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Government Deadlines are Fast Approaching for Montgomery Home Buyers

Thursday, April 15, 2010
by The Hat Team

Buy or Refinance Your Montgomery Home NOW!!

The federal Home Buyer Tax Credit ends in just two weeks. Time is running out for you to take advantage of this incredible opportunity to get FREE money from the government to buy a home.

1.  Home Buyer Credit Act

  • DEADLINE: April 30, 2010 (June 30th with a signed, binding contract).

  • montgomery homeELIGIBILITY: First-time buyers and repeat buyers (those who have owned and lived in one residence for 5 consecutive years of the last 8).

  • INCOME LEVELS; $125,000 individual and $225,000 for couples.

  • PURPOSE Allows Montgomery home buyers to receive a tax credit (which may be claimed on this year’s taxes) of $6500 to $8,000.

***Remember that a tax credit is a dollar-for dollar reduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

2. Home Affordable Refinance Program (HARP)

  • DEADLINE: June 2010
  • ELIGIBILITY: The mortgage loan on your Virginia Beach property must be owned by Fannie Mae or Freddie Mac and owner occupied.  Property may include 1 to 4 units. Current mortgage must be paid current and up to date. Loan-to loan value cannot exceed 125% (previously 105%).

  • PURPOSE: To extend underwriting guidelines so as to allow “underwater” mortgage holders (those with loan balances which exceed the value of their Montgomery home) to avoid foreclosure.

3. MILITARY SERVICE MEMEBERS Exception!

If you are a service member on official EXTENDED duty outside of the United States for at least 90 days during the period Jan. 01, 2010 to April 30, 2010, you are GRANTED A 1 YEAR EXTENSION on the First-Time Homebuyer Credit.  That means you have to be under contract by April 4, 2011 and close by June 30, 2011. 

Contact us today for help getting you home buyer tax credit!

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How Does Housing Recovery Act Help Montgomery Home Buyers

Thursday, August 7, 2008
by The Hat Team
President Bush signed into law this week The Housing and Economic Recovery Act. This is the most sweeping change to housing reform since the New Deal of 1934. It is designed to assist more Americans invest in home ownership and shore up the faltering housing and mortgage markets.

Like any legislation, it comes with the good and the bad. I encourage you to write your Congressmen to see if we can get legislation to revoke some of the bad.  For example, effective October 1, 2008, FHA will increase the minimum required down payment from 3% to 3.5% for Montgomery home buyers. The legislation also calls for the elimination of seller down-payment assistance programs such as AmeriDream and Nehemiah by October 1, 2008.


As of July 14, 2008, upfront MIP premiums became risk-based on credit scores and the annual premium increased across the board. Instead of the original plan of making FHA loans more affordable for potential Montgomery home buyers; the new legislation is doing the exact opposite and makes it more expensive.

Details of the Housing and Economic Recovery Act:
Here are some key provisions of the Housing and Economic Recovery Act that most affect Montgomery home buyers:
  • GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
    View 2009 FHA and GSE loan limit estimates (PDF)
  • FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The down payment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
    View 2009 FHA and GSE loan limit estimates (PDF)
    FHA Reform Chart (PDF)
  • FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
    FHA Foreclosure Rescue Chart
  • VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
  • Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
  • GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
  • Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
  • National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
  • LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
  • Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
It remains to be seen the overall effect the Recovery Act will have on both the individual home buyer and the housing industry as a whole.
From the Experts: 
“We’re going through a major financial crisis…let’s be clear: Fannie and Freddie can’t be allowed to fail. With the collapse of subprime lending, they’re now more central than ever to the housing market, and the economy as a whole.”
– Paul Krugman, Professor of Economics at Princeton and New York Times columnist, 7/14/2008
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Borrowing Is More Difficult For Montgomery Home Buyers

Wednesday, March 7, 2007
by The Hat Team

Montgomery home buyers with poor credit are having a more difficult time qualifying for a mortgage in a changing real estate market due to sub-prime lending practices. Sub-prime lending is the loaning of money, primarily for home equity loans, to people with spotty credit or the credit challenged, shall we say.

 

Skyrocketing property values in the past few years made it easy for homeowners to borrow heavily against their homes with second mortgages and home-equity loans. But as housing prices have leveled off, overextended homeowners are now defaulting because they cannot afford higher mortgage payments and can no longer refinance.

 

Every where you look, including websites such as BankRate.com, you see information about the dramatic increase in foreclosures due to sub-prime lending. In the wake of increased foreclosures, lenders are tightening their belts and increasing loan qualification limits. The majority of sub-prime borrowers are either lower income or minority borrowers, and the stricter loan qualifications are making it tougher for them to obtain financing.

 

As these alternative credit programs (loans for credit-challenged borrowers) disappear, it becomes increasingly important that home-buyers deal with an agent whose background and training include mortgage financing techniques.  No matter how tough lenders become, they all have what is called a Community Reinvestment Act obligation to reach out to marginal borrowers. 

 

We, at The Hat Team, not only have the knowledge and experience to help you find financing for your new home, we have a network of well-qualified, reputable lenders who will do everything they can to assist you also.

 

You can learn more about us at HatTeam.com or give us a call, 800-428-5239. We are at your service!

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