What is the Mortgage Credit Certificate Program anyway?
The MCC Program provides financial assistance to first time homebuyers for the purchase of single family homes, townhomes and condominiums. It is a dollar for dollar tax credit against the borrowers federal income taxes - currently15%. The remaining 85% remains a standard tax deduction.
Eligibility is for first-time Homebuyers who have not owned a home in the past three years, are purchasing a home in a participating city within the country, plan on living in the home and meet the income and purchase price limits.
The Borrowers income cannot exceed $97,000 for 1-2 persons or $112,470 for 3 or more (no co-signers allowed for this program).
The maximum purchase price is $570,000 for existing units and $630,000 for new construction.
If the borrower sells the property within nine years there may be a recapture tax penalty.
This program is only available with participating brokers and funding lenders. Applications are processed on a first come, first serve basis with an application fee of $275. For more information and details about this program to www.sccgov.org (go to affordable housing).
My 2 Cents - Make sure you are working with a mortgage broker up to date on all the programs currently available.
Showing posts with label Financing. Show all posts
Showing posts with label Financing. Show all posts
Wednesday, March 18, 2009
Thursday, February 19, 2009
Stimulus Bill and New Plan in the Works!
Last week Congress passed the American Recovery and Reinvestment Act of 2009. which was signed by President Obama at the beginning of this week.
Among other things, the stimulus legislation resets the conforming loan limit cap at $729,750, up from $625,500 and reinstates these 2008 loan limits through Dec. 31, 2009.
The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit.
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.The plan contains three main components, and only applies to primary residences.
1) The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house.
2) The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification.
3) The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications.
Among other things, the stimulus legislation resets the conforming loan limit cap at $729,750, up from $625,500 and reinstates these 2008 loan limits through Dec. 31, 2009.
The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit.
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.The plan contains three main components, and only applies to primary residences.
1) The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house.
2) The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification.
3) The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications.
Saturday, February 7, 2009
Loan Modication Explained
Loan Modifications
Loss mitigation encourages lenders though an attorney-based process to help create the best mortgage solution for troubled homeowners. Through this, homeowners can expect one of the following results to occur:
· Loan Modification
· Short Sale
· Deed in Lieu
What is loan modification?
It is renegotiating the terms of your existing loan. It is by far the most desired result in any loss mitigation process. Every client is assigned a personal real estate attorney and a professional loan negotiator, to effect a successful resolution through loan modification.
Results can include:
· Interest rate reduction
· Extended payment terms (up to 50 yrs)
· Principal reduction
Who qualifies?
You must have at least one of the following criteria:
· High Loan to value (90% or higher)
· Bad credit due to late payments on credit cards, mortgage, medical bills, etc.
· Adjustable Rate (has or will change in the future)
· Option Arm or pick-a-pay loan
· Temporary or permanent financial hardship ( i.e. job loss, divorce, income reduction, medical emergency, etc.)
· High Debt to Net income ratio
· Non-owner Occupied – Ok
The above information was provided to my company by Gary Foydle from The Loan Source. I thought it was good information and consise and hopefully, helpful. Let me know what you would like to hear about in the future.
FYI - If you are currently shopping for a home, rates are up at the moment (around 5.125% for a 30 year fixed). Although there are different lending options, I like to use the 30 year fixed as a sort of "measuring stick" for the lending market. Stay tuned for more updates!
Loss mitigation encourages lenders though an attorney-based process to help create the best mortgage solution for troubled homeowners. Through this, homeowners can expect one of the following results to occur:
· Loan Modification
· Short Sale
· Deed in Lieu
What is loan modification?
It is renegotiating the terms of your existing loan. It is by far the most desired result in any loss mitigation process. Every client is assigned a personal real estate attorney and a professional loan negotiator, to effect a successful resolution through loan modification.
Results can include:
· Interest rate reduction
· Extended payment terms (up to 50 yrs)
· Principal reduction
Who qualifies?
