New Jersey Mortgage and Home Loan Information

The End of NJ First Time Home Buyer Mortgages for Buyers Below 620 FICO Scores

by Steve Kappre, NJ Loan Officer

It was a nice run while it lasted, and over the last 6-12 months we were effectively able to put quite a few NJ first time home buyers into homes. As of March 15, 2010, NJ HMFA (Smart Start, Tax Prefund, and other options) will not allow a borrower to have a middle credit score below 620.

Another tightening of guidelines will no longer allow buyers to use alternative credit and have no credit score. In the past, a lender could fund such a loan by placing 4 trade-lines that were not already on a credit report (i.e. cell phone bill, auto insurance, gym membership). Now if this is done and there still is no credit score, the loan can not be approved per NJ HMFA guidelines.

It is another blow in the world of mortgage financing.

There ARE some good buyers out there that have credit scores slightly below 620 that would make solid home owners. It is unfortunate that these guidelines restrict otherwise solid home owners. But the line has to be drawn somewhere. This makes the knowledge and understanding of credit scores and reports more important than ever!

With the end of NJ first time home buyer programs for buyers with credit scores below 620, it is more important than ever to work with a highly qualified, local mortgage loan officer. If your credit is marginal or below 620, call today for advice on how to raise your score to qualify for the Smart Start, Tax Prefund, or other HMFA program.

Credit Links

Credit Scoring - What Makes Up My Credit Score? (1 of 6)

Credit Scoring - Payment History (2 of 6)

Credit Scoring - Balances (3 of 6)

Credit Scoring - History (4 of 6)

Credit Scoring - Mix of Accounts (5 of 6)

Credit Scoring - Inquiries (6 of 6)

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• Purchase, refinance, rehab loans
• Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail | NJ Loan Officer .com

NJ First Time Home Buyer Tax Prefund Program

The NJ First Time Home Buyer Tax Prefund Program has been a great option for New Jersey buyers needing down payment assistance programs. The program allows $5,000 of the $8,000 first time home buyer tax credit to be used towards your down payment and/or closing costs.

For buyers in the price range up to $142,000, the $5,000 can be used to cover the full down payment requirement for an FHA loan. When this is an option, a home buyer can also have the seller pay some or all of the closing costs. This is a great option for first time buyers because it lets them keep more money in the bank - something everyone homeowner needs!

The NJ Tax Prefund program will only be available while the first time home buyer tax credit is available, which means that both are gone in the coming weeks! To receive the first time buyer tax credit (and prefund option) a buyer must be under contract by April 30th and settle by June 30th.

If you need assistance, DO NOT delay. These loans typicially take about 45 days to close. Call today to get pre-approved for this option.

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• Purchase, refinance, rehab loans
• Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail

NJ HMFA Smart Start Lender - First Time Home Buyer Programs

Whether NJ first time home buyers utilize the available programs or not, every home buyer and Realtor need to know about these options. The main program that is offered by HMFA (Housing and Mortgage Finance Agency) of New Jersey is called the Smart Start program.

The Smart Start program is available for first time buyersand allows for down payment assistance or 2, 3, or 4 percent (%) of the loan amount. As an example, if you were financing $100,000, you could receive a grant of up to $4,000. The interest rate changes based on what assistance percentage is chosen.

The assistance can be used for closing costs or a down payment, or both. Often a home buyer with a little money in the bank can keep their money for after settlement and utilize both the down payment assistance program option and seller concessions. This creates a safer environment for a new home buyer as more of their own money can be kept in the bank.

The Smart Start program has income restrictions. As of 2/27/10 a first time buyer can make as much as $85,600 per household, and the limits go up depending on the county and the number of people in the household. (See Chart).

Although HMFA offers this program and many others like it, HMFA does not approve and finance these mortgages themselves, an approved HMFA mortgage lender such as Treasury Mortgage (A Division of Aurora Financial Group) would write, approve, and close these loans. In fact Aurora is one of only two firms that service these loans so you can do everything under one roof, which is better for everyone.

If you or someone you know is a first time home buyer, or if you are a Realtor, you owe it to yourself to know about these programs. They are not for everyone, but they are a wonderful fit for some and can make the first time home buyer experience a great one.

