USDA Home Loans

USDA Streamline Refinance No Appraisal 2/12

February 6, 2012 by Leave a Comment

kids cost moneyNC Residents are getting an added benefit from the Obama Administration during the next 24 months.  In a program announced for the economically hardest hit counties in the Country, last week USDA announced a new Streamline Refinance Program!

Under the new program folks refinancing their USDA Home Loan will need to meet the following guidelines:

  • No appraisal required – the current residence must be in a USDA “Footprint Area” and currently be insured under the USDA program.  So refinancing from a Conventional loan or a FHA loan to USDA will not work under this program.
  • No Credit Report Required – the current mortgage must be current, and all of the previous 12 months of mortgage payments need to be made on time.  That’s all.  We just verify that you made your house payments on time.
  • Employment Verification Required – we will need to verify that you are employed, and drawing enough money to meet the underwriting guidelines… meaning we must prove that you have enough income to make your house payments.
  • Can not take cash out -  All we can do is finance your current loan balance, and the new Guarantee Fee (PMI) which is 1.5%.

This should be a pretty quick process!  We just did a comparison for a homeowner who purchased their home in June of 2009 in Johnston County.  Their current interest rate is 5.75%.  Even with the change in the USDA Guarantee fee (now there’s monthly PMI for USDA Home Loans) they are saving over $130 a month, and we are not having to charge them ANYTHING!  So the balance on their mortgage isn’t changing much, and they don’t have to worry about an appraisal… and they get to skip a mortgage payment and lower their house payment by $130 (and change) a month!  WHAT A DEAL!

If you want to see if you qualify for this program in NC – call Steve Thorne, USDA Home Loan Expert in NC 919-649-5058.  We have the best mortgage rates available, and we know how to work with USDA!

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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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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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USDA Home Loan Change in PMI 12/11

December 14, 2011 by Leave a Comment

usda home loansUSDA notified us that they are once again changing their “PMI” for their Home Loan Program.  USDA, like FHA and the Veteran’s Administration don’t actually “make” the guaranteed loans, they just insure the lender against default.  That “default” insurance is just like PMI, and unless you are putting at least a 20% down payment – you are going to have some sort of this insurance,

Earlier this year, the USDA RD Single Family Loan Department announced that for the 2012 fiscal spending year, folks who are purchasing a home would expect to pay the following:

The new fee structure for FY12 is as follows:

·         2 percent Upfront Guarantee Fee for purchase transactions.  This means that if you are purchasing a $100,000 house, the loan will be $102,000; OR, you can pay the 2% out of your pocket… or see if you can get the Seller to pay it.  We are NOT seeing many situations where the Seller is doing this, but if you have extra funds, you can go ahead and pay this off.  Unlike FHA, the Guarantee Fee (or Mortgage Insurance Fee) is not refundable.

·         0.3 percent AnnualFee for purchase transactions.  This means that if you purchase a $100,000 house, with a $102,000 loan on it, you will pay a MONTHLY Insurance fee of $25.50 ($102,000 x .3% = $306 divided by 12 months = $25.50 a month)

Even with this additional fee – USDA is still much lower than FHA!

With this newest update, as of Wednesday, December 7, 2011, refinance transactions will be issued by the Agency utilizing a 1.5 percent upfront guarantee fee and a 0.3 percent annual fee.

Unlike the FHA Streamline Refinance, some USDA Home Loans do require an appraisal.**  If you’ve been in your home for several years, this might be the time to Refinance! If you have questions about USDA Home Loans, and purchasing a home in NC – please call Steve and Eleanor Thorne, USDA Home Loan Experts in NC 919-649-5058

**UPDATE!  As of February 2012, USDA Rural Development Single Family Home Program is offering a LIMITED Streamline refinance program available.  Because of this, we MIGHT be able to refinance your USDA Home Loan to a lower rate with NO Appraisal!  Please call us for details!

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USDA Rural Home Loans in North Durham

October 27, 2011 by Leave a Comment

We get many calls from folks who love living in Durham, and want to know if they qualify for a USDA Home Loan. It’s often not a question of the home buyer qualifying for the program – often times, especially when it comes to Durham, there are few HOMES that qualify!  USDA RURAL Home Loans are designed as no money down mortgage loans for home buyers wishing to live in a more rural setting.

Unfortunately, most of Durham does NOT qualify.  As you can see from the Map below, the areas in North Durham past the Eno DO qualify.  Some of the areas near Briar Creek Qualify – and then, around 751 and 55 (think just past South Point Mall towards Wake County) there are properties available for the program.

durham usda

Here’s a close up of the area to the North of the Eno – again, the shaded area does NOT qualify

usda_durhamThere are also parts of Chapel Hill that qualify for USDA RD Home Loans.  In all, NC has over 70 Counties where the ENTIRE County Qualifies for USDA Home Loan financing.  This is a great progam!  It’s cheaper to get into a house than a FHA or Conventional Loan, and it has the cheapest PMI available (almost a hundred dollars a month cheaper than FHA!)!

