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Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. – NOT So FAST!

yourmortgageplanner — Tue, 02 Jun 2009 17:25:10 +0000

I am sure you have heard all the Hype about the new ability about Using the $8,000 First Time Homebuyers Tax Credit as a Down Payment. Not so FAST! As a lender on the Broker side I am all over this; I have queried multiple lenders and have included there response. In short not one lender has implemented it and feel it will only be available towards the Closing Cost not the 3.5% required down payment.

Most borrowers will still have to come up with the FHA’s required 3.5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. Ten states have such programs in place, according to the National Council of State Housing Agencies. – AP: By ALAN ZIBEL

At this time Eagle has no investors who will take this. David feels that we need more time for the program to “evolve” as no one know who will monetize these funds. Borrowers can not yet use this as down payment, they still need the 3.5% down, it may let sellers off the hook for closing costs, but at this point no one knows.

When this is available to us, we certainly will let the world know, that includes YOU! – Eagle Funding.

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Update On 2009 First-Time Homebuyers Tax Credit

yourmortgageplanner — Wed, 15 Apr 2009 23:26:53 +0000

Rer IRS Website:

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

http://ftp.irs.gov/newsroom/article/0,,id=204672,00.html

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Am I Eligible For Making Home Affordable Refinance

yourmortgageplanner — Tue, 07 Apr 2009 02:46:09 +0000

Fannie and Freddie have officially announced and launched Making Home Affordable Plan Program!

Making Home Affordable program “looks the other way” with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.

Not every homeowner is eligible for a Making Home Affordable refinance, however. There are 3 basic criteria that must be met.

First, your existing home loan must be backed by either Fannie Mae or Freddie Mac. Thankfully, both companies provide online lookup services. Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac’s site requires your social security number.

Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home’s value by more than 5%. The math formula is (Mortgage Balance) / (Home Value). If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

If you didn’t pay mortgage insurance prior to refinancing, you won’t have to pay it after refinancing — even if your loan-to-value exceeds 80%.
All refinances require income verification — even if the original mortgage was a stated income loan.
Second mortgages cannot be paid off using loan proceeds — they must be subordinated

There are other guidelines, too, and both Fannie Mae and Freddie Mac have dedicated portions of their website to the Making Home Affordable program. To the layperson, unfortunately, the information may be a bit technical.

Program Highlights:

Up to 105% LTV.
All existing subordinate financing must be re-subordinated. New subordinate financing
not allowed.
No minimum credit score requirement.
Mortgage insurance is not required if existing loan does not have mortgage insurance in force,
regardless of LTV.

To take advantage of the program email or call today! 1-888-271-3437 x7

The program ends June 10, 2010.

FAQ!

http://www.makinghomeaffordable.gov/

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The Five Main Factors Affecting Credit Scoring

yourmortgageplanner — Mon, 06 Apr 2009 18:31:38 +0000

There are five factors that comprise the credit score. They are listed below in order of importance, just as an underwriter would look at the score:

• Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments, judgments and charge-offs have a negative impact. Missing a high payment has a more severe impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.

• Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home.

• Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.

• Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards only.

• Inquiries: 10% impact. This quantifies the number of inquiries that have been made on a consumer’s credit history within a six-month period. Each hard inquiry can cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other words, 11 or more inquiries in a six-month period will have no further impact on the borrower’s credit score.

Remember, a computer that’s not taking any personal factors into consideration calculates these scores. When a credit report is generated, it is simply today’s snapshot of the borrower’s credit profile. This can fluctuate dramatically within the course of a week, depending on the individual’s own activities. The borrower should be made aware of this when they enter into the loan process, and know that it’s not in their best interest to go out on a shopping spree. They need to make sure they are not creating a negative impact on the score while the lender is reviewing their file.

Secondly, it is often beneficial to compile a tri-merge credit report. This provides scores from the three credit bureaus, Experian®, TransUnion®, and Equifax. The lender should be provided with this rounded profile because these three scoring systems can vary in their results. The lender is going to look at the middle score and throw out the other two. In many cases, this works to the borrower’s advantage.

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Good Credit Equals Lower Mortgage Rates

yourmortgageplanner — Sun, 05 Apr 2009 19:25:25 +0000

In the 1960s, Fair Isaac Corporation started working on a system lenders could use to evaluate the likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual to be a “man of his word,” so to speak. Fair Isaac sought to take human error out of the equation with a reliable system that could determine whether or not consumers were truly worthy of credit, and thus FICO was born. This evolved to become the standard for lenders by the 1980s.

Credit scoring has an enormous impact on a borrower’s ability to purchase a home. It can mean the difference between getting a good interest rate and the home of their dreams, or whether they even qualify at all. For this reason, it is important for borrowers to understand the credit scoring process, and to know what their credit score is when they look to obtain mortgage financing.

