Buy a House, Get a Raise!

February 8, 2012 by 8 Comments

buying a foreclosed home in ncBuy a House, Get a Raise! I’ve told people this for years, and they don’t always understand.  You see, when you purchase a house, it gives you a tax incentive, and so if you are paying $1200 a month for a mortgage payment you are likely writing off at least $400 a month in interest and taxes!

So a house / mortgage payment of $1200 does not compare with a rental payment of the same thing!  Nuying a house can be an emotional experience,  but there are benefits to homeownership too!

There are some GENUINE Deals out there when it comes to purchasing foreclosed property- HUD has a program that only requires $100 downpayment!  There are special First Time Home Buyer Programs too!

In addition to that – Did you know that rental history is not adding anything to your credit score??? Home-ownership does?

In general, your landlord does not report to the credit bureau unless you’ve screwed something up!  A mortgage company, reports an on time, monthly installment debt.  This can be a HUGE lift to your credit score!  8o))Just one more reason to call us about purchasing a home in NC!  Steve and Eleanor Thorne, Mortgage Banker  at 919-649-5058.

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Improve Your Score 50 Points – NOW!

February 7, 2012 by Leave a Comment

credit_issuesWe’ve written many times here about writing dispute letters when you have incorrect items on your report.  In addition to this, you could improve your score by 50 points if you would do the following:

  • Pay off any verified bad credit item on your report. In exchange for your payment have the lender remove the item from your credit report.  This works especially well if you have medical collections… once the collection is sold multiple times, it shows on your credit report multiple times, so get it off!
  • Pay your bills on time. It is alleged that missing one monthly payment can cause your score to drop by up to 50 points. We tell folks that they should be able to purchase a home if they have 12 months of ON TIME payments!
  • Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card… but if you must use a secured card – do it! But, make sure it reports to all 3 bureaus.
  • Pay your large debts down. This is called your available credit to debt. The bureaus need to see that you are not in over you head and that you do have credit that is not being used.

These four action items are the only things you need to concern yourself with when trying to improve your FICO credit score.  The minimum credit score for most loan programs is 640.  If you have a score in the high 500′s to low 600′s, and want to buy a home – we might be able to help!  Call Steve Thorne 919-694-5058

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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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Raleigh NC Top Public School Recognition

August 20, 2010 by 2 Comments

“Yep, just another reason to move to Raleigh!” is what one friend wrote on Facebook after seeing that Raleigh was named the Top Public School System for Large Populations over 300,000 by Great Schools. Also in the Top Five School Systems the report lists Colorado Springs, Mesa Arizona, Honolulu and Virginia Beach.

We live in this school district. While the report correctly states that:

[Wake County Public School System is ]home to three high schools that offer the demanding, well-respected International Baccalaureate program. In fact, the entire district is focused on college prep; more than 90% of students plan to continue some form of higher education, with well more than half heading off to four-year colleges.

The competitive Academic environment can not be overstated at some schools.  Our daughter attends Green Home High School, where a grade point average of 3.5 is in the middle to lower half for the class!

Having great schools, with dedicated teachers, and parents who truly care about education will continue to help Raleigh / Cary be top destinations for businesses looking to expand.  As noted in the report:

Overall, Raleigh has survived the economic recession and real estate crash and is already growing again. Many families point to the wide cultural diversity — museums, sports, extracurricular offerings and camps, options in education and worship, dining, and more — that makes it a great place to live.

We Agree! We”grew up” in the Triangle, live in the Cary / Raleigh area, and enjoy sharing information with folks relocating here!

If you are considering a home purchase in Raleigh or Cary, NC call Steve and Eleanor Thorne 919-649-5058. We have programs specifically for those who are relocating, and we have the best mortgage rates available.

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USDA Rural Development Switching Underwriters

July 12, 2010 by 2 Comments

USDA Rural Development Single Family Housing announced some consolidation and changes regarding WHERE files are going to be processed.

No matter who originates a USDA home loan, it is re-underwritten (or processed) through a local USDA office. In the past, loans for Wake County went to Wake, Johnston County went to Sanford and Franklin County went to Franklin County.

So, there will be an underwriter, or processor out there who in the next couple of weeks, won’t realize there’s been a change… will be going too fast without updating their rolodex, and they will ship a file off to the wrong place.  I can guarantee it.

If you are considering a USDA home loan for your purchase in NC, look at the following list of where files are being processed for your county.  Ask your loan officer… then call Steve Thone,Mortgage Banker in Cary , 919-649-5058.  We love USDA home loans!

