RISKS WHEN SCHEDULING A CLOSING DATE

Hello everyone!  It's been a while since I blogged. 

Today I want to talk about scheduling closings.  If you are a seller, or the agent for a seller, scheduling a closing is not fun.  As long as you are aware there is a good possibility the closing could be delayed you'll be OK.  I've been in Real Estate and Lending for over 33 years.  In the "old days" you didn't even schedule a closing until the lender called and said we're ready to go.  This would be the way to go, except people do like to plan on a closing date.  There are just so many things these days that come up and delay closings.

Reasons for delays:  Loan Volume.  With the economy the way it is, lenders are not hiring new staff to keep up with the refinance volume.  They don't want to ramp-up staff only to lay them off if it slows down.  Rates are about the best they've been EVER!  Someone purchasing a home is a bit of a priority, because when you refinance, you already live there.  But refinances can't be shoved to the bottom of the pile all the time.  When you lock into an interest rate, you only have a certain amount of time to get the loan closed or that rate could be lost.  Some lenders are taking 90 days or more to get a  refinance loan closed. 

Another delay could be what was presented at time of application varies from what a lender verified.  Income could be less, debts could be more, assets may not be enough, there could be miscellaneous deposits, or NSF's on bank statements.

Income:  These days, STABLE income is essential.  Over-time, bonus, and commissions need a consistent 2 year history.  If 2009 was less than 2008 and year-to-date is less, you won't be using this income to qualify.  Anything "decreasing" is not good.  If someone says they work 40 hours a week, but the recent pay stubs show less than 40 and the year-to-date income doesn't support 40 hours a week, you'll have problems.

Job history:  If someone doesn't have a 2 year work history this could cause problems.

Cash to close:  Lenders used to get a verification of deposit.  If it showed a two-month average balance consistent with the current balance, it was all good.  Now it's a requirement to look at the last 2 months of bank statements.  On these statements you look for NSF's.  More than one NSF or so and it could cause a denial.  Consistent NSF's are considered bad credit.  Deposits other than payroll could cause problems.  Any deposits should be documented and the source of the deposits provided.  Lenders are looking for "loans" that may not show up on the credit report when there are "unsubstantiated deposits" in an account.

Credit reports:  If there are accounts that are "disputed" it may cause a loan denial.  Disputed accounts are not calculated in credit scores, so if the disputed account would turn out to be accurate, the credit score may be less and the loan could be denied.  Borrowers should get loans out of dispute before the apply for a mortgage. 

Credit inquiries:  Any inquiries on a credit report could delay a loan closing.  A credit report is only good for a certain amount of time.  If a borrower is getting pre-approved, and they find a house and plan on closing and it's been 5 months, we need a new credit report.  If they've applied for new credit since the initial report was pulled, the pre-approval may not be any good if new debts show up.  If you're thinking of applying for a mortgage, DO NOT APPLY FOR NEW CREDIT!  No % off store purchase if you apply for a card (happens a lot during holiday shopping).  No buying appliances for your intended home purchase before you close on 90-day same as cash.  If a credit report update is needed right before closing, this could cause a delay while the new debt is verified and could even cause a denial if another debt puts you over the allowable ratios.

These are just a few thoughts I had today.  If you have any mortgage questions, just give me a shout and I'll try and help.

Happy Thanks Giving!

The opinions expressed here are the views of "Jolyn the Mortgage Expert" and do not necessarily reflect the views and opinions of Guaranty Bank.

FIXED RATES UNDER 4%

Every rate is a custom rate-quote.  Just because your friend may have gotten 3.875% on a fixed rate, doesn't mean you can get less than 5.375%.  Why?  You've got to be careful.  Deal with someone you can trust or that was referred to you.  On-line brokers and internet sites can be verey dangerous.  This doesn't mean you can't find a legitimate one by any means, but be very cautious.  It's always better to deal with someone you were referred to.

Rates can be different from one borrower to the next.  For example:  If a 10 year fixed happenes to be 3.875% there are several things that you should know.

The APR - This is not the rate you get for the term of the loan but it's very important.  It tells you if there are  a lot of fees attached to the loan.  The APR will always be higher than the note rate you get because some of the closing costs are "finance charges".  The more charges you have, the higher the APR.  Keep an eye on the APR figure.  It goes up if you need mortgage insurance because you don't have 20% equity.  If it's considerably higher, then the rate they quoted you isn't as low as you though.  I can give you a 3.75% fate fixed for 30 years, but you'll be paying so many points to get that rate, you really aren't getting a 3.75% rate because you paid THOUSANDS in fees to get it.

