Home Buyer Tax Credit Version 3.0

First it was $7,500 for first-time home buyers, then it was $8,000 for first-time home buyers, and now it is $8,000 for first-time home buyers AND $6,500 for 'move-up' home buyers! Let's talk about the main differences between the last home buyer incentive bill and the latest version.

Here are some accurate details from the National Association of Realtors website:

Who Qualifies for the Extended Credit?

* First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.

* Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.
How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.



Here are a few great links to some print-friendly documents breaking down the details discussed above:

2008 vs. 2009 Home Buyer Credit Comparison Chart

Home Buyer Credit Q & A

How to Get the Extended Home Buyer Tax Credit





Estimated Current Rates:

30yr Conventional 1 Point: 4.875% (4.9843 APR)

FHA 30yr Fixed 0 Point: 5.00% (5.9209 APR)



*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

The First-Time Home Buyer

Numerous factors right now are leading to the best deals in a very long time, probably ever, for the First-Time Home Buyer. Home prices at decade lows, affordability at all time highs, low fixed mortgage rates, and of course the significant $8,000 tax credit. All leading to the first-time home buyer being the most prevalent part of the real estate market right now.

Some important tips for all home buyers, and especially first-time home buyers:

Sit down and form a personal budget before you even contact a Realtor or mortgage finance professional so you know going in what your comfort level is in terms of monthly payments & cash out of pocket for closing

Use outlets like www.freecreditreport.com to pull your own credit and know what is in there prior to having a mortgage company run it

Use a reputable Realtor! A strong real estate agent makes it the highest priority to protect you throughout the entire transaction. They will also be very careful to help you get the best deal in the terms of your agreement and the price negotiated for the home you want. Ask your friends or family who they used to buy or sell their homes and most importantly if they thought the Realtor they used did a good job. A great Realtor can make the home buying process a wonderful experience, whereas a bad Realtor can make the biggest financial transaction you can make an absolute nightmare.

Use a reputable Mortgage Consultant! Same goes here...a bad loan officer can create a horrible home buying experience. Unfortunately there are a lot of loan officers out there that care far more about their wallets than yours! Use a similar strategy as finding a good Realtor- ask family and trusted friends. We are in a referral business so when someone I've worked with refers a friend or family member it creates a natural level of accountability. DON'T SHOP INTEREST RATE- I know, it sounds crazy, but most all bankers, brokers, and lenders 'get' the same interest rate and all provide market rates that are typically within .125% of each other. If you are seeing a rate much lower it is artificially being lowered because the lender/broker/bank charging you junk fees or points-this is an absolute guarantee as I have done MANY a mortgage in the 11th hour because a client thought they were getting an 'unbelievable' deal. The mortgage consultant you choose is responsible for assisting you secure financing for an amount of money that will account for your largest asset, yet also your largest debt so be confident this person is well positioned to advise you appropriately.

This process should be an exciting one and when you work with real estate professionals that excel in their industry you should be impressed by the services provided. The First-Time buyer has been about 40% of the market so we (mortgage consultants and Realtors) understand the common questions and concerns that go along with making this big step. Be wise in the professionals you choose to work with and they will guide you through the process with confidence.

Two interesting articles:

The First-Time Home Buyer Tax Credit alone should account for over 400,000 buyers to the market this year says Mark Zandi, chief economist for Moody's

Details on the Characteristics of First-time Home Buyers





Estimated Current Rates:

30yr Conventional 1 Point: 4.875% (4.991 APR)

FHA 30yr Fixed 1 Point: 4.875% (5.736 APR)






*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

Big Changes in the Truth-In-Lending Act

Effective July 30, 2009, settlement dates will be impacted by an amendment to the Truth in Lending Act.

The Housing and Economic Recovery Act (HERA), amends the Truth in Lending (TIL) Act by requiring early disclosures to homebuyers and a waiting period between application and settlement.

Here are some of the big points all real estate professionals & potential home buyers MUST be aware of:

A waiting period of at least seven business days is required between the day the disclosures are received and day of settlement. In addition, a buyer must receive the disclosures within three business days of applying for a loan.

