Wednesday, February 24, 2010
Mortgage lenders facing increased regulation and revised paperwork required by the US Department of Housing and Urban Development (HUD) are advising potential home buyers that time is running short for the home buyer tax credits.
FAQ - 1st Time Home Buyers
Qualified 1st time home buyers are eligible for a tax credit of up to $8,000 for a home that they are buying provided that they have entered into a binding contract on or before April 30, 2010. The buyer has until June 30, 2010 to complete the purchase or complete settlement on their purchase.
FAQ – Repeat Home Buyers
Qualified Repeat Home Buyers are eligible for a tax credit of up to $6,500 for a home that they are buying provided that they have entered into a binding contract on or before April 30, 2010. The buyer has until June 30, 2010 to complete the purchase or complete settlement on their purchase.
The new Truth in Lending Act (TILA), new Good Faith Estimate (GFE) and HUD-1 Settlement forms, Real Estate Settlement Procedures Act regulations and the Fannie Mae Home Valuation Code of Conduct (HVCC) governing the appraisal process, are all industry changes affecting the time necessary for the mortgage lender to process and approve a mortgage loan. The amount of time necessary to complete a “clean” mortgage loan has risen to approximately 60 days. Complications could extend the amount of time significantly and place a buyer’s chances of meeting the timelines for the credit in jeopardy.
Therefore many lenders are advising buyers to enter into a binding contract to purchase a home by April 01, 2010. Be aware that every day of delay beyond April 01, 2010 increases the chances of failing to meet the timelines of qualifying for the tax credit.
Countdown Clock for 1st-Time Home Buyer Credit – http://www.homebuyertaxcredit.com/
Charles Kraus, GRI – Associate Broker
Coldwell Banker Residential Brokerage
(O): (800) 456-1996
Wednesday, February 17, 2010
Monday, February 15, 2010
Here are a few reasons why: On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly. Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000. There is only one way to avoid being affected by all of these costly changes that lie ahead – submit all FHA mortgage applications by the last week of March.
On The Interest Rate Front -
Industry reports show that the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen. This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.
Source: Coldwell Banker Home Loans Newsletter
Friday, February 12, 2010
Wednesday, February 3, 2010
A new website offers you a chance to rate your current neighborhood or a neighborhood that you’re considering for its car dependence. WalkScore.com allows you to score an address for its walk-ability. Just enter the address and press enter and WalkScore.com will score the address for walk-ability and convenience to businesses, schools, libraries, restaurants, etc..
Check out an address at http://www.walkscore.com
Charles Kraus, Coldwell Banker Residential Brokerage