MAKING SENSE OF THE NEW MORTGAGE ENVIRONMENT

The new mortgage environment has changed dramatically in 2010, leaving many consumers very confused and uncertain. Borrowers that closed on a mortgage loan within the last ten years have probably heard of the terms “no-doc,” “limited-doc,” “stated income,” “zero down 80/20 loans”, and even “zero down-payment loans with 580 credit scores.”
Several of these mortgage programs were part of the subprime market, also known as non-conforming loans. We had a culture of “underwrite the file with automated underwriting systems,” then document them according to those underwritings findings. Many loans were originated and closed with nothing more than an appraisal and title work based solely on credit score. However, many buyers of those mortgages (AIG, Lehman, etc.) decided to no longer buy this type of paper, or they became financially insolvent, due largely to these types of loans. That was, essentially, the official end of the “subprime” mortgage market.

What remains is FHA, VA, and conforming lenders. They require full disclosure and documentation, which means two years of tax returns and W-2’s, a month of pay stubs, as well as a list of assets and reserves, among other things. This can be frustrating for those formerly able to get financing with as little less as a credit report and an appraisal. The self-employed individual that “writes off” or deducts most of the income on their returns, has little-to-no options in regards to conventional financing. Couple this with the decline in home values, and the mortgage market has become more challenging than ever before.
However, it’s not all gloom and doom. Mortgage rates for purchasing and refinancing are at 30 year lows. We are seeing signs of home values on the rise. There are also several low down-payment options for potential home buyers. FHA still only requires 3.5% down, and there are some down payment assistance programs that can even reduce that. A blood relative can still gift 100% of that 3.5% down payment and in Ohio the Ohio Housing Finance Agency (OHFA) still offers grants for down payment assistance. If you are a military veteran, VA still offers 100% financing for eligible veterns.

So keep the faith and have hope. Guidelines will ease as time passes. We’ll probably never go back to the lending policies of the 1990’s and 2000’s, but home ownership is still the American dream and it will always be for those willing and able to pursue it.

Mike Lang has over fifteen years experience and is a mortgage loan officer at Fifth Third Bank in Gahanna, Ohio; Mike.Lange@53.com; 614-775-5138.

Need Down Payment Assistance?

In today’s environment, many home buyers, especially first time home buyers, are in need of help in the form of down payment assistance in order to purchase their first home. Even if they can come up with the down payment, it may be a good idea to take advantage of down payment assistance, when available, as that money can then be used for other necessities.

As a realtor, I have access to and work with several builders and at least one agency that have programs to help with the down payment in the form of a grant or through work-equity. With the expiration of the home buyer tax credit, builders have come up with creative ideas to generate more sales and help potential purchasers buy their products. Both of these builders offer a wide variety of affordable homes in various styles, floor plans, options that make it affordable for the first time buyer.

One builder offers a program whereby the buyer can earn up to 3.5% of their down payment by doing easy tasks such as clean up, planting shrubbery, painting their new home. If buyers cannot come of with the down payment, or they would like to save that money for other purchases, this program can be very helpful and get them in the home of their dreams.
Another builder is offering a grant of up to $4,000 for one of its builder communities. In this same community, the builder will also pay the buyer’s closing cost, resulting in zero out of pocket expense for the buyer. Builders can also offer other incentives such as free upgrades, special options, or free finished basement.

Another option would be the Ohio Housing Finance Agency, which makes affordable housing opportunities available for low-to-moderate income Ohioans. They offer extra help for active duty military and military veterans, firefighters, police officers, emergency medical technicians, healthcare workers, paramedics and teachers. www.ohiohome.org.

These great programs make home ownership more affordable and within the grasp of someone who might not otherwise qualify.
Call me at 614-805-7793 for more information about down payment assistance program or to get you pre-qualified.

Berwyn Home Sold!

A little over a month ago, I listed a two-bed room brick ranch in Berwyn, a quiet little subdivision just east of downtown Columbus. I was a little nervous about the listing because I've always been told "two-bedrooms don't sell." It also was on a slab, but it did have a one-car garage.


