Michael 's Blog

First Time Homebuyers - Mortgage Credit Certificate – Colorado

Summit Home Mortgage — Mon, 20 Jul 2009 09:48:34 -0500

**NEW** Mortgage Credit Certificate (MCC) in Colorado

First Time Homebuyers - Mortgage Credit Certificate - Colorado

The Mortgage Credit Certificate (MCC) program is no longer just for Denver County but Colorado as a whole! The program is in addition to the $8,000 first time home buyer tax credit.

In simplified terms the Mortgage Credit Certificate (MCC) will put thousands of dollars in your pocket on an annual basis. When compared to the $8,000 credit the MCC will actually be more beneficial financially.

The program is simple. By way of an additional tax credit you will receive an extra $100 - $300 of income, every month! The credit will remain in place until you no longer occupy the home. So in theory you could receive the credit for an infinite amount of time, resulting in much more cash in your pocket than the $8,000 tax credit. By the way, it's not a loan!

Funds for this program are limited which should give first time home buyers a real motivation to purchase a home within 2009.

Michael Shotnik

MCC Specialist

Summit Home Mortgage

mshotnik@MCCcolorado.com

303-800-4595

Keywords: MCC, Mortgage Credit Certificate, Colorado, Denver, $8,000 first time home buyer tax credit, refinance, ARM, first home, incentive, tax credit, rebate, w4, payroll, income, free money

What happened to Mortgage Rates?

Summit Home Mortgage — Thu, 28 May 2009 15:09:56 -0500

Yesterday we had the worst day for mortgage rates we've had since October. It was a landslide that most did not see coming. Rates seemed to be fairly level over the previous month so the drastic change was unexpected by most.

What happened?
The easiest answer is that investor money moved out of Mortgage Backed Securities and into Treasury Bonds. This shift of money drove Mortgage Backed Securities to worse levels thus driving interest rates up. The motivation for the move was to capture the higher rate of return of Treasury Bonds. Mortgage Backed Securities had remained at high levels (good mortgage rates) while Treasuries were pushed lower. This discrepancy between the two is what induced a massive amount of money to transfer from MBS to Treasury bonds.

What's next?
It is likely that interest rates will improve over the next month or two but the chances of them reaching the levels of last week are slim. It will most likely take patience to get even close to the previous levels.

What does this mean for you?
Interest rates are still at nice levels so refinancing may not have as much benefit as it did last week but may still offer enough savings to make it worth-while. If you purchased or refinanced as recently as a year ago the probability of saving money in this environment is still high. In my opinion purchase business will remain strong because of the time of year as well as the $8,000 tax credit (available until 12/01/2009).

If you are looking to purchase or refinance this dramatic rate movement should open your eyes to the volatility of the market. I would suggest working with an extended timeframe in order to capture the best rate possible and maintain your peace of mind.

Micheal Shotnik
Summit Home Mortgage

Is an FHA Streamline Refinance a secret??

Summit Home Mortgage — Wed, 18 Mar 2009 17:23:34 -0500

An FHA Streamline Refinance is considered to be very secretive because not many loan officers know how to properly do an FHA Streamline Refinance!

How does an FHA Streamline refinance work?
As a Denver based office we know the Denver market very well. We know that over the last 2 years those who have refinanced or purchased a home in the Denver area have an interest rate of 6-7.5%, don't have much equity in their home and probably have an FHA loan.

If you currently have an FHA loan you have a huge advantage over those who don't. You are eligible for an FHA STREAMLINE REFINANCE.

What is a streamline refinance? It is a refinance from one FHA loan to another to better the terms of your loan. Whether it be lower your interest rate, convert to a fixed rate mortgage or modify the length of your loan. Any of these improvements would give reason to consider refinancing.

When can I do a streamline refinance?? You are eligible for a streamline refinance at any time, whether it is one month after you purchase or refinance or 10 years later. The only caveat is that the new loan has to have a benefit to you. Right now the obvious benefit is a lower interest rate.

Should I do a streamline refinance now or wait?? Do it now! Rates are at 30 year lows and cannot sustain these low levels for long. Once the stimulus money takes hold and the economy shows signs of improvement the rates will trend upward along with the stock market.

How much will I save??

