Should I buy since they passed the Tax Credit Extension?
By · CommentsCan I qualify for my new home loan?
Great! They passed the credit extension and included a provision for move up buyers http://www.federalhousingtaxcredit.com/, but can I qualify?
With home prices and interest rates at their lowest levels in years, and the new tax credit from Uncle Sam, now is the time to buy – maybe! Gone are they days of having a pulse and getting a home loan. Now you have to prove yourself and typically have some skin in the game, which is a good thing if you want to qualify.
Here are three easy steps to help you take advantage of the awesome deals in today’s market place:
1) Get a free copy of your credit report. All three reporting agencies are required to give you a copy once per year upon request. It will not include your credit scores. https://www.annualcreditreport.com/cra/index.jsp
2) Find a knowledgeable Realtor and one with years of experience.
3) Find a Loan Officer with a minimum of 10 years experience and who is licensed. All must be licensed by March 31, 2009. You can contact the Department of Banking and Finance. http://dbf.georgia.gov/00/channel_title/0,2094,43414745_46296143,00.html
So what are you waiting for? It is a great time to buy and Uncle Sam wants to give you an incentive. Mortgage rates and home prices will not stay low forever and the tax break expires 6/30/2010. Contact me if you need any additional help with your home loan needs.
How long do mortgage rate quotes last, on average?
By · CommentsMortgage rates aren’t changing as quickly as they were earlier this year, but they can change regularly on a daily basis. Over the last several months, on average, wholesale lenders have updated their rate sheets every 4 hours, 11 minutes. Over the last week, it’s even shorter with updates occurring every 3 hours, 20 minutes.
So what is a consumer to do?
Look, I’m a guy who has study the mortgage markets for over 20 years so consider this advice when you are shopping for mortgage rates. Unless you’re willing to accept a higher mortgage rate, stop trying to time the market for a lower one. More often than not, you are going to lose.
This is especially true since rates tend to rise a lot faster than they fall. There is a saying in the mortgage world: Mortgage rates take the elevator up and the escalator down. Therefore, as you start shopping for your mortgage rate, keep in mind there is almost never a reason to hold out for that extra 1/8 percent. An 1/8 percent equates to a minimal amount of money that won’t change your kids college nest egg of fund your next vacation trip to Hawaii. Moral victories aren’t worth gambling for.
Mortgage rates change. That’s what they do. So if you’re in the market for one, call or e-mail me and we can talk about your mortgage rate needs. Either way, get a move on. In a just a few hours, that rate quote you’re staring at is going to be expired.
Going “GREEN” has some pitfalls
By · CommentsI am all for conservation, recycling and protecting our wonderful planet earth, however we must be careful when enacting laws without considering the consequences. Take for example H.R. 2454 (Cap and trade bill) working its way through congress. This bill will have a direct effect on people trying to get home loans when purchase an existing home. I have attached a link to the bill below, all 1428 pages.
To summerize, if this bill passes, homeowners will be required to have their homes certified “Green” or energy efficient before it can be sold. Sellers of older homes may be required to upgrade their windows, roofs, doors, insulation and appliances to government standards.
So Realtors, Loan Offices and home owners beware!!! Beginning 1 year after enactment of this Act, lenders will not allow a buyer to qualify for a home loan unless the seller has retrofitted their existing home to comply with the energy and water efficiency standards of this Act. Now that is truly SCARY for our fragile industry.
FHA guidlines for roofs
By · CommentsIt is very important everyone involved in a real estate transaction for a home loan understand the issues that can arise from roof issues. FHA does not require a roof report or clearance for their home loan transactions. However, some lenders will have requirements that go beyond the minimum standards required by FHA.
If an appraiser makes note of any roof issues in the body of the report, then FHA will require a two year clearance on that roof. Best practices for Realtors would suggest anytime they go visit a home they give the roof a good once over to see if there are any glaring problems. This will save issues that come up in the eleventh hour of a home loan transaction.
