FHA Mortgage Insurance Increasing…

March 15, 2011 By
change Slide

Here we go again. FHA mortgage insurance premiums are changing for the 3rd time this year.

The proposed change was announced last month as part of the Obama Administration’s report to Congress. This change is largely driven by the rapid increase in the use of FHA financing which now is approximately 20% of all home loans currently originated.

The annual MIP (mortgage insurance premium) will increase .25% on all 30 and 15 year loans effective April 18th, 2011. Existing FHA loans are not impacted by the price change, and currently there is no changed planned to the 1% upfront mortgage insurance premium (UFMIP) charged by FHA on all loans.

Below is a chart of the changes effective 4/18.

Filed Under: For Consumers, For Realtors, News, Va loans

MCC – Mortgage Credit Certificates, A Blast From The Past

February 22, 2011 By
MCC Slide

With all of the creative financing options of the past several years’ one option that has been forgotten is the good old-fashioned Mortgage Credit Certificate (MCC). In the early to mid 90’s the MCC was a popular tool for many first time home buyers. Here are answers to some common questions about the MCC program.

What is an MCC?
An MCC is a dollar for dollar tax credit on a borrower’s federal tax return. This credit is used to offset a tax liability.

Who is eligible?
MCC’s are generally limited to First Time Home buyers. Some State/Local Housing Financing agencies allow buyers in targeted area’s to be non-first time buyers. Generally MCC’s are limited to low to moderate-income borrowers. Income limits vary according to the geographic location of the property.

How much is the credit and how is it calculated?
An MCC credit is equal to a minimum of 30% of the interest paid by a borrower during the year, but it is available every year as long as the borrower resides in the home. That could worth thousands of dollars!

How will it help my clients?
If a borrower pays $6,000 a year in interest and has a 30% MCC credit, that credit amounts to an extra $1,800 for the borrower over the year. In addition for borrowers with higher debt ratios the MCC credit may help them qualify.

How do my clients take advantage of the MCC program?
We will help your clients determine their eligibility. If eligible we will help them complete all necessary paperwork.

Learn More Here;
http://www.tdhca.state.tx.us/homeownership/fthb/mort_cred_certificate.htm

Give me a call to learn all of the details and to find out how to use an MCC to sell more homes!

Mark Hairston
(512) 789-6967

Filed Under: For Consumers, For Realtors, Tax Credits

A Look at Credit Scoring…

February 10, 2011 By
credit Slide

After 25 years as a Mortgage Professional here in Austin, one area that repeatedly comes up with both the Real Estate community and consumer is the subject of credit scoring and how it affects loan underwriting. With all of the drastic changes in over the past few years in loan products, the issue of credit is more important now than ever.

Simply put, a credit score is a three-digit number based on a borrower’s bill-paying history and debt profile and statistical information about other borrowers that lenders use to determine the likelihood of certain credit behaviors, including whether you will pay on time.

The score that Mortgage lenders use in loan underwriting is called a FICO score. This is the model developed by Fair Isaac & Co. Credit (FICO) back in the late 1950’s. Since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower’s credit history into a single number. Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information which best predict future credit performance.

There are really three FICO scores computed by data provided by each of the three bureaus––There are three major credit bureaus in the United States:

Equifax: 800-685-1111 website: www.equifax.com

Experian: 888-397-3742 website www.experian.com

Trans Union: 800-916-8800 website: www.transunion.com

Your Credit score is based on the final number of individual ratings in five categories:

  • 35% of your score is derived from payment history
  • 30% of your score is derived from outstanding balances on accounts
  • 15% of your score is derived form length of credit history
  • 10% of your score is derived from types of credit you carry
  • 10% of your score is derived for frequency of credit inquiries

So, how can I increase my score? While it is difficult to increase your score over the short run, here are some tips to increase your score over a period of time.

  • Pay your bills on time. Late payments and collections can have a serious impact on your score.
  • Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
  • Reduce your credit-card balances to 30% of the credit limit. If you are “maxed” out on your credit cards, this will affect your credit score negatively.
  • If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.
Filed Under: For Consumers, For Realtors, News

Home Buyer Tax Credit extended for Veterans

January 31, 2010 By

Many veterans are unaware of the extension of the first time Home Buyer Tax Credit, and it’s really a great situation to take advantage of. Qualified Veterans get an additional year to buy their homes–or at least until May 1, 2011 and  are eligible for a tax credit of up to $8000.

Who qualifies?
Members of “uniformed” services
Members of Foreign Service of the United States

Employees of the Intelligence Community
and those on Extended Duty, defined as having “official orders outside the US for at least 90 days in the period between December 31, 2008 to May 1, 2010. In other words, any active veterans that meet this qualification will receive the same home buyer tax credit if they are in contract to purchase by April 30th, 2011 and complete the transaction by June 30th, 2011.

One of the other benefits in the extension is a waiver on the time of occupancy, which is great because most home buyers that took advantage of the original tax credit had to use that home as their primary residence–but this provision does not apply to veterans. They do not have to repay the credit if they sell the home in less than three years, if they have to move because of official business.

There’s also a provision for current home owners–they’re eligible for a $6500 tax credit if they have lived in the home they are selling, or have sold as their principle residence for five consecutive years over the past eight.

The income limits have also been increased to $125K for single buyers and $225K for couples, and the purchase price of the home cannot go over $800K.

I’ve found that many veterans are not aware of the extension of this tax credit, so if you know any in this position, please let them know about this great opportunity–and thank them for their service.

Mark Hairston is a leading Mortgage Broker with Texas Mortgage IQ in Austin. To take advantage of stellar rates, call 512-472-3500 or email mark@texasmortgageiq.com

Filed Under: For Consumers, For Realtors, Va loans