Tax Credit Extension

There are reports that the US Senate is trying to extend the Tax Credit until April 30th 2010. The extension will include raising the income limits. For singles the limit will be 125k, and for couple it is be 250k. A new advantage will be a $6500 tax credit for home buyers who have lived in their current home for at least 5 years, and buy a new primary house. This new bill has support from the Senate and the House. And based on NAMB stats, they believe the 8k tax credit has created 200k new jobs, slow foreclosures, and stabilize home prices.

This should be a no-brainer for the Senate and House. It will be even better if the moratorium on the HVCC rule will get passed. Combined they will make the housing market so much better for so many people.

Also, this is a true credit; it is not a tax deduction. If you bought the home this year and closed by 11/30/09, 8k will added to your normal refund. If you owe money, the full 8k will be added to that amount, and any positive difference will be given back to you.


SR. Mortgage Broker
DC Area homes

Unreleased Liens

When you have a second mortgage and the balance is zero, and you sell the home, please make sure you have a release for it! Title companies d0 their diligence to clear liens, but as a seller, you may also want to contact your bank to make sure you have the release. I have seen settlements where the second lien was never released and that would hold everything up.

This is especially the case on second mortgages that are a few years old. They have been sold multiple times, because banks keep buying each other out, or because they get filed away because of a certain period of time. If they are at least 2 years old, the current bank may not have the liens information readily available, and it would require them to be researched, worked on, and cleared. That will be impossible to do if you inquiry at the time of settlement. If the lien is not cleared, the title companies will require for the seller to put the amount of money of the second mortgage in an escrow until it can be verified that it has been released.

Documentation is REQUIRED, even if you could get a verbal confirmation over the phone; it will not be enough for the title company release all of the proceeds. The biggest misconception sellers make is thinking that because they have a zero balance on the second mortgage, it has been automatically released. Please take the time early in the process, and contact your bank to request a copy of the release.

DC, DE, Fl, MD and VA Licensed Mortgage Broker
Montgomery County Homes

Who Can Pick The Title Company

On purchases 98% of time the buyer’s agent selects the title company. What most buyers don’t know is that THEY have the right to select the title company. Sometimes its worth it to discuss it with your mortgage broker, because they will be doing most of the work with the title company.

The LOs are the ones who will order title, supply all of the information needed for the title work, and work with them on make any bank request changes, and scheduling and coordinating the settlement. This becomes a very important issue right before closing, because sometimes the loan amount may change, the bank may want changes to the title work, or they may need verification about a correct address for the subject property, or any other changes the bank will require before the give the loan a final approval and release the documents and the money.

I understand that realtors have their relationships with title companies, but for the benefit of the buyer, they need to involve the LO and the key to everything is communication. Everyone wants the deal to close, and that can be accomplish smoother with the LOs working on providing the loan with a title company they works with consistently and they know each others procedures, turnaround times, and staff.


Sr. Mortgage Broker
Bethesda Homes

Seller-funded buy-downs

With so many homes on the market, and sellers and agents trying to find ways to sell them, a seller-funded buy-down is a great option. Most buyers are using the FHA program that allows up to 6% in seller concessions. On Most transactions, 3-4% will cover all of the closing costs; bank fees, title fees, pre-paids items, and taxes. If you receive an additional credit, you should use that to buy the rate down. If you receive the full seller concession, you should be able to buy the rate down .25 to .75%. That savings in rate is much bigger over the lifetime of the loan, that if you were to buy the home for 10k less. This program can be very helpful to all parties involved, if it is structured and priced correctly. If a borrower receives the full seller concession, please make sure your broker uses it to buy the rate down. Some brokers will use it to pay themselves points and fees. If should be listed on the GFE as a “Discount Point”, not under origination.

On the conventional side of financing, seller concessions are also allowed, but they are based on the LTV. The lower LTV, the higher the allowable seller concession.

MD Sr. Mortgage Broker
Fairfax County Homes

Quick Read for Borrowers

This is a very tough market for everyone involved, and as a borrower you need to educate yourself as much as possible. Some of things you can do are these; When ever you hear someone quote a rate, ask for long it will be locked. As I have mentioned before, you need to really consider a 45 day lock, because of the HVCC and HERA laws. A lot of people quote rates on a 30 day lock, and then the risk falls on you. If it does not close, they will either charge you for an extension or the bank will make you take worst-case pricing, between the day you locked and the new day you are going to lock. Also, rates are not the same with a regular FHA refi and an FHA streamline. A streamline is supposed to be no-cost with the borrower bring their payment to the table. Ex. Instead of making the payment on 11/01, the make it on 10/23, and therefore, they do not need to make it again on 11/01. If someone says they charge Zero points, please verify that by asking for Good Faith Estimate, to make sure they are not charging extensive fees, that may equate to a point, no are called something else. These new regulations have been implemented to protect the borrower, but it is also the borrowers responsibility to ask and inquiry to make sure they are getting the best option possible, on the terms they were quoted.

Licensed Mortgage Broker in DC, DE, FL, MD, and VA.
Fairfax County listings