Credit Scores: The Report Card for Grown Ups

Credit reports are a lot like school report cards.  Both measure how well you are performing using various numerical grades, such as a 4.0 or a 750, and both have to be approved by a person in charge, whether it is a parent or a home lender.

If you’re not a straight A student in Credit 101, here are some tips for making the grade during the home buying process.

1. Types of Credit:   The three most important types of credit are mortgages, student loans or other installment loans, and auto loans.  Credit bureaus place the most weight on these three types of loans when determining credit score. As such, late payments on these are the most detrimental to credit scores.
2. Credit Cards:   Credit bureaus want to see credit card usage, just not too much. The balance from revolving debt, such as credit cards, should not exceed 40% of the maximum amount.  For example, if your credit card limit is $1,000, try to keep the balance below $400.  The goal is to keep the debt to available credit limit ratio low, even if that debt is spread across a few credit cards.  It is better to have two credit cards with balances below 40% of the limit, than to have one card that is always maxed out.  In reference to multiple credit cards, the optimal number of credit cards to have is 3 to 4. 
3. Credit Score Criteria:   Lenders use stricter criteria when pulling credit reports for potential home buyers.   As a result, there is often a small difference between the borrower’s individual score and the lender’s score.  For example, a potential home buyer pulls their credit score with Experian and sees that their score is 700.  It is possible that the lender’s credit report for the borrower may show only 680.  The small discrepancy is related to the type of credit inquiry, explained below.
4. Credit Inquiries:   Credit inquiries are another factor that affects credit scores.  Inquires can be from various types of creditors, and are often classified as either “hard inquires” or “soft inquires”.  Soft inquires are those that are not being reviewed by a prospective lender.  These include checking your own credit, or credit checks made by businesses to offer you goods or services. Hard inquires are those that are reviewed by a potential lender for the purpose of extending your credit for a loan.

Having your credit pulled too often, and by too many different types of creditors will lower your scores.  The credit bureaus do not view “applying for everything” as a responsible decision. The only exception is if you are rate shopping.  Credit bureaus understand that while rate shopping you may have your credit report pulled by various lenders in a short amount of time, so they rarely give you a hit on your score.

For more information about your credit “report card” and how it is used during the home buying process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.

A Touching Note From Our Most Recent Client

In July my former husband and I decided to sell our marital home. Overwhelmed by the reality of moving, I assumed I would rent because I didn’t think I could qualify to buy on my own. Truthfully, even if I did qualify, I was kind of afraid to purchase. At age 54, I hadn’t lived on my own for over 30 years. Was I ready to take on the responsibility and commitment that buying a home entailed? But I discovered that anything I could afford to rent would mean no dog, no piano, and no three bedrooms. With encouragement from my former husband, I decided to see if I could qualify for a mortgage. Despite advice to the contrary, I went with a big name, national bank, and right before my eyes I was pre-approved. Quickly thereafter, with the help of my team of real estate agents (best friends for decades who were so fun to work with), I found a townhome in a lovely little area in Baltimore and decided to put in an offer. The offer was accepted and a moving date set. The process was working out so beautifully it seemed too good to be true . . . and it was. A month into the process the bank rescinded its approval because I didn’t fit the standard mortgagee guidelines.

I found out on a Friday afternoon I wasn’t getting the loan and at that point I didn’t know what to do. What could I do? My moving date was three weeks away. Technically, the sellers could put the house back on the market and find another buyer. I had no idea how to proceed, but my realtor called the next morning to let me know she’d talked to Stuart Epstein from Carrollton Mortgage Services, a Division of Bay Bank NSB, and that I should expect a call from him to discuss the possibility of a loan through them. Stuart and I talked early Saturday afternoon and he explained that his company wasn’t a “big box” bank, but a personal one that also did portfolio loans. This meant they had more discretion as to which loans they approved, as opposed to the big banks which had to follow cookie-cutter (my words) rules. He said that based on our conversation it sounded like I could be a candidate for such a loan.

