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Archive for Buyer
Jan
25
How Fair Credit Reproting Act Protects the Home Buyer
Posted by: | CommentsThere will always be various transactions that will require credit reports. Every time, you apply for a credit card, your credit reports would have to be looked into before any application is granted. If you were to rent a house, most property owners would request for a copy of your report to determine your ability to pay.
Another major financial transaction that makes use of credit reports is home buying. Buying a home is always often equated to getting a mortgage. Since mortgage naturally involves big sums of money for borrowing, lenders would definitely want to ensure their borrowers are responsible people. Before homebuyers can get their mortgage, they will undergo careful screening and evaluation. In addition, lenders perform such activities by checking their credit reports.
As a homebuyer, you should be concerned with your credit reports. Every piece of information mentioned in there will be considered. That is why it is always important to check for its accuracy.
However, in every system like credit reporting, there will always be loopholes. And these loopholes could pave way for unfair practices and fraudulent activities.
As a homebuyer, you need to be protected from these kinds of practices. Doing so would ensure a smoother mortgage application. So how do you do this? You start by knowing your rights under the Fair Credit Reporting Act.
Fair Credit Reporting Act is one of the legislations that protect consumers by regulating practices in credit reporting. Homebuyers should know these things as any unfair practices could be detrimental in their mortgage applications and other financial transactions. Moreover, it protects their privacy to prevent any forms of identity theft and hard inquiries that could negatively influence credit scores.
This law can give lenders a good picture on their borrowers without any smudging their credit reputation. Thus, a more reasonable decision can be made in approving their mortgage.
Here are other ways Fair Credit Reporting Act protects homebuyers:
-Any rejections in mortgage application, which is attributed to erroneous data or other inaccuracies of the report, can be disputed. Homebuyers can also request for changes to correct such inaccuracies provided evidences will be furnished
- Any homebuyer planning to get mortgage has the right to determine their credit scores and reports by requesting it from various Credit Reporting Agencies. They can charge a fee for the request. However, every consumer is entitled to obtain a free credit report annually.
- Homebuyers can limit the inquiries made on their credit report especially when they lack permissible purpose.
- Homebuyers also have the right to know the reason why they were rejected in their mortgage application.
- They can also seek damages from the violators of Fair Credit Reporting Act, if they were adversely affected from any unfair reporting practices as well as other forms of violations.
Every Credit Reporting Agency and other users of your information are bound to follow these rules. Therefore, you have the right to exercise these laws legally for you to have a speedy home buying transactions.
Jan
23
Stimulus for the First-Time Home Buyer
Posted by: | CommentsAre you a first-time homebuyer? Do you plan to purchase your home now? Then this is just the perfect timing. Aside from the getting the chance of purchasing affordable homes, you can also enjoy an added bonus provided by the government. Thanks to the stimulus bill, first-time homebuyers can now enjoy tax credit of as much as $8,000.
How does this work?
For this to be applied, taxpayers should claim the tax credit using the 5405 form. The amount can be $8,000 (as mentioned above) or 10% of the property’s purchase price. For married couples, who decide to file separately, the equivalent amount can be $4,000 for each couple.
The said amount can be paid back to the taxpayer, in the event their federal tax is less than the tax credit. For example, tax owed for the year is only $4,000, the remainder $4,000 will then be treated as a credit refund. The IRS shall then send a check to the taxpayer in order to pay back the difference.
Who is eligible?
As mentioned, this is for the benefit of the first-time homebuyers. They should have purchased their homes last January 1,2009 or until December 1, 2009. They should also have a Modified Adjusted Gross Income (MAGI) of $75,000 for single applicants or $150,000 for married applicants with joint returns. The tax credit phase-out begins when their MAGI exceeds the limits and shall be equivalent to zero if the MAGI reaches $20,000 excess.
Properties purchased shall also be single-family homes, town houses or condominiums, mobile homes or boathouses, trailer homes and cooperative apartments. This property shall be treated as a primary residence within 3 years from the date of purchase.
How is it different from the 2008 stimulus bill?
Last 2008, a similar stimulus was created. This was enacted according to the Housing Recover Act of 2008. First-time homebuyers were granted a tax credit but the amount was only $7,500 for singles or $3,500 for couples with separate returns. Eligibility is no different from the 2009 tax credit. However, the 2008 tax credit was designed as an interest-free loan. Homebuyers would have to pay back the tax credit on 2010. This should be paid back within 15 years with 15 equal installments. Unlike the 2009 tax credit, it will only be repaid if the homeowner fails to maintain the home as their primary home within 3 years from the date of purchase.