$200,000 loan

Current rate: 6.5%

Proposed rate: 5.25%

Proposed savings: $160 per month

Savings over the life of the loan: $60,000

If you apply the monthly savings to your loan the savings will be over $100,000!!

Do I qualify??
-The only qualifying involved is ensuring you currently have an FHA loan, have good payment history over the last 12 months and are employed!! Almost seems too easy!!
-no appraisal needed!
-no W2s or tax returns needed!

The process is simple and the savings can be gigantic. Even if you currently have a good rate it is still worth considering an FHA streamline refinance.

Call me today before we lose these amazing rates!!

Michael Shotnik
Summit Home Mortgage
303-800-4595
License # LMB100017466

FHA Streamline Refinance

Treasury - 4.5% Mortgage Rates??

Summit Home Mortgage — Tue, 09 Dec 2008 09:19:14 -0600

On December 4^th details of a Treasury intervention to bring mortgage rates down to 4.5% was leaked. This news was not supposed to be released as the plans are still under discussion. I have not commented on this topic because I wanted to see if more concrete news was going to be released but at this point nothing new has come out and I feel it's my job to give my opinion on the topic.

First, at this point the plan is just speculation, so I'm remaining central on the issue.

From what we're hearing the plan will only be eligible for first time homebuyers (people who have not owned a home within the past 3 years). The 4.5% will not be available for refinancing or buying an investment property. In my opinion the plan should included refinance loans. For the people whose budgets are tight the drop in rate to 4.5% would allow for more spending thus help the economy.

Going into the New Year and new leadership I think the 4.5% would be great for the Denver housing market. As a relatively strong market the 4.5% would incent more fence sitters to buy homes. The more buyers we have in the market the less supply Denver has which will level home prices out if not drive them up.

I plan on updating readers on this topic as often as news is released. If you are interested in refinancing or buying a home in the near future this news directly affects you. To be added to my email list send me an email: mshotnik@summit-mortgage.com

Entertainment, Lies and Homeownership

Summit Home Mortgage — Mon, 10 Nov 2008 12:00:55 -0600

If you are one of the many Americans that routinely watches the local news than you mostly likely think no one is able to buy or sell real estate in the current market. The media is in the business of entertaining whether it be true or false and in the case of the local Denver Real Estate market is way off. The term that is regularly used like "credit freeze" and all the publicity given to failing banks greatly discourages first time and seasoned buyers from buying a home. Any investor will tell you to buy low and sell high, now is the low point and for some reason the media is scaring people away from real estate. Homebuyers will realize the most benefit by buying in this real estate lull and selling at the next high. The process is cyclical and proven to re-stabilize and produce massive gains every time.

To set the record straight we have outlined steps to homeownership in this market:

•1. Find

•2. Qualify

•3. Budget

Find. The first step is to find a price range and quality of home you are interested in. Denver and the Metro area vary greatly depending on the aspects of a neighborhood that are important to you. A local real estate agent can easily provide you with detailed information about a particular home or area of Denver.

Qualify. After you have decided you would like to buy a home a very important step is to speak with a mortgage professional. As a mortgage banker I can help you determine what purchase price you qualify for and also what type of loan product is the best fit for your individual situation. Many home buyers avoid this step until they are very involved in the home buying process. I always recommend starting early because by the time you find the perfect home you won't want to talk to me about interest rates and amortization terms you'll want to spend time at Crate and Barrell picking out your furnishings.

Budget. Whether you need to save for a downpayment or prepare for move in costs budgeting is another important aspect. As a home buyer you will have additional costs as well as financial benefits that will need to be incorporated into your monthly and annual budget. I suggest planning financially before and after the home purchase.

Finding, Qualifying and Budgeting for your new home is an exciting process. If you focus on the 3 elements laid out above you will discover just how beneficial owning your own home can be.

In an effort to educate our clients we hold monthly workshops to focus on Finding, Qualifying and Budgeting for home ownership.

EMAIL ME TO INQUIRE ABOUT THE NEXT HOMEOWNERSHIP WORKSHOP - mshotnik@summit-mortgage.com

Final bit of advice:

The absolute truth about real estate regardless of the market conditions is the sooner you get in the sooner you'll realize your financial potential.