On Sunday evening at 7 o’clock I met Stuart in his office. I couldn’t believe that he would take time out of his weekend to meet with a total stranger to discuss a loan, but that’s what he did. In less than an hour he explained to me that the next day the board was convening to review potential loans and that he was going to advocate for me. He told me that I would know of its decision before 11 the next morning, and that once given approval it would not be rescinded. I cannot describe how grateful and hopeful I was after that meeting.

On Monday Stuart called me shortly after nine o’clock to tell me I’d been approved! I felt so many emotions all at the same time: relief, gratitude, euphoria, disbelief. I was humbled by the fact that one person’s willingness to advocate for me could result in something so life-changing. I still am. I have a lovely place for my children when they come back from college for vacations and visits. I have something I can take care of on my own, financially & physically. I have a place to begin this next phase of my life that I can call home. All because Stuart Epstein took a chance on me and saw me as a human being instead of a file. Thank you so much, Stuart.

A Client Shares Her Experience With the Stuart Epstein Team

"I'm a 27 year old single mom of 2. I recently closed on my house at the end of August. I had a really wonderful experience with Stuart, Jen & Bob. They were there for me every step of the way. I needed about a dozen preapproval letter, and never had an issue getting one.

I've been under contract for three houses so I had to do three loan applications. The first house fell through due to repair issues. The second was a short sale. I was under contract for two months before that fell through. Luckily I found another home which is the one I'm now a proud owner of. Jen & Stuart were there every step of the way. They helped me get involved in housing counseling classes so I can have a better understanding of the commitment I was entering. They also helped me get the various grants to lessen the closing costs. Overall the experience of buying a home is overwhelming, but I had a very awesome team. I really appreciate all the hard work that went into making my dream of buying a home come true."

- Latosha

Credit Score Limbo: How Low Can You Go When Buying a Home?

Applying for a home loan with a low credit score can feel like playing a game of limbo.  Having a mortgage application denied can feel like being in limbo. 

Borrowers that do not initially qualify for a mortgage due to their credit score can shorten the time they are in credit-rebuilding-limbo with a few simple steps.  Although, it might be helpful to first understand how credit scores are used when buying a home.

Lenders pull a tri-merge credit report from all three bureaus for each potential borrower.  All lenders use the middle score, which for many lenders needs to be no less than 640 in order to qualify a borrower for a mortgage.  

If the applicant’s score does not meet the cut off, the lender will then try to determine the cause of the low credit score.  Collections and judgments are common causes of low credit scores, and must be paid before the mortgage application can be approved. 

Medical collections are different.  Medical debt that collectively adds up to less than $1,000 does not have to be paid off in order to be approved for a mortgage, so long as that debt does not affect the credit score.  Lenders will vary on this rule.  You should ask your lender about medical collections before you do anything with them.

Some creditors will take longer to update paid debts than they do to turn over the debt to collections in the first place.   In this instance, the lender can use written proof that the debt has been paid.  The document must show all the account information, borrower name, and company letterhead.  For the revolving debt, or credit card accounts, the credit bureaus like to see you utilize your revolving credit, but not too much.  It is suggested that the balance remain under 40% of the credit limit to ensure the outstanding debt can be handled and paid timely.  As always, if you remit more than the minimum payment, it is looked upon in a positive manner to show the bureaus continue credit worthiness.

Completing this step is sometimes all it takes to increase a borrower’s credit score that fell just below the cut off.  If a borrower’s credit score is too far below 640, than they may be in credit-rebuilding-limbo for a while. There are still additional ways to speed up the process.

Potential borrowers can gather up documents that show they have been regularly paying their debts, and overnight them with return receipt requests to each of the credit bureaus.  The credit bureaus will then research and update the borrower’s credit score. This usually occurs within a few months.  

Lastly, borrowers may not have to pay off all of their debt in order to qualify for a mortgage. There is a calculation system, available to some most lenders, which allows them to see how credit scores would be affected if the borrower paid off a percentage or the balance of their debt.  Although it is not a certainty, it typically helps borrowers know where they need to be in order to take out a mortgage. 

As the potential borrower pays off their debt and gathers documentation, it is always good to stay in contact with the mortgage loan officer and/or the person that is assisting you in repairing your credit.

If you have any additional questions about how credit scores affect the home buying process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.

Federal Home Loan Bank of Atlanta (FHLB) Is Back!