You must have at least one of the following criteria:
· High Loan to value (90% or higher)
· Bad credit due to late payments on credit cards, mortgage, medical bills, etc.
· Adjustable Rate (has or will change in the future)
· Option Arm or pick-a-pay loan
· Temporary or permanent financial hardship ( i.e. job loss, divorce, income reduction, medical emergency, etc.)
· High Debt to Net income ratio
· Non-owner Occupied – Ok
The above information was provided to my company by Gary Foydle from The Loan Source. I thought it was good information and consise and hopefully, helpful. Let me know what you would like to hear about in the future.
FYI - If you are currently shopping for a home, rates are up at the moment (around 5.125% for a 30 year fixed). Although there are different lending options, I like to use the 30 year fixed as a sort of "measuring stick" for the lending market. Stay tuned for more updates!
Saturday, January 31, 2009
Economic Recovery Package
$819 Billion Stimulus Package Approved!
Last week, the US House of Representatives passed the current Economic Recovery Package(HR 1). The California Association of Realtors totes this as good news, as the bill contains a number of issues critical to our industry including extending all 2008 Metropolitan Statistical Areas' Fannie Mae, Freddie Mac and FHA loan limits throughout the end of this year.
The extension prevents an MSA's 2008 loan limit from being reduced in 2009 for Fannie Mae, Freddie Mac and the FHA. Language in the bill also specifies that if an MSA's loan limit is set to change, it can increase, but is prohibited from declining.
The proposed legislation also will eliminate an existing payback requirement on the first-time home buyer tax credit for qualified buyers who purchase a home between December 31st 2008 and July 1st 2009.
Next week, the Financial Services Committee will meet and review other housing issues.
Last week, the US House of Representatives passed the current Economic Recovery Package(HR 1). The California Association of Realtors totes this as good news, as the bill contains a number of issues critical to our industry including extending all 2008 Metropolitan Statistical Areas' Fannie Mae, Freddie Mac and FHA loan limits throughout the end of this year.
The extension prevents an MSA's 2008 loan limit from being reduced in 2009 for Fannie Mae, Freddie Mac and the FHA. Language in the bill also specifies that if an MSA's loan limit is set to change, it can increase, but is prohibited from declining.
The proposed legislation also will eliminate an existing payback requirement on the first-time home buyer tax credit for qualified buyers who purchase a home between December 31st 2008 and July 1st 2009.
Next week, the Financial Services Committee will meet and review other housing issues.
Wednesday, January 28, 2009
FICO Update
Understanding FICO Scores -
We all know how important FICO scores are so here are some basics to enhance your FICO knowledge. Good borrower credit scores help make it possible to qualify at better rates. For those with lesser FICO scores, FHA loans are available as an option.
This is how FICO Scores are weighted and structured:
35% by Payment History
30% by Balances Owed
15% by Length of Credit History
10% by New Credit
10% by Types of Credit in Use
And the overall calculated ranges:
720 - 850 Excellent, A-paper credit, the "good-guy" rates available;
680 - 719 Good, not much of a compromise on rates;
620 - 679 OK or Fair, clearly in range for FHA consideration;
580 - 619 Low, bottom of the range for FHA consideration, "alternate credit" comes heavily into play;
500 - 579 Poor, truly nothing can be done without credit rehabilitation.
Feel free to contact me for more information.
We all know how important FICO scores are so here are some basics to enhance your FICO knowledge. Good borrower credit scores help make it possible to qualify at better rates. For those with lesser FICO scores, FHA loans are available as an option.
This is how FICO Scores are weighted and structured:
35% by Payment History
30% by Balances Owed
15% by Length of Credit History
10% by New Credit
10% by Types of Credit in Use
And the overall calculated ranges:
720 - 850 Excellent, A-paper credit, the "good-guy" rates available;
680 - 719 Good, not much of a compromise on rates;
620 - 679 OK or Fair, clearly in range for FHA consideration;
580 - 619 Low, bottom of the range for FHA consideration, "alternate credit" comes heavily into play;
500 - 579 Poor, truly nothing can be done without credit rehabilitation.
