Proving Housing Expense When Landlord is Foreclosed Upon

January 18, 2011 by Leave a Comment

Qualifications for a USDA Home Loan in North Carolina

Rental Payments / Housing Expense

We just sent a letter to a consumer applying for a USDA mortgage loan about a problem with the approval…

“I completely agree with you that it’s not your fault that the owner of the property was foreclosed against and due to the massive amount of foreclosures it took the bank almost a year to get around to doing something with the property.  It really is a catch 22. They want to see how you paid your existing housing expense and we cannot provide it due to no fault of your own.” *please see note at end of this post

I CAN TELL YOU that many people are having problems in their mortgage applications right now not because THEY missed rent or mortgage payments… but because the home they were renting was foreclosed on, and no one would take their payments!

USDA Home Loan Underwriters, especially – are looking at how you paid your current housing obligation to determine if they are going to lend you money for a new home. If you can’t PROVE you paid rent during the last 12 months you could have a problem.

Our best advise is this:

  1. Make sure you are setting your rent payment aside each month in a savings account. We need to prove that you CAN manage a monthly housing expense, and if you have been saving $750 or paying that towards a rent – then it’s pretty easy to show the underwriter that you won’t have any payment shock.
  2. Keep all documentation you get from the Landlord, the courts, the sheriff’s office the bank.  We need to document that you TRIED to make the payments and they were returned.

Remember also that the HIGHEST debt ratio allowed on a USDA Home Loan is 42%. We do have borrowers who are approved with higher back ratios – but this is considered an Underwriting Exception.

If we are asking that evidence of on time payments for the Housing Expense to be an exception (because the home went into foreclosure) then we can’t ALSO ask for an exception on the total back ratio.   We only get ONE exception per loan.

I’m not trying to make you a mortgage loan officer with all of this… I’m just pointing out that if you are in a situation that is beyond your control, and you are not being forced to make a rental payment… I wouldn’t “blow” that money. Talk to a loan officer NOW. It’s difficult to get a mortgage in 2011 if you don’t have a rental history – and you should have one (meaning if you have been living with family, that’s a little different).

If you need more information about Qualifying for a mortgage loan in NC, please call Steve and Eleanor Thorne, 919-649-5058 NC’s USDA Home Loan Experts.

*By the way we were able to make this customer a loan, it was just a longer process than anyone wanted, and it was frustrating… that’s why I’m suggesting you call NOW!

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USDA Home Loan Maps Wake Forest and Rolesville NC

August 17, 2010 by 1 Comment

It can be difficult to tell exactly WHERE you can purchase a home that qualifies for USDA Home Loan Financing.  These are 100%, no money down loans, with NO Monthly PMI (which makes them cheaper on a monthly basis than FHA, and you CAN make a downpayment if you want to…), and in most of the cases we see… the SELLER is paying the Closing Costs!

For information on qualifying for USDA Home Loans in NC, Click Here

For information on where you can purchase USDA Home Loans in other parts of the Triangle, click here.

Many of our competitors are NOT doing USDA Mortgage Loans – but we are closing them every week! Here’s a list of counties in NC where you can get this 100%, no money down loan.

If this is an area you are considering for a home, Call us 919-649-5058!  We work with TOP Real Estate Agents in this area who are familiar with the market, how to negotiate for the Seller to Pay Closing Costs, and how to get you the best price!

Call Steve Thorne 919-649-5058 USDA Home Loan Expert if you have questions on Qualifying for a USDA Home Loan in Wake Forest NC and Rolesville NC. We have the best mortgage rates available in North Carolina

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USDA Lending Money 5.27.2010 With Changes

May 28, 2010 by 3 Comments

Great News!  USDA Rural Economic Development has money to lend and they are working around the clock to get loan underwritten! Unlike other programs, USDA must ALSO underwrite all mortgage loans prior to funding.  Since they were out of money for @3 weeks – they are behind.

So that’s the GOOD NEWS… Here’s part of the bad news:

The Funding Fee is now 3.5%. That’s up from @2% with funds that ran out in May, 2010.  So if you purchase a $100,000 your loan will now be $103,500.

