I attended a mortgage seminar last week and here are some of the highlights as they pertain to first time homebuyers and the changing lending market

1. Loan Level Price Adjustments for conventional loans. Unit recently most borrowers would qualify for a Lender's best rate with a FICO credit score of 680. Today a multi-teared system is employed. For example today a borrower with a 740 credit score might get 4.875% while a 700 credit score will get 5.375% and a 660 score will get a 7.25%.

Also, keep in mind that FHA, VA, WHEDA and other portfolio loans (not resold by lender to secondary market) do not have these price adjustments.

When we look at properties it is even more important to get pre qualified with credit taken before looking at any houses. Also, since every time you have your credit pulled it could ‘ding' your credit report it might be useful to only use one trusted Lender throughout the transaction. Keep in mind many free credit report services do not provide consumers with actual FICO scores. Call me if you want my recommendations.

2. Many of the conventional 100% LTV (loan to value) programs are gone. Rural Development program (available in Dane County but not Madison and immediate suburbs) is the only 100% LTV program around.

3. $8,000 tax credit for first-time homebuyers (or buyers that have not owned for 3 years) can be claimed on 2008 or 09 tax returns. Home must be purchased between now and November 30 2009. The credit doesn't have to be returned if buyer occupies home for more then 3 years, for those who do not there is a recapture provision. For a $200,000 30 year Mortgage at 5.25% $8,000 would equate to more then 7 months of payments.

4. Condo's have a risk premium associated with them, in the range of a ¼ of a point.

5. More transactions then previous years will ask the seller to buy down points on the mortgage. This will reduce mortgage interest rate, but lender will have to be brought into discussion before writing the offer.

6. Private Mortgage Insurance (PMI) products are seeing dramatic changes.

7. Home affordably index is at it's all time high. It has never been a better time for credit worthy buyers to buy there first home.