We are in a Perfect Storm right now.  First time home buyers around Atlanta right now have:

1. The highest home affordability factor since before 1970
2. The lowest mortgage interest rates since the 1950’s, thanks to the Fed buying mortgage baced securities
3. An $8000 federal tax credit for first time home buyers
4. An $1800 State of Georgia tax credit for buying a home

I announced on this blog recently that I was teaming with some real estate professionals from around Atlanta to launch a big, and very important initiative: Atlanta’s Million Dollar Challenge.

The goal is simple: To help 125 first time home buyers around Atlanta to purchase their first home by November 30, 2009.  That is the final day to close on home and receive the $8000 federal tax credit for first time buyers.  If we reach our goal of 125 buyers each receiving the $8000 tax credit, then we will have helped bring $1,000,000 of federal tax dollars into our community.

As part of our effort, we aim to educate Atlanta first time home buyers about the tax credit and what that will do for them; as well as the home buying process.  And, a series of seminars has been announced that will help facilitate this education process:

Event 1: Thursday, August 20  @ 7:00pm
Sheraton, 2844 Cobb Parkway SE, Atlanta, GA 30339 – Across from Cobb Galleria

Event 2:  Tuesday, August 25 @ 7:00pm
ROAM 5815 Windward Parkway, Alpharetta, GA 30005 – Across from Windward Marriott

Event 3:  Wednesday, September 2 @ 7:00pm
The 1818 Club 6500 Sugarloaf Pky, Duluth, GA 30097 – in the Gwinnett Chamber of Commerce Building

So, sign up to reserve your seat HERE.  And, we will see you at the event, and look forward to helping you receive your part of the $1Million Mortgage Challenge.  Sign up today!

I read just last week a study by the National Association of Realtors that fully 50% of the prospective first time home buyers did not know anything about the $8000 federal tax credit if they buy a home by November 30, 2009.

And my experience with Atlanta area first time home buyers?  The same.

So I want to pass along this FAQ sheet for first time buyers.  I found it quite informative.  Pass it on to a young renter, who is thinking of buying their first home: tax-credit-flyer1

I got back from vacation at the beach yesterday, and after unpacking the car, turned on the Fox Business Chanel.  I cannot remember the commentators name, but she was bantering with the guest about how difficult it is refinance a mortgage these days.  One complained that she has a great credit score, but now can only refinance at 65% LTV (Loan-to-Value) rather than the 80% LTV that she is acustomed to.  The guest huffed, “Yeah, and self-employed people can just hang it up.  They can’t get financed”.

I am not sure where they are getting their information; but it is patently false.  I am sorry that the news commentator has had a tough time refinancing, but a mortgage refinance in Atlanta is not that difficult.

First, it is easy to finance up to 90% of the value of the home, to $417,000; and up to 97.75% of the value of the home up to $346,240 with an FHA refinance.  Now, news commentators make a nice living, so she may have a Jumbo loan.  Assuming it is under $1.5MM loan amount, then it is quite possible to refinance at 80% of the home’s value.

Regarding self-employed borrowers, we used to finance nearly all of them with “stated” income, or non-verified income loans.  It was just so much easier.  Now, it’s back to old school of getting their tax returns and {drumroll} actually READING them.  That’s right, we need to read tax returns again.

Even I had to brush up on how to read tax returns correctly.  I had not done it in that long.  But, like riding a bike, it was only a little uncomfortable to get back in the swing of reading tax returns for self-employed borrowers.  And they are buying homes, refinancing homes, and getting approved for home mortgage loans, all around Atlanta.

But then, news outlets thrive on bad news, I suppose.

Merideth Whitney was one of a small handfull of people – people with a microphone that Wall Street listens to – who accurately predicted the fall of the financial industry back in 2007.  In my book, that’s a feather in her cap.

Another kudos goes out to her for this call, made yesterday.  She is right on with the analysis that, A) the “Making Home Affordable” plan signed into law in March by Pres. Obama will be the first bit of government aid that will actually help the homeowner.  And, B) this plan will put a LOT more money back onto the balance sheets of large banks and financial institutions.

A win-win.  Well, yes.  Just don’t look at the taxpayer footing the bill for a third leg.  But, for the bank and the underwater homeowner, this can be a good thing.  An interesting listen to Meredith Whitney:

I perused this article this morning, which is one of many that back up what I have been saying in this blog for some time now.  Once the Fed stops buying Mortgage Backed Securities, mortgage rates will increase.  And, probably dramatically so.  Recently, I saw a Mortgage Bankers Association article which indicated that the Fed is currently buying 85% of the MBS that are being sold.

That is a number to give you pause: 85%.  It is highly unlikely that other buyers will step in to fill that gap when the Fed stops buying.  So, what will happen?  Only one thing can happen.  Mortgage interest rates will rise.  Will they double like the above article says?  Perhaps.  But even if they go up by 50%, that still puts a lot of perspective home buyers out of the market.

So, if you are going to buy, buy now.  And, if you are going to refinance into a long-term fixed rate loan, do so now.  You will be happy that you did.