FHA Mortgage Loans

I Have A Repo on My Credit Report Can I Buy a House?

February 6, 2012 by 5 Comments

Villages of ApexI’ve had several of these questions lately, and I figured I’d let you know what I’m seeing.

Just because you have a repossession on your credit report does not mean that you have to delay in purchasing a home… but that doen’t mean it’s not a problem.

Okay, so let’s say you have a repossession from 2005.  Next year, 2013, the issue is going to “age” off of your account.  That means, no matter what the creditors are telling you, it’s going to go away – COMPLETELY away.  So, in most cases I don’t recommend that folks shell out $4000 to settle the deficiency balance this year (when it’s going to age off next year) because then it’s going to stay on your account for another 7 years! (To find out how long items stay on your credit report, click here!)

But, it might still be difficult getting a loan with that balance on there!  The critical things to consider are this:

  • How old is the repo?  If it’s less than 5 years old – you might need to make arrangements for payments.
  • What is your credit score?  Need 2 scores over 600 in most cases now!
  • Do you have other good credit?  You should have 3 good accounts!
  • Are there other collections?  If so, they likely need to be paid off before you apply for a mortgage loan.

Every credit report is like a snowflake… it’s different.  There’s no clear way that I can answer this question on a blog post – I’m just trying to let you know that it does not HAVE to keep you out of the mortgage market.

Bottom line – call us and let’s see if we can help you get on a path to purchasing a home!  Steve and Eleanor Thorne, Mortgage Banker in Cary NC, 919-649-5058

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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…

New House PMIIf not, well, there are some cases whereby you can get it Lender Funded (meaning the rate is higher to cover the cost) or you might be offered secondary financing (often called a 80-10-10). OTHERWISE, you’re stuck… but it’s often tax deductible, and PMI is what’s keeping the mortgage wheels rolling, so play along!

If you are applying for a FHA mortgage – you’re insurance premium has gone up to 2.25% with monthly payments of .55% of the total loan amount.  For more information on the FHA PMI (or MIP), please click here.

USDA and VA loans both have Guarantee Fees.  These fees are charged by the respective agencies – but I’ve always considered them as the “insurance” collected to cover the agency in the event of a default on the mortgage.  The main difference between the Guarantee Fees and PMI (or MIP) is that there’s no MONTHLY fee (plus they call it a fee, not insurance)!

If you have additional questions about MIP, PMI or Guarantee Fees, CALL US!

Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058

 

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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.

Do your research!  Work with someone who KNOWS the guidelines!  Call Steve Thorne 919-649-5058.  We offer FHA loans, and we can do the FHA Affordable Program too, which offers expanded guidelines for folks who have not been in the “Credit” Market for very long.  Perfect for those just getting out of college!  Did you know you can purchase a home using FHA as the mortgage with your parents?  Give us a call!

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After Foreclosure – Can You Buy Another Home?

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 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.  [Read more...]

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Can You Refinance To The Lowest Mortgage Rate?

January 1, 2012 by 7 Comments

refinance to low mortgage ratesMortgage Interest Rates are at ALL TIME lows, and many of the people calling us want to know if it’s even possible to Refinance these days!

The answer is maybe.  If you are looking for a “rate term” meaning no cash out – and you haven’t missed any mortgage payments in the last 12 months and you think you have at least a 600 credit score - call me.  We can possibly figure this out.  There are some cool guideline changes coming out between now and the beginning of March 2012 that don’t have any “Loan To Value” requirements for refinances!

If you are getting a divorce – and you have never worked, and you need to use the alimony your spouse is SUPPOSE to start paying you in September to qualify for a home… well, call me… because we need to talk about how this is going to work and what documentation we are going to need.

Every situation is different… don’t GIVE UP before you ASK US what we can do.  Just be realistic, and know that in most cases, cash out – unless you have really good credit scores, documentation and equity in your home, is a difficult loan to close right now.  That doesn’t mean we are not doing them – it just means you might as well load up the suitcase with documentation, cause we’re gonna to need it! [Read more...]