Here’s the OTHER Bad News:

Most Brokers will not be able to close these loans. We close on a warehouse line, so I’m good to go – but with law changes earlier this year… Brokers must meet a 5% High Cost rule. In that rule, a Broker can not make more than 5% on a loan.  Origiantion Fee, credits we give to a borrower, attorney fees, title insurance, funding fees, application fees, underwriting fees and several other things go into the calculation.  This will make it literally impossible for BROKERS to do these deals… I personally think it is sad that Consumers just lost so many options.

Again, we are making these loans, and will be glad to help you with purchasing and qualifying for a USDA home loan!  Call us!  Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058 Remember, if you are considering a NEW HOME – the builder has to let you use the mortgage company of your choice… and offer the SAME incentives!

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USDA Gets Cash From House -Come on Senate!

April 30, 2010 by 3 Comments

GOOD NEWS!  The US House Finance Committee approved a measure to fund the U.S. Department of Agriculture (USDA) Rural Housing Service Loan Guarantee Program (section 502 Loans).

Say What? Have you been reading that USDA is out of money?  Well, it’s not COMPLETELY out -but it’s close. In our part of North Carolina it’s taking about 12 days to get your loan underwritten by USDA…. they sent out a message this week that they thought they would be out of cash by May 7th.  This means that if your loan is not ALREADY submitted to USDA, then you would be SOL (So out of Luck).

So the fact that this program will likely get more money is GREAT NEWS!  What will be even better, is if Congress can pass this bill by the end of next week – assuming it looks like it will pass, then USDA could continue issuing “Conditional Commitments.”

If, If, IF they continue issuing “Conditional Commitments” after next week – we will be able to continuing funding – even if Congress takes another 2 or 3 weeks to get it all passed.

The HIC-UP comes when there’s uncertainty about weather Congress would change the program. The version passed by the House Finance Committee does NOT change the current program. To view the Bill, click here - H.R. 5017, “Rural Housing Preservation and Stabilization Act of 2010,” – Rep. Paul Kanjorksi (D-PA)

We will keep monitoring this.  If you have questions about USDA Home Loan financing, and you are purchasing in NC – please call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, Inc.  919-649-5058


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What Does It Mean When USDA Runs Out Of Money?

March 12, 2010 by 1 Comment

Every year Congress puts funds into the USDA Rural Development “Account” for them to lend out to home buyers. It’s a great program that requires no money down (for program details click here)…

On March 11, 2010 Rural Housing folks announced that they will probably run out of money before the end of April.  What does that mean?

Unlike FHA, VA and Conventional loans – USDA Home Loans must be underwritten by a USDA underwriter.  The Underwriter issues a Conditional Commitment.  If the “account” that USDA has within the Federal Government to fund loans from runs dry… they can issue TWO different kinds of Commitments

According to Chase, the world’s LARGEST insurer of USDA Home Loans, “if the USDA issues “subject to funding commitments” we can still fund USDA loans, even if they are out of money. The USDA’s 3-11-2010 notification said that they will not issue the commitments subject to the availability of funds therefore we can’t fund the loans.”

This is significant because the Tax Credit for Home Purchases ends in April… and MUST fund by the end of June.  If you are looking ofr a home, and are considering using USDA Home Loan Financing – we suggest you call us IMMEDIATELY!  If you are SELLING a home – please make certain the funds are available for your transaction!  Call Steve Thorne, Corporate Investors Mortgage Group, 919-649-5058

HERE’s AN UPDATE AS OF April 6, 2010

 

 

 

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USDA Home Loans have PMI?

August 24, 2009 by 1 Comment

USDA loans are the coolest loans on the planet right now, and most people don’t understand that it has a form of mortgage insurance…

Mortgage Insurance does not pay your mortgage off when you die (well, maybe there’s a kind that does, but that’s not what I’m talking about).  The PMI-type mortgage insurance is default insurance. It covers a small portion to the bank if you default on the loan.

With Conventional loans, it’s referred to as Private Mortgage Insurance, or PMI.  This insurance generally cost @ .58%of the loan amount on a monthly basis (assuming you have 10% to put down and really good credit scores).