Fees cannot be collected before the disclosures are provided. As part of the Home Ownership and Equity Protection Act (HOEPA), this amendment does not include collecting fees for credit reports.

If a fee or rate change impacts the APR, there is an additional wait time between reissuing the TIL statement and settlement. Any change that increases or decreases the APR by more than .125% will require reissuing the Truth in Lending statement.

Below is a list of any/all charges that would result in a change to the APR. I also provided a definition of the APR. It is sometimes helpful to see the official definition considering there is a lot inaccurate info out there about this important number associated in every mortgage written.

The APR (annual percentage rate) is defined as: an expression, on an annualized basis, the charges imposed on the borrower to obtain a loan.


Changes to any of the fees/numbers below would have an impact on the APR:

Mortgage Amount

Sales Price/Appraised Value

Origination and Discount points

Application Fee

Final Inspection Fee

E-mail Fees

Flood Certification Fee

Warehouse Admin Fee

Subordination Agreement Fee

Require Fee

Processing Fee

Administration Fee

Settlement/Closing Fee

Commitment Fee

Tax Service Fee

Reinspection Fee

Attorney Fees

Document Preparation Fees

Mortgage Insurance Premium

VA Funding Fee



These changes will affect the homebuyer and the Sales Associate. These new guidelines will have precedence over the closing date, not the contract or the borrower’s request. Dilligence will be key for all parties involved to insure timely closings!

My team & I are prepared for the changes and will proactively work to make this a seemless transition, but as always, any questions please reach out!




Estimated Current Rates:

30yr Conventional 1 Point: 5.125% (5.235 APR)

FHA 30yr Fixed 1 Point: 5.25% (5.976 APR)




*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

Seller, Assist Me in Buying Your Home

The overall costs of buying a home can be quite costly in the Northeast Corridor. I typically recommend clients to estimate approximately 4% of their sales price for closing costs involved in the transaction. This accounts for mortgage costs, title company or closing attorney costs, as well as the county & state costs that goes into a home purchase.

Many times potential buyers target just the down payment as their goal to save up for, but often disregard the substantial closing costs. Breaking this news comes a little easier when I explain the benefits and strategy of using a SELLER ASSIST in their home purchase.

Basically, a seller assist are monies you can negotiate the seller to pay towards your closing costs. I have used this strategy in every home I've purchased. You are going to pay a little more for the home due to the seller crediting back these funds towards your costs. (being very careful that the home will still appraise for the increased price you are purchasing the home for including the seller assist) As always, it is a little easier to show you in terms of numbers how this works:

No Seller Assist Scenario:

You see a home you really like listed for sale at $100,000.

You decide you would offer this seller $90,000 and have setup a pre-approval for this potential mortgage at a 10% down payment.

With no seller assist involved you would have to put your 10% down (10% X $90k= $9,000) PLUS your estimated 4% of the sales price in closing costs (4% X $90k= $3,600) bringing the total cash needed for closing to $12,600

Seller Assist Scenario:

Same home you wanted to offer the seller $90,000, but this time you'd like to see if the seller will help pay the closing costs.

So to offer the seller the same $90k net price you would simply ADD the above estimate in costs ($3,600) to the original price ($90k) you'd want to offer and ask the seller to credit you back the $3,600 towards your closing costs. Again, being very careful to assure the home will appraise for the total price you're paying of $93,600!

In this scenario you now have to put the same 10% down on the new higher price of $93,600 ($9,360), but the estimated $3,600 of closing costs are being credited from the seller.

So doing the math you need your $9,360 for the downpayment, but the $3,600 you were going to have to pay now is being paid by the seller. Essentially lowering the monies you need to close by $3,600!

The seller gets a total price of $93,600, but has to subtract from that
the $3,600 he is giving you back towards your cost--> netting them the same $90k you originally felt was fair.

The seller assist structure is a fantastic way for first time homebuyers, or anyone for that matter, to lower the total monies needed for closing and still offer the seller a fair price for the purchase of their home.