We have been given a rare opportunity to access the remaining funds for 2013; effective August 26, 2013!

The First-time Homebuyer Program (FHP) provides matching funds for down-payment and closing-cost assistance to low- and moderate-income homebuyers. Federal Home Loan Bank of Atlanta partners with member financial institutions to make awards of up to $5,000 per household. The money is distributed to eligible homebuyers on a first-come, first-served basis.

Check with us on 2013 Income limits to see if you/your buyer is eligible today!

Let Us Work for You!
Please call Stuart directly at 410.491.0200 or sepstein@baybankmd.com.

Another Client Shares Her Experience With the Stuart Epstein Team

I talk the talk, every day, working for Live Baltimore, promoting home buying in Baltimore City. It finally came time for me to walk the walk.

I’m lucky enough to know Stuart and his staff on a professional level through a work partnership. I know Carrollton Mortgage Services promotes the use of homebuying incentives and that when the time was right, I’d feel confident using them as my mortgage lenders. Well, that time arrived and his staff not only walked me through the buying process with a tightly-held hand, they helped me secure over $27,000 in incentives!

We laughed at the settlement table how I was the “poster child,” for renters turning buyers- my monthly mortgage (everything included) is $300 less than the rent I was paying. I wholeheartedly express that Carrollton Mortgage Services is the “poster child” for trustworthy, professional mortgage lenders. I couldn’t be happier with my experience.

- Kate Schroader

Understanding the Home Appraisal Process

Both homeowners who are selling their home and potential buyers are often confused by the home appraisal process.  

Sellers often feel that their home is worth a certain amount especially if they upgraded their home, made improvements or added amenities.  On the other side of the process, a potential buyer may have found their dream home for X amount and wonder if the house is really worth that much. 
These questions and concerns are at the heart of home appraisals. 

At its core, an appraisal determines the value of taxable property or property that appreciates; such as fine jewelry, art, businesses and land.  A home appraisal is simply the opinion of a state-licensed third-party professional whose expertise is in determining the value of the land and buildings or structures contained on the property. 

In residential properties, the appraiser will usually compare the sales cost of other properties in the area.   However, the appraiser will also evaluate the lot size, square footage of finished and unfinished spaces, condition of the property and features like a garage or fireplace.

When it comes to home improvements, it is important to remember that there is no set amount associated with upgrades.  The appraised amount of any upgrade could very well be less than the cost the homeowner paid for the upgrade.  Again, appraisers will look to other properties in the neighborhood with similar upgrades to determine the value.

For example, a homeowner may spend $25,000 on a swimming pool but if the local marketplace can only support a $10,000 pool, then that upgrade will be marked on the appraisal as $10,000.  This is the reason why homeowners should choose their upgrades wisely.  

Lenders determine appraisal guidelines in order to force appraisers to attach a fair market value on a home based on comparable sales.  Comparisons are based on the most recent six months of market activity and often examine closed or pending sales of at least three similar properties.   This process prevents appraisers from over-valuing the home in question; a practice that some believe contributed to the 2007 housing bubble.  Recent Federal rules have been instituted to prevent lenders from having influence over the appraiser’s results by requiring non-interested third party services to select and communicate with the appraiser prior to its completion.

Although the home appraisal process protects the lender from unnecessary risk, it also protects the buyer from overpaying on a house. 

If you have any additional questions about the home appraisal process, please call Stuart directly at 410.491.0200 or email at septstein@baybankmd.com.

Mortgage On A Tight Deadline

We just received this from a recent client:

"I came to Stuart and his team about a possible mortgage on my first house only a few weeks before I was supposed to close. There was a tight deadline in place that we managed to hit. The experience that I had working with Stuart's team was excellent. They had my best interests at hand throughout the process and processed all of my paperwork quickly. I would suggest Stuart and his team to anyone because of their knowledge and professional approach while working with customers." – Matt McEwen

Contact our office today if you are in the market for a new home or re-fi. Call us at 410.491.0200 or email us at SEpstein@BayBankMD.com

Carrollton Bank and Bay Bank Are Tying the Knot

Banking on Positive Changes: Carrollton Bank and Bay Bank Merger

Carrollton Bank is excited to announce to our clients and future clients that the closing date for the merger with Bay Bank has been scheduled for April 19th.   Carrollton Bank has received the necessary regulatory approvals from the Office of the Comptroller of Currency (OCC).

