Federal Housing Tax Credit

 

In case you haven’t heard by now the tax credit for new home buyers has been extended until April 10^th of 2010.  There is a $6500 credit to include repeat buyers or move up buyers.

Some key highlights:

1. You can amend your 2009 tax return even if you close on the new home in 2010
2. New higher income limits, so if you made too much before you might get it now!!
3. If you are purchasing a home from a relative this credit is not valid
4. Tax credit is for homes priced at $800,000 or less
5. The actual tax credit is 10% of the purchase price up to $8000 for a new buyer and $6500 for a repeat buyer.
6. As long as you have a signed contract prior to April 30, 2010 you will qualify just as long as you close by June 30, 2010.

 

A great website to get complete information is http://www.federalhousingtaxcredit.com.  They outline all the important details of the program.

Feel free to contact us with any questions on the program as well and how it might benefit you.  Our toll free number is 877-885-6872 ext 101 or email me at eddie@loanofficeusa.com.

Renovation Loan Anyone?

 

Over the past couple of months there’s a lot of talk about borrowers obtaining the funds for that bank owned home, foreclosed home or even renovating their current home.  Believe it or not there is an easy solution just as long as it is an owner occupied property.  That solution is called the FHA 203k loan.  Many lenders try to stay away from these loans as they are a bit lengthier than your normal loan and require a bit more patience on everyone’s side.

Types of 203 loans:

1. 203(k) Streamline:  This loan does not allow for structural repairs and are limited to a total of $35,000 in hand.  There is no minimum dollar amount but the repairs are limited to repair, replace and update of current items.
2. 203(k) Standard:  Loans with more than $35,000 in repairs and or property repairs that are in need of structural improvements.  This requires the service of a 203(k) consultant that will be assigned to you by your lender.

 

This loan places you the borrower with a lot more buying power when making offers.  You no longer have to worry how you are going to finance the home before you make the repairs.  Typically you would have to get a very high interest loan for acquisition and repair of the property and then obtain a final loan to pay those 2 off within a certain time of completion.  The 203(k) removes all those steps.  You have one easy step rather than three.  You get one long term low rate loan that will finance both the acquisition and rehabilitation of the property. 

Property Types:

There are a variety of eligible property types.  It can be a one to four family home.  You can convert a one family to a two, three or four family home if zoning laws permit.  You cannot however reduce the amount of units.  Condos are also acceptable.  Cooperative units are not eligible.  For the specifics of these property types it is better to discuss with a loan consultant as these laws change quite frequently.

 

The Process In a nutshell:

1. Locate the property
2. Execute a contract on the property
3. Begin chatting with a loan consultant to start the application process
4. FHA Consultant reviews the property and prepares his report
5. Appraiser performs an appraisal
6. Lender issues commitment
7. Loan Closes

 

The overall process isn’t all that difficult.  Like I initially mentioned it is a lengthy process but as long as all the proper documentation is submitted once the underwriters request it things move along smoothly. 

You can reach me at eddie@loanofficeusa.com or 877-885-6872 ext 101 for any questions you might have in regards to the program and if it is a fit for you.

Do you save money going directly to a Mortgage Lender?

 

The idea that you will save money going directly to a Mortgage Lender is not likely.  You will probably have a better chance in saving money with a Mortgage Broker.  The difference is that Mortgage Brokers have access to a multitude amount of lenders and with that, many different loan programs.  A Mortgage Broker can “shop” around for the best rate on any particular day.  Also, because the Mortgage Broker has access to many lenders, they can find lenders who specialize in various market groups that a few lenders avoid, ie applicants with minimal or no down payment, those with poor credit ratings, etc.  Furthermore, a Mortgage Broker does not need to add net cost to the lending process since they are doing the work of what a Mortgage Lender would usually pay its employees if it was done directly through the lender.  Visit us on the web at www.LoanOfficeUSA.com to be partnered up with a lender that fits your specific needs.

The Importance of Great Credit in Tough Lending Times

 

The days of easy credit have come and gone.  If your shopping for any type of loan your biggest bargaining power is your credit.  Most lenders have tiers that you are placed in once they run your credit and negotiating is limited once your in the lower tiers.  Here is some general information that we hope will help you get a better understanding of credit and what it consists of.

