Congress Restores FHA Loan Limits to NAR-Backed Levels

It looks like this should happen in the near future and the report states that we should go back to the previous loan limit we had prior to October of 2011. The FHA loan limit is currently $271,000 after the limit dropped from $371,000 in October of this year. This is GREAT news and will make financing easier for many of the home buyers in Mesa County. Currently our inventory is lower than is has been in 18 months.

Congress Restores FHA Loan Limits to NAR-Backed Levels

Feel free to give me a call, send an email, or a text with any questions. Thanks! Becky Behrens

Foreclosure - Strategic Defaults' Can Damage Credit for Years

This is a tender subject. I know some folks feel that they have no other option, but I think it is important to know the repercussions. I'm a firm believer that the more information we have the better decisions we can make. If you are struggling to make your mortgage payments or you are already behind, it is easy to think that maybe you should just walk away. However, there are a few options out there and it is best to stay in contact with your mortgage company. You may be eligible for a loan modification or a good canidate for a short sale. Yes, both of these options will affect your credit, but not as badly or for as long as a foreclosure. Both of these options require work and diligence on your part. It is easy to feel very overwhelmed and just want to quit. Trust me during this process you will feel like throwing in the towel, but the reward for sticking with it is worth it. The Rewards are that your credit won't take as big of a hit. I know some of you feel it can't get any worse, but it can. The big picture of your credit score is that anyone who asks for your SSN can and probaly is running a credit check on you. If you refuse to give them your SSN them the various companies assign you as a person with low credit. Now, think carefully who already has or request your SSN. I can name a few - health and auto insurance, credit card companies, auto loans, banks, physicians, colleges, and employers. Not all of these entities order a credit check on you, but some do and based on your credit score they are increasing your interest rates, reducing your line of credit, cancelling you card, and increasing your insurance rates. The one that most folks don't think about is employers, depending on their parameters, low credit can hurt you from getting security clearance for some positions(especially for government positions). If you are applying for a job and you are in the running, but you have a low credit score it can hurt you. In general, all of these entities feel that if you have low credit score you are a bigger risk to them. I'm not saying this is right, however it does happen.

I know that there are a couple of you reading this now and you have tried these options, but for whatever reason these options didn't work out for you. They key is that you tried and gave it your best.

REALTOR® Magazine-Daily News-'Strategic Defaults' Can Damage Credit for Years

$8,000 Tax Credit Nears End

This is a great article that is easy to read-

The government is offering an $8,000 tax credit for first-time homebuyers - that is, folks who haven't owned a home during the past three years. According to the plan, first-time homebuyers who purchase a home may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.

However, the program is scheduled to end soon. In fact, the Internal Revenue Service recently reminded potential first-time buyers that they must complete their first-time home purchases before December 1, 2009 to qualify for the special credit, which means the last day to close on a home and qualify for the credit is November 30, 2009. In other words, right now is the time to take advantage of this opportunity.

Here's some information to help you understand what the tax credit benefits are and who qualifies.

Benefits of the Tax Credit

It's important to remember that the $8,000 tax credit is just that... a tax credit. 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 you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.

Better still, the incentive is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax incentive... and still receive a check for the remaining $4,000!

Who Qualifies?

The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers. To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800.

Remember, these are general examples. Borrowers should consult a tax advisor to provide guidance relevant to their specific circumstances.

What Type of Home Qualifies?

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 homes and houseboats used for principal residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.


I don't want anyone to miss an opportunity by either waiting or misunderstanding the media headlines. Let's talk further on this. Call or email me, and let's discuss what this might mean for you.



The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today! Laura Holm

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to the recipient or distributor a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Mortgage Interest Rates- Avoid This Costly Mistake

The following article came my way and I found this news very interesting. This Article was sent to me in a enewsletter from a Bank of America lender.

Avoid This Costly Mistake

If you've been following the financial news, you've probably heard that the Fed's been buying Mortgage Backed Securities. Unfortunately, people have picked up on the news and mistakenly discussed how these purchases will continue to cause rates to drop lower. But is that really what it means? No.

The following information can help set the record straight and help you make smart decisions that lead to a low interest rate for your home loan.

How is the Fed's Bond Purchase Related to Rates?

The Fed has been buying Mortgage Bonds. BUT... more precisely, they're buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools are likely to be refinanced and paid - because current rates make it very attractive to refinance a loan over 6.0%. Thus, giving the Fed a quick recoup on some of its investment.
Bottom line: The Fed's purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

The Problem Is...
Many consumers are in situations where they can refinance now and save hundreds of dollars a month on their mortgage payments. But if they hear people throwing around teases of lower rates ahead, they may decide to hold off on making the decision to save, in the hopes of gaining a few more dollars of savings per month if a lower rate came their way. Of course, while they're waiting, rates could turn higher - especially when you consider that the Fed is scaling back its purchases of Mortgage Backed Securities - and this window of opportunity could pass them by entirely.
Is the Fed Scaling Back? And What Will It Mean to Rates?
Last week, the New York Fed began to scale back their Mortgage Backed Security purchase program. The Fed has been buying about $25 Billion worth of Mortgage Backed Securities per week, but the new plan to drag out these purchases over a longer period of time means that they will be reducing both the frequency and amounts of their purchases. This will cause higher levels of volatility, as the Fed will be purchasing less often and less consistently. As a result, rates will probably rise gradually over time.

Here's the Clincher

Even if consumers are ultimately able to time the market perfectly and save another few bucks per month, they could still end up losing. That's because while they delayed, they lost the savings each month they could have gained by taking action sooner. In other words, they may have lost hundreds of dollars for every month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.
I don't want anyone to miss an opportunity by either waiting or misunderstanding the media headlines. Let's talk further on this. Call or email me, and let's discuss what this might mean for you.


The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today!

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to the recipient or distributor a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

REALTOR® Magazine-Daily News-Uptrend Continues in Pending Home Sales

The following link includes statistics for regional areas. The good news that all regional areas showed an increase, Although some area home sales increased more than others. Also, if you haven't owned a home in the last 3 years, you may qualify for the $8,000 tax credit. In order to take advantage of this credit you need to close on your new home before Dec. 1, 2009. Feel free to call me if you have any questions. Thanks!

REALTOR® Magazine-Daily News-Uptrend Continues in Pending Home Sales

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Do You Know Your Credit Score?

In one of my recent posts I mentioned that the lenders have tightened their standards. Although, there are still ways to qualify for 100% financing it isn't as easy as it was a year ago. I always suggest that talking to a lender should be your first step in buying a home. Once you and I know where you stand, we know exactly how to proceed in order to find you the best and most house for your money. One of the most important factors is your FICO (credit) score. Do you know your FICO score? How do you stack up and what does it mean? If you are unsure I would recommend that you check out the following websites.

myFICO - This website is recommended by Suze Orman. For a small price you can find out what your FICO score is and if needed how to improve it.

CreditBloggers, Where do you rank... - This explains how and where your credit score ranks.

New Home Building Down From Last Year in Mesa County

In my last post I mentioned building permits were down and a brief reason as to why. A huge reason is the lenders have more stringent lending practices. There was an article in the local paper that goes into more detail and explains how and why the smaller builders are struggling. One of the reasons for higher lot prices has to do with the cost of subdividing, development, and the amount of time it takes to do both of these in Mesa County. Also, notice that the statistics at the end of the article aren't for our local market except for one concerning foreclosures and I am questioning how accurate that statistic is. If you go to my previous post on foreclosures you will find a link that will take you to a list of current foreclosures.

Loans Hard To Get For Some Grand Valley Developers- This is the article from the local paper.