Michael Shotnik

Mortgage Banker

Summit Home Mortgage

P 303-800-4595

E mshotnik@summit-mortgage.com

New Location – Idaho Springs, CO

Summit Home Mortgage — Thu, 23 Oct 2008 15:54:35 -0500

www.idahospringsmortgage.com

In an effort to service more of Colorado Summit Home Mortgage now has a branch in Idaho Springs Colorado. Idaho Springs is in Clear Creek County just west of Floyd Hill. Our office is on Colorado Blvd about 1 mile west of the I-25 off ramp.

New Address:

In the RE/MAX building

2313 Colorado Blvd
Idaho Springs, CO 80452

Summit Home Mortgage

-Bankers not Brokers = better rates & an easier loan process

-Certainty in this uncertain market

-loans for purchases and refinances

With a presence in Clear Creek County we are able to offer:

-USDA Rural Housing Loans

1 loan up to 100% of the appraised value (purchases only)

NO mortgage insurance

Great rates!

-FHA (purchases and refinances)

1 loan up to 97%

Flexible underwriting

Great rates!

Stop by and say HI!!

Michael Shotnik

Direct Mortgage Banker

Summit Home Mortgage

720-979-4355

mountainfinancing@gmail.com

www.idahospringsmortgage.com

Refinance Your Mortgage: 4 Great Reasons – Denver, CO

Summit Home Mortgage — Sun, 12 Oct 2008 22:58:27 -0500

Michael Shotnik

Refinance Specialist

Link: refinance-denver.com

Most people go through their day to day routine and don't consider how their mortgage could be improved to reduce stress, put more money in the bank, get rid of those high interest credit cards or create financial security. If it's in your financial plan to do all of the above you are half way there by owning your own home.

ARM to Fixed Rate. Adjustable Rate Mortgages are generally available at lower rates which is very attractive in the beginning. When the ARM starts to adjust is when it's definitely time to consider a fixed rate mortgage. 30 year fixed mortgages offer a type of security that ARMs do not. The rates are slightly higher but offer a piece of mind ARMs do not. There are many products available to refinance your ARM into a fixed rate mortgage.

Link: refinance-denver.com

Lower Your Monthly Payment. Mortgage rates are at a historical low point. The best value from a refinance comes in the form of a rate reduction. Over the course of 30 years even a small rate reduction can save thousands in interest over the life of the loan. If you have not refinanced since you purchased your home chances are your rate or terms of your mortgage can be improved.

Consolidate Debt. Another great way to save money on a monthly basis is to reduce the interest you pay to borrow money. If you have credit card debt generally at 15% - 28% you can save money by reducing the rate on your debt. By consolidating the debt into your mortgage you will be paying mortgage rates on your once revolving debt.

Cash out. Equity in your home can be put to work by pulling the equity out in the form of cash. A great way to take advantage of equity in your home is to do home improvements. Lenders love when you add value to your home, it reduces the risk to them.

Link: refinance-denver.com

If you are reading this article you must be thinking about your mortgage. For most people their mortgage is the largest monthly obligation they have. This is why it makes sense to make sure your payment and terms are aligned with your financial plan.

Michael Shotnik

Refinance Specialist

Link: refinance-denver.com

Summit Home Mortgage

mshotnik@summit-mortgage.com

303-800-4595

FHA Down Payment 3% or 3.5% - Neither

Summit Home Mortgage — Fri, 10 Oct 2008 10:32:26 -0500

Michael Shotnik

Mortgage Banker

Denver, CO

Link: denver1stmortgage.com

FHA Down Payment Confusion

With new FHA changes (HR 3221) taking affect on October 1^st there has been a lot of confusion regarding the down payment required for FHA loans. A lot of realtors were informed that starting October first the minimum down payment would be 3.5%. THIS IS NOT TRUE! The 3.5% minimum down payment will not take effect until January 1^st 2009.

Given that Colorado is a low closing cost state the minimum down payment until Jan. 1^st 2009 is as follows:

Lower of Sales Price/Appraised Value	Down Payment
$50,000 or less	1.25%
$50,001 to $125,000	2.35%
$125,001 or greater	2.85%

As you can see above the minimum down payment isn't even 3% regardless of the purchase price!