Some other HMFA options are the Tax Prefund Program, Live Where You Work, Police and Fireman's Loan, and more

Lastly, be quite sure to work with a loan officer and lender that are very experienced with this program. If they are not writing HMFA Smart Start loans every month (be sure to ask them) then you are probably dealing with the wrong people!

Call, text, or write for more information or to be pre-approved for these programs.

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• Purchase, refinance, rehab loans
• Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail

Think You Can Pick ANY Lender or Agent to Work With?

Let me share with you a recent event that caused a home buyer to miss out on $10,000.

I talked to a buyer two days ago. His significant other was doing some research about a local grant programs and they found me. In this case he called about a program that allows first time buyers to receive $10,000 towards the purchase of a home.

There are income limits to qualify for this program. Based off of his income alone, he made just a little too much money. However since his significant other would be living in the property, and is unemployed, this could change the qualifying factors, which also consider the number of people in the household and/or the number of people on the deed. So with two people in the home and on the deed, they now qualified for the $10,000 grant based off of their income.

TOO LITTLE ... TOO LATE

So they qualify now, good news right?? Not exactly. It would have been better had they never found out. Their loan officer told them the whole time that the significant other could not be on the loan since she provided no income. 

BZZZZZ - - - NOPE - - - NADA - - - Wrongo

You can indeed have a co-borrower that has no income and have them on the loan. Just think of a housewife, a retired spouse, etc. But due to being misguided, this first time home buyer will miss out on $10,000. He was only a week away from settlement when we talked about this, and the program takes about 45 days to complete. The seller is not willing to delay.

Who's wrong here ... the lender, the loan officer, the Realtor?

Realtors should certainly know about these programs, but this is out of their scope. Is it the lender's fault? Not really. A lender can train a loan officer, but they can't make them know everything. IT IS THE LOAN OFFICER'S FAULT! I'm not about to out that loan officer, I don't work like that. But shall I ask the question again; Do you ...

Think You Can Pick ANY Lender or Agent to Work With?

Well of course you can!!

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• Purchase, refinance, rehab loans
• Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail

Making Your First Time Home Buying Experience Successful

Well the run has begun and the whirlwind of first time home buyersis picking up steam all across the country. Every buyer will want to know how understanding and using all of your first time home buyer options comes into play in their personal home buying goals.

BUYERS TAKE NOTE:

What many Realtors and lenders (and therefore buyers) don't understand is that the $8,000 first time home buyer tax credit is not the only first time home buyer incentive right now. Indeed in New Jersey we are looking at a handful of mortgage options including a $10,000 grant-assistance program, a 4% (of loan amount) grant-assistance program, a tax-prefund mortgage option which allows $5,000 of the $8,000 tax credit to be used for buying a home, and a zero-down (100%) financing option. And that is just in Gloucester County!

Why do I say that Realtors and lenders don't know about these options??

Because I talk to buyers (and Realtors) all the time that know little to nothing about such options. Buyers come to me because their agent or their current lender could not answer their questions about such program options.

BUYERS do not need to miss out!! Ask as many questions as possible! Work with a local agent and lender that know their FIRST TIME HOME BUYER STUFF!!!! Do not settle for a mediocre substitute!

Buyers can also check out: Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Educating NJ First Time Home Buyers about Information on the Internet

Last night I had the privilege of spending a little over half an hour on the phone with a first time home buyer. Initially I wasn't overjoyed at spending time with a client at 7:30 on a Friday night, but the reality was that I ended up having a good time helping a young couple understand the home buying process.

There are various programs available (which can be confusing even to someone in the business). Locally in Gloucester County and South Jersey there are several loan programs that first time buyers can take advantage of.

In this particular case this buyer had done a good amount of research on the Internet. And so it makes sense that they came across the same bogus websites that I come across when doing research: The websites that offer programs, incentives, and other options that DON'T EXIST. It is no wonder why many first time buyers are so confused; Even when they do study up and research they are bombarded with misleading, inaccurate, and even blatantly false statements.

Why do some websites and lenders mislead and even lie on their websites?