Carrollton Bank’s current and future clients can expect the same great service and same great rates.  Carrollton Mortgage Services will be continuing business as usual especially as the housing market ramps up for the summer season.

Carrollton Bank and Bay Bank are coming together to create a new bank that will be in a better position to compete in the market.  The two holding companies will merge under Carrollton Bancorp and the banks will operate as Bay Bank.  The combined 12 branches will be able to serve a broader market.  The merger is a wonderful opportunity for both banks to become the bank of choice for consumers and businesses who want a bank with deep roots in the community.

Carrollton Bancorp will be a well-capitalized institution in good standing with our regulators.  In 2010 Jefferson Bancorp formed Bay Bank after purchasing the failing Bay National Bank.  This merger will pay off $9.1 million in Troubled Asset Relief Program (TARP) funding to the U.S. Treasury and remove both banks from the limitations imposed by this program.  This allows the new bank to better leverage successful services such as Carrollton Mortgage Services.

The new team of over 160 employees will have a broader reach in the community and the deeper management team will continue to build the bank into a top-tier bank in the region.  Carrollton Bancorp will have a strong Board of Directors made up of both Bay and Carrollton directors who are active in the business community in the region.
The Carrollton Bank and Bay Bank merger will combine the strengths of both organizations to provide better service to customers and be the go-to local bank in the community.

Look out for new exciting mortgage products coming soon!

If you have any questions, please call Stuart directly at 410.491.0200.

Lean Green Mortgages

Going green isn’t just a trend anymore; what started as a not-so-cost-effective environmental movement is now proving to have a twofold benefit, both to our wallets and Mother Nature.  

Most people want to save on their electricity bill.  Double-pane windows, low-wattage lights, better insulation, programmable thermostats, and smart appliances all contribute to reducing a home’s carbon footprint. 

But could an energy efficient home lower your mortgage payments?

The Institute for Market Transformation (IMT) partnered with the University of North Carolina in a study released on March 19th 2013.  The study found that Energy Star homeowners are 32 percent less likely to default on their mortgages.

The results of this study may prompt lenders to reduce the monthly mortgage payment when considering how energy efficient a home is. 

Lenders compare monthly expenses to monthly income when assessing lending risks.  For years, lenders assumed that smaller utility bills from energy efficient homes would reduce lending risk, but there was never any hard data to back up the claims.  Lack of study metrics, and small survey pools yielded inconclusive data. 

For the recent study, the IMT researchers looked at a real estate database from CoreLogic in order gather a sufficient sampling.  In an effort to make the study more controlled, researchers factored in metrics such as the borrower’s credit score, the size and age of the home, local unemployment rates, and local climate and energy prices.

The study examined 71,000 single-family, owner-occupied homes across 38 states and D.C. between 2002 and 2012.  Real estate statistics from California was unavailable due to privacy laws and the real estate data from Alaska and Hawaii deviates substantially from the rest of the continental US, so these three states were left out of the sample.    

Approximately 35 percent of the homes sampled were Energy Star-certified. 

The study measured loan default based on the percentage of homeowners who fell behind on their mortgage by 90 days or more.  Foreclosure laws differ from state to state making measuring default based on this indicator relatively tricky. 

The “urban legend” that lenders had assumed to be true, did indeed turn out to be true: homeowners of energy efficient homes were 32 percent less likely to default on their mortgage.   It is likely that having a couple of hundred extra dollars a month in a homeowner's pocket from energy savings could make well-insulated, tightly sealed homes a safer bet for banks.

However, there could be other factors contributing to these results. Since these homes tend to be more expensive, it is possible that a person who pays a premium for an energy efficient home may also be someone who is already more financially stable or astute than a conventional home buyer, even despite the fact that the study factored in a homeowner’s credit score,

Ultimately, this report could benefit homeowners looking to lower their mortgage. Lenders could better assess risks and offer attractive rates to encourage people to buy efficient homes. 