FHA is a wonderful program for first time homebuyers as well as seasoned buyers. The rates are better than conventional financing and the required down payment is much less. When the 3.5% required down payment goes into effect FHA will still be more advantageous than conventional financing.

Eligible source of down payment assistance:

-gift from family member

-gift from employer

-loan from family member (must disclose the terms of the loan)

Michael Shotnik

Mortgage Banker

Link: denver1stmortgage.com

First Home? Gotta read!

Summit Home Mortgage — Thu, 09 Oct 2008 16:31:51 -0500

Michael Shotnik
First Home - Loan Specialist
mshotnik@summit-mortgage.com

denver1stmortgage.com Mortgage Broker vs. Mortgage Banker

Mortgage Broker

A Mortgage Broker is an intermediary between the borrower and the lender. Most mortgage brokers represent multiple lenders and will work to find the client the lender that is most likely to approve your application. Mortgage brokers can generally offer a broad range of programs. It is important to understand that although a mortgage broker is in place to find you the correct product it is not always in their best interest to give you the best rate. Mortgage brokers earn a fee/commission for their work on your particular loan. The mortgage broker's commission can come from 2 places. Directly from you in the form of an origination fee or from the lender as YSP (yield spread premium). The higher the rate they sell to the client the more YSP the mortgage broker makes. The YSP will be disclosed on the good faith estimate but not in exact figures. Brokers generally state YSP 0-3%, this is sufficient for disclosure purposes and will not inform the client of exactly how much money they are making. At the time of closing you will see the YSP paid to the broker by way of a fee that details POC (paid outside of closing). This is the amount the lender is paying the broker in addition to any origination fees you are paying them directly.

Mortgage Banker (that's us!)

Not to be confused with the local bank down the street. Mortgage bankers only provide mortgage banking and are considered bankers because they lend their own funds unlike a broker. Mortgage bankers offer the flexibility of working with a broker and are also able to provide direct funding which improves the rate for the client. Bankers are able to make approval decisions "in house" unlike a broker which greatly improves underwriting time. Upon closing the servicing is transferred to a servicing company who will service your loan. The transfer is seamless and is done without further participation from the client. As a client you will deal directly with the banker who will fund your loan right from the start, yet will have the flexibility of "shopping" your particular loan to multiple servicing companies to acquire the best rate and terms. Unlike brokers bankers do not get paid YSP, bankers are paid a release fee. This fee is paid by the servicing company once the loan is transferred. This fee is set by the servicing company.

Definitions:
YSP - yeild spread premium. The income a broker makes from the lender.
Lender - bank lending funds to home buyer.
Broker - independent contractor acquiring financing on behalf of the buyer.
Banker - employee of the lender, direct funding source.
Origination - fee charged by the broker/banker to establish financing for the buyer.
GFE - Good Faith Estimate. Estimate that details the costs associated with the loan.
POC - paid outside of closing. Any fee that is not paid at time of closing by buyer or seller.
Underwriter-person who approves or denies the loan.

Please call or email me if you would like my list of dos and don'ts for first time homebuyers!

Visit my website to read the entire "First time homebuyer series"!

Michael Shotnik
First Home - Loan Specialist
mshotnik@summit-mortgage.com

denver1stmortgage.com

Fed Rate Cut & Colorado Housing Trends

Summit Home Mortgage — Wed, 08 Oct 2008 12:35:07 -0500

Michael Shotnik, Direct Mortgage Banker

Denver1stmortgage.com

Fed rate cut

The Fed cut its key lending rate by .5% before the market opened this morning. The market reacted positively for about an hour and then sold off as a result of higher expectations for the Fed cut. Wall Street is remaining hesitant until there is more certainty in the market. I've heard a couple analysts say we'll soon see a 1000 point jump in the market on any given day. This makes sense; a lot of investors have pulled large sums of money out of the market and are waiting for a "safe" re-entry point. In my opinion we are getting to the low point and the market will have no reason to go any lower and that's when we'll see massive volume and massive gains.

Housing Market

Despite looming credit issues Augusts' pending homes sales index reflects an increase in buyer activity. This index tracks how many homes are under contract at any given time and in August the numbers of home under contract was up nationally and even more so in the west.

