VA Loans and Credit Scores

January 15, 2010 By 3 Comments

home loans for veteransHave you seen the new Remax Commercial that says “when he gets home… we’re going to buy a new home!” And then it pans to the guy overseas, and he’s looking for homes on the Internet!  LOVE that Commercial!If you’re one of those folks looking forward to taking advantage of your VA Benefits, check out your credit score!

The Veteran’s Administration does not actually make VA home loans… but they INSURE them.  Because of this, the VA gives guidelines for who they will insure, and what their credit scores should be. I’ve recently been writing that Credit Scores are getting tighter in NC, and I’ve said that “it’s the Golden Rule” because the Banks are the ones who are setting their OWN guidelines about who they will loan money to and under what circumstances. [Read more...]

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Filed Under: credit, VA Mortgage Loans Tagged With: , , , , , , ,

FHA Qualifying Requirements

July 31, 2009 By 2 Comments

Many of the folks we are talking with right now want to purchase a home using the FHA Mortgage Loan program – and then taking the $8000 Tax Credit (you can get that back NOW, like in 12 weeks, by amending THIS YEAR’s TAX RETURN!) to “pay yourself back” for the downpayment!

Here are qualifying requirements for an FHA Mortgage Loan:

  • You can have a Co-Signor on a FHA loan.
  • You need to wait at $8000 Tax Credit Updateleast 2 consecutive years following a bankruptcy.
  • Any history of foreclosure must be at least 3 years old
  • You must have had a stable income for at least 12 months and proof that you have paid all your bills.
  • You must be able to make a 3.5% down payment, which is considerably lower than conventional loans.
  • The Downpayment can be a GIFT!
  • There are also eligibility requirements for the home. Properties that are eligible for a FHA loan include: single-family homes, 2-4 unit properties, condominiums, double-wide manufactured homes and modular homes. Ineligible homes include (but are not limited to) co-ops, boarding houses, commercial properties, hotels, and private clubs. A home is also ineligible if the seller acquired the house within the past 90 days. For any property over 10 acres, the loan will be based on the price of the house and the first 10 acres only. Additionally, the property must be used as a primary place of residence.
  • You can count Part Time Income for a FHA Loan
  • You need a credit score of at least 620 to get our best priced FHA Loans… lower scores might qualify- call us for details!

If you are considering a PURCHASE of a home in Cary, NC – or refinancing a FHA Mortgage in Raleigh, NC Steve and Eleanor Thorne – Connect With Us on Facebook, Inc. Cary NC, 919-649-5058 for the BEST (read cheapest!) FHA Mortgage Rates!

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Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , ,

First Time Home Buyers Get $8000 in NC

March 20, 2009 By 2 Comments

With the new programs adopted by the Government, there’s a great “gift” for First Time Homebuyers!

It’s a G-I-F-T from the Government, and unlike the $7500 credit given out in 2008, you do NOT have to pay it back, as long as you are actually going to live there for 3 years!

This makes getting a mortgage so much better!

Here are some of the details!

  • The $8000 tax credit or 10% of the home’s purchase price, whichever is less, is available only for first time home buyers (Definition of a “first time home buyer” is a buyer who has not owned a principal residence during the three-year period prior to the purchase)
  • There is a $75,000 adjusted gross income limit for tax filers filing as single and $150,000 limit for joint return filers.
  • The $8000 tax credit is available only for primary residence purchases.
  • The tax credit does not require a repayment in most cases.
    • The tax credit does have a repayment provision if the homeowner does not occupy the property for a minimum of 3 years from the closing date.
  • The home buyer must purchase a home between January 1, 2009 and December 1, 2009.  (Remember – this does NOT go through the end of the year!)

The $8000 tax credit is received when you file your tax return.

Frequently Asked Questions:

How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

I read that the tax credit is “refundable.” What does that mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

For more information on the 2010 Tax Credit click here.

If you have questions about purchasing a home in NC (or refinancing into a lower rate), we would love to help!  Please call Steve and Eleanor Thorne, Mortgage Lenders @ Connect With Us on Facebook, 919-649-5058 x 104

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Filed Under: First Time Home Buyer Tagged With: , , , , , , , , , , , , ,

FAQ RE: Obama Loan Modification Program

March 17, 2009 By 3 Comments

The Obama Administration announced plans to allow for special considerations in cases for folks who are currently behind on their mortgages, and headed into foreclosure.  Those guidelines apply only to mortgages that are currently held by Fannie Mae or Freddie Mac – but could impact a significant number of people in NC.

