Kevin Sandridge - Winter Haven Mortgage Broker

I’ve received a lot of questions about the recent stimulus package and the $8,000 “First-Time Home Buyer” tax credit that is part of it. There are many scenarios and questions about who does and who does not qualify… and even the term “First-time home buyer” is not entirely correct!

Here are some of the top questions complied and answered by the National Association of Mortgage Brokers, the National Association of Realtors and tax advisors! I have also provided a visual breakdown showing the differences between the initial $7,500 Tax Credit and the new $8,000 Tax Credit.

Nota Bene: This post is for the informational benefit of my Winter Haven, Florida readers. As always, I advise you all to consult your legal and financial representatives to ensure that your individual situations truly merit taking this tax credit.

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Monday was a great day for me, namely - because I was able to share some good news with a client who was looking to refinance several rental properties here in Winter Haven, Florida but was unable due to Fannie Mae's previous 4 investment property limit. This all changed last Friday, however -as Fannie Mae announced that effective March 1, 2009, real estate investors can once again own and finance up to 10 individual properties. The restriction reversal does come with new minimum requirements, however - which may still keep a good number of investors on the sidelines for now. Homeowners buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards, as set forth by Fannie Mae:

• 720 credit score
• 25% downpayment for a 1-unit (30% for a 2-4 unit)
• No mortgage delinquencies in the last 12 months
• 6 months of reserves for each investment property

<!--more-->What's happened here is Fannie Mae realized the need to open up credit a bit for qualified investor borrowers. The thing is, their idea of qualified means real estate investors with good credit, a big downpayment and large cash reserves. According to Fannie Mae, the change rationale is that experienced investors can "play a key role in the housing recovery". Until now, foreclosure auctions have gone at less than full speed because investors unable to pay cash have been halted by the existing 4-property Fannie Mae limit. While I applaud the move, I'm hard pressed to believe that there is an abundance of investors out there with 6 months of cash reserves for each property they own. Maybe they're out there - and if so, I hope this decision helps to spur more mortgage activity. Always a fan of that! Moving ahead, look for faster absorption of current foreclosures nationwide, which should provide further support for the housing market.

Related article

• Fannie, Freddie to ease mortgage payments? (money.cnn.com)

Now that Congress has come to an agreement on the $789 billion stimulus package , and President Obama is set to sign in into law - current Winter Haven, Florida home buyers and homeowners should pay special attention to what the new law has in store.

The package contains two benefits related to housing.

The first provision represents a small bump to a familiar program. It gives first-time home buyers an $8,000 tax credit as long as they purchase a home between January 1, 2009 and August 31, 2009.

Note: This is a true tax credit.

However, to limit abuse and misuse, the $8,000 credit is contingent on home buyers holding property for a minimum of 3 years.  Sell your Winter Haven home before the 3 year anniversary date, and you'll have to pay back the cash. It's also worth noting that the date range applies closings and not sales agreements.  Closings must occur between January 1, 2009 and August 31, 2009 to be eligible.

A second noteworthy feature in the stimulus package is that it encourages existing home owners  to "green" their homes. As such, adding energy-efficient windows,doors, furnaces and insulation, homeowners can secure home owners larger tax deductions based on home improvement, up to $1,500.

Nota Bene: Don't move to claim these tax beneifts blindly.  Everyone's individual tax liability situation is different, and you may be ineligible for any number of reasons.  Be sure to discuss your plans with a qualified accountant before committing to a plan.

As always, if you're looking ot buy a home here in the Winter Haven area, please give me a call at 863-604-3019 so that we can get you preapproved.  Rates are holding steady, but as with life - the only constant with Florida mortgage rates is change!   To expedite matters, you may also apply online for your Florida home loan.

Hi folks, Kevin Sandridge here with your Weekly Mortgage Report.

The initial outlook for this week is a bit stormy for the housing market here in Winter Haven, Florida and across the nation. Consumer confidence tanked to an all-time low last week, and 100,000 American workers were handed pink-slips, each playing a role in adding significant downward pressure on the mortgage market.

For three weeks in a row, mortgage rates rose and average home loan fees increased. Not something we like to see, obviously.

Sliver Lining En Route

Despite this negative news, there are two bright spots worth taking a look at which indicate that our country may be nearer to economic recovery than we think.First, the supply of "used" homes for sale fell from 11 months to 9 months nationwide. This statistic often translates into what Realtors refer to as the "absorption rate," which is the time frame it would take at any given moment for the existing housing inventory to be bought up.

What we're seeing in this 2 month drop (nationally) is that home buyers are in fact beginning to re-enter the housing market to a measurable extent - a signal that home prices are finally approaching an equilibrium.

Secondly, the US Gross Domestic Product (GDP) -- a measurement of the country's complete economic footprint -- declined by a much lesser margin than experts initially expected. A positive surprise like this makes us wonder about what else the Doomsday Economists may be wrong.

We won't have to wonder long.

This week should see a lot of activity mortgage wise - as massive amounts of data, legislation and rhetoric will be released and should influence mortgage rates. Some of the information impacting mortgage markets this week include:

• The Personal Consumption Expenditures Index report. The PCE is a preferred inflation measurement and inflation is the enemy of mortgage rates. A high reading will pressure mortgage rates up.
• Retail stores are set to release data on same-store sales or "comps." Same-store sales data allows investors to see what percentage of a retail store's growth has come from sales from existing stores versus the opening of new stores.
• The Pending Home Sales report. This notes the number of "homes under contract" and is a good gauge for buyer interest and the general health of housing.
• 20% of the S&P 500 firms will report earnings.
• Congress is expected to vote on the Stimulus package - Here's hoping we can trim the fat... Hah!

The biggest impact on rates, however, could come on Friday - as we are presented with January's jobs report. Few data reports move the market like employment numbers, and with the press giving so much attention to layoffs lately, expect Wall Street to have many an ant in its pants!

(Image courtesy: Wall Street Journal Online)

Homeowners or soon-to-be homeowners need to listen up: The Homeowner Insurance Policy Landscape is a little scary right now. What's more... things don't look too incredibly cheery moving into the future.

Take the following points to heart as you consider your current and future homeowner or condo insurance policy choices. You'll be glad you did.

1. Consider carefully before making a claim: I know it's a standard notion to do this, but it warrants a look here. Here in Winter Haven, Florida - we're still feeling the after effects of the 2004 hurricane season where insurance claims are concerned. To date, the most common claims tend to be fore mold damage. Insurers are starting to cap their allowable expenses for such claims at $5,000 to limit their "damages."

My recommendation: If it's a bad situation posing serious health risks, then make the claim. That's why you have insurance. However, if you can remedy the situation yourself - do so. There's a strong chance that you will not be covered the next time you renew your insurance after a major mold claim.

2. Get Renter's Insurance in Between Owning Homes: It's becoming more and more common for folks to sell their homes (via Short Sale or other means) and then rent for a while prior to buying their next home.

My recommendation: To help make sure you're covered for your next home purchase, consider carrying a renter's insurance policy with your previous insurance provider. This way, even if they stop writing new business in your area or state, you should be able to re-up your homeowner's insurance when you purchase your next home.

What you don't want is a gap in coverage - causing you to have to start fresh with your past company, or perhaps one you'd rather not work with.

Just some food for thought. State Farm's pulling out of Florida, and I'll be looking for a new insurance company soon. I know I'd appreciate these concepts if I didn't know them already.