Veterans get a Tax Credit Extension, what about the rest of us??

October 22, 2009 By 2 Comments
First Time Homebuyers could use $8000

First Time Homebuyers could use $8000

On October 11, 2009 the Congress agreed to extend the $8000 Tax Credit for First Time Homebuyers for any Veteran who served at least 3 months of “Qualified Overseas Duty”  in 2009 for another 12 months!

The Service Members Home Owners Tax Act also has a provision that waives the “payback” fee to the IRS of the credit if the Veteran is required to deploy to a different station (I guess that makes sense – you shouldn’t have to pay your boss when THEY are requiring you to move!)

Qualifying for a VA Home Loan/Mortgage is easy!  For details on the 100% mortgage program available to Veterans, click here.

This is GREAT for Veterans who are serving overseas, and WELL DESERVED, but many people want to know if it going to be extended for the REST of the Population!  For more details, click here.

If you have questions about qualifying for a Mortgage Loan guaranteed by the Veteran’s Administration call Steve and Eleanor Thorne!  919-649-5058 We have the lowest rates, and offer the best service on the PLANET!

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Applications for FHA / VA/ USDA Mortgages Up!

July 12, 2009 By 3 Comments

According to the Mortgage Banker’s Association in Washington, DC, the applications for “Government” backed loans is MUCH higher than for any other segmant in the market.  Traditionally, if you were interested in purchasing a $300,000 house – you would consider a Conventional Mortgage Loan.  We would often do those loans as 80-15-5 with the borrower putting 5% of thier downpayment into the transaction, and then get two other loans (80% and 15% of the amount needed).  Conventional Mortgage Loans made through the Banks have long DOMINATED the total applications for mortgages in the Country.

That’s why a shift to FHA / VA / USDA mortgages as is BIG NEWS!

“The MBA’s Weekly Mortgage Applications Survey found that the Federal Housing Administration (FHA) and the Veteran Administration (VA) backed 35.9% of all mortgage applications in the month of June, spiking from 25.7% from a month earlier and 27% from June 2008.”

“A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans,” said Orawin Velz, MBA’s associate vice president of economic forecasting, in a corporate statement Thursday.

What does this mean for you, and getting the best mortgage interest rate?

Mortgages can be looked at as a commodity – the more people willing to purchase a government backed mortgage, the better the price will be.  In the past, FHA/VA and USDA mortgages priced 1/2% in interest higher than a Conventional mortgage loan… meaning, if the best Conventional mortgage interest rate was 5% – the best FHA/VA/USDA price (or mortgage interest rate) you could expect would be 5.5%.

We are seeing that margin get smaller – meaning if you have 3.5% to put into a transaction, so that you can get an FHA mortgage, you will probably get a rate of 5.375% or maybe even 5.25% if everything is “lining” up correctly!  Yippee!

For more information on Risk Based Pricing, please click here.

For information on how to get the lowest mortgage interest rates in Cary, NC, and what questions to ask, please click here.

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Filed Under: FHA Mortgage Loans, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , ,

First Time Home Buyers Get $8000 in NC

March 20, 2009 By 2 Comments

With the new programs adopted by the Government, there’s a great “gift” for First Time Homebuyers!

It’s a G-I-F-T from the Government, and unlike the $7500 credit given out in 2008, you do NOT have to pay it back, as long as you are actually going to live there for 3 years!

This makes getting a mortgage so much better!

Here are some of the details!

  • The $8000 tax credit or 10% of the home’s purchase price, whichever is less, is available only for first time home buyers (Definition of a “first time home buyer” is a buyer who has not owned a principal residence during the three-year period prior to the purchase)
  • There is a $75,000 adjusted gross income limit for tax filers filing as single and $150,000 limit for joint return filers.
  • The $8000 tax credit is available only for primary residence purchases.
  • The tax credit does not require a repayment in most cases.
    • The tax credit does have a repayment provision if the homeowner does not occupy the property for a minimum of 3 years from the closing date.
  • The home buyer must purchase a home between January 1, 2009 and December 1, 2009.  (Remember – this does NOT go through the end of the year!)

The $8000 tax credit is received when you file your tax return.

Frequently Asked Questions:

How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

I read that the tax credit is “refundable.” What does that mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

For more information on the 2010 Tax Credit click here.

If you have questions about purchasing a home in NC (or refinancing into a lower rate), we would love to help!  Please call Steve and Eleanor Thorne, Mortgage Lenders @ Connect With Us on Facebook, 919-649-5058 x 104

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What Improvements Can You Make with a FHA 203K Loan For?

March 2, 2009 By Leave a Comment

renovate homes!FHA has a great program to help with renovating a new home!  It’s called the 203K program - and if you’ve been on Craigslist, you’ve definately seen, “this property is eligable for FHA 203k loan!”