What is a credit score?

A credit score is a number that signifies what risk you pose to getting a loan.  The higher the credit score the lower risk you have.  These scores can change every month since your credit information changes and generally gets updated monthly as well with creditors.  One thing that is for sure is that lenders use credit scores differently.  When you’re appling for a car loan they might tell you your credit is ok, and then your mortgage rep will tell you it’s not so good.  This is normal since qualifications tend to be different for every loan type.  One thing that we know for sure is that with low credit you better be prepared to afford a high interest rate or not qualify at all.

How is my credit score used?

On the mortgage end of this question, the answer is simple.  Your credit puts you in a certain class of rates and guidelines.  Once the lender has that credit score it will tell them what adjustments that need to be made to your rate and program because of the score.  That is only the beginning of course.  You have to then qualify based on your debt to income ratios, loan to value ratios etc…  As far as auto loans goes, it is similar but many lenders have different criteria when it comes to auto loans.  Know one thing, the higher the credit the lower the rate you will qualify for, the lower the rate the higher loan amount you qualify for.

What impacts my credit score?

1. Amount of open liens
2. Number of late payments
3. Number of open accounts
4. Credit Inquiries
5. Collections & Judgements

Those are the most common areas that you should be worried about when reasoning why your credit is where it is. 

Summary:

1. Paying your bills on time on a montly basis will gradually increse your credit score
2. The higher your credit score the lower your rate and the larger the loan amount you qualify for
3. Having loan balances close to their limit will decrease your credit score
4. Too many inquiries will decrease your score but checking it yourself will not
5. Negative items can be removed from your credit

Visit us at www.loanofficeusa.com/credit.html  and request your free credit consultation.  Our experiences partners have removed 665,515 NEGATIVE items in 2008 alone.  With over 18 years experience, millions of removals and service to over 1/2 a million clients you can be sure you are in good hands with our credit consultants.

Is Foreclosure Your Last Resort?

 

Have you suffered any hardships lately?

• Lost Your Job
• Pay Cuts
• Decrease in Salary
• Unexpected Bills
• Adjustable Rate Mortgage Keeps Going UP!!
• Family Hardships

If so you might just be a candidate for a loan modification.  Many companies are out there promoting themselves in these difficult times as legitimate loan modification assistant companies.  Be very careful as to who you deal with when choosing someone to represent you.  Most of the times having the backing of an attorney is always a little more secure in securing the proper modification that fits you and your family.

So what exactly is a modification you ask.  The basic idea behind a modification is that the lender will work with you to ring the payment to a reasonable rate that makes it easier for you to afford those payments.  They do look at your current financial situation as well.

Don’t think they are just going to go ahead and modify that loan with no questions asked of course.  In most cases they will as you for a financial statement, assets, income and most importantly a hardship letter.  The more in detail the hardship letter is the better your odds are of course.  This letter you will write is your sales pitch to them. 

The lender needs to know why they should work with you.  You need to convince them that you will be able to afford lower payments, otherwise they will just foreclose on the property and sell it for whatever they can get rather than waste their time processing a new loan modification for you. 

Your financial statements should be accurate as well.  If you overstate your expenses you’re going to put yourself in a position that your debts outweigh your income by a huge margin.  If they begin to calculate your new payment at the reduced rate, add up all your expenses they better not be more than your actual income.  If that is the case there is no way you should be in the home and therefore no modification would work.  So be very careful when submitting those financial breakdowns and don’t go  overboard with the actual numbers. 

Assuming a modification makes sense and they propose something to you, there could be various options.  I personally have seen lowering interest rate to a 4.5% for a certain time period and gradually increasing it into the low 6′s within a 10 year period.  I have also seen lowering the current rate to the mid 5′s at a fixed rate.  It’s a case by case scenario when negotiating and all lenders are different because they are all in different financial situations themselves. 