Feel free to contact me for more information.
Tuesday, January 27, 2009
Behind the Scenes with Interest Rates!
Loan Update
Today at my Tuesday office meeting, there were 2 mortgage brokers giving us updates on loans. Most rates these days are based on owner occupied purchases with 20% down, 720 or higher credit scores and 30 day pricing plus 1 point. Given that, a 30 year fixed conforming loan (under $417,000) is about 4.875% as opposed to a super conforming loan ($417,000 to $625,000) which is 5.625% and a jumbo loan ($625,000 to 3 million) which is 5.75%. Jumbo rates are currently down.
Gary Foydl from Loan Source, gave some behind the scene info on lending. #1 - Late last year the "Feds" began buying mortgage backed securities which resulted in lower interest rates. A lot of folks applied to refinance their homes which ended up clogging up the system which caused rates to go up. #2 - Lenders encouraged Buyers to pay at least 1 point (which can buy down an interest rate between 1/2 to 1 1/8 pts currently) and get more invested in holding onto their loans. #3 - As we know from getting a new loan, our loans are soon sold to other lenders in a package deal. Only 10% of those loans were able to be jumbo - which impacted the jumbo rates and availability. The result was to artificially raising rates due to clogged pipelines. Rates would vary due to timing.
Let me know if this is interesting or confusing. I like knowing the behind the scenes info - especially as it affects our market.
Today at my Tuesday office meeting, there were 2 mortgage brokers giving us updates on loans. Most rates these days are based on owner occupied purchases with 20% down, 720 or higher credit scores and 30 day pricing plus 1 point. Given that, a 30 year fixed conforming loan (under $417,000) is about 4.875% as opposed to a super conforming loan ($417,000 to $625,000) which is 5.625% and a jumbo loan ($625,000 to 3 million) which is 5.75%. Jumbo rates are currently down.
Gary Foydl from Loan Source, gave some behind the scene info on lending. #1 - Late last year the "Feds" began buying mortgage backed securities which resulted in lower interest rates. A lot of folks applied to refinance their homes which ended up clogging up the system which caused rates to go up. #2 - Lenders encouraged Buyers to pay at least 1 point (which can buy down an interest rate between 1/2 to 1 1/8 pts currently) and get more invested in holding onto their loans. #3 - As we know from getting a new loan, our loans are soon sold to other lenders in a package deal. Only 10% of those loans were able to be jumbo - which impacted the jumbo rates and availability. The result was to artificially raising rates due to clogged pipelines. Rates would vary due to timing.
Let me know if this is interesting or confusing. I like knowing the behind the scenes info - especially as it affects our market.
Thursday, January 22, 2009
Tax Relief for Homeowners?
The following article is taken from my C.A.R. (California Association of Realtors) Newletter and I thought it was very interesting as well as worthwhile to know. I recently posted some information about loan modifications as one of the emerging solutions to our current economic issues but never expected the government to offer the following relief - read on!
IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With more than one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.
As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate, or secondary, to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. The IRS currently is working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.
IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With more than one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.
As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate, or secondary, to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. The IRS currently is working to expedite that time frame to help distressed homeowners. For IRS instructions on requesting relief from federal tax liens, go to IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.
Tuesday, January 13, 2009
Loan Modifications
Great Article in the Mercury News
We are seeing the evolution of different solutions to our mortgage crisis. Lately you've probably been hearing more about 'loan modifications'. Loan modifications have evolved as another alternative to having a mortgage that is too much to handle. Lenders are renegotiating with some borrowerers in order to salvage what they can, making the loan affordable to the borrowerer and thus avoiding the foreclosure route.
Counseling is available by contacting the lender directly or going to a HUD approved non-profit counceling agency (might be the smarter first step). There are also private loan-modification services that will help with the process for a fee.