It is also important to note the amount of seller assist can never exceed the total closing costs and have some restrictions on the underwriting of your mortgage. To break it down simply:

On a mortgage using FHA financing the seller assist is always capped at the lower of 6% of the price or the total closing costs.

On a mortgage using conventional financing putting 5% down or less the seller assist is always capped at the lower of 3% of the price or the total closing costs.

On a mortgage using conventional financing putting 10% down or more the seller assist is always capped at the lower of 6% of the price or the total closing costs.

Contact me at any time for any questions on anything real estate finance related, but remember to talk to your trusted real estate professional on using a potential seller assist to keep YOUR MONEY in YOUR BANK!


Estimated Current Rates:

30yr Conventional 1 Point: 5.25% (5.363 APR)

FHA 30yr Fixed 1 Point: 5.375% (6.283 APR)




*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

Don't Worry, Be Happy!

My recent posts have been inundating you with the technical side of mortgage operations, so I wanted to post this brief memo on Happiness! The mortgage industry is a very intense and high anxiety business right now with the constant tightening of lending requirements and challenges throughout the industry so here is some light reading that quickly talks about the importance of striving and "practicing" the achievement of happiness!

The Art of Happiness
Making Each Day Your Best

In The Art of Happiness*, the Dalai Lama shares this powerful insight into life:

"I believe that the very purpose of our life is to seek happiness. That is clear. [Regardless of religion], we are all seeking something better in life. So I think the very motion of our life is toward happiness."

But how are we to achieve this happiness that we all seek? What common factor can we rely upon, regardless of our health, wealth, appearance, family, etc? The Dalai Lama goes on to discuss how the mind can be trained for happiness, despite a lack of material wealth and success. It's that whole idea of "wanting what you have versus having what you want."

Stephen Covey refers to this as "responsibility," or the ability to choose your response. Tony Robbins calls it "reframing your perspective". James Allen simply calls it "self-control." Whatever name it goes by, the principle is the same: We all have the power to think positive thoughts, and to react positively to every "negative" thing that happens in our lives.

Why, then, is it so hard to do?

Because like anything of any worth, it takes effort. It takes practice. It takes time. And like most skills, the sooner you begin, the sooner it gets easy. But no matter how old we are, we can all start practicing positive thinking today, and begin being happier immediately.

It's very easy to get out of practice, however, so it's best to surround yourself with triggers for happiness. Music is one of the best triggers. We can also remind ourselves with little incantations such as "look on the bright side" when things aren't going as planned.

~*The Art of Happiness, by Howard C. Cutler, MD, ©1998, Simon & Schuster, Inc.

Some additional resources:

https://www.stephencovey.com/

http://www.dalailama.com/

http://www.tonyrobbins.com/Home/Home.aspx

http://jamesallen.wwwhubs.com/



Estimated Current Rates:

30yr Conventional 1 Point: 5.125% (5.232 APR)

FHA 30yr Fixed 1 Point: 5.25% (5.976 APR)




*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

New Appraisal Guildelines Sweep In

In response to appraisal abuses and issues throughout the real estate finance industry there are new rules and regulations every mortgage company must follow. It is dubbed The Home Valuation Code of Conduct. These changes have radically altered the way appraisals are ordered, appraisers are communicated with, and new disclosures borrower's must read & sign.

Here is a full breakdown with every letter of the ruling, I understand this is not the most exciting read by any stretch, but any real estate professional in any area of the industry needs to be aware of these changes:


Home Valuation Code of Conduct

I. Appraiser Independence Safeguards

A. An “appraiser” must be, at a minimum, licensed or certified by the state in which the property to be appraised is located.