Overall a modification is the last resort if you cannot refinance your property.  Be prepared to give supporting documentation and have patience.  The overall process can take a few months but be worthwhile in the end.  If anyone has any questions at all on loan modifications please feel free to email me directly my email address is eddie@loanofficeusa.com, you can also reach me at 877-885-6872 ext 10 or go online  at www.LoanOfficeUSA.com and sumit a refinance application with your information and make a notation that you are looking for modification information. 

LoanOfficeUSA now on Twitter!!

With all the buzz about twitter lately we’ve decided to use it to benefit all our visitors here at LoanOfficeUSA.com.

For all you twitter users visit us and follow us.  For all that are not part of twitter join us in making this crazy world of lending a bit easier and putting you the consumer at ease.

With twitter we will be able to keep everyone posted on daily rates, market updates, market trends and forecasts.  In today’s turbulent economy there’s nothing better than constant update in order to make sound decisions.  That’s what we’re here for.  Just another tool to make the consumers life a little easier.

Visit us on twitter at  http://twitter.com/LoanOfficeUSA

For all your loan needs and research we are here to help!  www.LoanOfficeUSA.com

Fannie Mae Refi Plus

So you might be one of the many borrowers that has contacted us thinking that they don’t qualify or that it might not be worth it to refinance because the value of your home as decreased dramatically.  Well let’s revisit that scenario because there is new light to shed on the situation and it is benefiting many.

In walks the Fannie Mar Refi Plus loan.  You ask yourself what exactly does that mean in English?  Well to sum it up briefly, this is a new loan option that you can place yourself in as long as you are currently in a Fannie Mae loan.  Depending on the results once your information is submitted limited documentation is required as well.  In certain cases all they are verifying is that you are currently employed.  They are looking for on time payments. 

So what are the benefits you ask.  To start off, no matter what your new LTV (loan to value) might be you will not need to get mortgage insurance.  This will be available if your current FHA loan does not have mortgage insurance.  Here is a breakdown of eligibility:

	Existing Fannie Mae Loan	New Loan Being Refinanced	Eligible
1	LTV <= 80% and currently does not have Mortgage Insurance	LTV <= 80% and currently does not have Mortgage Insurance	YES
2	LTV <= 80% and currently does not have Mortgage Insurance	LTV > 80% and requires NO Mortgage Insurance	YES
3	LTV > 80% and currently has Mortgage Insurance	LTV > 80% and requires Mortgage Insurance	NO

Along with the qualifications above here is some additional information that will help you.

• Maximum 95% LTV for Owner Occupied (Primary Residence) 1-2 Unit Conforming Loan Amount

• Maximum 90% LTV for Owner Occupied (Primary Residence) 1 Unit High-Balance Loan Amount

• Maximum 80% LTV for the following loan scenarios:

  • 3-4 Unit Owner Occupied (Primary Residence)

  • 2 Unit Owner Occupied (Primary Residence) High-Balance Loan Amount

  • Investment Properties

There are daily updates on these types of new financing options.  We will attempt at keeping you in the loop with any updates that come along but please don’t hesitate to send any questions you might have to us.  Visit us at www.LoanOfficeUSA.com to submit any questions or call us at 877-885-8672.

Smart Auto Finance Shopping!

With the abundant of cars that are on the lots these days driving by any auto dealer, it’s very tempting to see what prices they have on those 2008 leftovers.  Believe me when I tell you there are plenty of leftover vehicles still on those lots and will be for quite some time.

 

With a great deal comes great responsibility.  The biggest responsibility is that you owe it to yourself to be prepared with auto financing before walking into an auto dealer.  Yes they promote 0% financing, low rates and that they have plenty of money to lend, just that when you walk through those doors the commercials you just saw before you left the house change rapidly.

All of a sudden you found that great deal that you were looking for on the car of your dreams.  Now you sit down with the finance department.  Be prepared for some bad news if all of your finances aren’t in order!  When I mean finances I want to emphasize the significance of credit score in getting those marvelous deals you are hearing about.  Be prepared for them not to give you what you expect as well.

Before you go into an auto dealer looking for that potential new car you’ve been dreaming about for quite some time organize yourself and follow some simple steps.

1.      Determine how much you want to spend.  It is important to calculate what your affordability is before you start looking.  Rule of thumb as in mortgages, personal loans etc., is try and keep your debt ratios under 50% of your gross monthly income.

