Since November of 2008 mortgage rates have been on a series of ups and downs and many times frustrate those considering a refinance. I've experienced those frustrations more than once with customers fixed on a specific rate. When rates have fallen in the past 6 months to 4.375% or 4.5% many times it's only been for 2-3 hours. My ability to get in touch with my customers may determine if they'll lock into a historic rate!
Our current rate environment has been extremely volatile as it has also challenged historic lows. During the last week of April 2009, rates were within .125% of the lowest recorded 30 year fixed rate.
As many consumers consider a refinance, they find that the ability to react quickly is necessary to capture historic lows. As I encourage customers to shop mortgage service providers, I also suggest that you provide the necessary qualifying information so that when rates fall you are ready to lock. To assure instant rate messaging I suggest Twitter.com. Yes, many Americans today have fallen into the fad of setting up a Twitter account to inform friends of their daily activity but I consider it a great tool to keep you informed on rates.
As I considered Twitter as a mortgage professional the main benefit that I appreciated was my ability to notify customers of immediate, up to date, rate improvements. If you'd like to discuss how this easy service can benefit you as you consider a new refinance or purchase contact me at 612-282-5863, or sign up at Rate Watch on my home page.
Watching Rates? Don’t forget to subscribe to my feed. My link TwitterHomeRates is posted in (almost) real time, you can grab the feed directly and have updates piped to your phone, RSS reader, IM, or Twitter account.
Sunday, May 3, 2009
Monday, April 27, 2009
First Time Homebuyer $8,000 Credit
Since the early months of 2009 there have been many attempts to get the economy moving into a positive direction and as many know the real estate market can be a big contributor of that.
As I discuss the affordability of home ownership in 2009 with many "First Time" buyers I continue to find many buyers are confused about the $8,000 tax credit. I've included specific information that I hope will clarify the financial benefits of buying your first home before December 1st, 2009.
Feel free to call me as questions arise.
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
Homes that Qualify
The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principal residence also qualify.
So, if you know of anyone that has heard about this great buying opportunity please give them my name and number so I can discuss the benefits of this exciting offer!
As I discuss the affordability of home ownership in 2009 with many "First Time" buyers I continue to find many buyers are confused about the $8,000 tax credit. I've included specific information that I hope will clarify the financial benefits of buying your first home before December 1st, 2009.
Feel free to call me as questions arise.
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
Homes that Qualify
The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principal residence also qualify.
So, if you know of anyone that has heard about this great buying opportunity please give them my name and number so I can discuss the benefits of this exciting offer!
Friday, April 17, 2009
Refinancing with less than 20% equity
In the past 3-4 months most of my business has been working with customers that refinanced their homes with our current "historically" low fixed rate mortgages. In many of the early conversations with each customer the discussion of owners estimate of value comes up. I've seen many values drop as much as 20% within the past couple of years. Unfortunately, we've all experienced the fall of our market values and to many homeowners it has meant that they simply can't take advantage of sub 5% rates. I've locked customers into 30 year fixed rates as low as 4.375%.
In April, new refinance options allow those without 20% equity to refinance.Today I talked to my first customer that has found himself below the previous minimum equity standards for refinancing. And thanks to a new stimulus option my customer can refinance as long as his home's first mortgage isn't more than 105% of the home's value.
This to me is truly amazing. To take advantage of this incredible opportunity and participate with many other home owners there are a few simple steps that need to be taken and I wanted to share them with you.
Step 1) Identify your servicing lender. Access the following web site to identify if your first mortgage is serviced by Fannie Mae.
http://loanlookup.fanniemae.com/loanlookup/
Once you put your information into the site it will tell you if your loan is Fannie Mae serviced.
Step 2) Let's talk about any other mortgages that you may have on your home. That not only includes fixed second mortgages but Home Equity Lines of Credit. If so, your process may be even more challenging.
Step 3) Confirm that when you bought your home you put 20% down. Transactions that had less than 20% down and instead chose to pay a (MI) mortgage insurance premium are not currently able to proceed. So find your closing documents and provide the Hud-1 (closing statement) as an additional document needed for this new refinance.
Step 4) Gather the typical documents needed for a refinance.
A couple of items to keep in mind if you qualify.
1. You can only pay off your current mortgage and roll your closing costs into the new loan.
2. You need a 12 month payment history on your existing loan showing good payments.
3. Homes with second mortgages are not currently able to participate, but that may change.
4. Previous loans that included mortgage insurance are currently not eligible.
5. An appraisal still needed.
6. The newly established mortgage cannot exceed 105% of your homes value. Wow!
This new program called the DU Refi Plus will benefit many customers that didn't think they could refinance into rates as low as 4.5%. If this applies to you or any friends, neighbors, relatives please have them give me a call at 612-282-5863. And don't forget that I can lend in up to 50 States!
In April, new refinance options allow those without 20% equity to refinance.Today I talked to my first customer that has found himself below the previous minimum equity standards for refinancing. And thanks to a new stimulus option my customer can refinance as long as his home's first mortgage isn't more than 105% of the home's value.
This to me is truly amazing. To take advantage of this incredible opportunity and participate with many other home owners there are a few simple steps that need to be taken and I wanted to share them with you.
Step 1) Identify your servicing lender. Access the following web site to identify if your first mortgage is serviced by Fannie Mae.
http://loanlookup.fanniemae.com/loanlookup/
Once you put your information into the site it will tell you if your loan is Fannie Mae serviced.
Step 2) Let's talk about any other mortgages that you may have on your home. That not only includes fixed second mortgages but Home Equity Lines of Credit. If so, your process may be even more challenging.
Step 3) Confirm that when you bought your home you put 20% down. Transactions that had less than 20% down and instead chose to pay a (MI) mortgage insurance premium are not currently able to proceed. So find your closing documents and provide the Hud-1 (closing statement) as an additional document needed for this new refinance.
Step 4) Gather the typical documents needed for a refinance.
A couple of items to keep in mind if you qualify.
1. You can only pay off your current mortgage and roll your closing costs into the new loan.
2. You need a 12 month payment history on your existing loan showing good payments.
3. Homes with second mortgages are not currently able to participate, but that may change.
4. Previous loans that included mortgage insurance are currently not eligible.
5. An appraisal still needed.
6. The newly established mortgage cannot exceed 105% of your homes value. Wow!
This new program called the DU Refi Plus will benefit many customers that didn't think they could refinance into rates as low as 4.5%. If this applies to you or any friends, neighbors, relatives please have them give me a call at 612-282-5863. And don't forget that I can lend in up to 50 States!
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