Extension of Homebuyer Tax Credit Closing Deadline Has New Life

From Reuters:

The House just backed a measure to extend the closing deadline to Sept. 30 for buyers who met the April 30 deadline to have a signed contract. The current deadline requires those buyers to close the transaction by June 30 to receive the $8,000 tax credit for first-time homebuyers.

From House Rep. Frank Kravotil's site:
Today, the House of Representatives passed an extension of the $8,000 homebuyer tax credit for first time homebuyers. The extension was set to expire at the end of June. The extension, sponsored by Rep. Frank Kratovil and his colleagues Rep. Travis Childers (D-MS) and Kathy Dahlkemper (D-PA), will extend the credit until October 1, 2010.“The first time home buyer tax credit is working to revitalize the housing industry, a major indicator of the overall strength of the economy,” said Rep. Frank Kratovil. “However, more than 2,000 Marylanders who have already signed a contract to purchase a new home are having their closings delayed through no fault of their own. This common sense legislation will ensure that these individuals receive the tax credit that they rightfully deserve. Extending this tax credit will not only boost our economic recovery and support our housing market, but it is also the right thing to do.”The bill extends the credit for all homebuyers with a binding contract as of April 30, 2010 so that they are afforded more time to close the sale and still benefit from the credit.In late September Reps. Frank Kratovil (D-MD) and Travis Childers (D-MS) introduced a bill, The Tax Credit Extension for Homebuyers with a Loss Deduction Incentive Act (H.R. 3640), to extend the first time home buyer tax credit. A similar home buyer tax credit extension was eventually signed into law on November 6, 2009.

From the NAR:
Timely action is essential. Only one more day of eligibility remains for the credit. Despite the urgency, as many as 75,000 buyers and sellers still await bank approval of short sales or must cope with delays caused by third parties with responsibility for closing the transaction. Those selling properties damaged in natural disasters also are experiencing significant delays as they repair and restore homes that were under contract.
Extending the closing date from June 30 to September 30 is a pro-consumer relief provision that will also benefit many communities. It assures the fair treatment of purchasers who have followed the rules and done their part to assure that the sale goes through. Congress must assure that those who have met the eligibility requirements for the credit and done all within their power to satisfy the timing requirements will not have to forfeit the credit because of events and challenges outside their control.
The Senate must vote on the bill now. Senate Majority Leader Harry Reid should be on a mission to get this pushed through the process. If you're one of the folks who need this deadline extended...get on the horn with your Senator and make sure this bill gets passed ASAP. (ugh I hope there isn't any bacon attached!)

Tax Credit Deadline

Although the extension of the Tax Credit Bill was passed by the Senate, it was not passed by the house. Our sources in Washington do not believe it will pass before the 30th deadline. Be sure if your purchase involves the Credit, that they are underwritten and in closing so as not to risk delay. We do not want to cause you any problems by not having the loan closed and funded by June 30.

Homebuyer Tax Credit Deadline NOT Extended. But Senate Vote Adds Reid Amendment

News wires are buzzing with reports that the Senate just approved an extension of the homebuyer tax credit's June 30 closing deadline.

THESE HEADLINES ARE MISLEADING!!!

The June 30 closing deadline has not been extended...but it was accepted as an amendment to the Tax Extenders Bill. Under the amendment, borrowers who signed purchase contracts by April 30 would be given three extra months to close their loan and still qualify for the homebuyer tax credit. The new deadline would be September 30, 2010.

In a budget "point of order" vote taken this morning, the Senate actually voted against the bill that contains the homebuyer tax credit extension amendment. This forces the Senate Finance Committee, chaired by Senator Max Baucus, to rework the overall proposal before another vote is taken.

While this may be a cause of concern for borrowers who are awaiting a clear to close on their loan file, the "unanimous consent agreement" that set up the vote this morning says that any amendments accepted into the Senate Finance committee's version of the legislation would stand as long as the reworked bill is eventually approved by the Senate. Thus, the homebuyer tax credit closing deadline extension proposed by Senate Majority Leader Harry Reid would stand if the Senate agrees on the reworked version of the proposal. This only applies to the Senate. The House would still need to reconcile.

Below is the statement released by Max Baucus:

http://finance.senate.gov/newsroom/chairman/release/?id=cc18eb5c-03f5-4bea-9df7-c55e6ab15c2a
by Adam Quinones

4 Important Questions BEFORE selecting a lender and 5 Secrets after you do!

Before selecting a Lender
When selecting a lender, it is very important to first make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. How can you tell?

Below are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS, RUN. DON'T WALK. RUN. TO A LENDER THAT DOES!

1) What are mortgage interest rates based on?
The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.

2) What is the next Economic Report or event that could cause interest rate movement?
A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.swbcmortgage.com/Franke and hit the green MMG Weekly banner - this is updated weekly and will keep you informed about what is happening in the market.

3) When Bernanke and the Fed "change rates", what does this mean, and what impact does this have on mortgage interest rates?
The answer may surprise you. When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call.

