What if Mortgage Rates Went to Zero? Would You Buy Then?

September 28, 2010 by Leave a Comment

I am a self proclaimed economics junkie, nerd, enthusiast. I got really excited looking at some recent information about the Economy and Interest rates!

A survey done by CNBC of  leading market participants indicates that THEY believe the Federal Reserve will boost it’s balance sheet by about a half a TRILLION dollars in the next six months.

If you are like one of my friends, you are scratching your head going, “and I care about this because….?” Well you care about this because if the Fed does this – a likely benefactor would be LOWER Mortgage Rates.

The Fed stopped buying mortgages in March, and rates didn’t skyrocket… but they just are not going below certain thresholds. The idea is that the Federal Reserve will have to come back into the market in some fashion, and when they do, mortgage rates will likely go lower.

But HOW low will they go?  And would a rate at, or near zero, have first time home buyers running to buy like the next $8000 Tax Credit?

“The difference between a 4.5% and a 3.5% mortgage isn’t that great. If we were at 10% and rates fell to 5%,” that drop would attract much more borrower interest. “When you’re talking about incremental declines in interest rates, it does add some [demand] but not as much as you’d think.”

Mr. Bernanke is scheduled to speak this Thursday and there will be even more people listening to his “tone” to see if there’s any hint about deflation and the Federal Reserve”s Balance Sheet. If the CNBC poll is correct, we could get below the current stale mate.  Either way, though, mortgage rates are at the historical low point and that’s only ONE of the reasons people are buying in the Raleigh / Cary real estate market!

To find out what you can qualify to purchase in NC, call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We have the best rates and the lowest fees for mortgage loans in NC Do you think we need a new tax credit?  Read this

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Credit Scores and First Time Home Buyers!

May 20, 2010 by 3 Comments

How Credit Scores are calculated is changing, and the minimum scores required for mortgage loans are going HIGHER!  For information about “WHY” Credit Scores requirements are changing in NC, click here.

It’s important to know that Transunion began making changes to the way they calculate credit scores, and if you don’t change your credit strategy – you might not be able to purchase!

I think it’s important for First Time Homebuyers (especially) to know what credit scores they need so that they can take advantage of the $8000 Tax Credit, Low Rates and “Cheap Houses!”

If you are using VA Benefits, you need a 620 score, even though VA does not have a MINIMUM credit score!  I think that (JMHO) because VA doesn’t have a minimum – those VA rates have gotten higher in the last 2 months!  For details on Credit and Veteran’s Administration home loans click here! Again, do not be surprised if the VA rates are not as “cheap” as the FHA and USDA rates!  This is a SHIFT! [Read more...]

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Want the $8000 Tax Credit But No $ For Downpayment?

April 26, 2010 by 1 Comment

The $8000 First Time Home Buyer Tax Credit in 2010 expires at the end of this week, and people are really working hard to try and get in under the wire!

Tons of the people we are talking to do not have the money for a downpayment – and they are having trouble getting a Seller to accept a contract for USDA Home Loan… because the USDA Single Family Rural Development Home Loan Program is running out of money.

So what can you do if you don’t have a pile of money laying around for a down payment?

You can get a gift! You can file for the Tax Refund this year, even if you have already filed your taxes!  Get a gift from a Family Member!  Rob your 401K and pay it back!  Don’t let this opportunity pass!

Be careful not all purchases will qualify for the 2010 $8000 TAX Credit!

Here are some items to remember when you are trying to qualify for the credit:

  1. The home may not be acquired from a mother, father, spouse, or child
  2. The home may not be acquired from an entity in which you’re a majority owner
  3. The home may not be acquired by gift or inheritance
  4. The home’s primary buyer must be at least 18 years of age
  5. The home’s purchase price may not exceed $800,000
  6. The home must be meant for use as a primary residence

Remember – you must live in the property as your primary residence for at least THREE YEARS or you will owe Uncle Sam the refund. If you have other detailed questions about the CREDIT – look at the IRS Website.

We are still taking applications for folks who are writing contracts for USDA Home Loans. There’s still some money available – but it is going fast. If the seller will not accept a contract with USDA financing – consider FHA!  It’s a 3.5 down payment – and it CAN be a GIFT!

For answers to your questions about qualifying for a mortgage loan, contact Steve and Eleanor Thorne 919-649-5058. We have the best rates available and we lend all across North Carolina, Virginia, South Carolina, Georgia, Florida and Maryland.

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USDA Home Loans Could Be Getting More Expensive

April 20, 2010 by 6 Comments

4/20/10 – As we’ve mentioned (a couple of times) USDA Single Family Rural Development Home Loan Program is running out of money… WHEN that magic date is – we don’t know… But we know it’s coming in the next few weeks.