There are three main reasons I have found these misleading websites exist:

1. To "up-sell" a buyer into something they "qualify for" (As the case in offering SUPER LOW rates)
2. To sell ad space for other businesses (These sites often just get you there in hopes you will click on an ad on their page)
3. To sell a buyer's information to a company that actually is a lender. (A lead generator site)

It is rather simple - they want "the phones to ring" so they can sell people on something. Some websites will pull people in with the right "keywords". Some of these websites will offer just a little information and THEN SELL OFF YOUR NAME AND INFORMATION TO REAL LENDERS, at times without the home buyer having any knowledge of this. Working with these websites is a roll of the dice at best!

Even with the great amount of regulation taking place in the mortgage industry, there are still some screwballs out there. As an experienced lender I can not emphasis the importance of working with a local lender. I will be the first to admit that I have no idea what first time buyer programs are offered in other states (Other than NJ and PA). And I can guaranteeyou that someone outside on New Jersey can not offer you programs that a New Jersey based lender can offer you. (Not even all NJ lenders can offer the same programs, such as the case with many NJ first time home buyer programs.)

When it comes to buying real estate, the phrase often used is location, location, location. Many people don't realize that when it comes to choosing a mortgage company and a loan officer, the phrase location, location, location is just as important.

If you specialize in first time home buyer programs in other states, feel free to contact me. I often meet buyers that I can not help in many other states.

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• NJ Reverse Mortgages
• Purchase, refinance, rehab loans
• Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail

BEWARE: There is a combination that the first time home buyer needs to be aware of. That combination would look something like this ...

The main item of issue here is the short sale or foreclosure. The home buying transaction typically takes 30-60 days. However, when the bank that is holding the seller's mortgage needs to make a decision, on "who, where, when, why" regarding the sale of the home, a buyer can expect to add a few weeks ... or even a few months to the timeline. And that is no exaggeration.

In such situations you could have an attorney for the seller, a negotiator for the short sale, a PMI company evaluating their loss options, a seller that is going crazy and doesn't care anymore ... and the list goes on, with each party adding more time to the equation.

So first time home buyers be prepared. If the home that you are purchasing is a foreclosure or short sale, you may be getting an AWESOME deal on it. And well you can still get an awesome deal, just don't be heart broken or count on the first time home buyer tax credit.

If recieving the first time home buyer tax credit is going to make or break a transaction for you, think long and hard about how things could pan out.

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

• NJ First Time Home Buyer
• NJ Reverse Mortgages
• Purchase, refinance, renovation mortgages
• Conventional, FHA, USDA, VA, HMFA, PHFA, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail

NJ First Time Home Buyers: The Clock is Ticking Again

The real estate industry went through a "buzzer beater" with the first-time home buyer tax credit deadline last November. Title companies were scrambling, this NJ loan officer was working overtime, and attorneys were getting ready to duke-it-out if need be.

Many first time buyers were relieved to hear that the tax credit was extended. Some buyers closed a few days later without an issue. Some closed a few weeks later. And in one situation I was personally involved in, a home buyer was buying a short sale and closed in JANUARY, or two months later.

The current guidelines for the first time home buyer tax credit state that the home buyer has to be under contract by the end of April (April 30th). Buyers also have to settle by the end of June (June 30th).

BUT SOME BUYERS WILL STILL MISS THESE DEADLINES!

And some sellers will miss out as well.

There can be many reasons for this:

• Bad real estate agents
• Bad loan officers
• Unorganized buyers
• Short sales and foreclosure transactions that are mostly dictated by the bank holding the mortgage on the seller's end.

A few months ago, it was cake to close a purchase transaction in 2-3 weeks. These days most contracts are written for 45-60 days, and due to situations outside of a buyers control, they can take significantly longer.

BE PREPARED!! PLAN AHEAD!!

If you have questions feel free to call. Proper planning over the next few weeks may be the difference between a great success and a dreadful let down.