In today’s announcement, USDA will be underwriting for Guaranteed Processing as follows:

Asheville Office -
Buncombe,Henderson,Madison,McDowell, Mitchell, Transylvania, Yancey County
Murphy Office
Cherokee, Clay, Graham, Haywood, Jackson, Macon, Swain
Shelby Sub Office
Cleveland, Gaston, Lincoln, Polk, Rutherford
Winston-Salem Office
Catawba, Forsyth, Iredell, Stokes,Surry, Yadkin
Jefferson Area Office
Alexander, Alleghany, Ashe, Avery,Burke, Caldwell, Watauga, Wilkes
Henderson Area Office
Alamance, Caswell, Durham, Granville, Orange, Person, Vance
Lumberton Area Office
Bladen, Brunswick, Columbus, Cumberland, Hoke, New Hanover, Pender, Robeson, Scotland
Greenville Area Office
Beaufort, Bertie, Camden, Chowan, Currituck, Dare, Gates, Hertford, Hyde, Martin, Northampton, Pasquotank, Perquimans, Pitt, Tyrrell, Washington
Asheboro Area Office
Cabarrus, Davidson, Davie, Guilford, Mecklenburg, Montgomery, Randolph, Rockingham, Rowan, Stanley, Union
Sanford Office
Chatham, Edgecombe, Harnett, Johnston, Lee, Nash, Wake, Wilson
Kinston Area Office
Carteret, Craven, Duplin, Greene, Jones, Lenoir, Onslow, Pamlico, Sampson, Wayne
Halifax Office
Franklin, Halifax, Warren
Rockingham Office
Anson, Moore, Richmond

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Buying a Home after Foreclosure

June 20, 2010 by 3 Comments

Been there - Done ThatIf you are one of the millions of families that lost their home in the last couple of years to Foreclosure… you might think…

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.

My “real life” answer to this question is… in today’s credit environment, it’s going to be HARD to get a Bank to loan you money for a home if you had your home foreclosed upon less than 3 years ago.  I know what the guidelines say, but Bank’s do not have to follow guidelines set by FHA. 

FHA does not say you have to have a 620 credit score, but there are VERY few lenders who will allow you to purchase a home without at least a 620 score!  There are some Banks that will not allow you to purchase with FHA if you have ANY lates on ANY accounts in the last 12 months!  That’s not an FHA guideline, that’s a BANK rule, so again – I’d say - you might still be forced to wait 3 years, and have all of your documentation in order!

These guidelines are different from the Fannie Mae / Freddie Mac Conventional Guidelines… And these foreclosure guidelines are changing OFTEN… so I would not rely on information you get from an online site.  Call a loan officer.

If you are considering a mortgage loan in NC, call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, 919-649-5058

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DRATS! FHA is Getting More Expensive!

June 15, 2010 by 1 Comment

As we reported in April, Washington is trying to offset the costs of FHA foreclosures… and so it appears that FHA mortgage Loans are going to get more expensive. Many folks don’t realize that FHA doesn’t really MAKE loans… they just INSURE them.

Last week, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers. This bill passed almost unanimously, and although it doesn’t force FHA to raise the monthly fees, it still means that these loans will likely be more expensive later this year.

Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent..

Again, the bill does not force FHA to charge the full 1.55 percent, and FHA officials believe that an increase to 0.90 percent would be sufficient to currently cover the cost of these loans.

Here’s the impact on a 200,000 loan:

  • Current Premium (0.55%) : $91.67 monthly mortgage insurance premium
  • Expected Increase (0.90%) : $150.00 monthly mortgage insurance premium
  • Maximum Increase (1.55%) : $258.33 monthly mortgage insurance premium

No doubt, a fairly large increase, like this,  in monthly mortgage insurance premiums will reduce home affordability for buyers in North Carolina and strain some household budgets as people decide if it makes sense to refinance!

FHA charges mortgage insurance two different ways. It charges a monthly fee, and it charges an upfront fee. (for more click here).  FHA’s upfront mortgage insurance changed earlier this year to 2.25%.  This means that if you are borrowing $100,000 your loan amount is $102,250 with the upfront mortgage insurance.  Because higher monthly insurance premiums are expected to cover the default costs,  FHA indicated that it plans to reduce its upfront mortgage insurance premium paid at closing from 2.25 percent down to 1.000 percent.

