PMI For VA Loans??

July 15, 2009 by Leave a Comment

Veteran’s have a great benefit with VA Financing.  It’s a 100% loan, and in most cases, the seller can pay for closing costs.  It’s a conservatively underwritten loan, so there Uncle Sam Wants YOU to buy a house!is little chance that 5 or 6 years from now a Vet is going to be in trouble with a mortgage that they can’t afford!

All mortgage products that have less than a 20% downpayment have some sort of “Mortgage Insurance.”  I call it “Default Insurance,” because it really benefits the bank – in the event of foreclosure, the bank gets a small amount of money to cover some of their costs (It’s not a policy that pays the mortgage off in the event of death).

PMI is what most of us have heard this “Default” Insurance referred to.  For FHA Mortgage Loans, it’s called MIP (click here for details), and USDA Home Loans have a Guarantee Fee, which serves the same default insurance purpose. 

Veteran’s Administration Mortgage Loans also have a Guarantee Fee.  Here are some basic guidelines regarding how much your fee might be:

  • A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.
  • A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.0 percent.
  • The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.
  • Veterans who are using entitlement for a second or subsequent time who do not make a down payment of at least 5 percent are charged a funding fee of 3 percent.
  • Veterans who are classified by the VA as disabled will have a percent (down to zero) of their fee waived.

 Why would a Veteran make a Downpayment???  Because, with the cost of the “traditional PMI” the reduced Funding Fee is much C-H-E-A-P-E-R!$8000 Tax Credit Update~

We love making loans to Veterans!  If you have questions about purchasing a home in Cary, NC using VA financing, or refinancing your VA mortgage please call Steve and Eleanor Thorne, 919-649-5058.

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Basics to Qualifying for a FHA Mortgage Loan

February 5, 2009 by 1 Comment

Buy Baby A New Home!FHA mortgage loans offers some of the most flexible financing available for today’s home buyers!  With FHA, you can purchase a property that’s located almost anywhere, (unlike USDA that has a “footprint” of where you can purchase) and you don’t have to be a Veteran (a requirement for VA home loans ).  AND you can use a GIFT for your downpayment!  

Here are the Basic Guidelines:

  • You can Own property somewhere else…. meaning if you move to NC from Ohio (for instance) and you own a property there, you can still qualify for a FHA mortgage loan in NC! (but there are some details you need to remember about using rental income so click here to learn more!)
  • You can get a Gift for the Downpayment!
  • We can use income from a Second Job if you’ve had that job for at least 18 months, and/or you have a history of working 2 jobs!
  • Minimum Credit Scores are more difficult to pin down.  In GENERAL – you need at least 12 months of “clean credit,” and no collections or judgements in the last 12 months.  I you are new to the credit “game” it’s going to be tough to get a loan, but we do have some investors that will help with “non-tradtional credit.”
  • Debt To Income Ratios are “loosly” 33/43.  This means that based upon your GROSS income, you can have 33% of your monthly income going to your housing expense (which includes Principal and Interest, Taxes, Insurances and HomeOwner Dues, if you have them!).  Then you take your Gross Monthly Income and only 43% of your income can be gong to TOTAL debt – which includes the Housing expense above, but it also includes the items which report to the credit report (car payments, credit cards, etc.)
  • Downpayment is 3.5%!
  • You do not have to count child care payments!  (WHEW!)
  • You can use a non-occupying co-borrower.  This means that if your parents want to help you by being on the mortgage loan, you can use their income and assets to qualify.  BIG, BIG, B-U-T here… you can not have sorry credit, and overcome that with a co-borrower. 
  • The maximum loan amount for Wake County and Johnston County in NC is $271,050.  The maximum loan amount in Orange and Durham Counties is over $330,000!
  • You can STREAMLINE refinance to a lower rate FHA Mortgage with minimal costs!

If you are considering a purchase or refinance and have questions about FHA mortgage financing – please call us!

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

Government Guidelines Are Getting Tighter

January 13, 2009 by Leave a Comment

A major bank announced last week that they are going to begin charging a higher fee to folks seeking Government Financing (the most popular loans right now) that have credit scores less than 620.

For more information about this change… click here.  8o((

This does NOT mean that you can not get a loan if your score is less than 620, only that you will pay a higher interest rate, and it will be more difficult for the lender to give you a credit to cover part of your closing costs!

If you have specific questions about purchasing a home in NC, call us!

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

FHA Loan Limits Change 1/1/09

November 10, 2008 by 2 Comments

We're Not KiddingAccording to the Mortgagee Letter Published this week, HUD is changing the Maximum Loan Limit for Wake, Johnston, Franklin and Harnett Counties.  The change is based upon our average sales price, which has dropped a bit per National Association of Realtors, on Page 48 of their 88 page report – the Triangle will be in for this change at the beginning of the year. (access the report here)

Because our median sales price is lower – our FHA loan limit will go to $271,050 on January 1, 2009.  This means that at the end of the year, the maximum loan in Wake County, Franklin, Harnett or Johnston is $271,050 – down from the current maximum loan of $295,000.  These calculations are based on the Housing Bill that passed Congress in August.  Orange, Person and Durham Counties stay at their current limit of over $336,000!