Basic Underwriting Guidelines for USDA:

  • The Property must be located within the USDA Footprint for Rural Properties in NC
  • The Household Income must be UNDER the USDA Maximum Income Limits for the County (in Durham and Chapel Hill a Family of 1 – 4 the cap is 82,000, Person County is $74,050, Wake County is $90,650 – here’s a video that shows you how to find the maximum USDA Income limit for the area you are interested in)
  • Student Loans – DIFFERENT THAN FHA OR VA LOANS – Any student loan whether it is in repayment or deferred must be included in the qualifying calculations, per USDA Underwriting Guidelines (call us 919-649-5058 for more info).
  • 620 credit score and 12 months with no one writing anything on your credit report except GOOD STUFF.  Okay, so that exact wording is probably not in the Underwriting Guidelines… but if you have a credit score between 580 and 620 – THIS probably means you need 18 to 24 months of no judgements, no collections, AND on time payments.  You should also have at least 3 different companies updating your credit each month.  So, a car payment, a student loan, a credit card, and you’re golden!  We help people with their credit everyday, if you think you are CLOSE to a 580 score – Call us at 919-649-5058.
  • Previous Bankruptcy, Foreclosure or Short Sale?  USDA Underwriting Guidelines are pretty lenient.
  • The property must be Owner Occupied.  This is not a loan for Investment or Rental Property.

If you have questions about qualifying for a USDA Home Loan, an FHA Mortgage Loan… a first time home buyer program or a mortgage loan for Veteran’s, call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We do MANY of these loans every month, and we offer today’s lowest interest rates!

 

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Home Inspection Reports Causing Headaches at Closing

August 5, 2011 by Leave a Comment

Home Inspection ReportsMany home buyers get a home inspection prior to purchasing a new home in NC. We think that’s a great idea, but recently, we’ve run into some last minute problems that you should be aware of! (ESPECIALLY if you are applying for a USDA RD Loan in NC!)

We first saw this problem last fall with USDA Home Loan Financing… now we are seeing it across the board!

Here’s the problem… if the investor, Chase for example, knows that there is a home inspection, they want to see it and they want all issues on the report fixed. Even simple stuff.

We are sometimes advising clients to avoid putting the home inspection on the HUD. Granted, this is a PROBLEM, because it means that if the borrower was going to pay for the inspection at closing or the seller was reimbursing the buyer at closing the buyer has to absorb the cost outside of closing.

But that could be a better scenario than having to do a bunch of insignificant repairs that the investor discovers the day of closing. Or worse – repairs that the buyer was going to do himself after the fact. 

This is a great example of Lender Specific Guidelines.  Each lender has their own requirements… and sometimes those requiremetns are Geo-Specific.  But since we are seeing an INCREASING NUMBER of times where the Lender is asking for the Inspection Report and to see that all repairs are done… I think it’s something you should be talking to your lender about.

If you have questions about USDA Home Loans, and purchasing a home in NC – please call Steve and Eleanor Thorne, USDA Home Loan Experts in NC 919-649-5058

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USDA Home Loans – The OTHER 100% Loan

July 28, 2011 by Leave a Comment

usdaUSDA loans are great for people in Wake County!  This 100% loan has some exciting differences to FHA and VA loans.

USDA loans can be used for Manufactured Housing!  Since more than 35% of all housing in North Carolina is manufactured housing, this is a BIG PLUS!  Remember though, these must be NEW Installations – “existing” trailers do not qualify.

USDA loans have Minimum Credit Requirements and will allow borrowers to use non-traditional credit!  In addition to this,  we CAN use NC Housing Finance Agency “guidelines” to help people who have a score less than 620 qualify!

The only “tricky” things to consider about USDA loans is that they have some “quirky” requirements.  In order to qualify for a USDA the property must be in a qualified area, the borrowers must meet the maximum income limits for the area. USDA DOES NOT have a maximum loan limit based on the county the property is located in (like FHA) and base the loan on the amount the borrower can afford to repay.  They also consider the child care expenses, so when we talk, remember to tell us about those!

Property eligibility is determined by dense population – therefore, the City of Raleigh and Cary do not qualify for this program.  Johnston County, Chatham County, most of Fuquay Varina and Holly Springs – Wendell and parts of Wake Forest do qualify.  To find out if YOUR property qualifies click here.

The Income limits are calculated based upon the number of people in your family over the age of 18.  In general Wake County limits for a family of 4 (2 adults and 2 children) is $86,100.  It varies by area, and we put together a video to show you how you can check to see if your families income will qualify!

For more information on USDA loans contact Steve and Eleanor Thorne 919-649-5058  We still have USDA Home Loan fund available, and we are closing refinance USDA RD Loans too!

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USDA Home Loans in NC Are Affordable!

July 21, 2011 by Leave a Comment

NC Gets Rural FAST!In North Carolina, we get RURAL in a hurry!  I mean you can be in an area where you hear Roosters when you wake up, and only have to drive about 25 minutes to your job at the Research Triangle Park!  One of the programs that folks in this area are interested in, because it IS available – is the USDA Home Loan that’s been specifically designed for those who want to live in a more Rural Area… like Holly Springs, or Wake Forest!