Here’s a list of Frequently Asked Questions recently published:

The Obama Administration unveiled the final details of its “Making Home Affordable Program,” which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

One of the initiatives in this program is aimed at helping struggling homeowners “modify” their loans to avoid foreclosure. Here are some common Questions and Answers about the Modification Initiative in the program.

MODIFICATION INITIATIVE

Who is eligible?

To apply for a Home Affordable Modification, you must:

  • Own and currently occupy a one- to four-unit home.
  • Have an unpaid principal balance that is equal to or less than $729,750 (for one unit properties).
  • Have a loan that was originated before January 1, 2009.
  • Have a mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31% of your gross (pre-tax) monthly income.
  • And, have a mortgage payment that is no longer affordable, perhaps because of a significant change in income or expenses.

If you answered YES to all of these questions, you may be eligible for the Modification Initiative.

Am I eligible if I missed some mortgage payments?

Yes. If you missed two or more mortgage payments and answered “yes” to the Modification Initiative requirements above, you may be eligible for a loan modification.

Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification?

No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. Examples of being “at risk” include facing a significant increase in your mortgage payment or a reduction in your income. Contact me to discuss your specific situation.

I have a second mortgage. Am I still eligible?

Yes, but only the first mortgage is eligible for a modification.

I have an FHA loan. Can it be modified under this program? Are all loans eligible?

Most conventional loans including prime, subprime, and adjustable loans; loans owned by Fannie Mae and Freddie Mac as well as private lenders; and loans in mortgage backed securities are eligible for a modification. Contact me to discuss your specific situation.

I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on two, three and four unit properties are eligible as long as you live in one unit as your primary residence.

What does the Modification Initiative do?

If you are eligible for this plan and are approved, you will be put on a trial modification for three months at a new interest rate and payment.

If you successfully make the payments and are current at the end of the three-month trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years.

What happens after five years?

Beginning in year six, the rate may increase no more than one percentage point per year until it reaches the “rate cap” in your modification agreement, which is basically the market interest rate on the date the modification is finalized.

That means your rate can never be higher than the market rate on the day your loan is modified. This is great news because rates are currently at historic lows… and you can lock in now.

How low can my interest rate go?

Treasury is providing incentives to your investor to write the interest down as low as 2%, if necessary to get to a payment that you can afford based on your income.

What happens if that is not enough to get to an affordable payment?

If a 2% interest rate is not enough to bring your payment down to 31% of your gross monthly income, your servicer can extend your payment term–for example, give you a 40-year loan rather than a 30-year.

If that is still not sufficient your servicer will defer repayment on a portion of the amount you owe until a later time. This is called a principal forbearance. A portion of the debt could also be forgiven. This is optional on the part of the investor. There is no requirement for principal forgiveness.

Are there any other benefits to this program?

Yes. For every month you make a payment on time, Treasury will pay an incentive that reduces the principal balance on your loan. Over five years the total principal reduction could add up to $5,000.

How much will a modification cost me?

There is no cost to borrowers for a Home Affordable Modification. You will not be asked for any money.

If there are costs associated with the modification–such as payment of back taxes–your servicer will add those costs on to the amount you owe. Your servicer will also forgive any late fees.

Is housing counseling required under this program?

Borrowers are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan.

However, housing counseling is only required for borrowers whose total monthly debts are very high in relation to their incomes (55% of your gross monthly income).

If you would like to speak to a housing counselor, call 1-888-995-HOPE (4673).

How do I apply for the Modification Initiative?

If you meet the general eligibility criteria for the program, you should gather the following information:

  • Recent pay stubs to help determine your gross (before tax) household income.
  • Your most recent income tax return.
  • Information about your assets.
  • Information about any second mortgage on your house.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all other debts, such as student loans and car loans.
  • A letter describing the circumstances that caused your income to be reduced or expenses to be increased (for example: job loss, divorce, illness, etc.).

Once you have this information, call your mortgage servicer and ask to be considered for a Home Affordable Modification. The number is on your monthly mortgage bill or coupon book.

