Mortgage News | Bull City Real Estate

Posts Tagged ‘mortgage news’

Want The $8,000 Tax Credit? The Time To Act Is Now!

Tuesday, September 29th, 2009

If you have read this blog at all, you know that the $8,000 First Time Home Buyers Credit expires on November 30, 2009. To take advantage of the credit, you must complete your purchase by November 30. Being under contact is not enough – the transaction must be done and recorded with the county by the deadline.

“No problems” you say. “The end of November is a long ways away.” Actually, it’s closer than you think. Let’s work through the timing.

First of all, Thanksgiving is the last week of November. Between the holiday and all the “Last Minute Larrys” who need to close on November 30, I would strongly suggest buyers schedule their closing not later than November 20 [the Friday before Thanksgiving].

As I mentioned in a previous post, processing mortgage paperwork is taking 30-45 days. Let’s be optimistic, and assume 30 days from the contract date to the closing. Assuming that November 20 closing date, you need to have a home under contract by October 21.

October 21 is just three weeks away. That’s three weeks to find the right home, make an offer, negotiate with the seller and get in under contract. There is still time to find that first home — just not as much of it.

If you are still looking for that first home, please let me know. There are many great homes to choose from [starting with the home in Woodcroft that heads the right column]. The time to get started, however, is today.

Tags: first-time buyers, mortgage news

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Ready For A Quick Closing? Not So Fast.

Saturday, August 15th, 2009

As a small part of the Stimulus package, Congress passed the “Mortgage Disclosure Improvement Act.” This act, which took effect of July 30, attempted to ensure that buyers went into their closings with all the [correct] information. The main provisions of the Act are

A borrower must receive a Good Faith Estimate [GFE] and a Truth in Lending [TIL] disclosure within three days of submitting a mortgage application. [This was already required, but is reinforced by the Act]
The borrower must have at least seven days to review the GFE and TIL disclosures. This can not be waived by the buyer.
If the terms of the loan change, or the loan APR increases by more than 0.125% [one-eighth of a percent], the buyer has to receive a new GFE and TIL disclosure. The buyer than receives three days to review the new documents. The buyer can not waive this period, so if the change is made the day before closing, the closing is delayed.

All of this is supposed to prevent buyers from arriving at the closing table to discover the terms and expenses of their mortgage are not what the buyers thought they were. That is a admirable goal. What it will also do, however, is slow down the application process. Think about it — under the new system, lenders are going to want to be absolutely certain of all the numbers 72 hours prior to closing. Otherwise, the closing ends up delayed and everyone is unhappy [and they blame it on the lender, which makes it doubly bad].

The mortgage pros I’ve spoken to have said that buyers should assume the application process under the new system will take 45 days, where it used to take around 30. If you are a first time home buyer trying to get closing done before the tax credit goes away [on November 30], that’s another 15 days you need to build into your schedule. Don’t wait until the last minute. Email me today, and we’ll get started finding that first home for you.

Tags: first-time buyers, mortgage news

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Need A Low Down Payment? It’s Back!

Tuesday, July 21st, 2009

“I know prices are low and interest rates are great, but how will we come up with a 20% down payment?”

If I had a dime for every time I’ve heard that, I would be fairly wealthy. Apparently lenders are hearing it too, as they are starting to roll out plans that don’t require that large down payment. For example, Wells Fargo has their Community Development Mortgage Program [CDMP]. Under the CDMP buyers only need a 2% down payment to get to the closing table. For your average $135,000, you could be unpacking and rearranging the furniture in your new home for an initial investment of $3,000.

There are some requirements, but they are relatively minor;

Owner-occupants only [no investment property]
Minimum 620 FICO score
No “bad marks” [late payments, foreclosure, repossession, etc.] on buyer’s credit score for the past 12 months.
The interest rate will be slightly higher — perhaps a half-percent.

If you have been sitting on the fence waiting for the right moment to invest in a new home, this new mortgage plan might be just the thing to pull you off. If you would like more information, please email me and I’ll set you up with a Wells Fargo representative. The Federal tax credit ends on November 30, which is a lot closer than you think.

[edit: I forgot to add that there are some other requirements concerning income and the size of the home. For average buyers investing in a starter home, however, you should have no problems. You just can't buy the Biltmore with this.]

Tags: first-time buyers, mortgage news

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Buyers Can Use the $8,000 Tax Credit At Closing, Take 2

Saturday, May 30th, 2009

HUD has released updated guidelines allowing for the use of the $8,000 tax credit for first time home buyers at the closing. Those guidelines are in Mortgagee Letter 2009-15 [which is as long and filled with governmentese as you expect]. Here is a brief summary.

FHA-approved organizations [which is just about all banks and mortgage lenders] are allowed to purchase your $8,000 tax credit. This will allow you to use the credit at closing to cover most of your closing costs. One major catch — you can not use the credit to cover a required downpayment So, if you have an FHA mortgage, you still have to bring 3.5% to the closing table, but you could use the credit for just about anything else — closing costs, prepaid taxes & insurance, and so on.

While this isn’t everything, it is still a great step forward. Knowing that the $8,000 will cover closing costs, buyers can be a bit more aggressive on the price they offer and get into their first home for a lot less.

If you are interested in looking for your first home, please email me and we’ll get started

Tags: first-time buyers, mortgage news

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