If you have any questions about this topic, don't hesitate to contact us. You can call us at 410.491.0200 or email at septstein@baybankmd.com.

Mortgage Insurance is Once Again Tax Deductible

There’s a saying that Americans love to quote, “The only thing I have to do is die and pay taxes.”

Well, with tax season coming up, it’s time to focus on the more positive part of that short list.

One area that everyone likes to review is the deductibles, and it’s worth knowing as much as you can before you file your income taxes.

If you haven’t heard about the American Taxpayer Relief Act of 2012, you may want to pay attention.

The act declared that borrower-paid premiums on mortgage insurance are tax deductible through the end of 2013.

Like any deductible, there are a variety of facts you should know before claiming this deduction.
The loans that qualify for this deduction are referred to as “acquisition indebtedness.” In layman’s terms that’s money borrowed to buy, build or substantially improve your residence. The same residence must secure the loan.

Purchase loans and refinance loans are included under this heading and can be as high as the original acquisition indebtedness.

This deductible is the same among all loan types and the money used must be for a qualified residence. The IRS code defines residence and it usually includes the primary, and secondary nonrental home.

Finally, in order to qualify for this deduction, households must have an adjusted gross income of $100,000 or less to deduct 100% of their mortgage insurance premiums. For each additional $1,000 of adjusted gross income above $100,000, the deduction decreases by 10%.

In the case of married individuals filing separate returns, each must have adjusted gross incomes of $50,000 or less to deduct 50% off of their separate returns. For each additional $500 of adjusted gross income over $50,000, the deduction decreases by 5%.

Whenever you take a deduction on your personal income tax, it’s wise to be very careful and thoroughly review the guidelines. In the case that you take a deduction by accident, you might be penalized or audited.

Hiring a licensed tax preparer, or consulting with an experienced and knowledgeable tax attorney can help you avoid penalties and audits, and file a tax return that’s correct and processed quickly.

Debt’s Impact On Your Mortgage

When you apply for a mortgage, the lending institution will conduct research on the debt that you currently carry. This could be anything from a loan for a car to how much you owe on your credit cards.

The credit card debt that you carry can have an enormous impact on the amount of interest you’ll pay on your mortgage, and if it’s too high, you may not even be able to qualify for the mortgage.
Credit cards provide people with the chance to purchase products they need, along with products they want. Whatever you purchase should be paid off within an acceptable period of time.

Companies who issue credit cards report your debt and payments to regulated agencies that in turn create your credit rating. Failure to pay off a credit card, missing payments, or having too many cards can negatively impact your credit card score.

When you apply for a loan, the institution runs a credit report and looks at several different parts of the report.

The first is the debt to income ratio, or DTI. This measurement shows how much of your debt you pay each month in comparison to your monthly income.

A low DTI is a positive sign that you are meeting your debt every month, and a high DTI might dissuade a lender from granting you a loan. Remember that lenders like to see a DTI of below 43% typically, so it’s wise to pay down your debt if it’s currently high.

A second area of the credit score is debt utilization, which measures the ratio of your credit card balance to the card’s actual spending limit. Cards that are maxed out, or near their limit, drag down your credit score.

Obviously, a bad credit rating isn’t what you want. If you’re faced with this dilemma, meet with a financial advisor or planner and to determine the best route to take. You may need to consolidate debt, or halt spending until you can successfully pay off the bulk of your credit card debt.

Remember that you don’t want to get rid of all your credit cards! Banks and lending institutions need to see some record of experience managing debt. Once you’ve cleaned up your credit rating, use the card each month but be sure and pay off most of the debt.

Using credit cards to obtain certain products and services is a way of life, and they provide a resource that should be used wisely. If you think your credit rating could impact your opportunity to get a mortgage, consider finding a reliable financial advisor.

Many times, this advisor works with you to consolidate the debt, while still keeping one or two credit cards open and active. The secret is maintaining the right type of balance that shows lenders you can safely borrow money, and still pay it back on a regular basis.

A Mortgage Primer

Purchasing a house or a piece of property is one of the biggest investments you can make in your lifetime. Your home is the place where you feel safe, and where memories are created.

For many homeowners, a mortgage is an expense that ranks at the top of monthly financial duties. In many cases it might represent the biggest bill you have to pay on a regular basis.