Tips for FHA borrowers
The tax credit can now be monetized for the benefit of the FHA borrowers. The amount can now be added to 3.5% down payment required. This could help homeowners build more equity on the early stage of homeownership. On the other hand, it can also be used to pay the closing cost. This could help homeowners lessen their burdens in coming up with the fund to pay the huge amount involved. All of these advantages were made possible by the FHA loan bridging. However, there will be a nominal fee of as much as 2.5% or $200 maximum.
Learn more tips in home buying, simply by checking out Dallas TX Real Estate and Real Estate for Sale in Dallas TX.
Jan
22
Who Offered Joe The Home Buyer That Mortgage Loan Approval Anyway
Posted by: | CommentsI’m not saying a mini skirt has a direct affect on your mortgage loan approval. But keep in mind, the availability of money goes hand in hand with fashion.
Consider a declining economy. In general, people become more conservative with their money and consequently, longer skirts become popular.
On the other hand, economic prosperity ushers in risk taking and skirt hems rise. Case in point, consider the Flappers of the Roaring 20’s.
Much the same, no one could deny the economic outlook during the Clinton administration was promising. The drive to increase homeownership was noble. In fact, loan approvals were reaching all time highs.
Real estate was the financial rock of the economy. Financial skirt hems were on the rise.
Now if you were a mortgage broker, you were hearing something like this from The Big Three, Fannie Mae, Freddie Mac and FHA…
“100% conventional loans with PMI? No problem. Your borrower has a pulse? Good to go!”
Mortgage representatives witnessed automated underwriting systems spitting out unprecedented loan approvals all day long.
And then along came Subprime Lending. Mortgage brokers, visited by lender representatives, were being offered innovative programs never before seen.
Take a peek at what was being offered to Joe The Home Buyer to enable mortgage qualification…
Non verifiable income ok!
No income disclosed ok!
No assets stated ok!
No appraisal options ok!
Below 600 credit scores ok!
100% financing ok!
1st/2nd mortgage combos ok!
Non verified gifts ok!
No savings pattern ok!
Debt ratios out the wing-wang ok!
That was only the beginning. And deadly if ever combined with decreasing real estate values and job losses but I am getting ahead of myself.
It was official. FNMA, FHLMC and FHA were raising their skirts to qualify more home buyers.
America looked on as the Millennium ushered in more and more liberal guidelines. Caution was thrown to the wind. Excessive confidence was placed in credit scoring and automated underwriting. Fannie Mae, Freddie Mac and FHA were exuberant.
The door had been opened, the stage was set and in walked Subprime Lending. However the most recent darling of Wall Street needed to replace its tarnished loan shark image. So to make it more palatable for borrowers and mortgage companies, hard money underwent a name change.
Meet the new and improved Alternative Lending.
The volume got louder as Fannie, Freddie, and FHA played musical chairs. Round and round the guidelines they frantically darted seeing who could churn out the most buyers before the music ended.
Fannie, Freddie and FHA, the millennial Flappers, had raised their skirt even higher.
Now understand this. When one of the Big Three loosened underwriting guidelines, you can be sure the other two competed. But Alternative Lending financed by Wall Street made qualifying for mortgages the easiest of all.
It was at this juncture that home buyers stormed in by the thousands across America. And why not! Standards for mortgage loan approvals had never before made home buying this easy.
Lest you think I am criticizing the first time home buyer, please hear me out. Joe The Renter was watching his rent payment gradually increase. Saving for a down payment was slow. The threat of paying rent for years to come loomed over Joe.
Then Joe The Renter caught wind of new mortgage programs that did not require a downpayment. Mortgage loan approval was granted overnight and a month later Joe got the keys to his first house.
In light of the ease with which Joe could buy a house, there is a lingering attitude I find very disturbing. It goes something like this…
“Home buyers by the droves had the audacity to get a mortgage with no downpayment and everybody knows how THAT turned out for America.”
So I am going to say it once and for all. I am sick and tired of Joe The Homeowner being blamed for the mortgage debacle.
In the 1990’s the Big Three, Fannie Mae, Freddie Mac and FHA recognized that underwriting guidelines had become outdated. To modernize loan approval standards to match a healthy economy was necessary.
