Hector Amendola

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchaing a principal residence between January 1,2009 - December 1,2009. Highlights of the program are as follows:

• First-time homebuyers who buy a home within said dates qualify for the credit. The credit is calculated by using 10% of the purchase price and capped at $8,000. First-time home buyers are defined as those who haven't had interest in a property in the last three years. Eligibility would be determined by reviewing your last three years of tax returns to ensure Real Property hasn't been reported.
• The credit is for single people who report $75,000 or less and married filers reporting $150,000 or less. Those who earn more are still eligible for a partial tax credit amount based on their income. The credit is reduced to zero $95,000 (single) and $170,000 (married).
• This tax credit is different than the previous $7,500 in that the credit does not have to be repaid. The previous credit was an interest free loan that needed to be paid over a ten year period. NOTE- the credit would have to be recaptured if the buyers don't keep the house as a principle residence for at least three years.
• Participating in the tax credit program is done by simply completing IRS Form 5405 to determine their tax credit amount and cliam it on their 1040. No other applications are necessary.

Partial Tax Credit Amount

First Time Homebuyers can make up to $20,000 more than the maximum income to still qualify for a partial tax credit. You can determine how much you qualify by using the following formula:

(Income over Maximum) / ($20,000) x $8,000

So if you are single and earned $85,000, then it would look like this:

10,000 / 20,000= .5 then .5 x $8,000 = $4,000.

That income would qualify you for a $4,000 credit.

As always, feel free to contact me at 818.321.5153 with any questions.

Regards,

Hector Amendola

Venta Home Loans

"The Mortgage Business is personal again"

On the surface, figuring out whether you want to refinance using an FHA or a conventional loan program is a no brainer. On one hand, if you have the equity then you should be opposed to paying Mortgage Insurance so you'll go conventional...right? On the other hand, if you have very little equity and require Mortgage Insurance, then FHA is a must since rates are not based on fico scores so long as its over 620 and rates are usually lower...still with me?

In the last couple of weeks, I've been finding myself talking almost everyone in to refinancing in to an FHA loan regardless of their current equity. For starters, my FHA rates the last few weeks have been just about a half point better than conventional base rates. In additoin to lower rates, FHA doesn't adjust your rate based on fico scores and equity like conventional loans do. Providing you have a 620 fico scores, you get the same rate regardless of equity. Lastly, and this one is key, if you currently have an FHA loans then you are allowed to use your Mortgage Insurance Premium (MIP) refund to pay your new mortgage insurance premium if you are refinancing in to a new FHA loan. If your new loan is conventional, you lose that refund and the subsequent equity.

If your sole goal is to lower your monthly payment, then the real question is whether or not you will offset your monthly mortgage insurance with a lower rate. The answer....most times yes. Lately I've found that when I consider all of the factors, only people with extraordinary fico scores and at least 30% equity will benefit from a conventional loan when refinancing because their rate adjustments are minimal if any. The rest of the population is better suited to do an FHA refinance.

Obviously, results will differ. Make sure you consult your mortgage professional and consider all of the factors when you make your decision.

Do you have a money jar at home? If you're like me, lately you've been looking for ways to save a buck. Whether you're getting rid of your landline phone, working from home to save gas or eating at home more often it feels good to know you're trying and continuing to save up in case that dreaded economy gets any worse.

Today, I've got a way to save money we in the Real Estate industry haven't mentioned in quite a while. Refinance your home. Last month I closed my first refinance of the quarter and it felt good to help the couple not only pay off some debt but also lower their mortgage payment and feel at ease as the economy continues to trickle down to affect all of us. It made me think, if rates drop just a bit more we should really make a push to inform consumers that this could be an excellent way to save an extra buck. Well, rates have dropped and not just a little. The rates here at Venta Home Loans have dropped by almost 0.5% since last week.Anybody in the 6% interest rate realm should at least consider or speak to their favorite Mortgage professional to see if its worth it. I'm sure they'd be happy to hear from you and help if its to your benefit.