It’s a great program for making up to $35,000 of improvements to the home.  Many time, foreclosed property has what Realtors refer to as “Deferred Maintenance.”  This means that people who could not afford to make their house payment – also could not afford to have the termite / wood rot repaired, or the stove fixed, or the carpet replaced… So this loan is PERFECT for those kinds of updates!

What items can you update – and which ones can you NOT do with this loan?  Here are some basic guidelines:

Eligible Improvements/Work

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor Remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storm windows and doors, insulation, weather
  • stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges,
  • refrigerators, washers/dryers, dishwashers and microwave ovens
  • Accessibility improvements for persons with disabilities
  • Repair/Replace/add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing, including mold removal
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement
  • Connection to public water or sewage system

Ineligible Improvements/Work

  • Major rehabilitation or major remodeling, such as the relocation of a wall
  • New construction (including room additions)
  • Repair of structural damage
  • Repairs requiring detailed drawings, plans or architectural exhibits
  • Landscaping or similar site amenity improvements, including fence
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) draws/payments.
  • Any work requiring a plan reviewer
  • Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the mortgage closing.

REMEMBER!  If you are a First Time HomeBuyer, you might qualify for a $8000 tax credit (that you don’t have to pay back!)!  Click Here for more details!

Many loan officers do not offer this program, and are not familiar with the process.  Please call Steve and Eleanor Thorne, Connect With Us on Facebook in Cary, NC for details!  919-649-5058

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Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , , , , , ,

Government Loan Update to Guidelines

January 29, 2009 By 1 Comment

Government Underwriting Guidelines are Changing!And in the blink of an eye – while I was checking my Blackberry – there it was. More guideline changes!  Holy Cow Batman!

Many of that Nation’s Banks changed guidelines to show that FHA, VA and USDA minimum credit scores (some people call them FICO scores) are going to 620. What does this mean – since FHA has an underwriting “guideline” that allows for scores even below the traditional 580, and VA doesn’t have a minimum credit score?  Well, just because FHA and VA might accept and insure borrowers with lower scores – Wells Fargo, Suntrust, Countrywide, Security National Mortgage Corporation and OTHERS are not.

We do have companies that we work with that will make Government Loans to folks with scores under 620… that’s the good news.  Here’s the BAD news.  The rates are higher – and because we have a rate spread LAW in North Carolina – not all of those loans will be available!

Additionally – the PMI companies listed Wake County as a “Distressed” area effective February 2, 2009.  This means that the minimum credit score needed for a loan that requires PMI here is now 700.  That’s STIFF!

If you are considering a purchase later this year – go ahead and talk to your lender.  Let us begin the work of getting your scores “tight…” especially if you think you have a low credit score!  We need to  start this process EARLY!  Especially in view of the fact that Government Underwriting Guidelines are changing so quickly!  Call Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058.

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Filed Under: FHA Mortgage Loans, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , , , ,

Stop Renting – Buy Now

December 4, 2008 By Leave a Comment

Tired of Renting? Buy a House!Are you tired of having to clean up after roommates?

Then take the $8000 credit the government is giving first time home buyers – and BUY a house!

You have some great financing options (and YES we are STILL making loans to folks, and first time home buyers have the EASIEST qualifying of any group!):

  • FHA will allow gift funds for downpayment (or you might have it saved up)… you will need about 4% of the sales price to cover downpayment and closing costs!  (Click here for details on FHA loans)
  • FHA 203K loans can cover the cost of “fixing up” some of those foreclosed properties you might be looking at. It allows you to borrow money based upon the “fixed up” value of the home! (Click here for details on 203K loans)
  • Veterans have access to 100% loans! No PMI, can borrow over $400,000, and there’s no restriction about where the property needs to be located! (click here for more information on VA benefits!)
  • USDA also has 100% loans, and although there are some restrictions (click here for details) there’s no PMI, and it’s a 100% loan!

So what are you waiting on?  When you buy a house, you get a RAISE!  (It’s TRUE! Check out the Tax Advantages of Home Ownership!)  Call Stephen L. Thorne, Mortgage Loan Officer in Cary NC for more details at 919-649-5058!

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Filed Under: FHA Mortgage Loans, First Time Home Buyer, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , , , , ,

FHA PMI update October 2008

October 20, 2008 By 2 Comments

For the most CURRENT FHA MIP -  PMI information as of April 2012 click here

THIS IS INFORMATION ABOUT MIP THAT WAS CHARGED IN 10/2008.  We have it here in the event someone needs to understand how the MIP worked for their mortgage loan taken out in 2008.

This is an update to an earlier post reagarding FHA’s version of Mortgage Insurance (which is sometimes referred to as PMI).

As we mentioned, FHA mortgages have a one-time mortgage insurance premium, known as upfront mortgage insurance. The cost of this insurance has bounced around alot this year – and is NOW 2.25% of the loan.

This upfront fee is non-refundable.  There’s also a monthly fee that’s based upon several things, but will generally run .55% of the loan amount.  If you live in the property for more than 5 years, and you have a 20% equity gap – the monthly amount can be dropped just like with it’s conventional counter part – PMI.