Rates start at a certain percentage.  With all the changes in the mortgage industry, there are pricing "hits".  Some examples that may make your rate higher than the low rate your friend said they got:

1)  Credit scores:  Today, lenders want over 720 for credit scores.  Anything less can cause your rate to be substantially higher and may rule out getting a loan entirely.  It's almost impossible to get a loan with a credit score less than 620 right now.

2)  Purpose of the loan:  Your best rate is going to be if you are purchasing a home or refiancing the existing balance and you have some equity and a great credit score.  Your rate started going up as the equity is less, and if you are taking any cash out of the transaction to consolidate bills, combine a 1st and 2nd, or do home improvements, you will pay more. 

3)  Waiving escrows:  There is almost always a fee to waive escrows (Pay your taxes and insurance on your own and not with your payment). 

4)  Loan size:  The smaller the loan, the higher the rate.  Doesn't sound fair, but the amount of work is the same, so to cover the costs of lenders doing the loan, on small loan sizes, there may be a higher rate or more fees.

5)  Credit scores:  You get hit twice for credit score.  There is a straight hit depending on credit score, and then on a cash-out refinance, there is an additional hit based on your equity and credit score too.

You might actually get a better rate if you have a lower score and mortgage insurance than the same score and 20% equity.

Costs are another thing that's hard to compare.  Rates change daily, if not several times per day.  If you got one rate on a Monday and call another lender on Tuesday, the Monday lender can't give you that rate on Tuesday anyway. 

One good thing about the rediculously hard-to-understand new good faith estimate is that once a lender gives you a good faith estimate, there are restrictions on them changing these fees.  That's why until you lock into a rate with a lender, you'll probably not get a good faith estimate.  Even though it's called an estimate, lenders are bound by these figures and there is little or no opportunity to revise them.

It's a very confusing industry, and I feel for all you borrowers out there trying to get a clear picture of what rates are and what financing will cost. 

Just remember - IF IT SOUNDS TOO GOOD TO BE TRUE - IT IS !!!!!!!!!

Mortgages are relatively standardized now, so everyone has these adjustments to rate.  If you would like help trying to manouver through this confusing minefield we call mortgage financing, just shoot me an e-mail.  I'm not going to feed you a line of bologna to get your loan.  My advice is free.

Jolyn the Mortgage Expert


The views and opinions of Jolyn Oelfke are not the views of Guaranty Mortgage or Guaranty Bank.

RATES ARE AWESOME!

A 10 YEAR FIXED UNDER 4% - WOW!  The homebuyer tax credit may be gone (if you didn't close by June 30th unless they pull off a Hail Mary pass and get it extended at the last minute) but interest rates are so low you may want to make a move now and take advantage of motivated sellers, great deals on properties, and affordable mortgage rates.

The mortgage industry is still a little crazy, and they'll make you run the guantlet of the approval process, so be prepared to jump through hoops up until the day you close on your loan, and perhaps even after.  Investors are so paranoid about loans going bad they really scrutinize buyers and properties.  Don't take it personally - they make everyone jump through these hoops to get a loan.

I've been in the mortgage business for over 24 years now, and the company I was with for the past year closed their doors after 42 years because of the current lending environment.  Now I'm with Guaranty Bank out of Brown Deer, Wisconsin, as Guaranty Mortgage.  They are a family-owned bank that has been around since 1923.  This means I've got more programs, great service, and as always - my vast experience to help you manover the landmines of home financing.

If you want to check on the low rates, get a mortgage check-up to see if refinancing or debt consolidation is right for you, just give me a call.  You can go to my website:  http://www.jolynthemortgageexpert.com/ for helpful information and apply on line.  I'm here to help.

I've joined SHELTER MORTGAGE

What perfect timing!  If you didn't hear, the company I was working for, UNIVERSAL MORTGAGE, sent an e-mail on April 22nd and told us the company was shutting it's doors.  This came as a total surprise to us.  This left me in a pinch as I had 5 loans closing the next week.  I was only able to close one of them, but with help of other lenders in town, I got all my loans placed and closed with little or no delays.  Unfortunately, I lost all the income I would have gotten on them.  C'est Le Vive. 