But herein lies the rub. Had mortgage investors not succumbed to greed, and of most importance, had Wall Street not excessively leveraged…
Well, I contend Joe The Homeowner knows how THAT turned out for him.
Kate Ford, author of the contemporary and informative website Get-Your-Best-Mortgage-Rate.com understands how to help current and prospective homeowners in today’s home loan environment. Want an easy way to stay informed during a tumultuous economy? Stay in touch with mortgage events dedicated just to you by visiting Mortgage News and discover the magic!
Jan
18
What you need to know about the first time home buyer stimulus
Posted by: | CommentsPassed in the Spring of 2009, President Barack Obama’s stimulus package contains some good news for people who want to buy a home but think they aren’t able to. First time homebuyers can receive tax credits to help them get into a home. In addition to providing a tax credit, this bill also allows for grants for first time homebuyers that qualify. The hope is that this stimulus will help boost the economy by encouraging renters to begin buying. In addition to being a helpful bill for first time homebuyers, it will also help support real estate industries.
There is no pre-existing paperwork that you need to file in order to be part of this stimulus program. The tax credit is filed at the end of the fiscal year and if you qualify you’ll receive money back on top of your tax refund. If you end up owing taxes during that year, your owed amount will be deducted from your tax credit.
The first qualification for the program is that you can’t have owned a home within the last 3 years. If you are purchasing a home as part of a couple, neither one of you can have owned a home within the last 3 years. The purchase of your home must fall between January 1, 2009 and December 1, 2009. The closing date of your home purchase must be within these dates. When you purchase during this year you’re eligible for up to $8,000 in the form of a tax credit.
If you purchased a home in between April and December in 2008, you may be able to qualify for another type of tax credit. There was a similar first time homebuyer stimulus bill that was passed in 2008 with slightly different qualifications. The 2008 tax credit had to be repaid, but the 2009 tax credit is yours to keep free and clear.
You’ll also need to meet income requirements in order to qualify for the tax credit. A single homebuyer can make up to $75,000 per year and still qualify. If you are buying a home as a couple, you can make up to $150,000 combined income. Individuals or couples who make more than this may be able to qualify for another type of credit based on another formula.
Additionally, you’ll have to keep the home that you buy under this program for at least three years after applying for the grant. If you end up selling before these three years are up, you’ll have to pay back the tax credit. You must live in the home that you buy as your primary residence. It goes without saying that the home must be within the United States in order to qualify.
Obama’s first time home buyer stimulus plan is a definite incentive to purchase a home, especially in this buyer’s market. Although the stimulus plan is designed to help buyers who were previously unable to purchase a home, you need to make sure that you can fiscally afford a home. Contact a real estate agent in your area to get started with finding a home to fit this program.
Joe Cline writes articles for Austin real estate. Other articles written by the author related to Austin Texas real estate blog and Austin real estate can be found on the net.
Jan
15
Home Buyer Tax Credit Extension Will Assist Real Estate Markets Across The Nation
Posted by: | CommentsWhew! Many of us in the real estate industry breathed a mass sigh of relief when the government committed to continue the first time home buyer tax break initially granted last year.
This tax credit is truly what buoyed the realty market by causing Some potential home buyers, who presumably may not have bought without it.
The opinions on exactly how much impact the tax credit has had on the real estate market cover the gamut. Some taxpayers do not feel like their tax dollars should go toward giving other people a credit for something as random as buying a home. Give that all of us benefit from the economic stability that is brought by the tax credits, especially in the real estate business, and fields tied to it.
Some people point out that the tax grant simply induces people who were already planning on buying to buy. This point of view forgets that the entire point of establishing the tax credit was to help the real estate market for the short term. Since Many of the buyers who are buying right now were obviously already looking, then the limited deadline of the tax grant will help them decide to buy sooner, rather than later.
And, there is always those who try to manipulate the system. Many people who do not qualify for the first time home buyer tax break will fraudulently claim the benefits. If caught and convicted of the tax fraud involved some will face fines and jail terms that exceed any possible benefit they would have gotten.
The tax break helped save the real estate market from falling so sharply that Some Americans would lose most if not all, of their wealth, and may never want to invest in realty again. This tax break will be the first in Some steps taken by the government in assisting the realty recovery across the nation.
The author enjoys writing articles about Boise homes and other investment areas. His useful insights, articles and comments have made many happy clients in the Boise real estate arena. His business accumen is saught by many in his field.