B. No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:

(1) withholding or threatening to withhold timely payment or partial payment for an appraisal report;

(2) withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser;

(3) expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;

(4) conditioning the ordering of an appraisal report or the payment of an appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary value estimate requested from an appraiser;

(5) requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;

(6) providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided;

(7) providing to an appraiser, appraisal company, appraisal management company, or any entity or person related to the appraiser, appraisal company, or appraisal management company, stock or other financial or non-financial benefits;

(8) allowing the removal of an appraiser from a list of qualified appraisers, or the addition of an appraiser to an exclusionary list of disapproved appraisers, used by any entity, without prompt written notice to such appraiser, which notice shall include written evidence of the appraiser’s illegal conduct, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP) or state licensing standards, substandard performance, improper or unprofessional behavior or other substantive reason for removal (except that this prohibition will not preclude the management of appraiser lists for bona fide administrative reasons based on written, management-approved policies);

(9) ordering, obtaining, using, or paying for a second or subsequent appraisal or automated valuation model (AVM) in connection with a mortgage financing transaction unless: (i) there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file, or (ii) unless such appraisal or automated valuation model is done pursuant to written, pre-established bona fide pre- or post-funding appraisal review or quality control process or underwriting guidelines, and so long as the lender adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value; or

(10) any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality or violates law or regulation, including, but not limited to, the Truth in Lending Act (TILA) and Regulation Z, or the USPAP.

C. Nothing in this section shall be construed as prohibiting the lender (or any third party acting on behalf of the lender) from requesting that an appraiser (i) provide additional information or explanation about the basis for a valuation, or (ii) correct objective factual errors in an appraisal report.

II. Borrower Receipt of Appraisal

The lender shall ensure that the borrower is provided a copy of any appraisal report concerning the borrower’s subject property promptly upon completion at no additional cost to the borrower, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.

III. Appraiser Engagement

A. The lender or any third party specifically authorized by the lender (including, but not limited to, appraisal companies, appraisal management companies, and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third party (including mortgage brokers and real estate agents). The lender may accept an appraisal prepared by an appraiser for a different lender, including where a mortgage broker has facilitated the mortgage application (but not ordered the appraisal), provided the lender: (1) obtains written assurances that such other lender follows this Code of Conduct in connection with the loan being originated; and (2) determines that such appraisal conforms to its requirements for appraisals and is otherwise acceptable.

B. All members of the lender’s loan production staff, as well as any person (i) who is
compensated on a commission basis upon the successful completion of a loan or (ii) who reports, ultimately, to any officer of the lender not independent of the loan production staff and process, shall be forbidden from (1) selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender or forbidden from performing such work; and (2) having any substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment. If absolute lines of independence cannot be achieved as a result of the lender’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

B. Any employee of the lender (or if the lender retains an appraisal company or appraisal management company, any employee of that company) tasked with selecting appraisers for an approved panel or substantive appraisal review must be (1) appropriately trained and qualified in the area of real estate appraisals, and (2) in the case of an employee of the lender, wholly independent of the loan production staff and process.

IV. Prevention of Improper Influences on Appraisers

A. In underwriting a loan, the lender shall not utilize any appraisal report:

(1) prepared by an appraiser employed by:
(a) the lender;
(b) an affiliate of the lender;
(c) an entity that is owned, in whole or in part, by the lender; or
(d) an entity that owns, in whole or in part, the lender.

(2) prepared by an appraiser
(a) employed,
(b) engaged as an independent contractor, or
(c) otherwise retained by any appraisal company or any appraisal management company affiliated with, or that owns or is owned, in whole or in part by, the lender or an affiliate of the lender.

B. Section IV.A. shall apply unless:

(1) the appraiser or, if an affiliate, the company for which the appraiser works, reports to a function of the lender independent of sales or loan production;

(2) employees in the sales or loan production functions of the lender have no involvement in the operations of the appraisal functions and play no role in selecting, retaining, recommending, or influencing the selection of any appraiser for any particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender or forbidden from performing such work;

(3) employees in the sales or loan production functions of the lender are not allowed to have any substantive communications with an appraiser, appraisal company, or appraisal management company relating to or having an impact on valuation or to be provided information about which appraiser has been given a particular appraisal assignment before completion of that assignment;

(4) the lender, or its agents, and any appraisal company or appraisal management company providing the appraisal to the lender do not provide the appraiser any estimated or target value of the property or the loan amount applied for (except that a copy of the sales contract for purchase transactions may be provided);

(5) the appraiser's compensation does not depend in any way on the value arrived at in any appraisal or upon the closing of the loan for which the appraisal was completed;