My loan is scheduled for foreclosure soon. What should I do?

If your mortgage has been scheduled for foreclosure or if you have missed one or more mortgage payments, you should contact your servicer immediately.

You may also want contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).

We do not “normally” suggest that people work with a modification company – however, if you are considering this type of transaction, we can recommend some guys that have a good track record!

Call us.  Steve and Eleanor Thorne at  Connect With Us on Facebook in Cary, NC 919-649-5058

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Filed Under: Housing News Tagged With: , , , , ,

What Improvements Can You Make with a FHA 203K Loan For?

March 2, 2009 By Leave a Comment

renovate homes!FHA has a great program to help with renovating a new home!  It’s called the 203K program - and if you’ve been on Craigslist, you’ve definately seen, “this property is eligable for FHA 203k loan!”

It’s a great program for making up to $35,000 of improvements to the home.  Many time, foreclosed property has what Realtors refer to as “Deferred Maintenance.”  This means that people who could not afford to make their house payment – also could not afford to have the termite / wood rot repaired, or the stove fixed, or the carpet replaced… So this loan is PERFECT for those kinds of updates!

What items can you update – and which ones can you NOT do with this loan?  Here are some basic guidelines:

Eligible Improvements/Work

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor Remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storm windows and doors, insulation, weather
  • stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges,
  • refrigerators, washers/dryers, dishwashers and microwave ovens
  • Accessibility improvements for persons with disabilities
  • Repair/Replace/add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing, including mold removal
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement
  • Connection to public water or sewage system

Ineligible Improvements/Work

  • Major rehabilitation or major remodeling, such as the relocation of a wall
  • New construction (including room additions)
  • Repair of structural damage
  • Repairs requiring detailed drawings, plans or architectural exhibits
  • Landscaping or similar site amenity improvements, including fence
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) draws/payments.
  • Any work requiring a plan reviewer
  • Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the mortgage closing.

REMEMBER!  If you are a First Time HomeBuyer, you might qualify for a $8000 tax credit (that you don’t have to pay back!)!  Click Here for more details!

Many loan officers do not offer this program, and are not familiar with the process.  Please call Steve and Eleanor Thorne, Connect With Us on Facebook in Cary, NC for details!  919-649-5058

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Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , , , , , ,

First Time Home Buyer Tips!

February 26, 2009 By 1 Comment

First Home!If you are a First Time Homebuyer, the government recently initiated a program that could help you!

They are G-I-V-I-N-G you a $8000 credit that you can use on your 2009 and 2010 taxes! For details on this credit, click here!

First Time Homebuyers have many loan program options.  If you, or your spouse, are a Veteran then you qualify for a 100% VA Home Loan!

VA Mortgage Loan Basic Guidelines:

  • No restriction about where the property is located
  • No income restriction
  • Maximum loan with no downpayment is $417,000
  • Seller can pay closing costs
  • Total Debt should not exceed 43% of Gross monthly income

Buy Real Estate Now!USDA Rural Development also offers Mortgage Home Loan Programs with no money down!

  • Restricted to more rural areas – but all counties in NC have qualifying properties! Click here to see if your property is eligible!
  • Income Restrictions based upon how many people live in your home, click here to see if you meet those requirements! These income restrictions vary by COUNTY.
  • You can not currently own a property in the Geographic Area you are purchasing (unless it is in adequate), and if you have a previous home rented, you must show evidence that you are reasonably receiving income from that property (it’s a little complicated)
  • The Seller can help with closing costs, and you can receive a gift – but you can not have liquid assets equal to more than 20% of the sales price.
  • No swimming pools. (LOL!)

FHA Mortgage Home Loans are another great alternative for first time home buyers!

  • Maximum Loan Amount restrictions based upon the county the property is located.  To find out the limit for homes in the NC County you are interested in, please click here!
  • No Maximum Income Requirements!
  • Swimming Pools are Okay! 8-P
  • Down Payment of 3.5% can be a gift!
  • Allow non-occupying co-borrower!
  • If you have a bankruptcy or foreclosure in your past you might still qualify! (you MUST have re-established your credit, and have at least 3 current tradelines with AT LEAST 12 months of clean credit)

Our advice is that if you are First Time Home Buyer thinking you would like to purchase this year to take advantage of the $8000 Tax Credit you need to check on your credit scores in the near future.  Meet with a loan officer, find out if you need to work on your credit NOW, because in general, credit score guidelines are getting tighter!

