First Time Homebuyer Tax Credit

A new client contacted me this week and asked--"Are you an approved lender for the $8,000 first time home buyer tax credit?" Interesting question. The fact of the matter is, the mortgage professional you work with does not make a difference in qualifying for the credit! But, working with a true mortgage professional (rather than a "mortgage guy") will make a difference in how the whole process goes for you!

The next few posts here will help you choose the right mortgage professional. Today's tip:

Ask the following question: What are mortgage interest rates based on?

The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators!

I Love These!

Here's an e-mail I just received from a client of mine. I helped them buy their home and have since refinanced them as rates dropped, effectively cutting more than FIVE YEARS off of the the payoff schedule for their loan!


Peter,
It is has been a pleasure working with you on our three transactions. You are thorough and easy to work with. We have no problem recommending your services to friends and family.
Take care,
Peter and Karina

Tax Credit for Homebuyers

Just signed and sealed… a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

Exciting News

Dear KLM Family:

I'm sorry I've been slow with blogging the last few months. I have been very busy with lots of transactions! Some clients have benefitted from lower monthly payments thanks to a lower 30 year fixed rate mortgage, a few have refinanced into even lower rate 15 year fixed mortgages, and I continue to work with quite a few clients who are going through divorces. And in spite of the slowing real estate market, I have even been financing new home purchases!

Anyway, on to the exciting news.

As you read this blog, I am proud to announce that KLM Mortgage Group has merged with USA Funding Corp! Most of our clients are already familiar with USA Funding as the vast majority of the mortgages KLM has placed over the last few years were funded by USA Funding.

Hopefully you recognize that we have always worked tirelessly to stay ahead of the curve in our ever changing industry. The merger is strategic and vital as it will allow us to continue to provide you with the best possible service, rates, and mortgage products.

I look forward to continueing to be your preferred mortgage professional. Thanks to the long standing relationship between KLM and USA Funding the transition will be seamless for you, our valued clients.

Watch for more exciting updates to be posted!

Peter
414.807.7277

Inside Story: False Illusions and What You Need to Know

The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.

Here's the truth.
Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting THIS LINK.

So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.

Stay with me here...
With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

Here's the most important part.
Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $100 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $100 per month right now, in the hopes of gaining another $15 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.

The clincher is this:
Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $15 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $100 - for every single month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Let's talk further on this - call or email me and let's discuss what this might mean for you.

Peter Kazaks
414.807.7277
peter@peterkazaks.com

Vote!

With all the advertising and press it is hard to ignore the upcoming presidential election. Regardless of your views, I encourage you to vote!

Google has set up a great web site where you can enter your home address and get information on registration and polling locations. Fortunately for us in Wisconsin you can register to vote at the polls on election day! Polling locations will be on the web site mid-October. I encourage you to take a look at this and send the link to a friend!

Here it is: http://googlemaps.com/vote

Fear vs. Courage

Long time no blog! Sorry about that folks. It's been a busy summer! I managed to get married and stay busy with home buyers and divorce clients all summer. I'm excited to have a few minutes to blog, and wanted to share a thought with you about first time home buyers.

Owning a home is what most people think of when they talk about "The American Dream." Quite frankly, if someone is middle aged and is still a renter, most people will wonder what is wrong. Has this renter failed to move forward financially? Are they afraid to take on the committment of owning a home?

The real estate market has been in turmoil the last few months. No doubt about it. What does this mean for first time home owners? Good deals. Mortgage rates are great right now. FHA and WHEDA still allow folks with modest down payments or credit blemishes to get mortgages with great rates.

Don't let fear of the real estate market keep you on the sidelines. A home is a long term investment and now is a great time to evaluate your buying power. If owning a home is a goal for you, have the courage to research it and find out if now is the right time to buy.

If you or anyone you love is considering buying a home, please call me to find out what options are avialable. I am happy to help! I'm in the office at 414.807.7277.

It's Tax Day!

Tax day is a good day in my book, as homeowners get to take some nice deductions on their income taxes! It's also a good day as it also happens to be the birthday of a good friend of mine. How could I forget his birthday?

Here's a tax day fun fact: In 1916 federal law was amended to replace the word "lawful" with "income" in order to make illegal income taxable.