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FHA Seller Repairs Required

December 13, 2011 by Leave a Comment

If you are interesbuying a foreclosed home in ncted in purchasing a distressed home, or one that’s been foreclosed upon, it probably has some “deferred maintenance items” that need to be done.  Getting the Seller to DO those items, however, is normally difficult.  So the question becomes, what will FHA let you leave undone, while still giving you an FHA Loan on the home.

Here’s what we’re seeing with some “unique” foreclosed Bank Owned Properties and  “handyman specials” in December of 2011.

Un-permitted Improvements: 

In the last year or two, we’ve seen a couple of situations where a Seller has finished off a bonus room, upstairs, or converted a garage into a living space.  If this was not properly inspected and permitted, that space will not be calculated in the value of the property.  Sometimes, non-permitted additions and remodels are not completed to code.  For instance, if the garage conversion doesn’t have adequate heat or insulation, the FHA appraiser / underwriter may require that these items be brought to code. [Read more...]

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Qualifying For A FHA Streamline Refinance

December 13, 2011 by Leave a Comment

FHA Streamline refinanceFHA changed it’s guidelines so that VERY little is required to qualify, however, in North Carolina, we have our own State mandated standards, so again – many of the NC Banks can not offer this program the way FHA intended for it to work – WE DO!

FHA says that to qualify:

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Refinance Options For FHA Mortgages

December 12, 2011 by 1 Comment

fha refinanceIf you currently have an FHA Mortgage, we might want to peak and see if you’re eligible for an FHA Streamline Refinance.  This is a great program, that differs GREATLY from other mortgage programs!  Under the updated FHA guidelines, you can refinance to lower payments with No Income Verification, No Appraisal… it’s pretty simple!

The FHA Streamline Refinance program is only available to folks who currently have an FHA home loan mortgage.  Even if you are not currently occupying the property, we MIGHT be able to do a Streamline refinance!  This is not a program designed for those who want to take equity out of their home, only for those who currently have an FHA mortgage on their home, and want a lower mortgage rate!  It’s one of the easiest, fastest ways to get your payments down!

One of the biggest differences between the FHA Streamline Refinance, and a VA Streamline Refinance (or a USDA Refinance for that matter) is that the program does not require an updated home appraisal. [Read more...]

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FHA Repair Requirements 2011 in North Carolina

December 8, 2011 by Leave a Comment

needs to be fixedFHA Mortgage Underwriting Requirements for repairs are really quite different than they were several years ago, before there were so many foreclosed and distressed homes on the market in North Carolina.  In 2011,  FHA Home Loan Financing is one of the most popular programs available, because it is “forgiving” to folks who have had some credit challenges, it only requires a 3.5% down payment, the downpayment can be a gift, and you can purchase the property with a non-occupying co-borrower (a family member).

At the same time, Home Buyers are looking for a great deal – and this often means that they are looking for properties that are foreclosed, bank owned, short sales or… in other words have some “DIY” repair opportunites that need to be made. 

The question becomes, what repairs will FHA Guidelines require be done BEFORE closing, and which items can the home buyer do once they have ownership? [Read more...]

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How to Write a Contract With A DAP

November 24, 2011 by Leave a Comment

First off – A DAP is the “mortgage babble term” for DownPayment Assistance Programs.  These programs USE to be funded by a SELLER paid contribution – these days, however, “the Home seller can only help buyers pay closing costs by giving a portion of their proceeds back to the buyer at closing, in the form of closing costs. The amount of seller assistance that’s allowed depends on the type of loan the buyer is getting.”

Post “housing Meltdown” there are now many laws, guidelines and regulations on the books regarding WHAT a Seller can “give” a Buyer – and what they are not allowed to give.  Sellers are no longer allowed to give home buyers down payment funds. In fact, there are many situations where the Seller is very limited to what they can even pay towards closing costs!

But All Is Not Lost! There’s STILL A Down Payment Assistance Program Available, With over $8,000 in FREE $$! [Read more...]

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