Even though no bank, credit union or mortgage lender is safe from the perils of this economy, I decided to work locally for a bank founded in 1923 in Milwaukee.  I will be working for Guaranty Bank as Shelter Mortgage.  4 of us from the Onalaska Universal Mortgage office have made this move.  So basically, the Universal team is now Shelter Mortgage. 

It's perfect timing, as there are a lot of fantastic homes out there at great prices, and mortgage rates are at a 50 year low.

Shelter Mortgage has great rates, and I now have more flexible loan programs I can offer.  We have the usual fixed rates, Federal and State VA, FHA, WHEDA, Rural Housing (when they get funds again).

We're in search of office space, as we still have access to the old Universal Office, but I don't know for how long.  We're all working out of our homes, so you can take a nice drive and do an application at my house, or I'm totally mobile and can meet you for an application.

Give me a call at 608-779-1519 today.

I'm jobless!

Well - isn't this a fine how-do-you-do!  In 24 years in mortgage lending, I have never been out of a job.  What's scary is what happened to us could happen to any bank, credit union or mortgage broker without notice.

Last Thursday afternoon, April 22nd, we were notified that our warehouse line was pulled and we no longer had the ability to funds loans.  This basically means, we can't do mortgages.

My employer made a decision to exit the mortgage business.  This left me in a very precarious perdicament as I had 4 loans scheduled to close the week of April 26th.
I had to place these loans with other lenders, and tell the 4 borrowers who thought they were buying their homes this week they wouldn't be closing.  I was able to arrange to close the WHEDA loan on time as scheduled, but had to delay the other 3.  I also had to find homes for the numerous May and June closings I have in my pipeline.

In this "recovering" economy (It's not recovered yet - believe me!) everyone is at risk.  Banks, Credit Unions and Mortgage Bankers and Brokers don't have millions of dollars sitting in their vaults waiting to close loans, they have warehouse lines.  These lines of credit can be from the Federal Reserve, or other lending institutions.  They fund the loans from these warehouse lines, then when the loans are delivered to secondary market (Fannie Mae, Ginnie Mae, Freddie Mac) they are reimbursed the loan amounts and can then loan to the next borrower. 

What's happening throughout the US that's causing the situation at my employer?   Wth all the foreclosures and bad loans, the regulators are requiring more assets be placed in loan-loss reserve accounts to cover projected loan losses.  Lenders transfer the required assets to the reserve account.  That takes funds away from their net worth, as this loan loss reserve acccount can not be included in an institution's net worth.  This drops their "rating" down maybe to a C or D and makes them ineligible for their line of credit.  No warehouse line, not much money available to fund loans and you're out of business. 

I was talking to a stock-broker friend of mine who said you don't hear about it, but it's happening all over the US.  The FDIC is coming in right before 5:00 in the afternoon with their suits and brief cases, informing everyone that the doors are closed and here's the new owner that's taking over your bank.  Scary isn't it.

I'm weighing my options.  I'd like to work somewhere I can apply my vast knowledge to turn around a mortgage department and make them one of the top lenders of choice.  I've got a few in mind - I'll keep you posted.

LENDING IS VERY FRUSTRATING

Most days I don't like my job.  24 years in mortgage lending and some days I lean towards checking the want ads for a job. 

I've got a massive headache as we speak.  When we take a loan application, we need 30 days of the most recent pay stubs, 2 months bank statements, 2 years worth of W-2's and Federal tax returns with all schedules.  We send out verifications of employment and deposit, wait for a week or two to get them back, we ordered the appraisal that takes 2-3 weeks to get.  Then we get the file ready to submit to underwriting.  Guess what - the last bank statement we got is too old.  Pay stubs and bank statements can't be over 30 days old.  We call and request newer ones.  By the time we get those, something else is too old.  It's a vicious cycle. 

Or we get a new pay stub and the borrower isn't working 40 hours.  Why are his hours less?  Is his job in jeapordy?  There goes the red flag on income. 

It's no longer a question of how can help a borrower get into a home, it's what can we find to turn a borrower down.

If it's not the borrower income or assets that's the problem, it's the property.  They want 3 identical comparable sales of homes that have sold in the last 3 to 6 months in similar neighborhoods.  That can be a problem.  Around here, a home in the country on 15 acres, outside a small rural town for $350,000 will be a problem, as there aren't any comparable sales.  Houses in not-perfect condition are becoming a problem.  Repairs have to be done by closing, sellers don't have the money to do them, borrowers can't get the loan till they're done.