Learning Never Ends

The Wauwatosa Recreation Department is once again presenting Learning Never Ends: An Evening For Adults on April 17. The program includes 21 "mini-courses" on all sorts of great topics ranging from canine obedience to olive oils and vinegars from around the world. I will be presenting a class called "Manage Your Credit; Manage Your Life." Here is a description:

Did you know that insurance companies, credit card companies, mortgage lenders, and even employers want to know how good your credit is? Learn how to have the best possible credit through five secrets of credit scoring.

I would love to see you there! For $10, you can sign up for two courses, each of which lasts about an hour and 15 minutes.

For more information or to sign up, visit the Wauwatosa Rec department's web site by clicking HERE.

Party!

KLM Mortgage is turning three! My how time flies. We are celebrating on Friday April 18, and you are invited! We will have food, fun, and prizes from 8 a.m. to 8 p.m., please stop by!

See Me Speak (again)!

I'll be speaking on credit at the monthly Apartment Association of Southeastern Wisconsin membership meeting on January 21 at 7 p.m. at the Best Western Midway, 1005 S. Moorland Rd., Brookfield. The presentation is titled "Credit Reports - Manage Your Credit - Manage Your Life!"

I hope to see you there!

See Me Speak!

From the Southside Landlord Compact:

Subject: SouthSide Landlord Compact Meeting
DATE: December 20th, 2007
TIME: 11:30 AM - 1:00 PM
PLACE: Old Country Buffet Restaurant
4902 S. 74th Street

Peter Kazaks, a member of the SouthSide Landlord Compact and board member of theApartment Association of Southeast Wisconsin, is a highly respected officer at KLM Mortgage Group who will share his knowledge on consumer credit and answer as many of our questions as time permits.

Conforming Loan Limits Stay The Same

The Office of Federal Housing Enterprise Oversight (OFHEO) recently announced that the conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac in 200 would remain at the 2007 level of $417,000. What does this mean? For most of the U.S., if a mortgage is for more than $417k, it is considered a jumbo mortgage and the interest rate may be higher than on a conforming Fannie Mae mortgage.

FHA

Exciting news! Here at KLM Mortgage Group we have been approved by FHA! This means that I now have some new loan tools in my arsenal. FHA insures mortgages for some folks who don't qualify for Fannie Mae loans. In the last few years the "sub prime" market has been the most convenient source of mortgages for borrowers who don't qualify for Fannie Mae loans, but with the recent fallout in the sub prime market it has gotten much more difficult for borrowers with credit problems and not much cash in the bank to get a mortgage. FHA provides a great opportunity for these borrowers.

Some highlights of FHA insured mortgages:

• No minimum credit score
• Reserves (cash in the bank after closing) are not required
• No prepayment penalties

I'm excited to be able to offer FHA loans for people who previously would have benefitted from the now almost extinct sub prime products. Please call me if you would like to learn more!

Fannie Mae Makes Some Changes!

In response to the rising delinquency rates and the losses they cause to lenders, Fannie Mae announced yesterday that there will be new pricing adjustments for borrowers with a 679 or lower credit score, and for loans where the total loan to value is over 90%.

What does this mean to borrowers? The current underwriting system allow borrowers who are overall very strong (good income, plenty of assets, good equity in the house) but who have less than perfect credit to obtain the best rates available. Under the new structure, credit scores will have a direct impact on rate, and only borrowers with a 680 or better middle credit score will qualify for the best rates.

For the last year I've been talking about how credit is becoming more and more important. Now Fannie Mae has put it in black and white and it will start impacting borrowers in January for mortgages closing starting March 1, 2008.

On top of the increased importance of credit scores, there are pricing changes in the works for transactions where there is subordinate financing, for example a second mortgage or home equity line of credit. For the last few years there have been great mortgage products available which allow borrowers to get the best possible rate on an 80% first mortgage regardless of whether or not there is a second mortgage behind it, even up to 95% total loan to value. While the guidelines are a bit too complex to summarize here, the gist of it is that for most borrowers, if the down payment is less than 10%, there may be a slight increase in rate for the first mortgage.

In spite of all the doom and gloom in the headlines lately it is still a good time to buy a home. It will still be after the new guidelines go into place, but credit and down payment are becoming more and more important.