The Hombuilder’s Association of America is in Washington this week to discuss (read they are begging Congress) ways to get more money to the program FAST!  No wonder – it’s a zero down payment loan, and it’s the hottest mortgage product we have! (Guidelines are pretty strict read here if you’ve had a foreclosure or bankruptcy)

Last week two members of the House proposed legislation that would continue the funding… but both bills add requirements that would force lenders to raise the rates for these loans! 8o((

Rep. Shelley Moore Capito (R, WV) the ranking Republican member of the House Financial Services Subcommittee on Housing and Community Opportunity, late Tuesday introduced legislation that would increase the current 2% guarantee fee to between 3% and 4%.

Separate legislation was recently introduced by Rep. Paul E. Kanjorski (D, Pa.), chairman of the House Financial Services Subcommittee on Capital Markets. That version has the lender paying a 3.5% upfront fee when the loan is issued, while authorizing an annual assessment of .5% of the outstanding balance.

Neither program places additional cost on the taxpayers.

The next step is discussion at committee level before a final bill is moved to the House floor. That’s expected to happen quickly, given the money is quickly dwindling during the key Spring selling season.

Okay so WHY does Congress feel that it is necessary to either add a downpayment requirement and/or increase the Guarantee Fee?

These are ZERO Downpayment loans (for current guidelines click here) that have to be located in a more rural area.  There are income requirements… these are not $750,000 loans in Los Angeles (where FHA has way high loan limits). For the most part, these are $200,000 to $300,000 loans made to people living in outlying areas who are blue collar workers.  They have 2 or 3 jobs, and they are conservative, and the USDA Home Loan program has a LOW default rate!

I’m hopeful that Congress gives the program more money – and I hope upon hope that they don’t make it more expensive!

If you have questions about taking advantage of the USDA Home Loan program in NC – call us.  We can tell you exactly what’s happening now! Steve and Eleanor Thorne, USDA Mortgage Specialist, 919-649-5058

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2010 Tax Credit

March 17, 2010 by Leave a Comment

Click the image to enlarge
Home buying tax credits
Source: Fixr

Filed Under: First Time Home Buyer Tagged With: , , ,

What Does It Mean When USDA Runs Out Of Money?

March 12, 2010 by 1 Comment

Every year Congress puts funds into the USDA Rural Development “Account” for them to lend out to home buyers. It’s a great program that requires no money down (for program details click here)…

On March 11, 2010 Rural Housing folks announced that they will probably run out of money before the end of April.  What does that mean?

Unlike FHA, VA and Conventional loans – USDA Home Loans must be underwritten by a USDA underwriter.  The Underwriter issues a Conditional Commitment.  If the “account” that USDA has within the Federal Government to fund loans from runs dry… they can issue TWO different kinds of Commitments

According to Chase, the world’s LARGEST insurer of USDA Home Loans, “if the USDA issues “subject to funding commitments” we can still fund USDA loans, even if they are out of money. The USDA’s 3-11-2010 notification said that they will not issue the commitments subject to the availability of funds therefore we can’t fund the loans.”

This is significant because the Tax Credit for Home Purchases ends in April… and MUST fund by the end of June.  If you are looking ofr a home, and are considering using USDA Home Loan Financing – we suggest you call us IMMEDIATELY!  If you are SELLING a home – please make certain the funds are available for your transaction!  Call Steve Thorne, Corporate Investors Mortgage Group, 919-649-5058

HERE’s AN UPDATE AS OF April 6, 2010

 

 

 

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Mortgages at Tax Time

January 22, 2010 by Leave a Comment

If you are getting ready to do your taxes, and you are renting…

P-I-T-Y!  I mean really, Bro… too bad.

You are missing out on THOUSANDS of dollars! People who OWN a home, get tons of deductions you don’t… just for living in a HOME!  Haven’t you ever heard the saying, “Buy a House Get a Raise!”

Mortgage Interest Deduction:

You may not deduct interest on more than $1,000,000 of home acquisition debt for your main home and secondary residence. Home acquisition debt means any loan whose purpose is to acquire, to construct, or substantially to improve a qualified home. The limit is reduced to $500,000 if you are married filing separately.
Use the worksheet on page 11 of Publication 936 to calculate the allowable mortgage deduction.
Let’s say you purchased a home in April of 2009, with an interest rate of 5.5% with a loan balance of $200,000. Your monthly Principal and Interest Payment would be $1135.
The Interest you paid April through December would be 6395.44.

This doesn’t include any other charges you might be able to write off… like TAXES on the mortgage!
So when you’re doing your taxes… just for fun… add a $6395.44 deduction in Schedule A, and see what kind of difference it makes for YOU! Remember, in addition to this deduction – folks who purchase and close before the end of June get an additional TAX CREDIT!

WoW!  If you are renting… you could really, REALLY be missing out! Seriously, what could YOU do with an extra $12,000?  (Tax Credit plus potential refund!)
Considering a mortgage loan to purchase your new home?  Call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, Raleigh, NC  919-649-5058!  Remember – USDA Home Loans and VA Mortgage Loans do not require any downpayment!