Act quickly. Rates have been quite volatile over the last few months and I don't anticipate they'll stop soon. There are so many factors that determine rate trends its impossible to predict. Even bankrate.com has "experts" that post conflicting opinions. There's no way to really know what will happen. What we do know is that today they're low and you could lock it low for the 30 days it'll take to close. Why not move on it? Just think of how the thought of saving on your mortgage payment will cheer you up during your holiday shopping!!!

HAPPY THANKSGIVING!!!!

Regards,

Hector A.

While I used to scoff at the idea of doing FHA loans, especially in my processing days , now days, I have to say I enjoy them a bit more. I mean, 3.5% definitely beats 10% for a down payment. Moreover, manual underwriting for a 620 fico score and cash out refinances up to 95% are things conventional can't touch. So why are agents so afraid of FHA financing?

If you've recently done an FHA loan or received FHA financing, you probably laugh at the idea that this is a better option. I mean you get scrutinized for every item, you have to explain everything in extreme detail and, as a lender, you long for the days when you could just check a 620 fico score and know the guy would qualify in spite of his foreclosure last year. Fact remains, we're in a completely different lending environment. So different, that most of the lenders we used to compete with for loans are now working in an different field altogether.

Now is the time for the mortgage market to balance itself out. The foreclosed properties being sold now simply can't go back in to the hands of buyers who can't afford them. As a result, banks are going to be strict with their guidelines because they have to sell these loans in the secondary market and they've tightened up their guidelines as well. My underwriter says she wants her "loan packaged and pretty so she doesn't have any questions." That and "Document, Document, Document" are her fave. Nobody wants anything questioned when its their turn to sell the loan and in turn its our job to answer all of the questions upfront.

Still think FHA is not for you? Here's a quick list of features you won't find anywhere else.

-3.5% down payment
-Down payment can be gifted
-Down payment assistance is ok as long as its not seller funded
-The rates are usually better than conventional
-Mortgage Insurance is consistent regardless of fico or LTV
-95% max LTV for cash out refinances

To say closing home loans is easy would be an insult to any of us who have struggled through an FHA loan despite how "easy" it looked up front. It's not easy. If it was easy, buyers wouldn't need us. It is, however the better option. The difference is that while 9 months ago I would ask my colleagues "Why FHA?" Today I tend to ask, "Why not FHA!"

Best Regards,

Hector Amendola

Venta Home Loans

"The Mortgage Business is Personal Again"

I'm a proud member of the National Association of Hispanic Real Estate Professionals (NAHREP). For those who don't know about the group, its a non profit organization with a mission to "increase the sustainable Hispanic homeownership rate by empowering the real estate professionals that serve the community." Our local chapter (NAHREP-LA) has a monthly educational member breakfast with some social mixers sprinkled throughout the year to allow professionals in our industry some time to socialize, network and learn. Over the past year, we've covered topics on foreclosures, short sales, eliminating 2nd mortgages and a 1031 Exchange courses worth DRE credit to name a few. This month, we delve in to Loss Mitigation and Loan Modifications. All of this while you enjoy a delicious breakfast at Paseo Cantina.

We would like to invite you to our November general meeting where we will be discussing:

Alternatives to foreclosure including : Forebearance, Repayment Plan, Deed In Lieu, Short Payoff Refi, Loan Modification and Bankruptcy

Options

• Who qualifies for a loan modification?
• What are the items needed to get the loan modification done?
• How long does a loan modification take?
• How do the New laws affect loss Mitigation.
• Procedures to have a successful Loan Modification
• Q and A session

This session will be presented by Beau Barnhart the President of New Beginnings Loan Modification

When and Where

Thursday, November 13, 2008
9:30am - 11:00am
Paseo Cantina
260 E. Colorado Blvd., Suite 203
Pasadena, CA 91101
Cost: Members $10 and Non Members $20
RSVP: maria@nahrep-la.org

Come on out and don't miss out on the fun!