Nationally West

Vs July: +7.4% Vs July: +18.4%

Vs last year: +8.8% Vs last year: +37.8%

As you can see above the West is performing much better than the national average. Since August mortgage applications have remained consistent we should continue to see our housing economy do better than expected. The driving factor behind real estate purchases is employment. Colorado has out-performed the majority of the country which is probably the strongest sign of recovery.

Average Sales Price:

Year/Quarter

2005

2006

2007

2007.II

2007.III

2007.IV

2008.I

2008.II

2008.III

Denver-Aurora, CO

247.1

249.5

245.4

255.2

254.1

230.1

223.5

225.2

TBD

Upward Trend

Market Correction

???

As can be seen above the change in trends in Colorado took place over the course of 2007. By tracking the second quarter on we should be able to see if we are pulling out of our downward trend which it looks like we may. We know applications are up and rates are down which should bring buyers into the market and reduce inventory, which should also at least level home prices out. In any other market I think we would start to see an upward trend but with the tight lending guidelines and the national slump I think the trend may come a little slower. But when we do level out and start heading back up the trend will probably last longer and be much stronger than the last uptrend.

Michael Shotnik, Direct Mortgage Banker

Denver1stmortgage.com

LOCAL MORTGAGE COMPANY GROWING IN WORST HOUSING CRISIS IN 20 YEARS

Summit Home Mortgage — Tue, 07 Oct 2008 15:58:18 -0500

PRESS RELEASE

For Immediate Release

Contact: Michael Shotnik

Tel. 303-800-4595

Email: mshotnik@summit-mortgage.com

LOCAL MORTGAGE COMPANY GROWING IN WORST HOUSING CRISIS IN 20 YEARS

Summit Home Mortgage, Denver Mortgage Company

If you're not growing you're withering. This is the philosophy Summit Home Mortgage employees follow. From the ownership down Summit is focused on growing the company with strong relationships with clients, realtors, builders and other industry professionals. Summit has continued to grow and make strides even through this volatile market.

From day one Summit's ownership was very conservative in their lending practices. Being a bank they take on additional responsibility for "bad" loans so it makes sense to stick to the basics and close only "make sense" transactions. As Michael Shotnik a banker with Summit comments "the phrase make sense has gotten a little more tricky to define. It is up to us as mortgage bankers to make the transaction look as strong as possible before the loan gets into underwriting. It takes years of experience to understand lending guidelines and without this experience the client is the one who pays the price". Summit focuses heavily on education and ethics. Each banker is required to understand the lending fundamentals and is held accountable on each and every loan.

Summit is not reliant on subprime and alt-a lending which has resulted in solid growth even through the current credit crunch. With focus placed on solid ethics and business practices Summit Home Mortgage will continue to grow.

Summit Home Mortgage Company is a Minnesota based company with two local Denver branches. The Denver branches are supported by the strength of a national bank and thrive with local connections. Summit works with first time home buyers, seasoned buyers and Investors. The program menu ranges from FHA to conventional programs for both purchases and refinances.

# # #

If you'd like more information about this topic, or to schedule an interview with Michael Shotnik, please call 303-800-4595 or email Michael at mshotnik@summit-mortgage.com

Refinance - Denver

Summit Home Mortgage — Mon, 06 Oct 2008 20:49:57 -0500

Michael Shotnik
Denver Refinance Specialist
Visit our website
Apply Online
mshotnik@summit-mortgage.com

Refinance with Confidence.

With all the market volatility and the downward trend in the stock market mortgage rates have been about the only bright spot. If the fed decides to cut short term rates which it sounds like they will then mortgage rates will increase. If you are considering refinancing out or an ARM or trying to capture a lower rate now is the time.

Visit our website to inquire about up to the minute rates.

Regardless of what the local and national media is saying we are still funding loans! My clients are still able to pull cash out of their homes and first time homebuyers are still able to purchase homes.

Type of refinances:

Lower your monthly mortgage payments. If market rates are 1% better or could save you $100 per month it would be a good time to consider refinancing. The saving on a monthly basis will add up to significant savings over the life of the loan.
Shorten your payoff. Many people believe in applying more than the minimum principal to each payment which is a good idea if you a good rate. If you are paying more than the minimum but your rate could be improved upon you are costing yourself years of interest payments. 15 year fixed rate mortgages have great rates which will lower the amount you pay to interest and allow you to pay your home off much faster.
Obtain funds for a remodeling project or a major purchase.

