One Document Needed To Get A Veteran Home Loan – DD214

February 9, 2012 by Leave a Comment

buying your first houseIf you were in the Military, and qualify for a Veteran Home Loan, you are probably not surprised or alarmed at the amount of paperwork required by the VA…  Some Veteran’s have been very careful with their Discharge Paperwork (DD214), others, have no idea where they put it!  Here’s some basic information, because when you apply for a Veteran Home Loan, you will need the paper work!

How do I get a Certificate of Eligibility?

You will need to  Complete a VA Form 26-1880, which is called a Request for a Certificate of Eligibility.  You then use that form to apply for your Certificate of Eligibility.

You can send the Request For A Certificate of Eligibility For Home Loan Benefits, to the Winston-Salem Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service.   Our experience with the process says that to avoid any possible delays, it’s best to provide such evidence. [Read more...]

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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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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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Mortgage Programs To Purchase Foreclosed Property

January 17, 2012 by Leave a Comment

 careful buying foreclosuresThere are tons of people who know that we are at or near the bottom of the real estate market, and they are ready to purchase a home.  Many of the folks we are talking to are looking at foreclosed property, because they believe they can get the best deals. 

There are some special points you should remember:

  • Many Banks will not finance manufactured housing.  If you are considering a mobile home, foreclosure, please tell your mortgage lender about the property type UP FRONT (If the lender is seasoned they know to ask this), because it makes a huge difference.

In NC, the mortgage lender has restrictions on their ability to pay closing costs if it is a very small home (less than $75K) .  If you have very little, to no money, to put into the transaction, you should ask HUD (or Freddie, or the bank – whoever is selling the property) to pay for your closing costs as part of the contract.

We do not offer any 100% financing programs that will allow you to make improvements/repairs to the property.  We do offer rehab loans, for properties with a total value (meaning purchase of the property plus the cost to rehab) of less than $295,000 in Wake County. 

Generally, the borrower must make a 3.5% downpayment for this loan.  HOWEVER, if you are purchasing a HUD foreclosure, we might be able to do a $100 downpayment.  It must be negotiated into the contract with HUD.  (SEE DETAILS BELOW!)  [Read more...]

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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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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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Is My Home Loan Underwritten by a Person or a Computer

April 25, 2011 by Leave a Comment

“Is My Home Loan Underwritten by a Person or a Computer??” I understood the borrower’s question.  The answer is, in North Carolina, your mortgage loan will be underwritten, or approved, by BOTH a computer system and a real person.  The Computer Program used to approve loans is call an Automated Underwriting System – or AU.  The Automated Underwriting is performed on every mortgage these days whether you know it or not.

Think about this – in 2010 we had over 395 changes to mortgage loan guidelines.  There are too many variances for a loan officer to know by heart any more! The Computer Automated Underwriting can be done upfront when you make loan application or later when the mortgage is submitted to underwriting. (Usually it’s done at BOTH times, because obviously, it is much better to know upfront instead of wondering if you are approved farther into the process!)

Automated Underwriting Definition

Automated mortgage underwriting is when a computer takes in all your qualifying information along with your loan program and spits out an approval or a denial based on what it saw. f you are approved, the automated underwriting computer tells you what documentation is needed for final approval and closing. If it was a denial, it tells you why you were denied.  The actual VERIFICATION of the information put into the Computer Automated Underwriting system is done by the Loan Officer, Processor, Underwriter and Closer (meaning a bunch of different folks are going to be verifying the documents).

Even though every mortgage (barring a very small handful) gets runs through a computer, it is not always the same computer system. Fannie Mae automated underwriting has all of Fannie Mae’s guidelines and was developed by them to underwrite their loans. FHA automated underwriting is a totally different computer system developed only for FHA approvals. Freddie Mac has it’s own system – and the system used to underwrite USDA Home Loans is called GUS.

The Computer Automated Underwriting System is simply looking to see if the numbers we input meet the guidelines that it has. If so, you get a big thumbs up… if not, it’s not a complete denial (usually).  The system will give us a list of items we need to review, change, update, or redo and try again.  I’ve updated information for a single file 21 times before I got it approved! (Paid off a truck, added a wife to the loan and made a larger downpayment!)

So, if you hear us talking about the Automated Findings, or the Automated System – that’s what we are talking about.  It’s part of the new Underwriting Team!

If you are considering a home purchase in NC, and want the BEST mortgage interest rates, and the BEST Chance of getting your mortgage loan approved – call Steve and Eleanor Thorne, NC Mortgage Loan Experts!  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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