Filed Under: First Time Home Buyer Tagged With: , , , , , , , , , ,

The First Time Home Buyer Tax Credit of 2010

January 16, 2010 by 1 Comment

Okay—so here’s why you REALLY want to buy a house in the first half of 2010…

Houses are C-H-E-A-P!  I mean CHEAP!! I’ve been in this business, in North Carolina decades, and I’ve never seen home prices so AFFORDABLE (read CHEAP!)!

Mortgage Rates are L-O-W! It does not look like this is going to continue to be the case, as “Big Ben” (and the Fed) announced he is going to stop purchasing Mortgage Backed Securities in March (which will force rates higher).

The Government is G-I-V-I-N-G you a tax credit of $8000 or 10% of the home’s value. If you are a First Time Home Buyer! So if you buy a really nice $250,000 house—that’s $8,000 for furniture, pay off your college loans, buy a car, big screen TV… or to just plain ole save!  $8,000!!!

There are a couple of restrictions / things to remember:

  • Some States are helping the Tax Credit to be used as a down payment.  Unfortunately, the State of North Carolina does not have the funds to be able to offer this grant program.
  • Homes that cost more than $800,000 aren’t eligible for the credit
  • You must be over 18 years old to claim the credit (dependents are not eligible to claim the credit either).
  • Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.
  • You cannot claim the credit if acquired your home by gift or inheritance OR if you acquired your home from a related person.

If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $8,000 or 10% of the purchase price. Note: A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (I would go with 50/50 as a reasonable method if one person is not eligible for the credit)

The way you determine which credit you are eligible for is based upon the purchase date. Only homes purchased from Jan 1 2009 to April 1st 2010 are eligible for the fully refundable $8000 credit.

If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

Foreign or Overseas Homes: You are considered a first time home buyer when buying an American residence, even if you owned principal residence outside of the United States within the previous three years. Non-resident alien’s cannot claim the credit. In addition to this, in order to qualify for a mortgage – you must have a two year US Credit History (FNMA and FHLMC changed rules in December of 2009).

Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit.

An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and close on that purchase by June 30, 2011.

For more details on the Tax Credit and Frequently Asked Questions, click here.

First Time Home Buyers should purchase a home NOW, because houses are CHEAP, mortgage interest rates are LOW, and the Government is GIVING YOU up to $8,000!!!  WOW!

If you have questions about buying a home in RTP, or want to get pre-qualified for a mortgage loan in Raleigh NC, please contact Steve and Eleanor Thorne, Corporate Investors Mortgage Group, Inc in Cary, NC  919-649-5058

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VA Loans and Credit Scores

January 15, 2010 by 4 Comments

home loans for veteransHave you seen the new Remax Commercial that says “when he gets home… we’re going to buy a new home!” And then it pans to the guy overseas, and he’s looking for homes on the Internet!  LOVE that Commercial!If you’re one of those folks looking forward to taking advantage of your VA Benefits, check out your credit score!

The Veteran’s Administration does not actually make VA home loans… but they INSURE them.  Because of this, the VA gives guidelines for who they will insure, and what their credit scores should be. I’ve recently been writing that Credit Scores are getting tighter in NC, and I’ve said that “it’s the Golden Rule” because the Banks are the ones who are setting their OWN guidelines about who they will loan money to and under what circumstances. [Read more...]

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FHA Qualifying Requirements

July 31, 2009 by 2 Comments

Many of the folks we are talking with right now want to purchase a home using the FHA Mortgage Loan program – and then taking the $8000 Tax Credit (you can get that back NOW, like in 12 weeks, by amending THIS YEAR’s TAX RETURN!) to “pay yourself back” for the downpayment!

Here are qualifying requirements for an FHA Mortgage Loan:

  • You can have a Co-Signor on a FHA loan.
  • You need to wait at $8000 Tax Credit Updateleast 2 consecutive years following a bankruptcy.
  • Any history of foreclosure must be at least 3 years old
  • You must have had a stable income for at least 12 months and proof that you have paid all your bills.
  • You must be able to make a 3.5% down payment, which is considerably lower than conventional loans.
  • The Downpayment can be a GIFT!
  • There are also eligibility requirements for the home. Properties that are eligible for a FHA loan include: single-family homes, 2-4 unit properties, condominiums, double-wide manufactured homes and modular homes. Ineligible homes include (but are not limited to) co-ops, boarding houses, commercial properties, hotels, and private clubs. A home is also ineligible if the seller acquired the house within the past 90 days. For any property over 10 acres, the loan will be based on the price of the house and the first 10 acres only. Additionally, the property must be used as a primary place of residence.
  • You can count Part Time Income for a FHA Loan
  • You need a credit score of at least 620 to get our best priced FHA Loans… lower scores might qualify- call us for details!

If you are considering a PURCHASE of a home in Cary, NC – or refinancing a FHA Mortgage in Raleigh, NC Steve and Eleanor Thorne – Corporate Investors Mortgage Group, Inc. Cary NC, 919-649-5058 for the BEST (read cheapest!) FHA Mortgage Rates!

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