-If you need to do repairs or remodeling around your house a home equity line of credit may be the way to go. Terms are flexible and the monthly payments are very reasonable.

-If the interest rate on your existing first mortgage is higher than current rates, it would make sense to refinance into a lower rate loan that allows for cash-out. You might be able to refinance your current loan for a larger amount than your current balance and use the excess funds for your project or purchase.

Refinance quickly. The time it takes to close is based on just how organized you are. If you have all your documentation together the process can be completed in a week's time.

Advantage of our services:

We are a bank. We do not experience the volatility that the rest of the mortgage market experiences because we are lending our own money.

Our rates our better. As a bank we have more control of the process which allows us to pass down lower rates to our clients.

Our underwriters are not overwhelmed. In this economy many lenders have had to lay off employees by the hundreds putting a greater work load on each employee. We are a growing company and have quick underwriting times because our staff is not overwhelmed.

We care. We are a national bank but have local branches to service clients on a local level. We are accessible face to face and commonly go to loan closings. We are very involved in the local Denver economy and take pride in the work we do!

Michael Shotnik
Denver Refinance Specialist
Visit our website
Apply Online
mshotnik@summit-mortgage.com
303-800-4595

How To: Prepare For Your First Home Purchase – Denver, Colorado

Summit Home Mortgage — Sun, 05 Oct 2008 21:30:26 -0500

The 3 most important factors to be aware of before buying your First Home:
1. Income
2. Credit
3. Assets

1. Income. To borrow the amount of money needed to buy a home you will need to show strong employment history. Any job gaps will need to have a make sense explanation and everything must be documented. Your income can be supported by W2, 1099 and or tax returns. And to verify your employment we will contact your current and previous employers

- How much can you afford?
Deciding how much house you can afford is a personal decision. Many factors come into play. How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?
There are no black and white answers to these questions. It's a matter of give and take. If you plan on a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments. If, on the other hand, you plan on a 15 year mortgage, you'll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.

-What size monthly payment can I afford?
When determining what size monthly payment you can afford, you'll want to consider what other monthly expenses you have. Tangible expenses such as car payments, day care and utility bills, all play a role in how large a monthly payment you can afford.
There are also the intangible expenses or lifestyle expenses that you'll want to consider. Things such as dining out, travel and when you buy your next car can affect how much you can afford. Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?

-How much can I borrow?
This is a question you'll want to get answered before you begin your home search. This is something that we're here to help you with.
We can answer any questions you may have about the mortgage process. But the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply complete our online application and we'll contact you promptly. We look forward to helping you buy your dream home.

2. Credit. Your credit also is very important in determining how much you qualify for. The debts that show on your credit report are all we will consider when determining the purchase price you qualify for. 620-850 is the range of credit scores that will allow you to capture the best rates the market has to offer. If you have no idea what your credit score is contact us and we can help you determine where you stand. If for some reason your credit is not up to par we offer a free credit repair service that will help you buy that first home.

What determines my credit score?
-Credit History - How long have you had credit?
-Payment History - Do you pay your bills on time?
-Credit Card Balances - How much do you owe on how many accounts?
-Credit Inquiries - How many times have you had your credit checked?

3. Assets. To qualify assets such as a checking, savings, 401k or any other accounts are not mandatory but generally help. 3 months mortgage payments is a good amount to have put aside to qualify. If needed to qualify assets can be gifted from family members or employers.

- How large a down payment can I make?
Many buyers look at their cash on hand as their only source for their down payment. This simply is not the case. One way to fund or partially fund a down payment is by using a gift. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.

*Each and every person's financial situation is different. Some people may need to prepare for months before they are able to qualify for their first home and others are ready from the moment they contact us. The best way to start is to contact us via email or phone and we can connect you with a local realtor and put a plan in place to buy your first home.

To learn more about purchasing your first home please visit our website devoted to your first home purchase: http://www.denver1stmortgage.com/firsthome

Your First Home Q&A:

Why should I buy, instead of rent?

Answer: Your first home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you'll enjoy having something that's all yours - a home where your own personal style will tell the world who you are.

