My New Blog

It appears that with the Senate 85-2 vote on the amendments to H.R.3548, the Unemployment Compensation Extension bill; we may actually achieve an extension and an expansion of the First Time Home Buyer Tax Credit. Highlights, if the amendment, as considered in the Senate is passed with the Unemployment bill, include:

>  A purchase transaction will qualify for those entering a binding contract before May 1, 2010 with a closing date before July 1, 2010.

>  The credit is up to $8,000 for a married couple. ($4,000 individual)

>  The original tax credit provision is expanded to include purchasers who have resided for 5 consecutive years (out of the past eight years) in their primary residence to qualify for a tax credit of up to $6,500 ($3,250 individual) on the purchase of a new primary residence.

>  Income levels have increased to $125,000 (single [was $75,000]) and $225,000 (couple [was $150,000]).

>  If the purchase price is greater than $800,000 no credit is allowed. 

>  Persons stationed outside the United States on official duty for 90 days during the period after 12/31/2008 and before 5/1/2010 will have eligibility extended for binding contracts signed before 5/1/2011  and closed before July 1, 2011.

You might want to make sure here next month that your mortgage lender is legally doing business for you here in Colorado. It turns out a very interesting story was emailed to me from our corporate attorney this evening.

Nearly half of the 8,729 licensed mortgage brokers in Colorado have failed to meet new state requirements and face losing their licenses Aug. 31. “We could be looking at a complete disaster,” Erin Toll, director of the Colorado Division of Real Estate, told the Denver Business Journal.

After Colorado enacted its mortgage broker licensing law in January 2008, all licensed brokers had one year to complete 40 hours of licensing education and pass a written test. By December of 2008, nearly 6,000 brokers had not fulfilled the new requirements. To avoid a potential blow to the state’s credit markets by revoking the licenses of a significant percentage of brokers at one time, the Division of Real Estate subsequently granted a 90-day extension.

However, as of July 2009, more than 4,000 brokers still had not met the requirements to maintain licensure. According to Douglas Braden, past president of the Colorado Association of Mortgage Brokers, if those brokers are active practitioners, and half of them lose their licenses next month, it certainly will present a significant problem for the state.

“When you take that many people that potentially were well-qualified, that were doing good business for consumers, and you take those allies away from consumers, it leaves them a whole lot less choice,” Braden told the Journal. “Less choice and more restrictive guidelines don’t mean we’re going to make more loans. It means we’re going to make a lot less loans, a lot less people are going to qualify and a lot less people are going to have someone in their corner.”

So you may have read my blog about the Denver mortgage credit certificate that is available. However, that is for just the city and county of Denver. Now there is a complimentary mortgage credit certificate available for the whole state. To learn more about the mortgage credit certificate and what it means to you in general as a first time buyer in Colorado, email or check out my webpage at www.myonlinemortgage.net/mcc Make note that the Denver MCC is similiar to the statewide version I am writing about today.

Ray

One would say with all the media attention that you should be able to put an offer on a house in Denver for far less then the list price. Afterall, they say the market is soft and there are a glutton of foreclosures out there. I wanted to give you a quick snapshot of what is really going on in the housing industry here in the metro area.

For example did you know there are public websites that show you data on trends of what houses are listed for versus what they sold for?

Here are a few examples:

20040 Mitchell Cir Denver~ Listed for: $135,000 and sold for: $155,000

7157 Huron St Denver~ Listed for $105,000 and sold for $131,500

6971 Saulsbury St Arvada~ Listed for $135,000 and sold for $175,000

7179 S Kline St Littleton~ listed for $200,000 and sold for $250,000

So there is Denver, Littleton, and Arvada as examples. This is even happening in Aurora as well guys. So what I am getting at is don't completely think when going to make your offer that you can write it for whatever you want and the seller will cave in to sell to you. This is good signs that our market is stronger then you expect from what you might hear on the news. Keep in mind that these examples are bank owned homes, so you can imagine that they needed some work. Now think how an individual selling their own home with pride of ownership will be sitting if they want to sell at a reasonable price right now??

Also, if you have friends buying they may be able to tell you as many of my agent friends have. It is tough to get an offer accepted because the competition is fierce right now.

My advice is to be ready! Meaning have all your financial ducks in a row with a pre-approval not a pre-qualification. Make sure you are ready to write your offer and not hesitate or think through it too long, unless you don't care too much if you miss out on that specific house. While all this is going on, you can still get the sellers to pay closing costs, but if this continues to strengthen you will have less luck with the sellers willingness to pay closing costs for you.

Happy house hunting~

Ray

You may be thinking to yourself there is no way to give yourself a pay raise when you buy your home. What if you could buy your first home in Denver using a mortgage credit certificate that would allow you to adjust your W4 and take home more money every paycheck? What if that money directly allowed you to buy a home that were 20% more expensive than what you could qualify for without the mortgage credit certificate?