To qualify for the mortgage loan, the home must be inside the “Foot Print” that the USDA Home Loan Program lays out – generally not in a densely populated area like Raleigh or Cary.  All of Franklin County, Johnston County and Harnett County qualify – and there are substantial areas in the Wake, Orange and Durham county areas that qualify too.  If you know an address for a property you are interested in, you can find out if it qualifies by clicking here.

You also need to have “decent” credit, and meet their Maximum Income Limits.  The Maximum Income Limits vary by County.  But for the MOST part, in the Wake/Johnston County area a family of 1-4 people the maximum income is $88,400.  In Durham County, the maximum income for the family is $82,000.

The most important part of a USDA Mortgage Loan is that it is CHEAPER on a monthly basis, and cheaper in down payment than most any other type of mortgage program available!  FHA loans now require 3.5% down payment, and Conventional Loans require 5% down.  Both of these programs have a Monthly “PMI” that is required each month that can add a minimum of $82 to a $150,000 loan!  Va Loans (available to Veterans) are great – but they have their own form of “PMI” that can be as much as 3% of the loan!

USDA Home Loans are 100% mortgage loans, no downpayment, and they have no monthly “PMI.”  The overall cost of the “default insurance” or “PMI” or “Guarantee Fee” is a complicated calculation – but equals right at 3.5%.  Even though this is up from the 2% they charged prior to 5.27.2010 – it’s still a GREAT loan!

If you have questions about a USDA Home Loan, please call Steve and Eleanor Thorne, Professional Mortgage Planners, 919-649-5058

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USDA Home Loan Credit Qualifications in NC

April 15, 2011 by 1 Comment

Good News!  You do NOT need perfect credit to qualify for a USDA Home Loan!  Whew!  This 100% no money down program requires a MINIMUM credit score of 580 – but folks, just because you have a 580 score, doesn’t mean you can purchase. These days – we normally need a score above 620 to get the loan approved by Underwriters.

If you are NEW to the Credit game, meaning you are recently out of school and don’t have any BAD credit, you just don’t have a TON of credit – we can probably get a 620 score approved. In general, you need 3 different trade lines with 12 months of payment history.  Equifax will verify your rental payments (assuming the lease was in your name) and calculate that as a trade line, the other 2 credit repositories will not.

Here are some guidelines on what USDA Home Loan Underwriters will NOT take:

  • Foreclosure within the last 36 months.
  • Bankruptcy within the last 36 months
  • More than one 30 day late in the past 12 months
  • Outstanding Judgments in the past 12 months
  • Two or More missed rent payments within the last 24 months
  • Chapter 13 Bankruptcy – Case by Case review
  • Delinquent tax liens
  • Delinquent student loans

If you are in the market for a new home, and you want to know if your credit will qualify you for a 100%, no money down mortgage loan with USDA Rural Development Mortgage Loan, call Steve and Eleanor Thorne – 919-694-5058 we are NC’s USDA Home Loan Experts!

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USDA Home Loan PMI Will Change 10/1/11

April 14, 2011 by Leave a Comment

If you are looking for a USDA Home Loan in North Carolina – you might want to do it before the end of September!  More Rule Changes! Okay, so you don’t HAVE to buy before October 1st.  It’s not like the 100% no money down program is going away – it’s just changing the way the PMI (which they call Guarantee Fee) is being charged.  Starting at the end of September, the  USDA Rural Guaranteed Loans will have an annual fee that is collected on a monthly basis. The upfront fee will be coming down as the guarantee fee is changed.

Currently, the guarantee fee for this loan is 3.5% of the loan amount which includes the guarantee fee, so it actually works out to about 3.63% of the net loan. If you are into algebra, the equation for that would be purchase price/.965-purchase price=guarantee fee.

The new PMI/guarantee fee will be 1% of the total loan amount plus a .3% annual fee. The calculations on this fee are a lot more complicated because it is calculated on the average yearly principal balance.   So, to do a simple back of the napkin calculation of what it will cost think about this:

$100,000 loan amount – add 1% for the upfront PMI fee.  So your monthly Principal and Interest payments are based upon $101,000.

On a monthly basis, you will be paying $25 a month for that original $100,000 loan during the first year… as your balance goes down, the amount you will be paying will diminish as well!

This will put USDA mortgage loans more in line with other low down payment programs.  However,  USDA Home Loans will still compare much better than FHA or Conventional loans due to the fact that the annual guarantee amount (the monthly payment) will be so low, and will be diminishing each year. In comparison,  FHA loans require a 3.5% down payment, and have an annual PMI (mortgage insurance) rate of .9%, three times what the guarantee fee will be with USDA home loans on a 100% down program.

If you have questions about USDA Home Loan Qualifications, Credit Score Requirements, or want to know what Counties Qualify for this program in North Carolina, Call Steve and Eleanor Thorne, NC’s USDA Home Loan Experts!  919-649-5058

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