Can I become a homebuyer even if I have had bad credit?

Answer: Yes. We offer a free credit repair service that will help you get your credit where it needs to be to qualify for a home.

Should I use a real estate broker? How do I find one?

Answer: Using a real estate broker is a very good idea to find the right first home. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering...the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume, and more. He or she will help you figure the price range you can afford and search the classified ads and multiple listing services for homes you'll want to see. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. And you don't have to pay the broker anything! The payment comes from the home seller - not from the buyer.
We will be happy to refer you to an experience realtor that has a proven track record with first time home buyers.

How much money will I have to come up with to buy my first home?

Answer: Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.

When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $500 - $2,000.

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. That's why many first-time homebuyers turn to HUD's FHA for help. FHA loans require only 3% down - and sometimes less.
Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise. If you buy a HUD home, HUD may pay many of your closing costs.

And remember, in your offer you can ask the seller to pay the closing costs for you!

In addition to the mortgage payment, what other costs do I need to consider?

Answer: Well, of course you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, your broker will be able to help you anticipate these costs.

So what will my mortgage cover?

Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.

When I find the home I want, how much should I offer?

Answer: Again, your real estate broker can help you here. But there are several things you should consider: 1) is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? You probably want to get a professional home inspection before you make your offer. Your real estate broker can help you arrange one. 3) How long has the home been on the market? If it's been for sale for awhile, the seller may be more eager to accept a lower offer. 4) How much mortgage will be required? Make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.

What if my offer is rejected?

Answer: They often are! But don't let that stop you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn't normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember - don't get so caught up in negotiations that you lose sight of what you really want and can afford!

So what will happen at closing?

Answer: Basically, you'll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with your agent to make sure you know exactly what you're signing. After all, this is a large amount of money you're committing to pay for a lot of years! Don't hesitate to ask questions.

I don't have money for a Downpayment or closing costs, can I still buy a home?

Answer: Yes! A program is still available that requires a Downpayment of only $100. This incentive is only available on certain properties so contact your real estate professionals to find out if any one of these properties will fit what you're looking for. An earnest money check of $1,000 but can be credited back to you at closing.

Follow the link to view homes available for $100: http://www.denver1stmortgage.com/100dollarhomes

My parents offered to help me with the Downpayment, will the lender allow this?

Answer: Yes. FHA loans will allow for gift funds to be applied to the Downpayment, closings costs and reserves to qualify for the loan.

How long will it take to close on our first home once our contract is accepted?

Answer: This depends on you as the borrower. If you are organized and the seller is able to move quickly purchase transactions can close in as little as 7 days. The average closing is 30 days out from the time of accepted offer.
How much will my real estate agent cost me?
Nothing! The seller pays the realtor commissions!

To learn more about purchasing your first home please visit our website devoted to your first home purchase: http://www.denver1stmortgage.com/firsthome

Sincerely,
Michael Shotnik
Direct Mortgage Banker
Summit Home Mortgage
mshotnik@summit-mortgage.com
303-800-4595

First Time Home Buyer $7,500 Tax Credit - Denver

Summit Home Mortgage — Fri, 03 Oct 2008 14:13:46 -0500

First Time Homebuyer Tax Credit - Q&A

I think there are a few misconceptions about the First Time Homebuyer Tax Credit. Hopefully the Q&A below will help you understand how it may help you and the economy. It may be difficult to completely grasp, don't hesitate to contact me if you don't completely understand the implications.

Effective for home purchased - April 9, 2008 - before July 1, 2009

Q: What is the purpose of the Tax Credit?

A: Congress's intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales.

Q: Who is eligible to claim the $7,500 tax credit?

A: First time home buyers purchasing any kind of home-new or resale-are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.

Q: Does the credit have to be paid back to the government? If so, what are the payback provisions?

A: Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

Q: What is the difference between a tax credit and a tax deduction?

A: A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed.

Q: I heard that the tax credit is refundable. What does that mean?

A: The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit.

Q: Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?

A: Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

Q: Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?

A: In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

Q: How do I claim the tax credit? Do I need to complete a form or application?

A: Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.

The information was obtained from the federalhousingtaxcredit.com

What will the bailout mean for you, me and the housing market?