UPDATE:  In February of 2009 – the FHA raised the limits back to the $295,000 limit!  Talk about CONFUSING!

The downpayment requirements for FHA also change at the end of the year, and if you’re buying that means you will be putting 3.5% starting on January 1st.

If you have questions about qualifying for a mortgage loan, or you want to check rates and see if we can beat what your loan officer is quoting you – call us!

Filed Under: FHA Mortgage Loans, Housing News Tagged With: , , , , , , , , , ,

Saving for a Home

September 29, 2008 by 1 Comment

If you do not qualify for a USDA Home Loan in NC, there are other options!  Are you a Veteran?  Those loans are 100% loans too!

NO?  Well, don’t worry!  FHA allows you to purchase and get a GIFT from your family and friends!  That’s right!  You could get a gift for the downpayment, and have the lender and the seller pay the other costs.

If you are getting married, they will accept a registry that shows the person’s name, and the amount of the gift!  So Uncle Barry could give you $25, Aunt Mary could give you $100, and so on – as long as you have the Bridal Registry!  If you need a registry for your guests, call us at 919-649-5058.

Don’t have a wedding coming up?  Well, you can still get a gift, or a series of gifts.  You could also do what a friends did (I’m not recommending this)… they borrowed the money on their credit card, put it in the bank… and left it there for 90 days prior to writing a contract!  That’s right, the money needs to be in your bank for 90 days before we verify your funds.

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

USDA Western Wake County

September 8, 2008 by 7 Comments

I We found this VERY cool map that shows exactly where you can purchase a home in Western Wake County using the 100% USDA program!  As you can see, if you are on the “left side” of Ten Ten, in Holly Springs, or Fuquay – or parts of Apex, you qualify for this 100% program! 

The “mortgage insurance” for USDA is considered a “funding fee” and is 2%.  So if you purchased this home that’s currently for sale at $136900 – you would have your P&I calculated on $139,638.  TODAY (and depending on when you’re reading all of this the house and the rates might be different) the P&I (principal and interest payment) for a 100%, no money down loan on this house, with no origination fee would be…

$860.00

Can you beleive that??  All the bad news on the airwaves, and you can buy this GREAT home at that price per month!  WOW!

If you need more information about qualifying for a USDA home loan, or buying a home in Western Wake County, please call Steve and Eleanor Thorne, Meridian Residential, 919-649-5058

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

Documents You Need 4 A Loan

July 22, 2008 by 1 Comment

A customer who is quickly becoming a friend of mine asked me recently what she needed to gather for a loan application - she’s moving to a new area (the company is relocating them) and before she packed everything up and moved into corporate housing (“Hey,” she said, “Maid Service and it’s free! Are you kidding?  I’m taking every day we get in Corporate Housing!”)!  Here’s my advice to her:

Great News!  The documents needed for a FHA loan are VERY similar to those you would need when applying for most other types of financing these days!  Here’s our “Scavenger Hunt” list!

  • Most Recent pay stubs for 1 full month.
  • The name, address and telephone number of someone who can verify employment.  (We will be sending them a form to complete)  We will be verifying your income for the last 2 years.
  • If either of you are now, or have been self-employed, or earned income OTHER THAN W-2 income in the last two years, we will need full copies of your tax returns.  If you ONLY earned W-2 income, we will need a copy of the W-2s for the last 2 years.
  • Any data regarding the relocation package, and specifically what NASA is covering.
  • If you owned property, and you’ve sold it, we’ll need a copy of the HUD-1 Settlement Statement.  If you own a property that is leased, then we will need a copy of the lease agreement.  We need to document 2 full years of residence.
    If you’ve been renting during the last 2 years, we will need the name, address and telephone number of the landlord.
  • We need copies of bank statements for the last 2 months.  If you are changing banks, remember that we will need to verify the money going out of one account and into another! (PLEASE try not to have any NSFs!)  We will need ALL pages of the bank statements.
  • If you are receiving a gift for the your down payment – we will provide you with a gift letter to have completed.  We will also need to verify that the person giving you the gift has the money in their account.  In the event that you, or the donor, do not keep money in a bank – we do have other options, so you will need to speak with us directly about that situation.
  • In the event that you do not have sufficient “lines” of credit, we can look at “alternative lines.”  This means that if you have only 1 credit card, and no other credit, we will likely need to use your cell phone, and your insurance (for instance) to establish that you pay your bills on time.  If you think you might be in this situation, please have the last statement available for us.

In every single loan file, there are other items that we might also request… it’s difficult for me to anticipate every different situation… for instance, if you sold a car before moving, and deposited $5000 from that sale – we are going to ask for evidence of the sale… but for the most part… this should be a VERY complete list.

Congratulations on your move, and your new opportunities!  I know this is an exciting time!

If you are considering a home purchase in Garner, or your buying a home in Cary, please call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, 919-649-5058

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