(6) the lender and any appraisal company or any appraisal management company providing the appraisal to the lender has adopted written policies and procedures implementing this Code of Conduct, including, but not limited to, adequate training and disciplinary rules on appraiser independence (including the principles detailed in Part I of this Code of Conduct) and has mechanisms in place to report and discipline anyone who violates these policies and procedures;

(7) the lender’s appraisal functions are either annually audited by an external auditor or are subject to federal or state regulatory examination, and, unless prohibited by law, the lender promptly provides to Fannie Mae or Freddie Mac the results of any adverse, negative, or irregular findings of such audits and examinations indicating non-compliance with any provision of this Code of Conduct, whether or not the examination was conducted for the purpose of determining compliance with this Code of Conduct; and

(8) the lender and any entity described in section IV.A. providing the appraisal to the lender recognize that, once the Independent Valuation Protection Institute is established, the Institute will receive complaints for review and referral regarding non-compliance with the Code of Conduct. Referrals and reports shall be made to Fannie Mae and/or Freddie Mac regarding such complaints and the Institute will provide information on the results of complaint reviews to Fannie Mae and/or Freddie Mac and make them available to the other parties to the Home Value Protection Program and Cooperation Agreement.

C. In underwriting a loan, the lender shall not use an appraisal report prepared by an entity that is affiliated with, or that owns or is owned, in whole or in part by, another entity that is engaged by the lender to provide other settlement services, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq., for the same transaction, unless the entity that provides the appraisal:

(1) has adopted written policies and procedures implementing this Code of Conduct, including, but not limited to, adequate training and disciplinary rules on appraiser independence (including the principles detailed in this Code of Conduct) and has mechanisms in place to report and discipline anyone who violates these policies and procedures;

(2) recognizes that, once the Independent Valuation Protection Institute is established, the Institute will receive complaints for review and referral regarding non-compliance with the Code of Conduct. Referrals and reports shall be made to Fannie Mae and/or Freddie Mac regarding such complaints and the Institute will provide information on the results of its review of such complaints to Fannie Mae and/or Freddie Mac and make them available to the other parties to the Home Value Protection Program and Cooperation Agreement.

D. Notwithstanding the requirements herein, the lender also may use in-house staff appraisers to (i) order appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or post-funding, (iii) develop, deploy, or use internal automated valuation models, or (iv) prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts), if it complies with the terms of this Code of Conduct.

E. The provisions of this section do not apply to institutions (including non-banking Iinstitutions) that meet the definition of a “small bank” as set forth in 12 U.S.C. § 2908, and which Freddie Mae or Fannie Mae determines would suffer hardship due to the provisions, and which otherwise adhere to this Code of Conduct.

V. The Independent Valuation Protection Institute

An Independent Valuation Protection Institute (Institute) shall be created as approved by the parties. Subject to section IX, when the Institute is established, the lender will provide information to appraisers and borrowers regarding the availability of the Institute's services, which are expected to include: (1) a telephone hotline and email address to receive any complaints of Code of Conduct non-compliance, including complaints from appraisers, individuals, or other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which the Institute will review and report as provided in IV.B(8) and IV.C(2) of this Code of Conduct; and (2) the publication and promotion of best practices for independent valuation. The lender shall not retaliate, in any manner or method, against the person or entity that makes a complaint to the Institute.

VI. Appraisal Quality Control Testing

The lender agrees that it shall quality control test, by use of retroactive or additional appraisal reports or other appropriate method, a randomly selected 10 percent (or other bona fide statistically significant percentage) of the appraisals or valuations that are used by the lender, including the results of automated valuation models, broker’s price opinions, or “desktop” evaluations. The lender shall provide to Fannie Mae or Freddie Mac a report of any adverse, negative, or irregular findings of such quality control testing, and any findings indicating non-compliance with any provision of this Code of Conduct, with respect to loans sold to Fannie Mae and Freddie Mac respectively, and the Enterprise may enforce all applicable rights and remedies, including requiring the lender to repurchase mortgages or the Enterprise’s participation interest in mortgages.