4) Do you have access to live, real time, mortgage bond quotes?
If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? NO WAY!

Be smart... Ask questions. Get answers! I cannot stress this enough. More than likely, this is one of the largest and most important financial transactions you will ever make, especially since your family has just grown. You might do this only four or five times in your entire life, however they do this every single day. It's your home and your future. It's their profession and if you are working with someone above and beyond, it is their passion. Make sure that your lender is ready to work for you and your best interest.

After selecting my lender, what is the next step?
Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are four rules and secrets you must know to “shop” effectively.

First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS

But you didn’t really need us to tell you that did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? If the rate seems average, what are the fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?

Second, YOU GET WHAT YOU PAY FOR

If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case; expect very little advice, experience and personal service. Worst case; expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. Remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount lenders who may have a serious lack of experience. Most importantly, remember that the wrong strategy can cost you thousands more in the long run. This is one of the largest financial transactions you will make in your lifetime.

Third, MAKE CORRECT COMPARISONS

When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND

This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY

This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks have slightly higher rates.

I know this seems like alot of information; however I want you to be well informed as knowledge is power. The only bad question is the one not asked, so please always find out if you are unsure.
Again, my advice to you is to be smart. Ask questions. Get answers.

3 Things Lenders Don’t Want You to Know About Shopping for a Mortgage Online

Anyone who’s even remotely interested in shopping for a home loan has probably paid attention to the commercials on TV touting the ease of using any of a variety of Internet services to compare mortgage offers from the comfort of your home. You may even have tried a couple of them yourself, although you truly do need to watch out when trying to use the Internet to do the heavy lifting for you. Sometimes, these Internet services might work fairly well for certain people. However, the one-size-fits-all approach they offer is going to leave a lot of people with loans that aren’t the best for them, or even worse, they may be shut out of the process altogether.

The problem with these services is that they never really get to know anything about your financial situation other than your credit history and income level. Basically, what winds up happening is that you’re reduced to a number to them. If they don’t like whatever that number is, you’re out of luck.

Here are three things you should watch out for when shopping for home-finance products on the Internet – things most online mortgage sites hope you ignore:

- Do they take the time to find out about your unique situation, or are you just a cyber-borrower in their eyes? Most of these sites simply don’t have the manpower to individually work with every borrower. So a lot of times you wind up with a bad loan simply because there was no one to check if they could have found a better deal.
- What do they offer people in special financial circumstances – such as the self-employed or people with damaged credit? Most of these sites don’t even want to work with you unless you meet their stringent criteria.
- Do they provide advice to help when choosing between loan products? Most sites simply gather offers, throw them in your lap, and pressure you to choose between them. Unless you’re a pretty experienced mortgage pro, deciding on the best offer can be difficult, if not impossible.

So, what’s the solution? Use the Internet to educate yourself and then work with a real human being. You may not have thought about “old-fashioned” methods of finding the best deal, such as working with a mortgage banker. However, for anyone who values a real person sitting down with you and working through the process, there’s no better option. Give me a call or send an email, 512.809-7680 / efranke@swbc.com - I would be happy to discuss the options available to you!

The Truth About Mortgage Refinancing

It seems like everyone in Texas is jumping on the mortgage refinancing bandwagon. Maybe you're thinking about it yourself? After all, with rates as low as they are, the promise of lowering your monthly payments, sometimes significantly, is a great attraction for many homeowners.

Before you sign on the dotted line, there are a few things you should know about the way refinancing works so you don’t make a mistake that could wind up costing you big time.

With refinancing as popular as it is right now, Texas residents have to be even more careful about shopping for the best loan. Even the most attractive offer can wind up being a disaster once you realize how much the loan is really costing you.

Here are a few tips when considering refinancing:
- You should get a significantly lower rate for refinancing to make sense.
- Don't rush to refinance unless it's truly worth your while.
- If you're working with a mortgage banker rather than going it alone, you can be assured that they're bringing you the best offers out there. If you're going it alone, you'll have to do the legwork for yourself.
- Consolidating unsecured debt with a refinance loan can be a dangerous idea. You may not be in financial trouble now, but if in a few years things change, instead of simply missing a credit card payment or two, you'll now be in danger of losing your home as well.
- Your credit score counts... big time. If you've had credit problems in the past like a bankruptcy, it might make sense to wait a while for your credit score to recover before trying to refinance. Most lenders make it hard for people with less than perfect credit to get the best deals. However, again, if you choose to let an expert like a mortgage banker get involved in the process, they can often find loan options that most homeowners didn’t even know existed - which can save you thousands over the long haul.

I specialize in providing mortgage information to Texas residents that allows them to make informed decisions about their mortgage financing options and learn the insider secrets that can save them thousands of dollars over the life of their loan. I am available for interviews and welcome all of your mortgage related questions. Call 512.809.7680 or email efranke@swbc.com for a Free No-Obligation Consultation or you may visit my website at www.EmilyFranke.com