You request an item from a borrower to solve one problem, and it triggers more needed items.

NSF's on your bank statement can cause your loan to be denied.  An isolated bounced check is ok, but if it's a continual thing you may not get a loan.

Haven't had your job for 2 years?  Don't have 3 active credit accounts with a 12-24 month payment history?  Have miscellaneous undocumentable deposits on your bank statement?
Cash at home you want to use for a down payment?  Commissioned? Seasonal employment?  Self-employed?  Truck driver paid by the mile?

All these things will make getting a loan difficult.

Since I can remember, we got a verification of employment, a check stub and your W-2's for income, a verificaiton of deposit to show you had sufficient funds to close and see what your 2 month average balance was and prove you had cash to close. 

It's a different ball game out there folks.  Now we get W-2's, Federal Tax returns, every pay stub you ever get, each bank statement you get till closing, we get your tax transcripts from the IRS to see if your tax returns are faked, we get verification from the social security administration to make sure you didn't steal the social security number, we pull your employers name and address off the internet so we've checked the address and phone numbers to make sure it's not a bogus emloyer we're given, we call just before closing to see if you're still employed, ughhh.

When we do a loan, we need actual bank statements, but we usually get print-outs that don't show us account numbers or even the borrower's names. When we do get bank statements they say page 1 of 4 and we only get 2 pages. If it says 1 of 4 pages, we need 4.

Borrowers are getting frustrated with us, we're getting frustrated with our underwriters. Lending is just not fun any more.

I developed a booklet for my homebuyers that explain the 5 parts of a loan, what to do once you've applied for a loan, what NOT to do, and what to expect. 

If you're a home buyer and want to find out about the pain-in-the-behind homebuying process, shoot me an e-mail and I'll send you a copy.  It will help you understand the hell that is my life, known as mortgage lending.

HOME BUYER TAX CREDIT - 28 DAYS REMAIN

You've only got 28 days left to take advantage of the Home Buyer tax credits for new and repeat buyers.  You need to get your offer accepted by April 30th to qualify and the loan must close by June 30th.  Up to $8,000 for buyers who have not owned a home in the past 3 years and up to $6,500 for repeat buyers who have occupied a home for 5 of the last 8 years as their primary resicence if they buy another home to live in.  Great time for upgrading, downsizing or if you just want a different house.  Call or e-mail me for details.

Buying a home in the flood plain soon?  Here's a recent event on that topic:

National Flood Insurance Program (NFIP) Authorization
The National Flood Insurance Program’s (NFIP) authorization to issue flood insurance policies expired at midnight on Sunday, March 28 as Congress did not vote to extend the authorization until April 30 prior to leaving for Easter recess. Any property located in a Special Flood Hazard Area (SFHA) may not close until the NFIP obtains authority to issue flood insurance (estimated to be April 12 at the earliest)

HAPPY EASTER EVERYONE!

WHEDA LOAN offers possible ZERO DOWN PAYMENT

WHEDA:  Wisconsin Housing and Economic Development Authority

They joined forces with Fannie Mae to come out with the WHEDA Advantage program.  Wisconsin properties qulaify.  Purchase price limits vary per county

Rate today is 5.75%
With 20% down it's 5.4%

Possibly no down payment with qualified buyer and credit score. 

30 year fixed rate loan.  Income limits apply.

BUYER TAX CREDIT - 37 DAYS REMAIN

37 days and counting.  You're running out of time to get your offer accepted and take advantage of the up-to $8,000 1st-time buyer or up-to $6,500 repeat buyer tax credit.

If you need the details to see if you qualify, give me a call. 

1st-time buyers are buyers who haven't owned a home in the past 3 years.  Repeat buyers are buyers who have occupied the same home for 5 of the last 8 years.

This credit has been extended for our veterans serving in Iraq.

44 days remain to take advantage of homebuyer tax credit

Only 44 days left to get an offer accepted on a property and take advantage of the $8,000 1st-time buyer credit or $6,500 repeat buyer credit.  If you need to know if you would qualify, give me a call or send me an e-mail.  Offers need to be accepted by April 30th and the loan must close by June 30th.

You can't get the money then buy, you have to apply for it after you purchase a home.

Have a great day!