This was a lovely brick ranch in Berwyn, where I'd sold a home recently, so I felt fairly comfortable the home could sell, as there is an active market that attracts a particular buyer. Berwyn is an older area where the neighbors seem to know and watch out for each other.

I actively marketed the property to other agents, called almost 200 homes in a half-mile radius to tell them I just listed, and sent out "Just Listed" postcards.

We had only one showing the first three weeks so we reduced the price. Right away we received a cash offer from one of the neighbors at 96% of market value and we're set to close by June 30th.

I could have allowed those negative thoughts to cloud my attitude, which would have turned into a self-limiting belief.

I'm certainly not saying to accept every listing, as you need to evaluate each home based on its qualities, but don't allow someone else's insides to affect your outsides.

Brick Ranch in Berwyn 43209

This is a lovely brick home for sale in Berwyn, a subdivision in East Columbus. Berwyn is adjacent to Berwick, just 7 minutes from downtown Columbus and the quaint shops and eateries of the Short North. It is just minutes away from Easton Town Center, Port Columbus airport, and Eastland Shopping Center. There are also walking and bike trails in close proximity. Berwyn is an older, established neighborhood in an urban setting with a suburban feel. The exclusive community of Bexley is just one mile north with all its shops, retail stores and Capital University.

Homes in Berwyn were built mid-60's to early 70's, many of which are all brick, and have a wide variety of styles to choose from, including two story, ranch, and bi-level.

The house at 2879 Proctor is a lovely brick ranch features two bedrooms and 1.5 baths. It was built in 1963 and has 1192 square feet of living space. When you first walk in, it feels like home. It has central air conditioning and gas heat, insulated windows and one-car attached garage, with extended driveway. Taxes for 2008 were $978 annually. This is a cozy, welcoming home that has great curb appeal, with a well-kept yard and mature trees. This house screams "welcome," not just to the home, but to the neighborhood.

The area has two public elementary schools, Berwick Alternative and Scottwood, Johnson Park Middle School, and Bishop Hartley High School. There are nearly fifty cafes, bars, and restaurants within a two-mile radius, as well as quick access to all public services such as police, fire departments, post offices, public libraries, hospitals, banks and savings institutions.

Interested in buying or selling a home in Blacklick, Canal Winchester, Columbus, Groveport, Pataskala, Pickerington or Reynoldsburg? I am also a short sale resource specialist and can help you work with the bank to get your home sold. Contact me at www.HouseHunterPros.com I specialize in finding solutions to your real estate needs. You can reach me by email at mtbhunter@aol.com or by phone at 614-805-7793.

2879 Proctor Drive, Columbus, OH | Powered by Postlets

2879 Proctor Drive, Columbus, OH Powered by Postlets

What Is This Schedule M Thing?

With tax time rolling along, I find there are a lot of questions surfacing about the Schedule M, or Making Work Pay Credit. This is a new credit for 2009 which allows for a $400 credit if you have earned income from W-2 wages. The Making Work Pay Credit can be claimed on Schedule M on your 1040 or 1040A.

The credit is part of the American Recovery and Reinvestment Act of 2009, effective April 2009. It provides a maximum credit of up to $400 per single files and $800 for married for working married couples.

The credit is only available for individuals or couples that had earned income, which means they actually worked in 2009. Retirees and disabled will receive a $250 check but are not eligible for the Making Work Pay Credit, unless they received earned income in 2009.

The form can be accessed on the IRS website at www.irs.gov/pub/irs-pdf/f1040sm.pdf.

The credit is 6.2% of your earned income and can be reduced if:

• You’re single and earn more than $75,000

• You’re married and have a combined income of more than $150,000

• You area government retiree and receive a credit

• You received the $250 economic recovery payment for certain social security, SSI, railroad retirement, veteran’s disability or pension benefits.