But what exactly is a mortgage?

And how does it work?

It’s not uncommon in today’s world for homeowners to have a vague understanding of their own mortgage and its many components.

Starting from the beginning, a mortgage is a loan made by a bank or lending institution. The principal is the actual amount of money that you borrow from the bank. The interest is the fee you pay to the lending institution or bank for borrowing their money.

Generally there are two types of mortgages – one is a fixed rate and the other is an adjustable rate mortgage (ARM). The fixed rate mortgage has an interest rate that will never change for the life of the mortgage.

Conversely, the ARM has an interest rate that varies over time, and it can fluctuate depending upon several other factors, including the economy, the state of the housing market, and the stock market. ARMs can be tricky to understand, and aren’t typically recommended for first-time buyers.

At the beginning of a mortgage term, which can range from 10 years to 30 in most cases, you’ll be making payments every month. The majority of each payment will go towards the interest, and a smaller part will pay the principal.

Over the time of the loan, the formula changes and more of your monthly payment will go towards the principal versus the interest.

Another component to the mortgage payment is property tax. This tax is calculated by the government every year and varies depending upon where your home is located. Taxes are used to fund everything from police departments to maintenance on bridges and roadways.

Part of the money you pay every month is collected by the lender and placed into what’s known as escrow. This money is then paid out at the end of the year to take care of the taxes.

Insurance represents another piece of the mortgage payment and is collected every month and also placed in escrow. There are two types of insurance, one is for property and protects your home against threats like fire and flood.

The second type of insurance is Private Mortgage Insurance and must be paid by borrowers who put down less than 20% of the actual price of the home or property. Known as PMI, this insurance allows the lender to sell the mortgage to other borrowing institution, who purchase them with the assurance that the debt will be paid.

Mortgages are key for anyone who wants to own a home. Knowing how they work, and what to budget for them each month is financially responsible and key to making sure your home or property is secure.

Contact my office for more information by either email or phone, 410.491.0200.

Big News! The CDA Increased Its Down Payment Help to $6500!

Big News!! The CDA (Maryland Mortgage Program) now offers an additional $1500 in down payment assistance (DSELP) if a buyer is purchasing a short sale/foreclosure!  This makes the total help you can receive $6500!!

Contact our office by phone, 410-491-0200, or email if you would like more information on this program.

Tax Legislation Notice

Our friends at Thomas & Libowitz, P.A. recently released an article explaining the most recent tax legislation. We hope you find it helpful.

The recently enacted 2012 American TaxPayer Relief Act is a sweeping tax package that includes, among many other items, permanent extension of the Bush-era tax cuts for most taxpayers, revised tax rates on ordinary and capital gain income for high-income individuals, modication of the estate tax, permanent relief from the AMT for individual taxpayers, limits on the deductions and exemptions of high-income individuals, and a host of retroactively resuscitated and extended tax breaks for individual and businesses. Here's a look at the key elements of the package:

• Tax Rates. For tax years beginning after 2012, the 10%, 15%, 25%, 28%, 33% and 35% tax brackets from the Bush tax cuts will remain in place and are made permanent. This means that, for most Americans, the tax rates will remain the same. However, there will be a new 39.6% rate, which will begin at the following taxable income thresholds: $400,000 (single, $425,000 (head of household), $450,000 (joint filers and qualifying window(er)s, and $225,000 (married filing separately). These dollar amounts will be inflation-adjusted for tax years after 2013.
• Estate Tax. See this explanation and more in the original article here.

The CityLIFT Program Explained

Many people would rather own a home than rent one.  The choice is easy; you are investing your hard earned money into home equity rather than a putting it into a landlord’s pocket.  But the truth of the matter is that many people have been impacted by our economy’s financial crisis and no longer have sufficient savings for a down payment on a home.  For this reason, Neighborhood Housing Services of Baltimore has implemented CityLIFT. 

The CityLIFT program provides up to $15,000 in down payment assistance or closing cost funds to eligible homebuyers who are purchasing a home within Baltimore’s city limits.  

Although Wells Fargo partnered with NeighborWorks America to provide the funding for this grant, eligible homebuyers do not have to go through Wells Fargo to issue the loan.  In fact Carrollton Bank is now an approved CityLIFT lender.