Summit Home Mortgage — Thu, 25 Sep 2008 15:15:31 -0500

I've received many panicked calls over the past few days from realtors and other real estate professionals who have watching the news and are hearing that no one is able to lend money. I want to start by saying that we are still funding loans. There have been NO major guideline changes within the past month and the purchase and refi loans that fit the guidelines are still being funded whether it be first time home buyers or cash out refis. The major guideline changes that were presented in July regarding Downpayment Assistance and MI changes are now in effect and don't seem to be hindering business. I'm inline to have a record month and at every closing there's no doubt in my mind that the wire will be there.

With or without the bailout I think my business will have to carry on. In my opinion the only answer to pull us out of this crisis is on the small business level and with people in my position. The only way to pull people out of these ARM's and difficult situations is to either refinance or modify their loan. The Fed's cannot directly address each individual situation and that's where local real estate professionals will have to come in. In order to help we need the products to address each individual situation. FHA secure was a step in the right direction and a new program will become available on Oct. 1^st 2008 FHA's Hope for Homeowners which should progress the move to help struggling homeowners.(http://www.denver1stmortgage.com/hopeforhomeowners).

Another important piece that will need to be taken into consideration is that for every transaction I complete there are at least 10 parties involved to make it happen. These 10 people are from 10 different companies that fuel hundreds of other companies. If these transactions cease a large sector of the economy will suffer along with the housing market.

When the bailout plans are released there will be a period of excitement and stock market gains. Consumer confidence will rise and the plan will seemed to have worked. I think the variable that will determine the success of the plan will be the housing market bottom. Here in Denver I believe we are at or close to our bottom and if the national market follows and hits bottom within the near future I think the plan will help us pull through the end of the year and position the economy to ride its way out of the mess. The feds will look like heroes and our resilient economy will experience gains that will lead us on the path of stabilization.

If we do not hit bottom within the near future I see a dark alternative. Even though bad debt will have been cleared off the banks books more will start to accumulate. With individuals upside down (owe more that their home is worth) their options will remain limited and we will end up in the same predicament. If we are still far from the bottom the only answer is bank failure or a further infusion of billions of dollars.

We are now part of a world economy which is much larger than us here at home. If we plan wrong the implications could be worldwide. We can only hope that Henry Paulson, the Treasury Secretary and Ben Bernanke, Federal Reserve Chairman have calculated the $700 billion to correlate to the timeframe it will take the housing market to pull through its current status.

In conclusion all I can say is that I hope that the momentum of the plan will help us realize the bottom of the real estate cycle nationally and put us on a path to recovery and stability.

Michael Shotnik

Direct Mortgage Banker

Summit Home Mortgage

303-800-4595

mshotnik@summit-mortgage.com

Hope for Homeowners - New FHA program!

Summit Home Mortgage — Thu, 25 Sep 2008 13:18:17 -0500

Hope for Homeowners is a NEW FHA program scheduled to be available October 1st!

The Hope program runs from October 1st, 2008 until September 30th, 2011.

The program is designed for homeowners who are current or behind on their mortgage and can document that they are/will be unable to afford the payment.

Details:

1. The mortgagor must occupy the property as a primary residence

2. The mortgagor must have been originated before Jan. 1st 2008

3. The mortgagor must certify that it has not intentionally defaulted on the debt

4. The mortgagor must have a DTI (debt to income) greater than 31%

5. The new mortgage must be determined to be payable by the mortgagor and not exceed 90% of the appraised value.

6. The lender must waive all penalties related to prepayment and fees related to default or delinquency.

7. The refinancing must include extinguishment of all leins on the property thus requiring the participation of all lien holders.

8. The refinanced mortgage must be a fixed rate product with a minimum of 30 years.

9. The mortgagor may not add a second mortgage within the first 5 years of the loan unless the Hope Board determines that a second is required to maintain the property. In that case the CLTV will be capped at 95%.

10. The mortgagors income must be verified with the 2 previous years tax returns.

11. The mortgagor must not have been convicted of fraud within the past 10-year period.

How can you apply?

1. Homeowners can go to their preferred FHA approved mortgage lenders (That's Us).

Michael Shotnik

Direct Mortgage Banker

Summit Home Mortgage

mshotnik@summit-mortgage.com

303-800-4595