Home Loan

Ok, here we go again. We are roughly 45 days away from the Federal Tax credit expiring for would-be home buyers. It seems like we just went through this the other day and in fact, it was just last October when we were writing articles just like this. It’s mid-March and at the end of April, the tax credit for home buyers and first-time home buyers will expire. The question is did you take advantage of it?

I hope you did and if you didn’t, there is still time, but a word of warning to all the procrastinators out there. I do not feel confident this time around that it will be extended. Am I sure about this? No, and I reserve the right to be wrong, but there are just too many things in play right now to lead me to believe that it won’t be extended. I don’t have enough room in this column to express all of my thoughts on the subject, but I will share a few things that lead me to this conclusion. First, it’s an election year and all bets are off on how a Senator or Congressman will vote once they are up for re-election. Second, the economy shows signs of improvement, but that could be a double edge sword. If it continues to improve, Washington will make an argument that there is no need to continue the program. If the economy falters, Washington could make the argument that the money needs to be better spent elsewhere to stimulate jobs. Third, since the deficit seems to be a hot topic among lawmakers, I have a hard time believing that there will be a lot of support to spend more money on this program, but then again, I could be wrong.

So where does that leave the home buyer…about 45 days from missing out on $8,000 or $6,500 in cash. There is still time to find a house, get under contract, and close. Remember, you don’t have to close until the end of June; you just need to be under contract by the end of April to get the money. Getting the loan in place, finding an agent, a house, and getting it under contract can be done in the next 45 days; but you have to start now. To find out how, check out www.taxcreditforeveryone.com or www.firsttimehomebuyerdenverco.com.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

For those of you new to the home buying process, a new change happened January 1^st, 2010 that will make you life allot simpler in terms of shopping for a home loan. The new Good Faith Estimate (GFE) requirements have made lenders HIGHLY accountable for the interest rate and closing costs quotes on a home loan. In the past, mortgage lenders and brokers could play “fast and loose” with their Good Faith Estimates often quoting terms that were not available just to get the client “in the door”. Once you invested a few weeks with them and gotten the loan approved, the terms would change at the last minute. Consumers either were forced to take the different terms or start the process over with a new lender. The number one complaint by consumers to HUD was that their terms at closing (rate, closing costs, and cash required to close) was significantly different than they were originally quoted.

Today Lenders are now required to provide you with a “Good Faith Estimate” (GFE) that binds them to their quote (rate and fees) for a minimum of ten days. In addition, the new GFE discusses lock options much more clearly. Sections A of the new GFE (lenders origination charges) cannot change at all (other than decrease) and Section B (Other Settlement Services) cannot change by more than 10% of the original quote. If the section B charges are above the 10% tolerance, the lender is required to “refund” the difference back the borrower at closing.  So the consumer is very much protected from terms changing at all from the original quote. I recently attended a seminar and one of the points that the instructor made is that the acronym GFE should now stand for “Guaranteed Fee Explanation” and I could not agree more. Basically the new GFE has become that, a form that guarantees the fees and rates to the client. Good news and more transparency for the consumer.