The program is similar to the USDA and VA programs.  Both of those loan programs have a type of mortgage insurance (called a Guarantee Fee), that’s non refundable.  The biggest difference is that FHA also has a monthly fee collected.

The common belief that the monthly mortgage insurance on a FHA loan is very expensive is wrong.  Unlike a Conventional Loan, no matter how much you put down, it’s either .55 percent of your base loan amount. When you compare this program to a Conventional Loan Program that requires PMI, you would need to put down at least 10% down in order to get to .52 percent.

These PMI amounts are accurate for Condos, 203k loans – or regular 203b FHA loans.

For more info – call Steve Thorne, Cary Mortgage Loans, 919-649-5058 – FHA Mortgage Loan Specialist!

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Fannie Freddie Change and FHA/VA Loans

September 9, 2008 By 1 Comment

The Paulson announced takeover of Government Sponsored Mortgage Giants Fannie Mae (FNMA) and Freddie Mac (FHLMC) created a welcome stability and confidence in both the mortgage market and the money markets as a whole.   The key need was for foreign governments and hedge funds to begin purchasing mortgages again – something that had all but stopped in recent weeks.

These entities are too large, effect too many individuals, and would create too much havoc if allowed to bankrupt for the US government to let them fail. I am not a personal fan of bigger government, but in this case, I’ll shout a big ole’ hoorah.  It is necessary for the stability of many levels of our economy.

Does the Fannie & Freddie bailout plan help or hurt FHA borrowers?  Aren’t FHA loans insured by HUD?   FHA Home Loans are insured by HUD, and are not directly associated with Fannie & Freddie. Ditto with VA.

However, many of these loans are sold through Fannie and Freddie into the marketplace… so knowing that this system will not be interrupted is important.

Also the market’s reaction to the bailout has reduced Interest Rates by nearly a half a percent across the board.  Again, this could be because of more interest in buying and holding mortgage loans.

Lower rates mean lower payments… so if you are a homebuyer you will be able to afford a little bigger home!  Yippee!!

If you have questions about purchasing a home in The Raleigh, Cary area please call Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058

FHA Loans are still more competitive and have lower overall costs than Conventional or conforming loans when purchasing a home with very little down payment (10% or less)

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Filed Under: First Time Home Buyer, VA Mortgage Loans Tagged With: , , , , , , , ,

Nontraditional Credit

August 25, 2008 By 2 Comments

roommatesDo you really want to get out of that apartment?  Did you know that NOW is that time you can make a KILLING buying real estate and DUMP your roommates??

If you’re ready to take the next move – and you don’t have three good lines of credit established – GREAT NEWS!

The new Housing Bill requires that Fannie and Freddie begin accepting NTMCR’s next year!  Hugh?  Non Traditional Mortgage Credit Report… The report is to be “designed to assess the credit history of hte borrower without the benefit of institutional trade references and should format as traditional references – including creditor’s name, date of opening, high credit, current status of the account… payment history.  It should not include subjective statements like ‘satisfactory or acceptable.”

That’s cool – but it’s not in effect yet!  This means that if you have limited credit experience, or you don’t have at least 3 trade lines, you need to get an FHA loan.  In Wake County, the FHA limit is $295,000, and as of October 1, 2008, the minimum downpayment for this program is 3.5%.

So don’t continue to put up with stinky roommates!  Break out!  Buy a house while prices are low – and you get a $8000 tax credit!

If you are purchasing a home in Garner, or buying a home in Raleigh/Cary, please call Steve and Eleanor Thorne, Meridian Residential 919-649-5058

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Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , ,

More Downpayment Needed for FHA

July 29, 2008 By 6 Comments

downpayment got higherThe New Housing Bill that Congress just passed in an effort to “save” Fannie Mae and Freddie Mac (F/F) has some other features that homebuyers need to be aware of.

SAVE UP! For more than 10 years there have been agencies that helped with downpayment.  The downpayment was “gifted” through the agency – and it’s a bit complicated – but it meant that a homebuyer seeking FHA financing could get a 100% loan.  Well, that’s been eliminated with the New Housing Bill.

ALSO – and this is the important part – the downpayment requirements for FHA financing just went to 3.5% effective October 1, 2008.  There’s some question about how FHA is going to calculate that 3.5% – and as those details are available we’ll pass them on – but for the time being, assume that you will need 3.5%.

The seller can still pay your closing costs, and you are allowed to get a gift from a family member!  Now is a GREAT time to buy!  SO SAVE UP!

If you are interested in purchasing a home in Cary, or buying a home in Raleigh, please contact Steve and Eleanor Thorne with Connect With Us on Facebook, a Mortgage Banker in Cary, NC  919-649-5058

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Filed Under: FHA Mortgage Loans, Housing News Tagged With: , , , , , , , , , , , , ,
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