Those individuals that received a pension and have questions should contact their plan administrator. A two page instruction sheet on completing the Schedule M can be obtained at www.irs.gov/pub/irs-pdf/i1040sm.pdf

INTEREST RATE REDUCED FOR FIRST TIME HOME BUYERS!

The Ohio Housing Finance Agency, a statewide agency that provides affordable housing to low-to-moderate income first time homebuyers, just announced an interest rate reduction for new homebuyers. http://www.ohiohome.org/homebuyer/first_time.aspx. Effective January 25th, the 30 year fixed rate mortgage for its First Time Homebuyer Programs are:

• 5.0% for loans without their 2.5% down payment assistance grant

• 5.5% for loans with the 2.5% assistance grants

• 4.75% for the Ohio Heroes program without 2.5% assistance grant

• 5.25 for Ohio Heroes with 2.5% assistance grant (firefighters, police officers, health care workers, and active duty military

• 5.05 for Grants for Grads 2.5% assistance grant

This is great news for first time home buyers who can be eligible for the $8,000 tax credit, as well as up to 2.5% of the purchase price to pay the down payment, closing costs or other prepaids. Since mortgage rates have crept up over the past several months, this OHFA rate reduction can lessen the impact of recent 30-year fixed rate increases.

Are Businesses Becoming More Socially Responsible?

There appears to be a growing increase in business social responsibility and consciousness. They offer discounts on their goods or services in exchange for donations to worthy causes, or sponsor projects to support the needy or disadvantaged. I wonder if this is a fad or a new way of doing business.

I received an email from Stein Mart promoting Dignity U Wear, a national non-profit in Jacksonville, Florida that provides new clothing to needy families. Deutsche Bank promotes “Undie Sunday” where they mobilize organizations to collect brand new underwear for children and families in need.

This type of social responsibility and consciousness is not only good for recipients of these services, but for the businesses that sponsor them. It makes them appear more human in the eyes of consumers, not just some corporation solely out for money and profit. For some, this may be another form of marketing, but for others it’s a part of their company culture and a genuine way of giving back to the communities that help make them profitable.

On my shopping experience at the grocery store this week, I was pleasantly surprised to hear an announcement over the loud speaker encouraging consumers to donate to the earthquake survivors of Haiti through their registers. It was heartening to hear that Kroger was making such an effort to support the victims of this horrific earthquake.

I know there are skeptics out there that cite the many scams that spring up when disasters such as this strike; however, there are many creditable organizations such as the Red Cross, Doctors Without Borders, World Vision, Habitat for Humanity, Samaritans Purse and others that have a long track record of support for victims of catastrophic disasters.

We know that businesses can write off advertising expenses, but I still contend that the more socially conscious companies are likely to see an increase in their bottom line and public image, as consumers come to view them as businesses with a heart for those in need.

Whatever the reason, I’m happy to see more businesses extend a helping hand. It does make me more likely to shop there, even if I’m not a regular customer, just to show support of their cause.

Home Buyer Tax Credit Seminar

If you’re confused about the Home Buyer Tax Credit for 2010 or just want to get more information about the home buyer tax credit, attend our free home buyer seminar on Thursday, January 28, 2010. The home buyer seminar will be held at Massey’s Pizza, 1755 Hill Road North in Pickerington, Ohio and starts at 6:00pm. Massey’s Pizza is located in the strip mall on Route 256 near Tussing, behind Chase Bank.

A representative will be available from the Ohio Housing Finance Agency to talk about their First Time Home Buyer Program, as well as the Heroes Program for firefighters, active duty military, healthcare workers and teachers. A mortgage loan specialist will also be available to talk about their loan products and help you get pre-qualified.

This is a wonderful opportunity to get informed and equipped to make that home purchase before the April 30th deadline and while interest rates are still low. Additional information about the Home Buyer Tax Credit an be found at the IRS website http://www.irs.gov/newsroom/article/0,,id=206291,00.html



RSVP by phone or email:
614-805-7793
mtbhunter@aol.com
http://www.househunterpros.com/