Carole Fields

FHA Raises Minimum Down Payment

Last week, the Federal Housing Administration announced that buyers with credit rating scores below 580 will be required to make a down payment of at least 10 percent, while the rate for higher-ranked borrowers would stay at 3.5 percent. With the demand for FHA-guaranteed mortgages at the highest levels in years, find out what these changes could mean by reading this article today. (Corbett B. Daly, January 19, 2010, Reuters.com)

New Rules Help Buyers at Closing

On January 1, 2010, the Department of Housing and Urban Development implemented the simplified Good Faith Estimate form. These new rules should help buyers avoid unpleasant surprises at the closing table.

For additional information, please read this article from "The Wall Street Journal" to see how this can impact your transaction.

Mortgage Modification- A New Approach

With the government's minimal rate of success on loan modification, there is a new model developed by Lewie Ranieri, formerly of Solomon Brothers.  Some credit Lewie with developing the systems that led to the current mortgage crisis. Now, it appears that he is trying to correct the crisis and help homeowners stay in their homes.

For more information, please read this article from Fortune magazine.

Refinancing--expect a wait

With interest rates historically low and some ARM's ready to reset to a higher interest rate, many homeowners are interested in rrefinancing their mortgage.  This is a smart move provided the homeowner has enough equity, great credit, a secure job, and patience to wait.  Gone are the days of quick approval and closing.  Some markets are declining and appraisals may be an issue, which can cause further delays. It is important to have a realistic idea of what has happened to property values in your neighborhood. 

Be prepared!  Lenders expect documentation of everything.  Provide it for them upfront and things should progress more smoothly.  For additional information about this issue, please read this article.

Tax Credit Up to $8000!

To help stimulate the economic recovery, the American Recovery and Reinvestment Act of 2009 allows qualifying first-time homebuyers to earn a tax credit of up to $8000 provided they purchase a home before December 1, 2009.

For this tax credit, a first- time homebuyer is one ( or a married couple) who did not own a primary residence  during the three year period ending on the date of purchase.  This credit can be claimed  on 2008 or 2009 tax returns. Buyers can claim 10 percent of the purchase up to $8000, or $4000 for married couples filing separately.

Read the small print, because the amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 if filing jointly.

For more information on this tax credit, please talk with your tax consultant and visit  www.irs.gov

Federal Income Tax Changes for 2008

Jenny Upchurch in an article in "The Tennessean" reports "Changes in federal income tax rules could benefit many in Tennessee, allowing more homeowners to deduct their property tax payments..."

Many are facing economic challenges.  In response to the times, the IRS has created a "What If" section on their web site to address such issues as foreclosures, losing a job, inability to pay the IRS, etc.

The first time home buyer credit can be claimed for a home purchased after April 8, 2008 through June 30, 2009. This is an interest free loan available to those who have not owned a home in the past three years. The maximum amount of the loan is $7500.

There are other changes which can benefit taxpayers. For additional information please read the article in "TheTennessean" and contact www.irs.gov 

Refinance Now?

Interest rates are predicted to possibly go lower in 2009.   Money is available for qualified buyers with good credit scores and predictable income.  Inventory is up in many areas of the country, meaning buyers have more choices than ever before.  What to do? Should you lock in an interest rate, now, or wait in hope that the rates will go lower?

 WHAT YOU NEED TO KNOW ABOUT MORTGAGES IN 2009Read this article for tips  on the mortgage situation (Peter Coy, January 6, 2009, msnbc.com) More Information . . .

Is It Time to Refinance?

Mortgage rates are coming down.  They are already historically low. As a matter of fact, I never expected to see them this low in my lifetime.  We are talking our parents or grandparents rates from the 1950's.

My husband and I decided that we would refinance and set a target of 5%.  We already have a very good rate, but it needed to be in that range to justify the costs of refinancing.  Well, it looks as if we may reach or even go lower than our target.  What a gift!  However, we must not get greedy.  Who knows how low the rates will drop and for how long?

This is a great time to refinance or buy; provided one has a good credit score. If not, your first order of business should be repairing your credit score--it is that IMPORTANT. There has been an increase in inventory and more choices are available than in previous years. It is encouraging to see some positive news. To learn more about the interest rate situation please read Chas Sick's interesting article in The Tennessean.

HUD Launches Web Site to Educate Consumers

HUD is listening to the concerns of the public in regard to the need for easy to understand financial information.

The U.S. Department of Housing and Urban Development (HUD) launched a new, comprehensive Web site to assist Americans with improving financial literacy, sustaining healthy homeownership and achieving financial security. (Amber Lyons, December 2, 2008, HUD) More Information . . .

Financing Help for Some Mortgages

Another program to assist some homeowners with Fannie and Freddie backed mortgages was unveiled Tuesday.

The Bush administration announced another plan to modify hundreds of thousands of distressed mortgages held or backed by mortgage finance giants Fannie Mae and Freddie Mac. To qualify for the new program, homeowners whose loans are owned or packaged by Fannie and Freddie must be 90 days or more past due on their payments for single-family dwellings in which they live. (Kevin G. Hall, November 12, 2008, RISMedia) More Information . . .