The Different Kinds of Mortgage Insurance

February 1, 2012 by Leave a Comment

New House PMIMost folks want to avoid PMI… but they don’t realize that they are happily paying a “kind” of mortgage insurance no matter what kind of loan they are getting!

Mortgage Insurance is not the insurance that covers you if you die, or are disabled and can not pay the mortgage… it’s the insurance that protects the BANK in the event you go into foreclosure.

Given the recent UP TICK in foreclosures, you can see why banks are requiring higher coverage amounts!  If you are applying for a Conventional mortgage, and you are putting more then 20% on a property you plan to live in, you avoid this additional insurance… [Read more...]

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Calculating FHA Downpayment

January 30, 2012 by Leave a Comment

Be CarefulI’ve been in this business for a while… my daughter would tell you I’m old as dirt… and for as long as I’ve been in this, we’ve had a complicated way of calculating FHA Downpayment.

FHA always used acquisition cost.  How much were you putting into the total aquisition of the property… closing costs and downpayment combined.

With the new rule changes of January 1… we use a STRAIGHT UP number.  The base loan will be a 96.5% of the sales price or appraised value – whichever is LESS.  If you are working with a loan officer is is unfamiliar with FHA – you could find yourself at the closing table wishing you’d done a little more research. I just saw a deal where the loan officer quoted the wrong downpayment amount by $1200. [Read more...]

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100% Loans In Wake Forest, NC

January 29, 2012 by Leave a Comment

Are you looking for a home in the Wake Forest Area?  Great NEWS!  This map shows the property that is eligible for USDA 100% fianancing!  The area that is NOT “peach” qualifies!

See that line where the railroad tracks go from “peach” to white.  That’s Roger’s Road.  This is a GREAT part of Wake County – property values are APPRECIATING here (unlike what you might hear about other parts of the country!), and values are continuing to go UP!

There are income restrictions for these loans, and they are intended for those who have not owned a property in the last three years.  If you would like more information about qualifying for this loan click here.

If you would like to see if the specific property you are interested in qualifies for this loan program, click here.

If you are interested in getting prequalified for a USDA home loan – please call Steve and Eleanor Thorne, 919-649-5058.  It’s a GREAT TIME to buy Real Estate!

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How Underwriters Currently Treat Income for VA Loans

January 28, 2012 by Leave a Comment

We are fortunate to live near several Military Bases, and we are working with several folks who are using their VA benefits to purchase homes.  Mortgage loans backed by the Veterans Administration are 100% loans based on the homes value, and do not generally carry location restrictions like USDA loans do…

We sell our loans to many different banks, and this give us great pricing and great flexability… and is also showing us that underwriters new house for the kidsare looking at BAH and BAS pay (along with other income) differently across the board.  Since this definitely affects how much home you can qualify to purchase, I figured I’d share what we are seeing TODAY, so that you can be prepared.

At least 2 of the banks we send business to allow BAH and BAS if there is no available base housing in the subject property area. (this is checked by location of the base and by a letter from a commanding officer) Other income can not be used with these banks… 

A couple of other banks, will allow BAH and BAS (no matter where the property is located).  Any other military income (submarine income, seaman pay, etc) can be used if we prove that it’s going to continue based on your assigned duties.

Still OTHER banks are underwriting loans and allowing the BAH and BAS (regardless of location), but they require that we prove any additional income is likely to continue for 3 more years… and another underwriter (different bank) also wants a 2 year history of receiving the income.

In other words, they are all over the place.  If you are purchasing a home and using your VA benefits, we suggest that you find a professional who is familiar with the Underwriting Guidelines used TODAY… because there’s no real standard.  Call Steve Thorne, 919-649-5058 for more information!

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First Time Homebuyers – Don’t Just Check On The Rate!

January 23, 2012 by Leave a Comment

 

Buying A House?There are tons of first time homebuyers out there negotiating the best deal on their new home, and now it’s time to get a mortgage.

Most of them only know how to ask one question:  What’s the Rate?

We’ve been in the mortgage business for over 20 years – and the only thing most people know to ask is - “What’s the Rate?” 

While that’s a great question, it’s kinda’ like going into a shoe store and asking if they have any shoes in a size 9.  Just shopping the rate is not necessarily going to get you the best price.

And what is the best price anyway!?!  Most of the clients that call us speak to my husband, Steve.  The first thing he ALWAYS says is, “hey, thanks for calling!  So you were referred to us by (insert name of friend, co-worker, agent, builder)?  That’s great!  [Read more...]

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Using USDA To Purchase A Home After Foreclosure

January 20, 2012 by Leave a Comment

If you are one of the millions of families that lost their home in the last couple of years to Foreclosure… you might think…foreclosure

Been There – Done That

You might not want to own a home again!

But if you’re one of those folks who truly does want to purchase again, here’s some potentially good news.

USDA says that they will allow you to purchase a new home to owner occupy, after foreclosure if you’ve done the following things:

  • Wait 3 years from the date of the Foreclosure.
  • Re-establish Credit
  • Have Credit Scores that meet the guidelines (as of the date I am writing this, that means you need a 620 score.)

Here’s the other part… you need to DOCUMENT what happened, and why you ended up in a Foreclosure.