 

2.      Determine exactly what you need in a car.  Is this a car that you need to rely on and need an extended warranty?  Weigh your options as there are a wide array of vehicles on the market today all with something a little different than others.

 

3.      Shop around.  So many people I know make the mistake of going with the first car they saw and test drove.  Today there are plenty of cars sitting there waiting for owners.  Shop around even if you have to go a little out of the way maybe an extra 10-20 miles to take a look at the vehicle.  There’s a good chance the next dealer might need to get rid of that vehicle a bit more than the other.

 

4.      Check with www.LoanOfficeUSA.com for auto quotes before you head out.   A simple and quick application online will guide you in the right direction before you head out.  There is nothing like peace of mind when shopping for a new vehicle.  If you show up prepared knowing the facts odds are you will save thousands in the long run.

 

DO YOU FHA?

Many borrowers habitually wonder what an FHA loan is and if it’s a loan that will benefit them in any way.  Let me break down an overview, the benefits and the qualifications.

 

Let’s start off by defining FHA.  FHA stands for Federal Housing Administration which in turn insures FHA loans.  They have been doing so since the the great depression when they came into existence.  Do not confuse them for actually lending money and making loans which is not the case, they simply insure the lender issuing the loan in case the borrower fails to keep the payment agreements up to date.

 

Benefits of FHA loan:

• Lower down payment requirements than typical conventional loans. Usual guidelines on a purchase loan transaction call for a 3.5% down payment.
• Easier credit score requirements. Although the minimum credit score requirements have increased over the last few months they are still lenient. The average lender is requiring you have a 620 credit score for a regular FHA transaction.
• Streamline Refinance option. If you currently have an FHA loan and it is current you can reduce your interest rate without the hassle of going through a full documented verification and reduce the interest rate.
• Lower rates. This will lead to tremendous savings throughout the life of the loan
• Non occupying co borrowers are allowed. To simplify this is basically simply that you can use someone that is not going to occupy the property to qualify for the loan with you. Whether it be family members or friends they may be eligible
• Sellers Contributions up to 6%
• Various products available from fixed rate, adjustable rate, FHA High Balance, FHA Streamline, FHA Secure

Conclusion:

Ultimately if you have less than perfect credit and minimal down payment FHA might be the most useful program on the market for you.  If you are a first time home buyer looking to put less than the typical 5% for the conventional loan down an FHA loan will get you into that new home with great rates and flexible underwriting.  It is not to be confused for subprime lending.  FHA gives current and future homeowners the chance at the American Dream of owning a home. 

For more information visit www.LoanofficeUSA.com and submit an application to be contacted by a qualified FHA Lender to assist you with any questions.

Buying A Home? Here Are The Basics.

If you know what to expect – and you have a trusted team of real estate and mortgage lending professionals to guide you – finding and financing your first home can be an exciting and rewarding experience.  

Obtain Mortgage Preapproval Before You Begin

House Hunting

• Learn how much home you can purchase
• Strengthen your bargaining position with sellers

Choose a Real Estate Agent

• Ask mortgage lenders to recommend agents they work with
• Select a reputable professional who knows the market and will listen to your needs
• Ask agents for references from former clients

Find the Right Home

• Determine the needs of you and your family
• Create a wish list of desirable features
• Take notes as you preview homes

Make an Offer

• Your real estate agent presents your offer to the seller, who will accept, counter or reject it
• When the price is settled, you and the seller sign a Purchase Agreement, defining the terms of the sale

Have the Home Inspected

• Hire a professional home inspector after the offer has been accepted to provide an in-depth look at the basic systems of the house, to reveal any safety hazards and give you a chance to reconsider the deal

The Home Will Be Appraised

• An appraisal, required by your mortgage lender, is a formal, written estimate of the home’s current market value obtain Title Insurance (where applicable)
• This guarantees that the property you are purchasing is free of liens or confusion in rights of ownership
• The policy insures against any losses to the property that result from defects in the title or deed

Close on the Property

• Ownership of the property is transferred
• A closing agent coordinates and distributes all the paperwork and funds and you become the proud owner of yournew home!