FHA has Mortgage Insurance Premium, or MIP, which is 2.25% of the loan amount PLUS a monthly amount of .90% of the loan amount (think it’s kinda’ expensive?).

VA has a Guarantee Fee. So if you are Veteran using your VA benefits the fee could be as much as 3%! (For details click here).

USDA Home Loans also have a form of default insurance (PMI), and it’s a Guarantee Fee. The actual dollar amount is a rather complicated formula, and it ends up being about 3.5% – but most people use 3.5% as a rule of thumb for prequalifying purposes. (updated 5.27.2010 from 2% which is what they charged earlier)  USDA Home Loans are AFFORDABLE!

Note that starting October 1, 2011 USDA Home Loan will change it’s PMI calculations.  Starting in October – there will be a 1% upfront fee and a MONTHLY CHARGE!

If you want more information about  USDA Home Loans in NC - please call Steve and Eleanor Thorne, 919-649-5058.  We are Mortgage Lenders in the Triangle that specialize in these types of mortgage loans.  Ask us about your Tax Credit! We have the lowest rates!

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Looking for a Home – When Do I Apply?

October 13, 2008 by 2 Comments

This is a question that was posted recently on Trulia Voices…

“Looking for a Home in the Triangle.  I think I’ll be ready to purchase in March of 2009.  When should I apply for a mortgage???”

People who are considering a move to the Triangle need to plan for their home purchase.  If you will be in the market to purchase in 2009 – you should speak with a NC lender as soon as possible.  Why?

We have our own set of unique qualifying guidelines in NC – mandated by the State Legislature.  While we are a “brick and morter” state (meaning if you are a mortgage company doing business in NC you should have an office here and not just be “virtual”), there are always those with fancy footwork trying to figure out a way around the system.  Better to be safe than sorry – and find a “local” to work with.

In some cases, our State Legislature defines how much a lender can contribute toward closing costs, they also dictate WHICH KIND of loan programs are available to consumers.  So again, think local.

But the MAIN REASON you should speak with a lender even six or eight months before you purchase is this:

With the “mortgage MESS” of the last year, credit scores have become one of the MOST IMPORTANT parts to a loan approval… ESPECIALLY in North Carolina.  Because our programs are limited, we rely even more heavily on high credit scores to qualify buyers, and get the best interest rate.  If you have a “good” score of 640 – we could get your FICO score up to 720 if we had 6 to 8 months! This change in your score could mean the difference of over $75 a month in your payment!

Let’s see… $75 a month savings, live in a house for 4 years, that’s a MINIMUM SAVINGS of $3600!  Just for speaking with a loan officer EARLIER in the process!  So if you are considering a purchase, call now!

Steve and Eleanor Thorne, Corporate Investors Mortgage Group, 919-649-5058

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North Carolina USDA Mortgage Loans

September 9, 2008 by 8 Comments

In NC, we have some big cities… but we get rural fast!  I can’t tell you how many people, dispite the cost of gas, who say, “I’m just lookin’ for some land!” or “I can’t stand those little ‘Barbie Doll’ houses sitting right next to each other!”

Well, if you’re looking to buy a rural home, we can help you learn about the benefits and features of purchasing a home by using the USDA Guaranteed Rual Home Loan.

But if you’re looking to finance a horse farm, you might want to read this first!

The USDA Guaranteed Rural Home Loan program was created to help low to moderate income families buy homes in designated rural areas with 100% financing.  It really provides people with the most cost efficient way to finance a home.

There’s a 2% fee (it’s their form of mortgage insurance) and it’s added to the loan amount.  So if you are borrowing $100,000 you will have your principal and interest payment calculated at $102,000.  There are income limits, and in Wake County a family of four can not make more than $86,100.

The loans are designed for RURAL AREAS… but all of Johnston County, Chatham County and much of the Western Wake County area are open to the Program.8000 Tax Credit UPDATE!

To See Homes That Qualify For this 100% Financing click here!

If you have questions about purchasing a home with USDA in NC, please call Steve and Eleanor Thorne, Corporate Investors Mortgage Group at 919-649-5058

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