5 Must Know Mortgage Topics for Chicago

Brian Cumpton of RWF, Wells Fargo weighs in...



1. Media Information. Know that some information given by the Media, whether online, written publications, or television, could be incorrect. Guidelines and programs have been changing since the Mortgage Market took a major turn in August of 2007. Media outlets often give inaccurate or just wrong information that may pertain to your transaction. Be a wise Buyer or Seller, and have a good relationship with the Mortgage Banker. They will be able to educate you about the current market and what is accessible.

2. FHA’s 3.5% Down Payment program increases Loan Amounts. 3-4 Flats may require a higher down payment than 3.5% depending on the Gross Rents of the property. FHA has raised loan limits for all of 2009, but must close by December 31st, to the following amounts:

- 1 Units $417,000 - 2 Units $533,850 - 3 Units $645,300 - 4 Units $801,950
Buyers can now purchase a higher priced home with the less up front through the end of 2009.

3. 1st Time Buyer Tax Credit for 2009. Receive up to an $8,000 tax credit if you’re a 1st time buyer. A 1st time buyer is defined as a buyer that has not owned a property in the past 3 years and has not filed any real estate deductions. This is available regardless of any mortgage program a buyer chooses.

4. Renovation Lending is red hot. Buyers are renovating property today at an accelerated amount. Due to a higher number of foreclosures and reduced prices within the market, buyers are choosing to renovate the home when purchasing with renovation financing... all in one transaction. Renovation financing will recognize the higher value based on the Cost Breakdown of the work and the Comparable Sales in the area. These programs are a great way to upgrade the home while using renovation financing to limit the up front expenses.

5. Mortgage Rates are at historic lows. With today’s Buyer’s Market and with historically low interest rates, buyers are in the drivers seat. With home affordability coming back into normal ranges, it’s realistic for today’s buyer to have more buyer power. Take advantage of this market.


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