VII. Referrals of Appraisal Misconduct Reports

Any lender that has a reasonable basis to believe an appraiser or appraisal management company is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the applicable State appraiser certifying and licensing agency or other relevant regulatory bodies.

VIII. Representations and Warranties

A lender shall certify, warrant, and represent that the appraisal report was obtained in a manner in compliance with this Code of Conduct. If the Enterprise determines, on its own or from a referral made by the Institute, that a lender is in breach of a material aspect of this Code of Conduct or in violation of a provision of the Code by a complaint referred from the Institute, the Enterprise will enforce all applicable rights and remedies, including suspension or termination of the lender’s eligibility to sell loans to the Enterprise, if the lender fails to remediate.

IX. Scope of Code

Nothing in this Code of Conduct shall be construed to establish new requirements or obligations that: (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction; (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment; or (3) require the lender or any third party acting on behalf of the lender to take any action prohibited by federal or state law or regulation.


Estimated Current Rates:

30yr Conventional 1 Point: 4.625% (4.7327 APR)

FHA 30yr Fixed 1 Point: 4.75% (5.2551 APR)




*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.

The Most Important Number You Have: Your Credit Score

Possibly the most important 3 digit number associated with your personal financial situation is your credit score. It's one of the most important, and often the only, indication of what the terms of your credit offering will be. It can determine your interest rate, the amount of credit you will actually receive, and how much time you'll have to pay the loan/credit back. The use of a "credit score" has become widespread. Credit scores are used in auto loans, home loans, credit cards, insurance policies, and even employers checking potential hires for a glimpse into their credit history. Here is some information on credit scoring to help make sure you keep it as high as possible in order to insure the best access to credit available.

There are three main credit bureaus that receive information from a person's different creditors every month to keep record of payment terms & history. Equifax, Transunion, & Experian are the three main bureaus. The information from these bureaus are then analyzed when a credit inquiry is performed. The inquiry provides a numeric value based on all the different items in your credit report. This numeric value is often called a FICO score. The name comes from the company Fair Isaac who developed the most popular model or scoring system. The number can range from a bad low score of 300 to a perfect score of 850. Here are the most important factors that go into calculating this all-important number:



So looking at this chart would tell you if you pay your bills on time (payment history), keep your credit balances low (amounts owed), establish a long history of timely payment, and don't request too much new credit you should establish a very strong score and get yourself the cheapest money lent to you!

One of the biggest myths on credit scoring I hear about is the fallacy that if you have your credit run more than once in a short period of time it can hurt your credit score. Untrue! There is a difference between a credit request and credit inquiry. If you request multiple credit cards in a short period of time, yes this could drop your credit score. However, when an auto lender or mortgage lender "inquires" about your credit it is usually scored as one request. One representative from a credit reporting company has told me up to FIVE inquiries by auto or mortgage lenders within 30 days would have NO adverse impact on your credit score.

There is also confusion about getting a different score from different parties. Every type of creditor is going to set their scoring model up a little differently. A mortgage company FICO score will be different than an auto lender who could be different than an insurance company who could be different than a score generated by your own credit report you pulled direclty. Confusing, I know. However, it does make some sense since each party is going to judge you on their unique system due to the type of credit you are asking for is different.

This topic is a VERY important topic that you MUST be well informed on! The impact on your personal financial picture could cost you thousands upon thousands of dollars if you do not keep your credit score high. Here are some great outlets to learn more about how credit scoring works:

myFico.com --> my personal favorite website on credit scoring

Get Your Free Annual Credit Report! --> always know what is on your credit report and your actual score!

Understanding Your FICO Score Booklet

Wikipedia's Credit Scoring Article

Federal Trade Commission's Facts for Consumers

How to Dispute Credit Reporting Errors

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Estimated Current Rates:

30yr Conventional 1 Point: 4.75% (4.8585 APR)

FHA 30yr Fixed 1 Point: 4.875% (5.4951 APR)


*Please understand these are simply the opinions of an experienced mortgage professional and should not be mistaken for anything otherwise.