This article in the Mercury gives resources and some good common sense advice in dealing with options. To read more, go to: http://www.mercurynews.com/saturdayrealestate/ci_11355649
My 2 Cents - Let's not make the same mistakes that got us into this mess. Do your homework, do your research, ask trusted professionals and most of all - deal with it! Problems won't go away by not looking at them.
We are seeing the evolution of different solutions to our mortgage crisis. Lately you've probably been hearing more about 'loan modifications'. Loan modifications have evolved as another alternative to having a mortgage that is too much to handle. Lenders are renegotiating with some borrowerers in order to salvage what they can, making the loan affordable to the borrowerer and thus avoiding the foreclosure route.
Counseling is available by contacting the lender directly or going to a HUD approved non-profit counceling agency (might be the smarter first step). There are also private loan-modification services that will help with the process for a fee.
This article in the Mercury gives resources and some good common sense advice in dealing with options. To read more, go to: http://www.mercurynews.com/saturdayrealestate/ci_11355649
My 2 Cents - Let's not make the same mistakes that got us into this mess. Do your homework, do your research, ask trusted professionals and most of all - deal with it! Problems won't go away by not looking at them.
Wednesday, December 17, 2008
Have You Checkout Out the Interest Rates?
Record Low for Interest Rates!
Now is a great time to check in with your mortgage broker or banker and find out the current interest rates as it applies to you and your finances. Yesterday, my representative from Bank of America was offering 4.875% for a 30 year fixed with 1 point for a conforming loan (up to $417,000). Even Jumbo loans were being offered decent rates (6% for a 30 year fixed with 1 point).
Sue McAllister from the Mercury News wrote today that 'The Federal Reserve entered a new era Tuesday, lowering its benchmark interest rate virtually to zero - for the first time in its 95-year history - and declaring that it will now fight the recession by pumping out vast amounts of money to businesses and consumers through an expanding array of new programs.' Sue McAllister is the real estate writer for the Mercury and was the author of a great real estate blog that was recently discontinued (sad news for us).
Could this actually be good news (haven't had any in so long it's hard to tell). Keep watching the rates and I'll keep you posted on any changes as well.
Now is a great time to check in with your mortgage broker or banker and find out the current interest rates as it applies to you and your finances. Yesterday, my representative from Bank of America was offering 4.875% for a 30 year fixed with 1 point for a conforming loan (up to $417,000). Even Jumbo loans were being offered decent rates (6% for a 30 year fixed with 1 point).
Sue McAllister from the Mercury News wrote today that 'The Federal Reserve entered a new era Tuesday, lowering its benchmark interest rate virtually to zero - for the first time in its 95-year history - and declaring that it will now fight the recession by pumping out vast amounts of money to businesses and consumers through an expanding array of new programs.' Sue McAllister is the real estate writer for the Mercury and was the author of a great real estate blog that was recently discontinued (sad news for us).
Could this actually be good news (haven't had any in so long it's hard to tell). Keep watching the rates and I'll keep you posted on any changes as well.
Wednesday, December 10, 2008
Interest Rates!
Update from Bank of America
I receive a weekly update from B of A regarding the current interest rates. Looking at it on a weekly (if not daily) schedule really helps put the market in persective. Right now, a 30 year fixed rate loan has an interest rate of 5.375 (5.549 APR) for a conforming loan (up to $417,000 loan amount). That is the lowest I've seen it in a long time. A 30 year fixed for an FHA conforming loan is going for 5.5% (6.029 APR). A 30 year fixed rate for a Jumbo Loan ($729,750 to 3,000,000 loan amount) is at 6.5 % (6.708 APR) right now. Also B of A is saying this is a good time to apply for a Veteran's Loans - they are lending up to 100% of the purchase price and as of right now, they are saying they can still close by the end of the year.
My 2 Cents - I would also advise checking out your credit unions or opening an account with a credit union. They have very competitive rates and they also have money. I recently did a transaction where my Buyer borrowed money from their credit union and it went very smoothly.
