I constantly hear from both Sellers and Buyers that getting a mortgage is very difficult today, and it’s nearly impossible to obtain a home loan in a reasonable amount of time. This is a problem that affects not only the homebuyers seeking the loan, but also the seller. If the financing does not come through then the whole deal falls apart and it’s right back to square one with the home back on the market after months of wasted time.
So if you’re experiencing trouble getting a mortgage, I want you to know three things:
1. You are NOT alone
2. We feel your pain
3. Whether a Buyer or a Seller, you have options to avoid this problem
In this post, I want to share with you the story of a co-worker here are Rent2ownMarket.com who is currently having trouble getting a mortgage.
She and her husband have decided to purchase a new primary residence. They have strong credit, and enough income and assets to afford their new home. Because of this, they thought that getting a loan would be easy. After all, they have bought and sold many houses in the past, and haven’t experienced any trouble getting a mortgage. As they have found out, the reality is in today’s market getting a mortgage can be a nightmare even for highly qualified borrowers.
In the past, 30 days was the benchmark for getting a loan approved. They are well past 30 days and everyone involved in the transaction is nervously waiting to hear from the lender that the loan has been approved. The underwriting process, which was supposed to take no longer than 14 days (which was the published turn time that the lender provided to them), is now going on 30 days, and there is no end in sight. The reason given for this longer time frame is that due to new government regulations and stricter guidelines from Fannie Mae, lenders have had to add additional steps to the underwriting process.
The long, drawn out process is not only stressing them out, but is exposing them to liability from the Seller. Two weeks past the closing date, the Seller, who needs the proceeds of this sale to buy his next home, is getting very uncomfortable. He could decide at this point to start charging them fees, or to put the home back on the market and try to find a new buyer.
Working to get this mortgage approved has been almost a full time job for my colleague. Every day the lender comes back requesting additional information that has very little to do with the loan at hand. She told me the other day, “At this point, I am surprised that they haven’t contacted my parents to make sure that I was raised properly.” Due to their excellent credit score, I’m sure they will eventually work through all of the hassles the lender is putting them through, but others will not be so lucky. However, if it’s this much trouble getting a mortgage with good credit, then getting a mortgage with low credit scores is virtually impossible.
An alternative for people who have been denied or are having trouble getting a mortgage, is to buy a home through our Seller Financing Program. With our program, you bypass the need to apply for a mortgage with a lender – and are saved from all of the hassle and stress associated with getting a mortgage. In most cases, within 5 to 7 days of application, you will know if you have been approved to buy one of the homes that we have listed. Working with us to buy your next home is truly the easiest way to obtain home ownership. No hassles, no stress, no long waits – and happy endings.
According to this report from Zillow’s Mortgage Marketplace — SEATTLE, Sept. 27 :
Nearly one-third of Americans are unlikely to qualify for a mortgage because their credit scores are too low, making homeownership out of reach for many. This is according to an analysis of more than 25,000 loan quotes and purchase requests on Zillow Mortgage Marketplace during the first half of September.
Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25 percent. Nearly one-third of Americans, or 29.3 percent, has a credit score this low, according to data provided by myFICO.com.
Here at Rent2ownMarket.com, we take issue with this report and want to set the record straight – Homeownership is NOT out of reach for these Americans! Our Seller Financing Program provides immediate home ownership to homebuyers regardless of low credit scores. Furthermore, that same Seller Financing Program features properties with no down payment solving yet another problem that vexes even home buyers with good credit scores.
The reason this is possible is that the sellers of homes in our Seller Financing Program are willing to wait until later to get paid. The amount of time they are willing to wait is called the Length of Term and it varies from property to property – anywhere from 2 to 30 years, but the most common are 5, 7 and 10 year terms. This is great news for homebuyers with low credit scores because it provides them plenty of time improve their credit before needing to obtain a mortgage. During the term, buyers will make a monthly payment similar to what they would make if renting. However, the vast majority of this monthly payment is tax deductible according to IRS Publication 537 – Installment Sales.
Homebuyer Tax Credit Extended for Certain Military Personnel…
Some buyers can still get First-time Homebuyer Tax Credit up until April 30, 2011. The extension applies to military personnel and certain federal employees provided that they served outside the United States for at least 90 days during the period 1/1/2009-4/30/2010.
Here is an excerpt from the IRS website that explains the details:
Additionally, there are new benefits for members of the military and certain other federal employees:
* Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
* In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Question and Answer
Q. Are both spouses required to be overseas for the requisite time period in order to qualify for the 2011 extension to claim the credit?
A. Only one spouse must be overseas on official extended duty for the requisite amount of time for either spouse to be eligible for the 2011 extension of time to purchase a principal residence and claim the credit.
Our Seller Financing Program fulfills all IRS requirements as a means of purchasing for claiming the Homebuyer Tax Credit. The program also offers the following benefits:
To learn more about our programs, you may wish to attend our Free Homebuyer Class – “How to Buy a Home with 100% Seller Financing”.
Before you know it the Homebuyer Tax Credit that was extended and expanded last November will be gone again. Although the credit applies to buyers who close on the purchase by June 30, 2010, taxpayers must purchase or be locked into a contract to close before midnight on April 30, 2010.
That’s only about 8-9 weeks away which may sound like plenty of time, but it’s not. According to the 2009 National Association of Realtors® Profile of Home Buyers and Sellers:
Buyers searched a median of 12 weeks and viewed 12 homes.
So, if you want to buy a home and could use an $8,000 gift from Uncle Sam, then you need to get it in gear. Fortunately, Rent2ownMarket.com’s Seller Financing Program can help.
First, just in case you didn’t realize it, our Seller Financing Program IS a eligible means of claiming the $8,000 First-Time Homebuyer Tax Credit.
The IRS has specifically addressed this issue on their website. It outlines the buyer must meet the benefits and burdens of ownership and includes 7 test points. Here is an excerpt from the Q&A page at www.irs.gov:
Question: Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example, a contract for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer’s payment obligations?
1) the right of possession,
2) the right to obtain legal title upon full payment of the purchase price,
3) the right to construct improvements,
4) the obligation to pay property taxes,
5) the risk of loss,
6) the responsibility to insure the property, and
7) the duty to maintain the property.
Source: First-Time Homebuyer Tax Credit Questions and Answers – Basic Information at: http://www.irs.gov/newsroom/article/0,,id=206291,00.html
Of course, the home buyer must still meet the other criteria such as not having owned another principal residence at any time during the three years prior to the date of purchase.
Now that we’ve got that straight, here’s the really good news… If you are able to rent, there’s a very good possibility that you can actually own using our Seller Financing Program. So, rather that wasting you money on rent, why not get all the tax advantages, and wealth building advantages of home ownership including the First-Time Homebuyer Tax Credit? Our program has no minimum qualifying criteria. Each application is subject to the individual seller’s approval and we are happy to see most applications approved.