This makes sense, because homes in many parts of the country are going to lose some of their value in the next 12 to 18 months.  Why would you want to go INTO a deal with that much additional costs? On the same $200,000 mortgage, a move like that would reduce the upfront cost by $2,500.

Bottom line, if you are considering a FHA mortgage – you might want to move quickly, because it’s going to get more expensive!  Call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  Certified Mortgage Planners in North Carolina!

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Fewer New Homes on The Market Nationwide

May 28, 2010 by Leave a Comment

New Home Supply April 2009 - April 2010The supply of newly-built homes for sales plummeted in April, a positive indicator for the Raleigh housing market as we head into the summer months.

It’s no wonder that homebuilders are breaking new ground at the fastest clip in 2 years.

At the current sales pace, the nation’s complete supply of new homes would be sold in just 5 month’s time.  That’s more than double the pace of a year ago.

Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.

It’s a similar spike as within the Existing Home Sales data released earlier this week.

But before we declare the housing market “repaired in full”, we have to consider a few of the reasons why home sales are charting so strongly.

The first reason is the federal homebuyer tax credit’s April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.

The second reason is that mortgage rates have remained exceptionally low, defying expert predictions.  Low rates don’t sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.

And, lastly, March and April’s new home sales may have been buoyed by aggressive discounting on behalf of homebuilders.  As compared to February 2010, April’s average new home sale price was lower by 13 percent.  That’s a sharp drop in a short period of time.

For now, though, homes are selling, supplies are dropping, and buyer interest is high. It’s no wonder builder confidence is soaring.

If you are considering a New Home Purchase in Raleigh, NC – please contact us to get pre-qualified!  We offer VERY competitive pricing, and in North Carolina Predatory Lending Laws require the Builder to allow you to use the Mortgage Company OF YOUR CHOICE. Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058

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Credit Scores and First Time Home Buyers!

May 20, 2010 by 3 Comments

How Credit Scores are calculated is changing, and the minimum scores required for mortgage loans are going HIGHER!  For information about “WHY” Credit Scores requirements are changing in NC, click here.

It’s important to know that Transunion began making changes to the way they calculate credit scores, and if you don’t change your credit strategy – you might not be able to purchase!

I think it’s important for First Time Homebuyers (especially) to know what credit scores they need so that they can take advantage of the $8000 Tax Credit, Low Rates and “Cheap Houses!”

If you are using VA Benefits, you need a 620 score, even though VA does not have a MINIMUM credit score!  I think that (JMHO) because VA doesn’t have a minimum – those VA rates have gotten higher in the last 2 months!  For details on Credit and Veteran’s Administration home loans click here! Again, do not be surprised if the VA rates are not as “cheap” as the FHA and USDA rates!  This is a SHIFT! [Read more...]

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Veterans Not Allowed to Pay all Closing Costs

February 16, 2010 by Leave a Comment

A new Good Faith Estimate went into effect on January 1, 2010 and because of all the requirements that go with any new Government Regulated Form… FHA came out in January with a list of fees they felt like were reasonable for Homeowners to Pay and Lenders to Collect.

Which prompted the VA to come out with a clarification on what Closing Costs  they feel are reasonable for a Veteran to pay in connection with a Mortgage Loan!  Here’s the latest from the Veteran’s Administration regarding Closing Cost Fees:

 

One Percent Origination Fee. The lender may charge the veteran a flat fee up to one percent

of the loan amount. The flat fee is intended to cover the lender’s costs and services, which are

not reimbursable as “itemized fees.” For Interest Rate Reduction Refinancing Loans (IRRRLs),

please note that this fee may not exceed one percent of the existing VA loan balance of the loan

being refinanced plus the cost of any energy efficient items less any cash payments from the

veteran – see line 4 on

b. Reasonable and Customary Itemized Fees. Veterans may pay reasonable and customary

amounts for the following services. Whenever these itemized fees relate to services performed

by a third party, the veteran may only pay the

(1) Appraisal and compliance inspections

(2) Recording fees

(3) Credit report

(4) Prepaid items (taxes, assessments, and similar items)

(5) Hazard insurance

(6) Flood determination

(7) Survey

(8) Title examination

(9) Title insurance

(10) Special mailing fees for refinancing loans

(11) Mortgage Electronic Registration System (MERS) fee

(12) Other fees authorized by VA

 

We love doing loans for Veterans, and encourage you to talk to us about the VA Mortgage Loan Programs available to you!  Did you know that it might be to your advantage to make a Down Payment on a VA loan?  Call us about VA Mortgage Loans!  Steve Thorne, 919-649-5058

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