WHEDA zero-down loan available today

It's March 1st!  The WHEDA FannieMae Advantage program came out today.  Zero down, 30 year fixed rate for Wisconsin homes.  1st-time buyers (haven't owned a home in the last 3 years) or any buyer in a TARGET area.  Rates change daily, but todays rate is 5.75% but that's with no mortgage insurance, no down payment, and only a $1,000 investment from borrower's own funds.  Balance of closing costs and pre-paid expenses can be paid by the seller.

Just another program to help borrowers get in on the $8,000 1st-time buyer tax credit.

Call me for details.  If you're not a 1st-time buyer, call me for the "target areas" to see if you can buy anyway.

WHEDA 1st-time buyer finanicng available again

THEY'RE BACK!  Wheda has been out of home financing for a couple years but is back just in time!  Their new program is the WHEDA Fannie-mae Advantage ZERO DOWN loan.  Designed for borrowers who haven't owned a home in the past 3 years.  Borrowers must contribune $1,000 toward closing costs from their own funds.  Income restrictions vary per county.  Wisconsin homes only.  Single family and duplexes over 5 years old.  Owner occupied only!  Rates estimated around 5.75% with no mortgage insurance which makes it a competitive rate compared to a conventional loan around 5% with mortgage insurance. 

This program comes out just in time for buyers to take advantage of the $8,000 buyer tax credit, also for those who haven't owned a home in the past 3 years. 

There are also TARGET areas throughout Wisconsin where you can still buy even though you have owned a home in the past 3 years. 

Call me if you need details.

63 days remain to get your offers accepted and take adavantage of the homebuyer tax credits!!!!!

HONEST LENDERS

Lost a nice borrower last week.  I'm a bit ticked about it.  I've always thought honesty is the best policy, but I lost a deal because of it.  When someone comes to see me about financing, I like to tell them what the maximum closing costs will be.  Until someone locks their interest rate in, rates and what I charge for fees isn't set.  Would you rather come to closing with less than you expected or have costs come in higher?

I was a bit upset about this deal because the lender at the bank told them their payment was $100 less a month and closing costs were $700 less. If we are at the same interest rate, there is no possible way the payment would be $100 less a month!!

With the new Federal Government changes, there is no way to know exactly what closing costs will be until we know who is doing everything like appraisals, and title work.  Because of these changes, we are required to estimate high, as once we give a borrower a good faith estimate we can not change the estimated fees to what the actual costs are and I end up paying the difference (note the word estimate doesn't mean crud).

Now in concept, I agree there are a lot of bad lenders and brokers out there who would lie to borrowers and quote low costs, then at closing, a borrower found out the needed hundreds, if not thousands of dollars more than the estimate.  What is now unfair to honest lenders like myself is we have to stand by the estimated costs.  Appraisals (which lenders can not order because we "influence" the appraisers) are ordered through appraisal management companies.  Because of this, appraisals can cost anywhere from $375 to $550 and we don't know what the cost will be until we get the appraisal because we can't order it or know who is doing it.  I can't put $375 because if the appraisal comes back costing $550, I personally have to pay the $175 difference.  Because of this, I will always put the maximum closing costs , and they should come in much less. 

In the instance of the loan I lost, my rate was 1/4% less, and if they had checked rates and locked with me that day, I could have offered them a credit toward closing costs of $825.  The borrowers paid 1/4% more in rate and $125 more in costs than what I could have given them based on what that lender told them.  I just wished them the best, rather than point out they would really have gotten a better deal with me.  They got screwed!  They're going to pay $27.12 a month more with the other lender, which is $325.38 a year or $9,761.45 over the life of the loan!  I'm not going to beg someone to work with me.  I only want to work with people who want to work with me and trust me.

I don't know how to express that I will give a borrower the fairest rate and costs, and that my rates are some of the most competitive around.

I hate it when lenders mislead borrowers to get a deal.  Just be sure you deal with someone who's reputable and was referred to you by someone you trust.

WHEDA FANNIE MAE ADVANTAGE - NEW ZERO-DOWN PROGRAM

It's true  - and WHEDA is happy to be back with a new loan program just in time for buyers to take advantage of a great loan and the $8,000 1st-time buyer tax credit.

I've got the details, income limits, property max sale prices, so call me for details.  For Wisconsin homes only and limits can vary per county.

Zero down, buyer must invest $1,000 into the loan transaction, seller can pay the balancde of closing costs.  Requires homebuyer education.

1st-time buyers are buyers who have not owned property in the past 3 years.  A mobile home on rented land does not count as owning property.  No condo's, no new construction, no manufactured homes, no 3-4 unit properties.

