closing costs, fees) that affects the APR, we are required to get all new disclosures signed by a borrower. Now this may sound simple, but if something were to change right before closing that affects the APR, the closing can not take place until 6 working days AFTER the borrower receives the new disclosures. Saturdays, Sundays and Holidays do not count toward this. So, last minute changes can really screw up closing dates.

Help me explain to sellers a closing date it just a target date, and the actual closing is hard to set up till the loan is fully approved. Appraisals are causing huge problems right now.

I'll keep you posted!

Thinking of sellig the Beeemer

It's a blast to drive! Amazing power. Now this isn't a cheap Z-3, it's an "M-roadster". There's a huge difference. The M's are shipped back overseas and suped-up with better suspension, more horse power and features. Regular Z-3's can be 1.9 litre motors, M's can be 3.2 litres. When they ship it back to the US, they are required to have a governor that only lets the car go 136mph, but you can get a chip to remove it. You see a few around, but not a yellow M. Still books at $19900. It's stored in a heated garage all winter. Thinking about buying a better winter car. I stopped by Auto Sport to look at a sport utility and he told me I shouldn't sell it, but that I'd have no trouble selling it with the shape it's in and low mileage. It's a 2000. There are on auto trader for $20,000.

Here's the 1st one

I'm trying to think of a way to keep all my friends, customers and associated informed on changes in the mortgage industry.

It seems like there's changes every week, and they really affect a borrower's ability to buy a home or refinance.

Since I've been in mortgage lending for 23 years, it's interesting that we are back where we were 20 years ago. Back when I started in lending, you needed 20% down, had to pay your bills on time and have a stable job. You may think DUHHH but over the past 5-10 years, guidelines have loosened up so much you didn't need any down payment, and you didn't even have to list a job or income! There was a lot of greed out there. It didn't matter that people couldn't afford the homes, all that mattered was to do more loans. This is everyone's fault, not just lenders. Did you have a retirement account? Did you want 12-20% return on your investment? Your retirement account probably invested in mortgage backed securities. The more loans that were done, the highter returns we were all getting on our 401K's. That's kind of simplifying it a bit, but the guidelines kept getting more and more lienient because of the hunger to do more and more loans.

With the Mortgage Crisis the lending guidelines have done a complete 360.

Here's an apprimate comparison:

1990 Had to prove you pay your bills on time, needed a down payment from your own money, they wanted 28% of your net income for your house payment, real estate taxes and insurance, and 36% for housing and all other monthly payments. You had to have a stable job with a 2 year history.

2006 Didn't even have to disclose income or job if you had a credit score in the upper 700's. You could get a zero-down loan, combo loans allowed you to have zero down and pay no mortgage insurance, you could get a loan 1 day out of bankruptcy.

Today: Most loans (there are Federal VA and Guarantee Rural Housing with zero down yet) need 5% down and it has to come from your own funds. FHA needs 3.5% down and it can all be a gift from an immediate family member. Most loans allow you to stay around 40% of your pre-tax income for all your monthly debts. Very difficult to get a loan with a credit score under 620 and you'll pay a higher rate it it's not 740 and above.

If you were pre-approved for a loan a month ago, get back in touc with your lender to make sure there weren't any guidelines changes that would prohibit you from getting a loan.

If you follow my blogs, you'll eventually see that it may not be what you want to hear, but I will tell you the truth. I don't tell you I can do something I can't.

I look forward to builing a blog-following! E-mail me any time if you have questions regarding home loans.

I'm going to give Blogging a hand!