What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt without being more than 90 days late on a payment at any time in the future. Credit scores can range between a low score of 350 and a high of 850. The higher the client’s score is, the less likely they are to default on their loan. Only a rare one out of approximately 1300 people in the United States have a credit score above 800. These are the slam-dunk clients that walk away with the best interest rates. On the other hand, one out of eight prospective home buyers are faced with the possibility that they may not qualify for the loan they want because they have a score between 500 and 620.

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Mortgage Rates April 2, 2009 – Mark To Market

yourmortgageplanner — Fri, 03 Apr 2009 06:24:52 +0000

Today FASB announced its decision in favor of relaxing standards on mark-to-market accounting rules. As discussed in yesterdays post it was speculated that the equity markets would favor relaxed standards and the bond market may not. This speculation came to fruition as we saw the DOW post a gain of 216.48 points, and the Bond Market selloff across the board. On a negative note the FNMA 30 YR 4.5% Mortgage Backed Security gave up .34bp, this translated into almost .25% worse in Mortgage Rates.

Many believe today was the end of our generations first Depression and tomorrows Job Numbers will signal the true bottom. Another positive signal the housing crisis may be nearing its end is the number of homes under contract to sell is rising, another signal that the housing market may be regaining its footing.

As reported by an industry trade group, the Pending Home Sales Index gained 2 percent in February. The report measures MLS-listed homes in “pending” status — sold but not yet closed.

Pending Home Sales is not a perfect statistic, though, by any means.

For one, the Pending Home Sales Index doesn’t account for non-MLS listed homes including For Sale By Owner properties and mass foreclosure auctions. In certain markets nationwide, these two categories represent a large percentage of the overall transaction volume.

Secondly, Pending Home Sales samples just 20 percent of all MLS-based transactions — hardly a complete listing.

But most importantly, a “pending” home sale is not the same as a closed home sale. A lot of things can go wrong between the time a home goes under contract and the supposed closing date. For example, the home inspection could fail, the contract could fall apart, and/or the buyer’s financing could be denied in underwriting.

All things equal, though, Pending Home Sales is a fair forward-looking indicator for the housing market as a measurement of buy-side demand for homes.

When Pending Home Sales rise, it’s tells us that buyers and sellers are matching up, clearing out market inventory. And actual home sales often follow “pending” ones — 80 percent of Pending Home Sales will close within 60 days.

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Cramer Ready To Take Out Stewart

yourmortgageplanner — Thu, 12 Mar 2009 19:00:19 +0000

Jim Cramer to MOP floor with Jon Stewart Tonight!! Tune it to watch Cramer educate the Faux News Reporter.

As Method Man says:

“I came to bring the pain hardcore from the brain
Let’s go inside my economic plane”

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Am I Eligible For Making Home Affordable Government Plan

yourmortgageplanner — Thu, 05 Mar 2009 16:07:08 +0000

When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:

To help financially-needy homeowners get mortgage relief
To help homeowners who’ve lose equity qualify for today’s low rates

Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable.

It also created an ”Am I Eligible For Making Home Affordable” form on its website.

In the press release, the Treasury detailed the President’s original blueprint. Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.

The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.

But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible.

For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The “refinance plan”, in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is “about the same or less” as the amount owed on his first mortgage may be eligible.

That’s about as much as the Treasury could say.

If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.

[where: 98109] [where: 85012] [where: Seattle, WA] [where: Phoenix, AZ]

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Obama’s Housing Plan Details

yourmortgageplanner — Wed, 04 Mar 2009 19:16:47 +0000

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2009 New Loan Limits “High Cost” Areas

yourmortgageplanner — Mon, 02 Mar 2009 05:51:36 +0000

As part of the stimulus package passed last week, Congress authorized a temporary increase to conforming loan limits in certain high-cost parts of the country.

“High cost” is defined by a regions’ median sales price.

With the temporary increase, a greater share of Americans can now qualify for Fannie Mae- and Freddie Mac-backed loans, usually the least expensive source for mortgage money.

Higher loan limits can be good for the housing market and the broader economy for two reasons:

Cheaper money can spur new home demand, supporting home values.
Higher loan limits render more homeowners refinance-eligible, freeing up cash for spending, saving, or investing.

The complete county-by-county loan limit list is available on the OFHEO website.

Of the 3,232 U.S. counties, 10 percent are considered ”high-cost”. Residents of these areas can expect the same low rates offered to the rest of the country, but with a slight premium.

[where: 98109] [where: Seattle, WA] [where: 85012] [where: Phoenix, AZ] [where: 85029]

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