Single family homes, zero down.  Duplex requires 3% down from borrowers own funds.

No news on the rate yet - probably not till 3/1/2010, but rumors are the rates will be good.

To take advantage of the homebuyer tax credit, offers on properties must be accepted no later than 4/30/2010 so.....

You've got less than 76 days left to find a home and get your offers accepted!  Get in touch with a  REALTOR today so you don't miss out, and call me about your financing.

WHEDA ANNOUNCES THEIR NEW PROGRAM

WHEDA (Wisconsin Housing and Economic Development Authority) ran out of funding more than a year ago.  They are coming out with a new program which is designed to get new homebuyers into the market.  Perfect timing, as we've got 77 days to get offers on  properties accepted if borrowers want to take advantage of the stimulous tax credits of up to $8000 for buyers who haven't owned a home in the last 3 years, and up to $6,500 for repeat buyers who have lived in their home for at least 5 of the last 8 years.

I'll be out with details of the program as soon as they roll it out tomorrow.  The BUZZ on the streets so far is that it is a zero-down, 30 year fixed rate program.  Borrowers must invest $1,000 into the purchase/transaction and have a middle credit score of at least a 620.

This WHEDA program will be a great addition to the potential tax credit and should provide a super opportunity for young 1st-time buyers out there.

There's not a better time to buy.  Great rates, great deals, free money!  (Well, you have to go into debt for up to 30 years to get the free money - but it's better than paying rent)

If you would like to get the details on the new WHEDA program, or the buyer tax credit, just shoot me an e-mail.  I'm here for you!

Remember:  You can't have everything - where would you put it? - comedian Steven Wright

Have a great day.  Get out and enjoy the sun (it's sunny here in Wisconsin)

$8000? Only 84 days left to get the buyer tax credit

Help spread the word - buyers have less than 84 days to get an offer accepted by 4/30/10 so they can take advantage of the stimulous' HOMEBUYER TAX CREDIT.  Even if you're not a 1st-time buyer, you may qualify for the up-to $6,500 repeat buyer credit.

Realtors are doing a good job of advertising it here in the La Crosse area, but I still don't think people are understanding it's $8,000 FREE MONEY for buying a home.  I doubt they'll extend it a 2nd time, so jump down off that fence and get writing offers!

I'm licensed in Wisconsin and Minnesota, so give me a call.  Even if I can't do a loan for you in your state, I'll be glad to answer quesitons on the tax credit for you.

85 days remain - time is running out!

The clock is ticking, tick-tock, tick tock, and if you don't find a home to buy soon, you will miss out on up to $8,000 free money.  85 days will go super fast.

Offers must be accepted by April 30th, and the closing must take place by June 30th if you want to take advantage of the stimulous program's up to $8,000 tax credit. 

10% of sale price up to $8,000 for buyers who have not owned a home in the past 3 years, and up to $6,500 for buyers who have owned a home for 5 of the last 8 years.  Buyers must purchase an owner-occupied property.  Can't use it for investment properties.  A duplex you will occupy qualifies.

If you've filed your 09 taxes, you don't have to wait till 2011 to get the tax credit, you can immediately ammend your return after your closing and get the benefit right away.

I'm licensed in Wisconsin and Minnesota, but even if I can't do your loan, you can still call me with questions.  I've done massive research on this program and am here to help.

As mentioned in my prior post - if you're thinking of selling this year, DON'T WAIT!  If you wait to list your home till May, you've just missed a ton of motivated buyers who needed to get their offers accepted by April 30th.  Call a Realtor today and get your home on the market.  You may be able to then buy and get the $6,500 repeat buyer credit.

DON'T WAIT TILL SPRING IF YOU PLAN TO SELL YOUR HOME

I've been trying to tell buyers to get out there and look for homes so they can take advantage of the $8,000 home buyer tax credit if they have an offer to purchase accepted by 4/30/2010 and close on that sale by June 30th, 2010.  I just realized - POTENTIAL SELLERS SHOULDN'T WAIT either.  If you were thinking of selling your home in late spring, you would miss this whole group of motivated buyers if you wait to list your home till after 4/30/2010. 

Get a hold of a Realtor today and take advantage of these buyers.  Also, if you have owned your home for 5 of the last 8 years, you may qualify for a $6,500 tax credit if you sell and buy another home to live in.