I receive a weekly update from B of A regarding the current interest rates. Looking at it on a weekly (if not daily) schedule really helps put the market in persective. Right now, a 30 year fixed rate loan has an interest rate of 5.375 (5.549 APR) for a conforming loan (up to $417,000 loan amount). That is the lowest I've seen it in a long time. A 30 year fixed for an FHA conforming loan is going for 5.5% (6.029 APR). A 30 year fixed rate for a Jumbo Loan ($729,750 to 3,000,000 loan amount) is at 6.5 % (6.708 APR) right now. Also B of A is saying this is a good time to apply for a Veteran's Loans - they are lending up to 100% of the purchase price and as of right now, they are saying they can still close by the end of the year.
My 2 Cents - I would also advise checking out your credit unions or opening an account with a credit union. They have very competitive rates and they also have money. I recently did a transaction where my Buyer borrowed money from their credit union and it went very smoothly.
Thursday, November 20, 2008
Good Faith Estimates
Final RESPA Reform Rule -
The United States Department of Housing and Urban Development (HUD) has published its final RESPA reform rule. Included is a new standard Good Faith Estimate (GFE) that lenders and mortgage brokers will be required to provide to consumers. The purpose of the standard GFE is to provide homeowners with clear loan terms and costs from different lenders that can be easily understood and compared. HUD also has created a new page on the HUD-1 Settlement Statement to help homebuyers better understand what they are being charged at closing and how these charges compare to the GFE issued by their lender. Unfortunately, this will not go into effect until the beginning of 2010.
My 2 cents - I understand loan charges and I have often been mystified by some of the good faith estimates I have seen in the past. I like the idea of a uniform estimate so consumers can easily compare different lenders. Also, ask your realtor to work up an estimated net sheet of your own for all your closing costs. This will reinforce the information you are getting from your lender as well as put perspective on all the costs involved.
The United States Department of Housing and Urban Development (HUD) has published its final RESPA reform rule. Included is a new standard Good Faith Estimate (GFE) that lenders and mortgage brokers will be required to provide to consumers. The purpose of the standard GFE is to provide homeowners with clear loan terms and costs from different lenders that can be easily understood and compared. HUD also has created a new page on the HUD-1 Settlement Statement to help homebuyers better understand what they are being charged at closing and how these charges compare to the GFE issued by their lender. Unfortunately, this will not go into effect until the beginning of 2010.
My 2 cents - I understand loan charges and I have often been mystified by some of the good faith estimates I have seen in the past. I like the idea of a uniform estimate so consumers can easily compare different lenders. Also, ask your realtor to work up an estimated net sheet of your own for all your closing costs. This will reinforce the information you are getting from your lender as well as put perspective on all the costs involved.
Mortgage Workout Programs!
The California Association of Realtors has created several new resources for homeowners seeking information on existing mortgage workout programs. The main lenders that CAR has general guidelines for are the following:
1) HOPE for Homeowners
2) Countrywide Financial (Bank of America)
3) Citigroup, CitiMortgage
4) JP Morgan Chase & Co
5) IndyMac Federal Bank, FDIC
6) Federal Government Loan Modification (Participants include: Fannie Mae, Freddie Mac, Federal Home Loan Banks, Hope Now participants, U.S. Dept. of the Treasury, Federal Housing Administration and the Federal Housing Finance Agency, and Wells Fargo.)
Consumer information sheets are available containing detailed information on specific programs. In general, the loan modification programs are intended for primary residences only.
It’s important to understand that mortgage loan modifications typically are handled on a case-by-case basis. Prior to calling a lender, homeowners should have the following information available:
1) Loan number
2) Income information and documentation
3) Most recent mortgage statement
4) Bank statements
5) Letter demonstrating financial hardship
If a lender is not listed above, homeowners may wish to contact their lender to determine if a workout program is available.
You may also want to contact a U.S. Dept. of Housing and Urban Development (HUD)-approved counselor. For a list of HUD-approved counselors in California, visit the HUD Web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=CA.
Hope this helps! I will continue to provide updated information as it comes my way. Also, feel free to contact me if you want any additional information concerning these programs.
