Matthew Watts

There is a whole bunch of confusion concerning this new First Time Home Buyer Tax Credit and I am looking to simplify things for you like I have been trying to do with all of my blogs.

I think that the most important thing to realize here is that it is not free money! It is not. It is in effect a no-interest loan from the government. It is to be repaid over a 15 year period. You won't be able to default because it will be taken out of your income tax refund of added to your charge every year.

So, I shouldn't take it? Of course you should take it! If you aren't sure why you should, call up Citibank and try to get a 0% loan from them with a 15-year term. Unless you are complexly set credit and savings wise...which I think it pretty much NOBODY in Michigan, you should take advantage of this.

What you have to be careful of is blowing this money on useless stuff and then ending up owing it back to government.

There are many good ways to use this money, here are a few examples:

Pay down the principle balance of your mortgage. In fact, if you get $7500 and put it directly on your principle balance of a $100,000 mortgage, that one payment will cut 4 years and $60,000 in interest payments right off of your mortgage! Even when you repay the loan, it will still end in an overall savings of $46,000.

Pay down high interest credit cards. In effect, this tax credit allows you to do a completely risk free debt consolidation loan. Pay that high credit card loan off, use the boost in credit score to get a better credit card at a lower interest rate, let the paid off card sit there open with no balance and enjoy a great credit score for quite some time and save thousand on future mortgages, credit cards, car insurance...you name it.

Invest it. Ok, so maybe the stock market isn't so hot now, but if you can find something safe that it sure to yield, it is a win-win for you my friend. Heck, even a high yielding savings account or a 2-year CD will make you great money.

Take advantage now, because the tax credit goes away if you close on your new home after July 1, 2009. Happy Home Hunting to you all!

For more in-depth help, go to our website:

www.iconmortgagelending.com

If you are going to buy a home in Michigan, especially in this foreclosure driven market, nothing is more important than the team of professionals you choose to represent you. Consider these points in your search.

Rome wasn't built in a day. Do you not rush into any situation. Take at least a week to look around for reputable companies to deal with. Talk to friends and family, do some research on a few companies you target, and never consider only one source for information.

Your loan officer is the first step and most important step. This person will be digging through all of your most personal documents, and trust is necessary. It should probably be an actual person that you actually meet and actually believe in.

The biggest mistake is to judge just by numbers and promises, which are easily fabricated. Judge their willingness to provide written estimates of their services. Sit back, and listen...are they mentioning a Good Faith Estimate? If they don't chances are they want to tell you about how great everything will be without any type of proof to their promises. If it is not offered...walk.

What about the reputation of the company itself? Do they keep a neat office, offer you a warm environment, are they licensed in any way or any formal training? I always look for a decent website too. I figure if they can't at least be found on the Internet...yikes.

Now for a Realtor. I think one important thing to know is how Realtor's get paid. If you find a house you like and call the Realtor that has listed that home for sale- that Realtor works for the seller. If it is a foreclosure property, that Realtor works for the bank and gets paid from the bank. So...I guess just consider that in your decision.

So what makes a good Realtor? Some questions to ask yourself are: Are they listening more or talking more. You want someone to find your dream home not sell you on one. Are they pushing you to sign a contract to work with only them? It's only my opinion, but good Realtors do not do this. Do they have the resources you need? Can they email you properties rather than having you drive to their office to discuss each one.

Your loan officer might recommend someone, but I would take their person and interview them along with others. Much like when a Realtor recommends a lender, you never know exactly why they are referring business to anyone and it may not be so noble. It may be though, so consider them but put them through the same process as anyone.

A good insurance agent and you're set. Again, interview the agent just like you are interviewing them for when something goes wrong. Like with all of these service providers, it is easy to look impressive when things are peachy. Try to find out how they are when things aren't.

Again, be weary of referrals. And again, don't do the "bottom line" judgement. With all of these services, its much more about the value in the service than just the price of the service. I mean, you can get your hair cut at a barber college for a third of the price, but people who get cut there typically spend a lot of time being lonely.

I know, seems so simple. Pay your bills on time, don't claim bankruptcy, but there is a lot more to it than that. So, what goes into a good credit score?

Good Payment History: Obviously.

Length of Payment History: One of the distinct disadvantages of a younger person.

Balance to Limit Ratio: For your credit cards it is essential to keep the balance below 50 percent. If you really want to have great credit, 30% is even better. The dollar amount is not important, it's the percentage.

Diversity of Accounts: Mortages, car loans, installment loans, student loans, credit cards, and charge cards they all help to show the variety of debt that you can properly manage.

Manageable Inquiries: No more than one per month. This will show that you are not trying to obtain new debt at a rate faster than you can handle.

Solely Owned Debt: Fairly new to the credit factor, but it is essential to have debt you obtained on your own rather than cosigned accounts.

Take all of these into consideration when trying to perfect your credit and make sure that you can make the payment before obtaining any new debt.

I have close a lot of foreclosure purchases over the last two years and have ran into some very odd demands from the selling banks. I would like to provide you with some of this information now on what these banks can and can not do that might help you in your own pursuit.

They can demand that you provide them with a pre-approval letter.

They can not demand that you obtain a pre-approval letter from any specific lender or broker. The doesn't mean you won't be told otherwise, but RESPA prohibits a seller, real estate agent, insurance agent, or anyone else from demanding an individual use any specific lender.

They can demand that your lender's pre-approval letter states that you are credit worthy.

They can not demand to have your credit report or credit scores be provided to them. The Gramm-Leach-Bliley Act protects your privacy from any entity involved in the transaction that is not your financial service provider. You can give written permission for the selling bank to see these, but I certainly would advise against it.

They can write purchase agreement addendums that supersede any original terms of the purchase agreement you signed with your Realtor and submitted to them.

They can not hold you to any terms that you do not agree to in writing. Though you may be excited to hear that your offer was accepted, I urge you to sit down with our Realtor and Loan Officer before signing the addendums that come back from the bank.

They can refuse to pay for a title insurance policy and pass the cost on to you.

They can not force any of their closing costs on you without disclosure in the purchase agreement. Seems like more and more we find extra little charges being slipped into transactions. If you didn't agree to pay it, you don't have to- just be sure to review your HUD-1 Statement with your loan officer.

I hope this helps some of you out. I am sure more will pop up in the future. If you have any requests for info, just email me matt@iconmortgagelending.com or go to our website: www.iconmortgagelending.com

Icon Mortgage Lending is teaming up with Big Sky Development to bring a common sense approach to the "trade up" transactions that have become so popular. If you are having trouble selling your current home, we can help. Check out the clip below and call 810-953-4266 for more details.

For more information go to our website:

www.iconmortgagelending.com