It is all true and not a sham! There is a program out from the City and County of Denver for qualified first time buyers to take advantage of a mortgage credit certificate. This certificate gives you the legal right to adjust your W4 filing with the I.R.S and take home 20% of the mortgage interest you would otherwise deduct from your taxes. So it becomes direct benefit to your finances when you buy, not later.

HOW does it work?

Let's say you bought a $175,000 home at 5.25% for a 30 year mortgage. We know you would pay roughly $9,187 in annual mortgage interest ($175,000 @ 5.25% = $9,187). Now take 20% of that $1837 for your annual mortgage credit certificate. From there you take the $1837 divided by 12 months and get a credit for $153 per month that you can have added back to your pay after you buy!

So, if your home payment (interest, taxes, mortgage insurance) on a $175,000 home were $1,027, then you would only have to qualify for $874 per month and in essence you could choose to qualify for more home, if you chose!

To learn more visit http://www.milehigh.com/housing/for-sale/mcc-program and you will see my number as an approved lender (the list is very short of approved lenders by the city and county)~

Call with questions~

Ray

303.779.0591 ext. 101

You may have heard or start to hear, that mortgage rates have gone up. In fact on new loans I am doing, I have seen anywhere from a .5-.75% increase in rates since May 21st.

So what is the reason for all of this you ask? Even though the fed is buying mortgage backed securities, they are being offset by the supply of mortgage backed securities hitting the market. The reason for this new supply is the result of all the mortgages that have closed as a result of the lower rates. Those mortgages have now been securitized and are being sold on the open market as mortgage backed securities. This new supply is offsetting the purchasing power of the fed and just may lead us to higher rates. As you can imagine there are still loads of mortgages that will be securitized and sold as mortgage backed securities. This could offset anything the fed can do in purchasing more mortgage backed securities.

My advice, if you were waiting for lower rates to refinance, you may miss the boat as the anchor seems to have been pulled.

So lately I have been watching a unique loan program that has hit the market specifically for folks who owe more then the $417,000 that conforming loans allow for in loan size.

There has been a new program put out that has rates as low as 4.625% for a 5/1 ARM and 5.5% on a 30 year fixed.

I have a client who is currently in an interest only adjustable rate mortgage where we will be dropping their payment over $400 per month and on top of that the new payment will be amortized thus reducing the principal from there as well. The net savings will be over $400,000 in interest savings on the life of their home loan.

It is somewhat restrictive in who can qualify, but if you are looking to better your cost of money on your jumbo mortgage let me know~ But also feel free to check out the mortgage calculators to see the impact to your mortgage.

Ray

As many of us know by now, the mortgage industry has seen high volumes of new applications due to record low rates. I received a call from a client a few Fridays ago who was having trouble with his lender he was trying to work with. It turns out this lender had been working on his refinance for 6 weeks. My client was told over and over his loan was almost approved, and to remain patient.

As a result of this misinformation he almost had a late pay report on his credit. After losing his patience he found us on google and called up. He and I talked and I explained to him that all the excuses and reasoning he had been told was incorrect and an attempt to buy time.

So the client came in two weeks ago and we got his loan into our system. I explained to him how a streamline works and the processes and time lines by which we would be working. After starting on the file we found that other FHA lender had assigned his case number (this is a number that identifies your loan to HUD, kind of like a social security number for your FHA loan). My client then asked the other lender to release the case number to us, again and again. Only to leave me having to call this lender's boss to finally get it done. Once we had that we submitted his loan to underwriting and within 3 days his loan was approved for closing. Now we are scheduled to close his loan on the 17th and will have taken us 13 calendar days once we got that case number into our names. He will get the rate he was expecting, but with a far superior straight forward service from us.

If you are refinancing and fill like you are getting the run around and not quite sure why it is taking so long to get answers, returned calls, or your loan closed let us know. We pride ourselves on making service to you as our first focus. And in these busy times I can say experience matters.

Ray

In the last few months we have constantly seen the grind of conventional mortgage insurance companies tightening their belts. Awhile back we saw the elimination of mortgage insurance for investment properties, which led to the 20% down payment requirement for investment properties. Then we have seen conventional loan programs require you have a 680 to put down 3%, then 5% down.

Now we have just seen 5 of the mortgage insurance companies left require you have a 700 or better credit score to be eligible for mortgage insurance, and with that you will have to put 10% down. So as it stands I would expect that soon we will see mortgage insurance on primary residences come to a crawl as well.

This will put us back to the model of 20% down on conventional loans. Or with great credit you may be able to get a first mortgage at 80% and a second at 10% with a 10% down payment (which gets you around mortgage insurance). And if you don't have it, then you will be left with 3.5% down and going F.H.A or VA on your home loan. Not that , that is too bad of an option as we are still seeing 5% rates for F.H.A and VA loans today.

I don't feel this will be a permanent position for primary home loans, but for quite a while until the mortgage insurance companies stop bleeding money from foreclosure claims.