1) HOPE for Homeowners
2) Countrywide Financial (Bank of America)
3) Citigroup, CitiMortgage
4) JP Morgan Chase & Co
5) IndyMac Federal Bank, FDIC
6) Federal Government Loan Modification (Participants include: Fannie Mae, Freddie Mac, Federal Home Loan Banks, Hope Now participants, U.S. Dept. of the Treasury, Federal Housing Administration and the Federal Housing Finance Agency, and Wells Fargo.)
Consumer information sheets are available containing detailed information on specific programs. In general, the loan modification programs are intended for primary residences only.
It’s important to understand that mortgage loan modifications typically are handled on a case-by-case basis. Prior to calling a lender, homeowners should have the following information available:
1) Loan number
2) Income information and documentation
3) Most recent mortgage statement
4) Bank statements
5) Letter demonstrating financial hardship
If a lender is not listed above, homeowners may wish to contact their lender to determine if a workout program is available.
You may also want to contact a U.S. Dept. of Housing and Urban Development (HUD)-approved counselor. For a list of HUD-approved counselors in California, visit the HUD Web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=CA.
Hope this helps! I will continue to provide updated information as it comes my way. Also, feel free to contact me if you want any additional information concerning these programs.
Tuesday, November 11, 2008
Changing Loan Limits
Did you see the article by Sue McAllister in the Mercury News regarding loan limits?
A little history – For a long time, loan amounts have been broken down into conforming and jumbo loans. Right now, a conforming loan amount is under $417,000 and usually gets a better interest rate. And yes, you guessed it, jumbo loan amounts are larger than $417,000. Earlier this year, as part of the economic stimulus bill that was put into effect around February of 2008, a conforming jumbo loan amount was created for loans from $417,000 to $729,000 which gave a better rate than jumbo loans but not as good as conforming but provided more opportunities for Buyers.
The conforming jumbo loans will expire December 31st. In Santa Clara County, the maximum for loans backed by Fannie and Freddie will drop to $625,500 as of January 1st, 2009. The new limits are affecting Buyers even earlier than January because many lenders won’t accept applications for conforming jumbo loans unless they can be closed by mid-December. Lois Jones of Bank of America here in Morgan Hill, says if you are depending upon a conforming jumbo loan, you should close your transaction by December 10th of 2008 at the latest.
Feel free to comment or contact me for additional information.
A little history – For a long time, loan amounts have been broken down into conforming and jumbo loans. Right now, a conforming loan amount is under $417,000 and usually gets a better interest rate. And yes, you guessed it, jumbo loan amounts are larger than $417,000. Earlier this year, as part of the economic stimulus bill that was put into effect around February of 2008, a conforming jumbo loan amount was created for loans from $417,000 to $729,000 which gave a better rate than jumbo loans but not as good as conforming but provided more opportunities for Buyers.
The conforming jumbo loans will expire December 31st. In Santa Clara County, the maximum for loans backed by Fannie and Freddie will drop to $625,500 as of January 1st, 2009. The new limits are affecting Buyers even earlier than January because many lenders won’t accept applications for conforming jumbo loans unless they can be closed by mid-December. Lois Jones of Bank of America here in Morgan Hill, says if you are depending upon a conforming jumbo loan, you should close your transaction by December 10th of 2008 at the latest.
Feel free to comment or contact me for additional information.
Tuesday, October 28, 2008
Resources for Foreclosure Help
Foreclosure Help!
There are a lot of people struggling to find solutions that will allow them to stay in their homes. There is information and help available. Listed below are some of those agencies working in Santa Clara County to provide information, solutions and relief. You can call direct and speak to someone or go online to get a sense of what the agency is about.