FHA Requirements for purchasing after Foreclosure

“FHA insured mortgages are generally not available to borrowers whose property was foreclosed on or given a deed-in-lieu of foreclosure within the previous three years. However, if the foreclosure of the borrower’s main residence was the result of extenuating circumstances, an exception may be granted if they have since established good credit…This does not include the inability to sell a home when transferring from one area to another.”

So you MIGHT be able to buy after two years, but we see VERY few exceptions made on this time frame. [Read more...]

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What To Dispute On Your Credit Report

January 18, 2012 by Leave a Comment

 

If You’re Huntin’ A Better Credit Score – Let Sleepin’ Dawgs Lie!

don't dispute everythingIf you are looking for a new home, you are probably aware that your Credit Score is a CRITICAL item in determining your interest rate and possibly how much house you can buy / qualify for!

We talk to people every week who receive a copy of their credit report, see some derogatory remarks from 2005 and immediately start writing dispute letters.

This might not be your best strategy (each case is different of course), because the credit score is really an indication of what you are about to do.  It tries to PREDICT what your credit behavior is going to be based upon RECENT activity.

So what happened 3 years ago, is not really as important as what happened 18 months ago!  If it is a MEDICAL COLLECTION – there’s a possibility it won’t have to be paid… most judgments and liens will have to be cleared before you can get a mortgage.

If you are considering a purchase, and want to know more about your particular credit report and circumstances, to get pre-qualified…  call Steve and Eleanor Thorne, Mortgage Banker in Cary, 919-649-5058

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Mortgage Programs To Purchase Foreclosed Property

January 17, 2012 by Leave a Comment

 careful buying foreclosuresThere are tons of people who know that we are at or near the bottom of the real estate market, and they are ready to purchase a home.  Many of the folks we are talking to are looking at foreclosed property, because they believe they can get the best deals. 

There are some special points you should remember:

  • Many Banks will not finance manufactured housing.  If you are considering a mobile home, foreclosure, please tell your mortgage lender about the property type UP FRONT (If the lender is seasoned they know to ask this), because it makes a huge difference.

In NC, the mortgage lender has restrictions on their ability to pay closing costs if it is a very small home (less than $75K) .  If you have very little, to no money, to put into the transaction, you should ask HUD (or Freddie, or the bank – whoever is selling the property) to pay for your closing costs as part of the contract.

We do not offer any 100% financing programs that will allow you to make improvements/repairs to the property.  We do offer rehab loans, for properties with a total value (meaning purchase of the property plus the cost to rehab) of less than $295,000 in Wake County. 

Generally, the borrower must make a 3.5% downpayment for this loan.  HOWEVER, if you are purchasing a HUD foreclosure, we might be able to do a $100 downpayment.  It must be negotiated into the contract with HUD.  (SEE DETAILS BELOW!)  [Read more...]

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NC Counties That Qualify for USDA Home Loans

January 17, 2012 by Leave a Comment

My daddy always says that we “Get Rural Fast” in North Carolina… one minute you can be neighborhood after neighborhood, and 25 minutes later you are in the country! This works well for those who are looking for a home with no down payment requirements!

Every square mile of 73 North Carolina counties qualify for USDA Home Loan financing! Look at the map below – if there’s no star in the county – the whole county qualifies for this financing!

NC County Map of USDA Home Loans

NO STAR means whole county qualifies for USDA Home Loan

There are five counties that are generally considered part of the “Triangle” in the middle of the state… Wake, Durham, Johnston, Orange, and Chatham.  All of Johnston County and Chatham County qualifies for USDA Mortgage Loans – much of Orange County qualifies, and there are many areas in Durham and Wake county that qualify too!

You can watch a video that explains how to go onto the USDA Website and look up a specific property address!

To learn more about USDA Home Loan Qualifications in North Carolina Click Here.

If you are considering a home purchase in North Carolina, and you want more information on the USDA Home Loan program – please call Steve and Eleanor Thorne, 919-649-5058.  We are NC USDA Home Loan Experts!

 

 

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Documenting A Mortgage Loan in 2012

January 16, 2012 by Leave a Comment

Yep – We’ll Take a Thumbprint of Your Second Child, Too

Tons of PaperworkIf you purchased a home in 2006 and find yourself in the enviable position of purchasing again now… you might be surprised by some of the ways the mortgage process has changed.

Oh Sure… you’ve heard that it’s hard to get a mortgage, but you’ve got 800 credit scores, a ten year job, cash in the bank (2.5 kids AND a dog!)!  You might think the stories about a tough time getting a mortgage is all about those “other” poor souls.

These days… it doesn’t matter how much money you make, what a great deal you got on the house - or if you have 2.5 kids… we want to know everything, and we have to PROVE/Document everything.

AND… just because your loan is approved does NOT mean that we are through asking you for more stuff!  Once a loan is approved by an underwriter, it OFTEN (luck of the draw) goes through a rigorous quality control audit.  The audit can require (in addition to any details the underwriter requested) a full tax return, or an updated credit supplement, or an additional bank statement.

To understand this a little better, consider the Privacy Acts, and how we now use the Internet to store varying data.  You might say on a loan application that your telephone number is 222.334.4555… and that MIGHT be the right number.  However, when the QC Auditor goes to verify that telephone number as yours (usually online through a service like Reverse Lookup) – they find that it’s your CELL number, and therefore not listed. [Read more...]

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