Let me know if you need details.  Even if you're not in my area, I will still offer my expertise and advice.  I'm licensed in Wisconsin and Minnesota.

SELLING YOUR HOME IN THE SPRING?

I've been targeting buyers to tell them about the $8,000 homebuyer tax credit.  Now I want to tell you sellers.  If you are thinking of putting your home on the market this spring, don't wait - do it now.  There are a lot of buyers wanting to get their offers accepted by the April 30th deadline.  If you wait to list your home in the spring, you'll miss out on this pool of ready buyers! 

Then if you sell your home, you can buy a new one and possibly qualify for the repeat buyer credit up to $6,500.  If you need details, just drop me an e-mail or give me a call.  If I can't help you, I'll direct you to someone who can.

99 DAYS REMAIN TO GET $8,000 HOMEBUYER TAX CREDIT

Time is fast running out to take advantage of the stimulous plan's HOMEBUYER TAX CREDIT.  Offers must be accepted by April 30th, 2010 and loans must then close by June 30th.

Up to $8,000 available to buyers who have not owned a home in the past 3 years.

Up to $6,500 available to buyers who are buying another owner occupied property as long as they have occupied their current/past residence for 5 of the last 8 years.

Call or e-mail me for details.

100 DAYS REMAIN to cash in on the homebuyer tax credit

To take advantage of the $8,000 or $6,500 home buyer tax credit, you have to have an accepted offer to purchase no later than April 30th, 2010 and the loan must then close on or before June 30th, 2010. 

PLEASE don't wait long to start shopping for that new home.

You can qualify for up to $8,000 if you have not owned a home in the past 3 years.

You can qualify for up to $6,500 if you have lived in your home for 5 of the last 8 years and buy a different owner-occupied property.

Call or e-mail me for details.  Why not take advantage of this while you can.

Stupid new guildeine update

Stable Income is the topic of the day.  Now we're told we need a 2 year history of employment.  If someone can not show a 2 year history they'll have problems getting a loan.  Now we've always looked for stable dependable income, but the news we're hearing now is truly stupid.  Say you're an RN who graduated and has had a nursing  job for 11 months.  You may have trouble getting a loan because you don't have 2 years of employment history.  How idiotic is that!  Why does having 2 years of employment constitute more stable income than 11 months of nursing for dependable income?  Before educaiton in your field of work counted as work history.  Not any more.

You know I'll argue this one for you! 

I know that they needed to tighten up lending guidelines - anyone could borrow money 3 years ago, but now they're going a bit too far and shutting good borrowers out of the market with the stuff they're dreaming up.  Tell kids to go to college and get a good education so they can get a good job, but - oh, I'm sorry, until you work for 2 years, you don't deserve to buy a home. 

There's no common sense, no grey areas, no compensating factors.

Make sure you're dealing with a knowledgable loan officer who keeps on top of the every changing mortgage market.  Give me a call if you need help or have quesitons.

$8,000 BUYER TAX CREDIT AMENDED TO INCLUDE $6,500 FOR REPEAT BUYERS

Seems like buyers are once again gearing up to cash-in on the buyer tax credit. 

Your offers must be accepted by 4/30/2010 and the loan must close no later than June 30th, 2010.  Don't wait till last minute, because it would be a shame if you miss it by 2 days because everyone was so busy the loan couldn't get closed in time.  Find a home early!

Can you use it for your down payment?  No.  It's a credit you apply for after you buy the home.  You can't get it ahead of time, as it's a credit to the income tax liability you have so until you do your Federal Income tax return you will not know how much of the tax credit you're intitled to. 
Let me explain.....

You buy a home in April.  You're a 1st-time buyer or haven't owned a home in the last 3 years.  You buy a home for $100,000.  You qulaify for the max, which is 10% of the sale price UP TO $8,000.

You purchas the home, then file your 2009 income taxes.  If you would end up owing the IRS $2,000, because you can claim the tax credit, you would get $6,000. That's the $8,000 tax credit, less $2,000 you owed in income tax.

If you would be getting a refund of $2,000 in income taxes, with the tax credit you would end up getting $10,000.  That's the $2,000 you would get plus $8,000 tax credit. 

Now if you can't buy a home in time to file your taxes, you can amend them  right away and should get the credit pretty fast.

Say you're not a 1st-time buyer?  If you have owned your home for 5 of the last 8 years, you could qualify for up to $6,500 as a repeat buyer.