The State of California Consumer Home Mortgage Information website can be found at http://www.yourhome.ca.gov/ and offers a ‘Guide to Avoiding Foreclosures’ as well as specific information on finding agencies working with foreclosure prevention. You can also contact the following agencies directly:
Consumer Credit Counseling Service –
Call (800) 540-2227 or try their website at http://www.gotdebt.org/
Neighborhood Housing -Call (408) 279-2600 or go online at http://www.nhssv.org/
Project Sentinel -Call (408) 720-9888 or go online at http://www.housing.org/
These are a few of the local resources. If you or someone you know needs help in another California county, or elsewhere in the United States, go to the HUD website to find lists of “housing counseling agencies” by state.
Foreclosures and Notices of Default reached new highs in the second quarter in Santa Clara County and in California (per Data Quick Information Systems). There are a lot of people in need of the right information and help. Let me know if you have other suggestions for people to get the kind of help they need.
There are a lot of people struggling to find solutions that will allow them to stay in their homes. There is information and help available. Listed below are some of those agencies working in Santa Clara County to provide information, solutions and relief. You can call direct and speak to someone or go online to get a sense of what the agency is about.
The State of California Consumer Home Mortgage Information website can be found at http://www.yourhome.ca.gov/ and offers a ‘Guide to Avoiding Foreclosures’ as well as specific information on finding agencies working with foreclosure prevention. You can also contact the following agencies directly:
Consumer Credit Counseling Service –
Call (800) 540-2227 or try their website at http://www.gotdebt.org/
Neighborhood Housing -Call (408) 279-2600 or go online at http://www.nhssv.org/
Project Sentinel -Call (408) 720-9888 or go online at http://www.housing.org/
These are a few of the local resources. If you or someone you know needs help in another California county, or elsewhere in the United States, go to the HUD website to find lists of “housing counseling agencies” by state.
Foreclosures and Notices of Default reached new highs in the second quarter in Santa Clara County and in California (per Data Quick Information Systems). There are a lot of people in need of the right information and help. Let me know if you have other suggestions for people to get the kind of help they need.
Thursday, October 23, 2008
More Credit Information and Resources
CREDIT REPORT RESOURCES
If you are looking for more information about your current credit status, then the following agencies are good resources for updated information. You can contact the following agencies for more credit information (recognized as the top three nationwide consumer credit reporting companies):
1) Equifax – http://www.equifax.com/ or 1-800-685-1111
2) Trans Union – http://www.transunion.com/ or 1-877-322-8228
3) Experian Information Solutions – http://www.experian.com/ or 1-866-200-6020
Fair Isaac & Company invented the FICO credit risk score that lenders started using in the 1960s. This approach to lending enabled financial institutions to improve their business performance and expand consumers’ access to credit. Today Fair Isaac’s FICO score is widely recognized as the industry standard for lenders. Myfico is the consumer division of Fair Isaac.
4) Fair, Issaac & Company – http://www.myfico.com/
Under the FACT Act amendments to the Fair Credit Reporting Act, you are entitled to one free Personal Credit Report in a 12 month period. To request this free annual report online, by phone or mail, visit http://www.annualcreditreport.com/ (does not include FICO scores).
If you are looking for more information about your current credit status, then the following agencies are good resources for updated information. You can contact the following agencies for more credit information (recognized as the top three nationwide consumer credit reporting companies):
1) Equifax – http://www.equifax.com/ or 1-800-685-1111
2) Trans Union – http://www.transunion.com/ or 1-877-322-8228
3) Experian Information Solutions – http://www.experian.com/ or 1-866-200-6020
Fair Isaac & Company invented the FICO credit risk score that lenders started using in the 1960s. This approach to lending enabled financial institutions to improve their business performance and expand consumers’ access to credit. Today Fair Isaac’s FICO score is widely recognized as the industry standard for lenders. Myfico is the consumer division of Fair Isaac.
4) Fair, Issaac & Company – http://www.myfico.com/
Under the FACT Act amendments to the Fair Credit Reporting Act, you are entitled to one free Personal Credit Report in a 12 month period. To request this free annual report online, by phone or mail, visit http://www.annualcreditreport.com/ (does not include FICO scores).
Tuesday, October 21, 2008
What the heck are FICO scores anyway?