If you are considering a home purchase, please call Steve and Eleanor Thorne, Connect With Us on Facebook, Inc 919.649.5058 for specific details regarding your situation!

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Filed Under: FHA Mortgage Loans, First Time Home Buyer, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , , , , , , , , ,

Stop Renting – Buy Now

December 4, 2008 By Leave a Comment

Tired of Renting? Buy a House!Are you tired of having to clean up after roommates?

Then take the $8000 credit the government is giving first time home buyers – and BUY a house!

You have some great financing options (and YES we are STILL making loans to folks, and first time home buyers have the EASIEST qualifying of any group!):

  • FHA will allow gift funds for downpayment (or you might have it saved up)… you will need about 4% of the sales price to cover downpayment and closing costs!  (Click here for details on FHA loans)
  • FHA 203K loans can cover the cost of “fixing up” some of those foreclosed properties you might be looking at. It allows you to borrow money based upon the “fixed up” value of the home! (Click here for details on 203K loans)
  • Veterans have access to 100% loans! No PMI, can borrow over $400,000, and there’s no restriction about where the property needs to be located! (click here for more information on VA benefits!)
  • USDA also has 100% loans, and although there are some restrictions (click here for details) there’s no PMI, and it’s a 100% loan!

So what are you waiting on?  When you buy a house, you get a RAISE!  (It’s TRUE! Check out the Tax Advantages of Home Ownership!)  Call Stephen L. Thorne, Mortgage Loan Officer in Cary NC for more details at 919-649-5058!

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Filed Under: FHA Mortgage Loans, First Time Home Buyer, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , , , , ,

What are VA Home Loan Benefits??

October 20, 2008 By 5 Comments

The VA Loan came about as part of the 1944 original Servicemen’s Readjustment Act most people refer to as the GI Bill of Rights. President Franklin D. Roosevelt provided veterans with a federally guaranteed home with no down payment. This feature was designed to promote housing and assistance for veterans and their families, at a time when we needed more veterans to realize the dream of home ownership. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.

Although it might seem like a complicated formula, the VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000 (except in some very high cost areas where they go over $700K). Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed.  All veterans must qualify for the loans, they are not automatically eligible for the program.

Today, there are over 30 million soldiers and service personnel eligible for VA financing. This loan 100% loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime.  If you served in Vietnam, or the National Guard or Reservist, and want to find out if you qualify please click here.

If you are purchasing between 1/1/2009 and 04/30/2010 you might qualify for an $8000 tax credit!  For details click here! (For First Time Homebuyers!)

Veteran’s!  We love to do VA mortgage loans!  Call Steve and Eleanor Thorne,   Cary, NC  919-649-5058

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Filed Under: VA Mortgage Loans Tagged With: , , , , , , , ,

Nontraditional Credit

August 25, 2008 By 2 Comments

roommatesDo you really want to get out of that apartment?  Did you know that NOW is that time you can make a KILLING buying real estate and DUMP your roommates??

If you’re ready to take the next move – and you don’t have three good lines of credit established – GREAT NEWS!

The new Housing Bill requires that Fannie and Freddie begin accepting NTMCR’s next year!  Hugh?  Non Traditional Mortgage Credit Report… The report is to be “designed to assess the credit history of hte borrower without the benefit of institutional trade references and should format as traditional references – including creditor’s name, date of opening, high credit, current status of the account… payment history.  It should not include subjective statements like ‘satisfactory or acceptable.”

That’s cool – but it’s not in effect yet!  This means that if you have limited credit experience, or you don’t have at least 3 trade lines, you need to get an FHA loan.  In Wake County, the FHA limit is $295,000, and as of October 1, 2008, the minimum downpayment for this program is 3.5%.

So don’t continue to put up with stinky roommates!  Break out!  Buy a house while prices are low – and you get a $8000 tax credit!

If you are purchasing a home in Garner, or buying a home in Raleigh/Cary, please call Steve and Eleanor Thorne, Meridian Residential 919-649-5058

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Filed Under: FHA Mortgage Loans, First Time Home Buyer Tagged With: , , , , , , , , , , ,
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