CityLIFT assistance requires obtaining a first mortgage.  A first mortgage is just a different type of mortgage that has priority over all the other claims of the property.  It does not mean that you have to be a first time homebuyer. If you currently own a home, you must sell it before closing on your new home with CityLIFT assistance.  Your current home cannot be rented or leased. 
 
Eligible CityLIFT homebuyers must be at or below 120% of the Area Median Income for Baltimore City.   There are different income limits depending on the size of your household.  In addition, any borrower on the mortgage must also be an occupant of the house.   

CityLIFT funds are structured as a “soft second” mortgage.  It is a 0% interest loan which is forgiven 20% each year for 5 years.  This is why part of the program requirements are that homebuyers must agree to maintain the home as their primary residence for at least 5 years.

In order to close on the house, potential CityLIFT participants must complete homebuyer education through a third party counseling agency that has been approved by the Department of Housing and Urban Development (HUD).  Some of the topics that are covered in the CityLIFT counseling session are budgeting and credit, financing a home, shopping for a home, and maintaining a home.

If you believe that you qualify or are interested in learning more about CityLIFT assistance please contact our team and we are happy to assist you. You can contact us by phone, 410.491.0200, or email, sepstein@carrolltonbank.com.

You can find a packet that explains the program here.

We Are An Approved CityLIFT Lender!

We are proud to announce that we are now an approved CityLIFT Lender!

The CityLIFTSM program in Baltimore is designed to provide $15,000 in down payment assistance grants to new Baltimore homebuyers and homebuyer education programs in areas most impacted by the financial crisis.  This is a “soft second” mortgage that is forgiven over a 5 year period.

• No First-Time Homebuyer Requirement
• Can use in conjunction with CDA loans and grant programs
• Can use in conjunction with one other city-based program

Call us today to see if you can take advantage of this great program!

STUART EPSTEIN - 410.491.0200

Loan Officer/Branch Manager

 

 

*Rates and program details are subject to change.

 



The Return of the Housing Market – This Time It’s for Real!

In the past five years the state of our nation’s economy has been tumultuous, to say the least. Everyone – from politicians to financial experts – has their own views on which economic indicators are the most accurate for determining true growth.

Of course the housing market is one of the top indicators mentioned, along with the bubble that burst several years ago, and almost doomed the nation to another depression.

But lately, this market is showing real signs of growth – not the kind of rapid expansion that leads to bubbles, but dependable, measurable progress that benefits the economy, and more importantly, people looking to purchase homes.

The Commerce Department recently released numbers in October that indicate builders broke ground on homes at a rate of 894,000. That’s a 3.6% increase from September!

While it’s definitely a great start, delving deeper into another indicator brings even more good news. That indicator is the cost to rent a house and the cost to purchase one.

The price to rent a house and buy one should rise at the same rate over an extended period of time, but when rents rise faster than home prices, it’s a strong sign that the housing market is picking up steam.

Rising rents shows that people realize that the money they’re paying for rent could be used to pay a mortgage. Owning a property is always a smart investment, and because it’s a long-term commitment buyers usually feel secure in the stability of their job and the national economy.

Housing markets across the country are already showing an improved comeback, and unlike other events in the past, it’s a steady growth. This is much better than a bubble because bubbles – as we all know – burst.

Taking a look closer to home shows that the same phenomena in nationwide markets are also true in our area. The growth has been stable, and as new homes are built and purchased, the positive ripple is felt throughout the economy.

Now that we’ve established the housing market is beginning to show signs of growth, it’s worth looking at what purchasing a new house can bring to a person’s overall financial situation.

Of course, purchasing a house is an investment, but remember it’s an investment that will increase in value over the years. Even better, it’s an asset that pays immediate dividends in terms of a place to live and raise a family.

Local homebuilders are already breaking ground on new homes, and that means the inventory is expanding. This provides potential buyers with many opportunities, including the option of having a home designed and built specifically for you.

Whether you’re purchasing an existing home, or looking at new developments, you need a lender that provides excellent financial packages with competitive rates and dependable, accurate insight into the housing market.