One exception to using the credit to buy a home:  You can't GET the credit, but in very few instances, depending on where you are buying, there may be HUD approved down-payment provider that would borrow it to you till you get the tax credit.  Here in LaCrosse, Wisconsin there aren't any approved providers.  99% change you can't find one in your area, so probably no chance of borrowing against the tax credit.  It's still worth checking out just to make sure it's not available in your area.

CNBC had someone on NBC's Today show telling people they can use it for the down payment.  I hope this comment didn't get anyone's hopes up.  They also said you can use the $6,500 to buy investment properties.  WRONG!  You could buy a rental property if you were going to occupy it.  Then you can only claim the credit against the portion you are occupying.  Say you buy a duplex for $140,000.  You can claim 10% of $70,000 (half of the $140,000 sale price) for $7,000 max credit, or $6,500 for repeat buyers. 

I've done a lot of research on this, and have researched a lot of scenarios, so if you have questions about the $8,000 or $6,500 tax credit for homebuyers, just give me a call or send me an e-mail.

I'm here for you!

$8,000 tax credit for the down payment on a house

This is basically not possible.  You get the $8,000, but it's after you purchase the house and it might not be the whole $8,000, as it's a tax CREDIT.  If you file your 2009 taxes and you end up owing in $2,000, with the $8,000 tax credit you will only get $6,000.  On the other hand, if you were to get a refund of $2,000, with the $8,000 you would end up getting a refund of $10,000.  Because it's impossible to know what you will be getting for a refund till you file your taxes, the tax credit can not be used for the down payment.  There are a few "approved" agencies that can contaract to BORROW you the $8,000 on the agreement that when you get your refund from the IRS you will pay them back, but 99.9% can't get this, so basically the tax credit is AFTER you buy your home.  The repeat buyer tax credit of up to $6,500 can not be used for real estate INVESTMENTS.  You have to occupy the property you will be purchasing.  You can buy a rental property if you are going to live in it, but you can also only use the value of the % you will be living in.  For example, if you buy a 4-plex for $200,000 what you would base your tax credit on is a value of $50,000.

Deal with a knowledgeable mortgage professional who has researched the tax credit thouroughly (like me).

Get your offers written now, as you only have till 4/30/10 to have an offer accepted and you must close on that purchase by 6/30/10 to be eligible for the tax credits.

New RESPA regulations

What a financing nightmare.  Laws designed to help borrowers are really hurting and confusing them.  Don't get me wrong - there were a lot of predatory lenders out there who ruined it for all of us, but it's sure hard to do a loan these days.  Putting the blame on all lenders for the real estate crisis is like saying all investment people are bad because of Bernie Madoff.  They talk about all the money out there and how it needs to be loaned out, but in truth, lenders don't want to lend to borrowers unless they are super perfect, plus they are scared to in case the loan goes bad as they approved it.  The desired minimum credit score now is 720 and up.  75% of borrowers in the US probably don't have a 720 score so it's difficult for them to get loans.  There are still a couple government loan programs out there.  I can go down to a 640 score (FHA) and there is no minimum required score on Guaranteed Rural Housing (GRH) but there are income and credit requirements on the GRH loan.

These new regs are really screwing up pre-approvals.  Basically, we can't pre-approve someone without a property.  Why?  If we were to issue a good faith estimate (note the word estimate?) we have to basically stand by those esitimated figures.  If things change, the lender pays the difference.  Without knowing all the details of the purchase (a firm offer to purchase, sale price, loan amount, closing date) it's not possible to quote costs.  Lenders are not supposed to gather "supporting documentation" which is pay stubs, bank statements, tax returns, until we have an application.  An application consists of these 6 things:  Offer to purchase, loan amount, estimated property value, social security numbers, names, and income.

So basically, we can meet with a buyer who is house shopping, ask them what they make, pull credit, and determine if we think they will qualify.  We can issue a PRE-QUALIFICATION letter, but it would be subject to them finding a property, getting their offer accepted, property appraising, and then the lender verifying they make enough to afford the house, their credit is satisfactory, and they have sufficient funds to close.  Pre-qualified is not a pre-approval.  There is a lot that can go wrong with a loan until we have everything verified, which we can't do till we have an accepted offer to purchase and can proceed with the application.

Please work with a qualified mortgage professional who keeps on top of the changes and has your best interest in mind (me of course).  There are a lot of trustworthy, professional, knowledgeable loan officers out there.  Be sure you're working with one.