The very popular $8,000 mortgage tax credit for first-time Maine home buyers (and $6,500 for repeat buyers) is due to expire June 30. And if you haven’t already signed a contract, you’ve missed the boat – all contracts must have been signed by April 30 and the loans have to close by the end of June. That is, unless Congress passes a proposal currently in the Senate, sponsored by Majority Leader Harry Reid (D-Nev.), which would allow buyers three more months to close, with a deadline of Sept. 30. Apparently, the tax credit has been so enticing that it has created a backlog of loans for lenders, and some, including the National Association of Realtors, worry that the high volume of contracts as well as the nature of foreclosure and short sales could mean many Maine buyers would miss the closing deadline and miss the tax credit they were clearly trying to take advantage of.

Maine Government News

Call 2-1-1 to Learn About Flood Recovery Options and Report Flood Damages

April 1, 2010
Maine Emergency Management Agency

AUGUSTA, MAINE -- Maine Emergency Management Agency (MEMA) is recommending that anyone who suffered home damage as a result of the flooding events over the last several weeks, dial 2-1-1 to learn about available recovery resources.

MEMA Director Rob McAleer recommends the following actions for those whose homes have been damaged:

• Document all of your damage and losses, and repairs you have made. Take pictures if possible
• Contact your insurance company to determine what will be covered
• Call 2-1-1 to report your damages and for information about other resources that might be available to you.

“We know that these last few weeks have caused problems for many people. “ McAleer said. “At the present time, we have not qualified for individual assistance from FEMA for these events. However, there are other programs that may be of help. We recommend anyone with questions about possible help dial 2-1-1 and ask for available referrals. 2-1-1 will also gather damage information and log the calls they receive. Based on what we learn, we may be able to qualify for additional assistance programs.”

A call to 2-1-1 is toll-free from anywhere in Maine. 2-1-1 referral information is also available on the Internet, at http://www.211maine.org

McAleer stressed that calling 2-1-1 is not a registration for assistance. “2-1-1 can offer referrals to programs that are available now. It is up to the caller to determine which programs might help them, and follow through on those referrals.”

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• You must be current on your existing mortgage(s)
• You must occupy the home as your primary residence
• You must qualify under current FHA underwriting requirements (after principal write down)
• Your FICO score cannot be less than 500
• Your front-end debt-to-income (DTI) ratio can not exceed 31%, and the back-end DTI ratio can not exceed 50%
• The existing lender must agree to principal write down
• The second mortgage lien holder must subordinate to the new first mortgage, and cap the balance at 115% of the value of the home.

• Temporary assistance for the unemployed: the government will allow unemployed borrowers to reduce or suspend mortgage payments for 3-6 months
• Helping Homeowners Move to More Affordable Housing (HAFA): Encourage short sales and deed-in-lieu transactions as an alternative to foreclosures. The government will increase payments to mortgage service companies and second mortgage holders who agree to participate and will double relocation assistance payment for borrowers successfully completing foreclosure alternative to $3,000 from $1500.

Gain a better understanding of the factors that determine your eligibility for a loan.

The importance of financial responsibility is oftentimes overlooked in a materialistic nation comprised of excessive credit card offers, stretched lines of credit and the weakening dollar. In order to boost financial responsibility and provide more accurate information to credit bureaus, the company that calculates FICO scores has introduced a revamped credit scoring system. Many consumers will benefit, but others may face higher interest rates which may affect their monthly mortgage payments. Become one step closer to financial confidence by gaining a true understanding of the factors that influence your credit score.

Determining Your Credit Score
The restructured FICO credit scoring system, created by the Fair Isaac Corporation, is reported to go a bit easier on consumers who make an occasional mistake, yet really crack down on those who have multiple late payments and delinquencies. The weight put on certain factors, like late payments, have changed, while the benefit of authorized-user status has been dropped from the scoring system altogether. These changes may strengthen or slump your score by 20 or more points. Get to know the other factors that impact your credit score by reviewing the details below.

Length of Credit History
The longer your credit history, the better. Lenders like to see that you can manage your credit accounts responsibly over time. Now that credit scoring model ignores authorized-user accounts, it is important for those “piggybacking” to establish their own credit on a new and separate account. The omission of authorized-user accounts from future FICO credit reports will enable credit bureaus to protect lenders from those trying to misrepresent their credit risk.

Payment History
Payment history is one of the most influential factors in determining your credit score. As mentioned earlier, future FICO credit reports will forgive a few late payments, but if your account shows multiple late mortgage payments and delinquencies you may see your FICO score drop.

Contact sethjacobs.com to discuss affordable mortgage products that will enable you to maintain excellent credit and payment histories.

Amount Owed
Another significant factor that is reviewed by the credit bureau is the amount owed on your credit accounts. Having a mortgage and several credit cards will not classify you as a high risk borrower, but owing a lot of money on several accounts will. Make an effort to keep all credit balances low so credit bureaus and lenders do not assume you've overextended your financial capacity.

New Credit
Opening several credit accounts over a short period of time may present you as a risk to lenders. This is especially so for those who do not have a long, established credit history. Try to keep new credit accounts to a minimum.

Credit in Use
Be aware of the types of credit accounts you use. This includes credit cards, financial accounts, retail credit accounts, installment loans and mortgage loans. The FICO scoring program analyzes all active credit profiles when determining your financial responsibility.

Remember, higher credit scores are the most desirable to lenders; but if yours takes a dip, no need to fret, you may still qualify for certain loans and mortgage products. Review your finances and work with Seth Jacobs so that you may better understand the role your credit score plays in your pursuit of an affordable mortgage product.

Keeping You Informed
Call 207-831-1903 or visit www.sethjacobs.com today, to learn more about the best loan options for your specific financial situation. Together we can obtain your ownership and financing goals.