Realtors would do themselves a favor by contacting the lender on all home loan transactions to make sure of any specific requirements they have in addition to the FHA guidelines. Keep in mind that this is only for your FHA loan closings.
Closing cost expectations
By · CommentsWhether you are buying a home or refinancing your existing home loanyou can expect to incur closing cost when you close the transaction. Closing cost can be broken up into two categories, recurring and nor re-recurring closing cost. Nor-recurring closing costs are fees attributed to the lender, broker, state or local government and the attorney. These fees are negotiable and vary based on your individual situation. Recurring closing costs are fees associated with establishing your escrow account if one is required based on your situation and are not negotiable.
Once you have applied for your mortgage the lender has 72 hours to provide you an initial GFE (Good Faith Estimate) and TIL (Truth in lending) disclosure. These documents are required by the Real Estate Settlement Procedures Act (RESPA). The problem with any GFE is that the lender isn’t required by law to stick by the fees stated within the GFE. This allows some of the unscrupulous lenders to add new fees before closing. If they do they must re-disclose to you with a corrected GFE 72 hours prior to closing.
It also pays to proceed with caution when it comes to brokers touting no closing costs loans. Theoretically, there is no such thing as a no closing cost mortgage. As altruistic as many lenders may be, they still need to make a profit. So, make no mistake, the borrower foots the bill, one way or another, by either paying now or in the futire , through a higher mortgage rate.
Home loan scams
By · CommentsThere are many home loan scams out there that you can fall victim to. Some of the most common are those that involve incomplete paperwork, false advertising, and misleading information and yes, even non-existent homes. These scams will almost inevitable lead to a disaster.
This is why it is so important to hire a professional realtor who will look out for your interest. Too many times people have gone out on their own to avoid paying fees. Unfortunately, they do not know which paperwork needs to be completed during the transaction that will protect them. Or when visiting the home, they do not get a home inspection completed. They just assume everything works in the house. The most obvious item is that the house should be in livable condition.
There are numerous legal issues that need to be cleared up as well. The most important is the title on the home. Is there a lien against the home? Avoid getting yourself into any legal issue as anytime you need to go to court, it is going to be expensive. Again, this is the most important purchase of your life, why try to cut corners, hire a lawyer to review all the paperwork. Have it all check out before you make any purchase.
One final issue is that of security. There is a reason that the house may be such a bargain. Usually houses are priced much lower in neighborhoods where crime is high. Because people are on such tight budgets today, they see the opportunity to own a house for such a cheap price just too good to pass up. If you are new to the area, ask people who have lived in the town for a while about that particular section. Make sure that the area you decide to purchase your house in is a secure neighborhood so that you can have a peace of mind knowing your family is living in a safe area.
Obtain a low mortgage rate
By · CommentsWhen refinancing your home loan, your goal should be to obtain a lower mortgage rate than the one attached to your current loan. However, many people make the mistake of not preparing ahead of time before applying for a refinance loan. In order to secure the lowest mortgage rate, you should make sure of a few things before applying.
1) Get the process started early and do not try to time the mortgage rate market. There are major delays in refinancing loans right now. Many homeowners applying for morgtgage loans are finding that lenders are very backed up. Be patient, mortgage rates are very low and will benefit anyone with a rate above 5.5% or has an adjustbale rate mortgage.
2) Credit score. Good or even great credit is no longer enough to secure the best home refinancing rates. Today, you must have stellar credit to get the best mortgage rate. A score of 750 or higher should be good enough to get you the best rates. Check your score constantly and make sure you take all the necessary steps to get and keep your credit score over the 750 mark. Pay down your credit card balances and pay off other loans if possible. Hiring a credit counselor may not be a bad investment if you need the help.
3) You will not be offered the lowest home loan interest rate unless you have good equity in your home. You need at least 20% equity. If you don’t have it yet, consider making a large payment to get your balance down low enough to get it. Of course, you need to weigh the loss of liquid assets against the advantages of the low interest rate to decide if this is a good idea financially.