Other NJ First Time Home Buyer links:

Use Your Tax Rebate to Buy a Home

Gloucester County First Time Home Buyer Grant

How to Have a Seller Pay Your Closing Cost While Using a First Time Home Buyer Mortgage Program to Cover Your Down Payment

Being a first time home buyer can certainly be a confusing situation. If you do not work with a Realtor and loan officer that know the business well, the complexities of buying a home can whirlwind out of control. As a first time buyer using first time home buyer mortgage options, these situations must be handled even more delicately. This article will focus on how to get the seller to pay the closing costs associated with the purchase of a home, and how to utilize local state or county first time home buyer grant/assistance programs to cover your required down payment needed to purchase a home.

STEP ONE - LINE UP YOUR FIRST TIME BUYER PROGRAM

Meet with a loan officerto be pre-approved for a first time home buyer mortgage and to confirm the amount of concessions you will need (or, how much you need the seller to pay for you). These options and figures can vary greatly based on the location of the home, the loan programs available, credit profile, the home's taxes, and more. It is vital that you find a loan officer that has a working knowledge of all of the local first time home buyer programs.

It is not uncommon for a loan officer to give inaccurate advice based off of his/her specific bank's limited options. The fact is that most lenders do not offer local first time home buyer financing. Many lenders simply state that, for instance, FHA or USDA loans are first time buyer programs. This is inaccurate, and indeed this can keep some people out of the home buying "game". To complicate matters, even if you find a lender that offers one of this programs, their loan officer(s) may have never worked with this type of program.

So to reiterate, find a local, experienced "first time home buyer" loan officer, and don't be afraid to ASK MANY, MANY QUESTIONS. Any reputable loan officer will be happy to answer all of your questions.

Some first time buyer grant/assistance programs are tied to the actual mortgage - they are a one-in-all financing scenario. Other grant/assistance programs are completely separate from the mortgage approval process. Depending on where you are looking to by, some of these programs may overlap. You may prefer one program above another, or sometimes even use more than one at the same time. Again, another reason to work with a loan officer experienced in helping first time buyers with these types of financing.

STEP TWO - DETERMINE CONCESSIONS

Once the first time home buyer grant/assistance program is determined, the lender can then calculate the amount of seller concessions you will need (the amount the seller will need to pay for you). Let's look at the following example to determine how a lender would determine this.

For our example, we will use the SMART START program currently offered in New Jersey (to participating lenders). With the NJ Smart Start program, a buyer can obtain assistance of up to 4% of the loan amount. In most cases, the buyer will select an FHA mortgage which requires a 3.5% down payment. (in this case, the mortgage is approved together with the assistance program).

Let's break this down:

Home buyer purchases a home for $200,000

FHA down payment requirement is 3.5%, or $7,000

The loan amount after the 3.5% down payment required would be $193,000

The assistance program, in this case, would be 4% of the loan amount, or $7,720

We find that the assistance of $7,720 covers the required down payment of $7,000

The left over assistance money ($720) would be used towards the buyer's closing costs.

Let us assume the buyer's closing costs plus prepaid items come to $6,000

To find out how much you need the seller to pay, you would take $6,000, subtract the positive credit from the assistance program ($720), and that is the amount the buyer would need to request for the seller to pay = $5,280

STEP THREE - START MAKING OFFERS

Meet with a Realtor to discuss your pre-approval and your objectives. Even though many Realtor's are familiar with seller concessions, many are not familiar with home buyer programs such as those mentioned above. To be ultimately successful you will want your loan officer and your Realtor to speak in detail about your specific loan approval and financing terms. As a buyer, do not assume all parties are on the same page. As a buyer, your involvement, even as a first time buyer, is very valuable.

Some Realtors will be priceless when making offers and negotiating for a buyer. Some will have a tendency to make offers based on the pre-approval amount only, not paying attention to the seller concessions desired (or required). Some agents may request the maximum amount of seller concessions allowed with FHA, which is 6%, but this is rarely needed.  If not structured correctly, the buyer will potentially lose out on the excess concessions they don't use, meaning that they over pay for the home. 

Maybe it goes without saying, but you "Get what you pay for" when you choose a professional to work with. Except in this case, you may pay much more (for a house) and get much less (from the seller). Ask as many questions as possible. It will help you find the right person(s) to work with.

Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

• Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com

      

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