Credit Scores and First Time Home Buyers!

May 20, 2010 By 1 Comment

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

USDA Rural Development Home Loans – No Money?

April 15, 2010 By 2 Comments

As of 4/15/2010 USDA has less than 2.0 Billion dollars left to fund in home loans.  This is a HUGE issue for folks who waited until the last minute to purchase a home, thinking they could a) get a better deal and b) use USDA Home Loan financing (no money down).  At the current rate – we will be out of funds before May 1.

There are TWO major issues you should know if you are STILL wanting to write a contract and get your Tax Dollars.

  • It’s going to be HARD to get a seller to accept your contract.  It currently takes 2 weeks at USDA underwriting to get a loan approved.  So if you write your contract this weekend, even if we could get an appraisal in ONE DAY – they would be out of funds before you could get submitted!

But let’s assume that you get /or have a contract that’s accepted prior to the end of April… now you need to close by the end of June.  Here’s the rest of what you should know:

  • The National Association of Home Builders are going to Washington next week. They are NOT asking for an additional Tax Credit… they are asking for MORE USDA dollars.  You see, the way this deadline approached left many people feeling that they were going to change the guidelines for USDA Home Loans.  The NAHB is asking that they leave it in place with no guideline changes – because the default rates on these loans are LOW.

The Associated Press Said today:

Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee, and four other members of his panel wrote letters to Agriculture Secretary Tom Vilsack last month supporting the program and proposing immediate funding options.

Waiting until the next fiscal year to replenish the program would mean shutting it down for five months. And proponents say that would hurt people who could not get a conventional mortgage.

We agree – and suggest that you contact your Senators and Legislators and ask them for more funds… we certainly have.

If you are in a contract or trying to get in a contract using USDA Home Loan Funds… call us.  We will give you straight answers, and work to solve your problems.  There are other solutions.  Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058

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Filed Under: USDA Home Loans 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, Connect With Us on Facebook, 919-649-5058

HERE’s AN UPDATE AS OF April 6, 2010

 

 

 

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Filed Under: USDA Home Loans Tagged With: , , , , , , , , , , ,

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, Connect With Us on Facebook, Raleigh, NC  919-649-5058!  Remember – USDA Home Loans and VA Mortgage Loans do not require any downpayment!

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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, Connect With Us on Facebook, Inc in Cary, NC  919-649-5058

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With All of the Risk Do We Still Need FHA?

November 1, 2009 By 1 Comment

It's hard to read the marketWith the continued talk of extending the Tax Credit for Homebuyers, there’s another group of Economist/Strategist discussing the “need” for the FHA Loan Program.

With the increase in loan production for this product comes additional defaults and late payments.

The US Citizens are paying for the program, because we guarantee the loans, so should we really be in the business of mortgage lending?

Brian Montgomery work as a Consultant for HUD and the FHA Commissioner, he has this to say:

“FHA has saved close to one million sub-prime/Alt-A borrowers from possible financial ruin by allowing them to refinance into a safe and secure 30-year fixed rate mortgage.  Another 2 million qualified borrowers (80% of them first-time homebuyers) have taken advantage of the declining house prices and historically low interest rates to purchase a home using FHA.  FHA’s role has grown substantially from three percent of lending activity by dollar volume in 2006 to nearly 25 percent of all mortgages originated today. That massive uptick in volume occurred almost overnight beginning in spring 2008.

Through it all…. FHA has helped pump more than $400 billion of mortgage activity and liquidity into the market since 2008, while still managing to deliver a higher credit quality borrower whose average FICO score is 700.”

I find that last part really interesting, because we are not seeing a TON of FHA homebuyers with 700 credit scores!  Our average FHA buyer profile has a score of @640.

Brian also notes, regarding the looming delinquencies that we should consider this:

“For FHA, the primary reason for continued defaults and foreclosures will be macro-economic problems that go beyond the scope of underwriting. For instance, continued job losses and the further decline of home values and equity.

Absent a massive economic downturn, I don’t believe FHA will face the same type of catastrophic losses we saw in the subprime sector. The reasons for FHA’s problems are very different from the ones experienced in the subprime sector where unsafe loan features and poor underwriting made investing in non-agency mortgages risky from the start.”

I think this is good news, because others are calling for massive tightening… and I think we need every eligible buyer to buy!  Forcing credit score requirements up to 680, or 700 is NOT going to help the housing market (because it turns so many folks away who can’t make that score) and it’s not going to keep the defaults from happening when people lose their jobs!

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

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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Filed Under: VA Mortgage Loans Tagged With: , , , , , , , , , , , ,

Could FHA Force Green Homeownership?

October 22, 2009 By Leave a Comment
Are we going to Force Green Living?

Are we going to Force Green Living?

President Obama, and most of the rest of us are thinking Green is Good, and in an Executive Order issued earlier this month, he required that all Federal Agencies must do everything possible to:

“increase energy efficiency; measure, report and reduce their greenhouse gas emissions from direct and indirect activities;… eliminate waste, recycle and prevent pollution…”

No Federal Agency, no Fannie or Freddie have put requirements on homeownership at this point – however it does cause one to pause.  How far do we go?

HUD is required to report back to the White House it’s Greenhouse Gas Emmission reduction suggestions by January.  Since there is pressure to show large increases in energy efficiency and corresponding decreases in pollution and greenhouse gas emissions…  could this move HUD toward imposing “green” standards on federally-assisted programs like FHA?

How else is the Department going to show  significant reduction efforts?

I think I’d keep this on the Radar.  This could have a HUGE impact on HUD programs, especially FHA single-family and multifamily insurance programs! Think the Minimum Property Standards could be changing??

Lead Paint – move over!  We could be requiring additional insulation, solar hot water heaters, upgraded windows!

If you are considering a purchase in Cary or Raleigh, NC and want to talk about being pre-qualified, please call Steve and Eleanor Thorne, 919-649-5058

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First Time Homebuyers – Rates Going Up

August 11, 2009 By Leave a Comment

Time to BuyWe talk to First Time HomeBuyer’s everyday that tell us, “We’re Looking!”  Well – here’s my advice… HURRY UP!!

The Tax Credit is going to “go away” at the end of November… and everybody is telling you NOW is the right time to buy – and that’s a FINE reason… But I think there’s ANOTHER incentive.

I wrote recently about the fact that rates are NOT getting below 5%. The Fed is meeting today- and there’s likely to be a statement tomorrow that they are NOT going to “prop” up the mortgage backed security market after September when the program is scheduled to end. 

The FED has been purchasing mortgage backed securities, and because of that – well, the more they buy, the lower rates go.  So as they’ve given no indication they will continue purchases, rates have started heading up! 

FIRST TIME HOMEBUYERS!  NOW is the time to purchase a home! You can use the USDA home loan program in NC (it’s a 100% loan!),  or FHA or VA (you wouldn’t believe the number of Vets that FORGET this great benefit!)!  Call us, Steve and Eleanor Thorne, to help you with qualifying for a new home!… we have the lowest mortgage rates!

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