As always, feel free to call or e-mail with questions--or even leave a comment here on my blog!

Trick Or Treat Times

I'm looking forward to passing out candy on Sunday! As usual, I'll dress up to do it, this year probably as a cowboy with a fantastic Wrangler rodeo shirt and jeans, boots, hat and belt buckle making for a pretty complete outfit.

What are you doing for a costume--for yourself or your kids? Feel free to leave a comment to this post with what you are doing!

Here are the trick or treat times for Milwaukee county:

Bayside: 2:30-5:30 p.m.
Brown Deer: 1-4 p.m.
Cudahy: 2-4 p.m.
Fox Point: 1-4 p.m.
Franklin: 4-7 p.m.
Glendale: 1-4 p.m.
Greendale: 1-4 p.m.
Greenfield: 4-7 p.m.
Hales Corners: 4-7 p.m.
Milwaukee: 1-4 p.m.
Oak Creek: 4-6 p.m.
River Hills: 1-4 p.m.
St. Francis: 4-7 p.m.
Shorewood: 3-5 p.m.
South Milwaukee: 2-4 p.m.
Wauwatosa: 1-4 p.m.
West Allis: 1-3 p.m.
West Milwaukee: 1-3 p.m.
Whitefish Bay: 4-6 p.m.

A Note On Lenders

In the past week I have had two clients ask me how many lenders I work with. It seems that many people think that a mortgage broker who works with a ton of lenders is more qualified to help them than a broker who only works with a couple. While access to the right loan products is very important for me to effectively help you, my client, it is even more important that I know the products and underwriting guidelines and have a deep relationship with the lender who will ultimately be funding the mortgage.

I do have access to many, many lenders. However, I have deep relationships with just a few. Because of this, I have the ability to call my account executive or an underwriter directly--and even drive to their office to meet with them face to face. When you work with a True Mortgage Professional, you benefit not only from your relationship with that person, but also from the business relationships that professional has built over years of working with the same partners who all contribute to a smooth transaction.

The better question would be, "tell me about the relationship you have with the lender which you plan to use for my mortgage." After all, isn't your mortgage the one which is really important?

Giveaways!

"Who Else Wants an Opportunity to Win All Sorts of Prizes Just for Being a Valued Member of the KLM Mortgage Group Family?"

Here at KLM headquarters we all decided that it was time to start having some fun. The best part about it is YOU are going to receive all the benefits! Starting in September 2007 we will be giving away prizes each and every month as our way of showing our appreciation for all of your loyalty and support over the years. Prizes will include Starbuck's gift cards, Apple iPods, Local Area Restaurant Gift Certificates, including Joey Buona's and much much more. There will be two giveaways each month. The first will be a general drawing that all of you will be entered into just by being a valued KLM family member. The second drawing will be specifically for anyone who has a birthday in that month. Unfortunately, over the years some of our information for birthdays did not come with us. This is where you can help us so you can have a chance to win. Just enter your information below so we can update our records and make sure you get entered into all of the drawings you are eligible for.

Prizes Giveaway Entry Form

First Name: Last Name: Best Phone Number: Address Line 1: Address Line 2: City: State: Zip Code: E-Mail Address: Birthday: Other Comments:

Wisconsin Foreclosures

According to the latest statistics, there are three times as many foreclosures currently going on in Wisconsin as there were this time last year. This is a direct result of rate adjustments on the massive number of subprime mortgages placed in the last five years. If you or someone you know has a subprime mortgage and an upcoming rate adjustment is going to make it hard for you to make your payments, there are options. FHA has recently announced a new program which allows favorable refinance options for people who may not be able to afford their mortgage payment due to a rate adjustment.

Call me today to learn more at: 414.453.7620

Read more about the latest foreclosure statistics in this Business Journal article.

Organize Your Life!

Many of my clients are experiencing an important life event--buying their first home, vacation home, or investment property, or downsizing to a condo after adult children have moved on. I don't know how many times I've heard a client say, "I just don't know how I'm ever going to get all my stuff organized for this move!"

Fortunately there is help available! Whether you are moving or just need some advice on how to best organize your kitchen, office, basement or garage, I suggest you check out Organized Transformations. They even offer a FREE 30 minute consultation. Take a look at their web site and give them a call. You will be glad you did!