Your Credit Score
Fair Isaac & Company invented the FICO credit risk score that lenders started using in the 1960s. This approach to lending enabled financial institutions to improve their business performance and expand consumers’ access to credit. Today Fair Isaac’s FICO score is widely recognized as the industry standard for lenders.
What is your score specifically designed to tell you?
It predicts the likelihood that your borrower will get a 90 day late on any trade line, within the next 24 months.
What is the range of credit scores?
Generally 300 – 850 (850 being perfect credit)
What is your score comprised of?
35% Payment History
30% Balances
15% Credit History
10% Type of Credit and number of each type
10% Inquires
Payment History
Recency – The most heavily weighted factor in the entire score model. When did it happen? 0-6 Months – Your score can be hit over 100 points. 7-24 months – Slightly hit (25 to 50 points). 25+ months – Not much of an effect.
Frequency – Being frequently late is weighted into the score.
Severity – Public records, judgments, tax liens are more heavily weighted.
Balances
Balances that exist on revolving charge accounts (Visa/MasterCard) are weighted more than high balances on installment loans.
If you have charged in excess of 50% of your credit limit, your score will go down at least 100 points.
If you have charged in excess of 75% of your credit limit, your score is dropped drastically.
If you keep less than 10% of your credit limit, you actually earn more points than paying them off completely.
Credit History
Your credit history is the length of your credit.
30 years history is considered excellent credit.
Three to five trade lines is best.
Type of Credit and Number of Each Type
Counts open and closed trade lines.
Finance company installment account, i.e. Levitz Furniture, affects your credit negatively.
Inquiries
Depending upon your credit and length of credit, inquires affect your credit differently.
Someone with a short length of credit history will get 30 points deducted off their score, versus someone with a longer credit history will get 10 points deducted and be allowed more inquiries.
Promotional inquiries do not affect your score.
I plan on providing more information about credit agencies as well as help that is presently available for consumers. Feel free to comment and let me know exactly what kind of information you are interested in having available!
Fair Isaac & Company invented the FICO credit risk score that lenders started using in the 1960s. This approach to lending enabled financial institutions to improve their business performance and expand consumers’ access to credit. Today Fair Isaac’s FICO score is widely recognized as the industry standard for lenders.
What is your score specifically designed to tell you?
It predicts the likelihood that your borrower will get a 90 day late on any trade line, within the next 24 months.
What is the range of credit scores?
Generally 300 – 850 (850 being perfect credit)
What is your score comprised of?
35% Payment History
30% Balances
15% Credit History
10% Type of Credit and number of each type
10% Inquires
Payment History
Recency – The most heavily weighted factor in the entire score model. When did it happen? 0-6 Months – Your score can be hit over 100 points. 7-24 months – Slightly hit (25 to 50 points). 25+ months – Not much of an effect.
Frequency – Being frequently late is weighted into the score.
Severity – Public records, judgments, tax liens are more heavily weighted.
Balances
Balances that exist on revolving charge accounts (Visa/MasterCard) are weighted more than high balances on installment loans.
If you have charged in excess of 50% of your credit limit, your score will go down at least 100 points.
If you have charged in excess of 75% of your credit limit, your score is dropped drastically.
If you keep less than 10% of your credit limit, you actually earn more points than paying them off completely.
Credit History
Your credit history is the length of your credit.
30 years history is considered excellent credit.
Three to five trade lines is best.
Type of Credit and Number of Each Type
Counts open and closed trade lines.
Finance company installment account, i.e. Levitz Furniture, affects your credit negatively.
Inquiries
Depending upon your credit and length of credit, inquires affect your credit differently.
Someone with a short length of credit history will get 30 points deducted off their score, versus someone with a longer credit history will get 10 points deducted and be allowed more inquiries.
Promotional inquiries do not affect your score.
I plan on providing more information about credit agencies as well as help that is presently available for consumers. Feel free to comment and let me know exactly what kind of information you are interested in having available!
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