$8,000 or BUST… Only 3 Months Left and Loans May Take Longer to Close!

Maple Grove, MN - With the November 30^th deadline quickly approaching for the $8,000 first-time home buyer tax credit, we've seen a huge increase in activity with our Realtor Partners and in our own office as well. Three months is not a lot of time! Everyone's talking about it [read here] and buyers are getting anxious! But be aware, the time required to process your loan could get longer and longer.

With all of the changes in our industry over the last couple years, the length of the process from loan origination to loan closing has increased. For example, the Home Valuation Code of Conduct (HVCC) no longer allows Loan Officers to communicate directly with Real Estate Appraisers. Though the heart behind this is to protect the consumer, the results of this law have created an environment where buyers and sellers alike are put at a disadvantage. Appraisers are no longer providing a service and managing business relationships, they are simply order-takers. This causes turn-around times to be extended and appraisal quality in some cases is diminished. All in all, getting the appraisal alone could take up to two weeks or more.

In addition, the Mortgage Disclosure Improvement Act (MDIA) has the potential of causing delays. In short, when a Loan Officer discloses a loan to you it needs to be VERY accurate! If the final APR varies by more than 0.125% of what was initially disclosed, you must be allowed three days to review the changes before you can close. The bottom line is this: Work with a Loan Officer who knows what they're doing! Thankfully, most of us who are still in the mortgage industry are here for the long-term. However, there is still a high level of knowledge and expertise that is needed to manage a smooth loan transaction.

Amongst other things, keep in mind that in late October and early November there will be a significant increase in purchase files hitting the desks of processors and underwriters - their turn-times in increase naturally due to the increase in work. Also, processors and underwriters do not work on Thanksgiving! If you think you can submit a purchase file on November 1^st and have it close by the end of the month, you may be sadly mistaken.

REMEMBER: If you close on November 30^th as a first-time home buyer, you get $8,000. If you close on December 1^st, you get NOTHING!

Our recommendation is for you to find your home and have a Fully-Executed Purchase Agreement by early to mid October. There will be many first-time home buyers who miss out on this tax credit opportunity. At all costs that shouldn't happen to our clients!

Ben Olson is Mortgage Consultant affiliated with Mortgages Unlimited, a Licensed Mortgage Lender - Minnesota Department of Real Estate. If you would like to get pre-approved for your home purchase, please contact Ben Olson at 763-416-2620 or visit www.AskBenOlson.com.