May 22, 2010
The First Time Homebuye Tax Credit came to an end on April 30, 2010. The month ended with record numbers of new mortgage applications because the new nationwide mortgage guidelines dictate that an application doesn’t officially begin until there is a property determined. This huge influx of applications has slowly gone through the “documentation and processing” stage and is quickly resulting in extended delays in actual underwriting decisions.
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05/11/2010
http://bit.ly/HUDcosts
It is common knowledge in the real estate industry that the new required HUD Good Faith Estimate of Costs in conjunction with the final HUD Settlement Statement that is required in most real estate purchases is very confusing. I have been handling my own closings since 1992 and repetition creates a standard presentation. The new procedures have caused me to stumble through the explanation of these documents a few times.
Surprisingly, HUD’s booklet “Shopping for you Home Loan” is actually a pretty good explanation of the forms. Here is a link for you to copy to your desktop that will take you directly to a pdf file of the document. I encourage all realtors to send this link to every client when they contact you about buying or selling a home. It will help them understand the documents to come. http://bit.ly/HUDcosts
05/07/2010
The stock market has created quite a roller coaster ride in rates this week. As we close out this week, I am finding the FHA 30 year fixed rate to be the bargain of the week. It is not uncommon to find 4.875% for about any size loan. Conventional mortgage rates can be a quarter of a point higher than FHA. As always, there are a lot of considerations that go into the pricing (lock term, loan amount and credit score to name a few) but any way you look at it rates are a bargain right now. Read More→
April 24, 2010
The First Time Homebuyer Tax Credit is about to expire. If you haven’t applied for a mortgage yet, you are virtually out of time. All buyers must have committed to a “binding contract” by April 30, 2010 and the transaction must close by June 30, 2010. If you have already been “pre-approved” but not yet secured a property I want to ask you one question. “Have you provided income documentation to your lender yet?” Did you give the lender W2s, paystubs, tax returns, etc? If you have not you need to understand that you are NOT “pre-approved”. You may have been pre-qualified but without the income docs and an authorized credit report, the lender has put you in a very compromising position. The guidelines have changed extensively in the past year and there are many “qualifying” issues that can only be answered if you provide those documents. Don’t wait another hour. Get those docs to your lender and ahve them confirm that you are “income qualified” for the mortgage that you want.
This brings to mind another issue for you to understand. Today’s guidelines state that a lender will officially begin a mortgage application when a property address is determined. Without an address you will not have been issued an official “Good Faith Estimate of Closing Costs”. You may have been given an itemization of estimated costs but it is NOT a binding document for the lender. I am going to provide to you the Official HUD Booklet that explains how to understand the new GFE. The lender is required to provide this to you at the time of application but that could be too late. You absolutely need to read this document. Save it to your desktop and read it from there as it is more than 50 pages. If you become familiar with this booklet and compare it to the “itemization” that you should have already received, when your new GFE is issued you will be able to determine that your lender is NOT playing games with you. You should be able to see that what you were told and what you are going to get (mortgage loan costs) are what you are expecting.
The new GFE is very confusing and you need to prepare for it. A lender that wants to take advantage of you will use that confusion to their benefit and at the time of closing you will have a very disappointing and possibly very expensive experience. That is, unless you perform your own “due diligence” and prepare yourself. It is absolutely the only way you will be able to protect yourself and your family.
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