FHA and VA Mortgage Loan Guidelines Waiting Periods

October 25, 2010 By 2 Comments

If you’re like millions of American’s the last couple of years have been tough.  People who have lost their jobs, or their houses, or their business didn’t just wake up one morning and say, “Oh, instead of making my payments, I think I’ll take a trip to Belize!” They never imagined they would be one of “those people” with bill collectors and “dings” on their credit.

Well, the good news is that your credit score is really just a snap shot of the last 24 months. Yes, missed payments will stay on your credit file for 7 years – but their IMPACT on your credit is greatly diminished after 24 months. (If one person on the loan has good credit, and one person has “poor” credit click here). [Read more...]

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Raleigh One of the Smartest Cities in America!

October 4, 2010 By Leave a Comment

We keep getting good news about Raleigh / Cary! In the past month we’ve been named as the first place to most likely see appreciation in Real Estate, one of the best places to Retire, One of the best areas for Single Rich folks and now… one of the BRAINIEST Cities in America!

According to new Census Bureau data, the national average for cities with people 25 years or older who have bachelor’s, master’s, professional school or doctorate degrees is less than 25%… In Raleigh, that concentration is at 42.4% putting us at number 4 on the list!

“There’s a very high correlation between earnings and educational attainment,” said Todd Gabe, an economics professor at the University of Maine.

Cary currently trends at number 13 on the fastest area in the country for Job Growth!

According to CNN Money, Wake  County is one of the nation’s leader in a high-tech and biotech jobs.

Wake County is home to Research Triangle Park, the country’s largest industrial park, where IBM has extensive operations, employing 11,000, along with GlaxoSmithKline, Cisco Systems, and SAS Institute.

Even though there are more than 160 companies in RTP, the lion’s share of Wake County’s jobs come from the public sector. The lion’s share of local jobs are with the state government or the public school system. North Carolina State University and the county are also major players.

If you are considering a home purchase in Raleigh or Cary NC – call Steve and Eleanor Thorne, 919-649-5058.  Professional Mortgage Planners with over 20 years experience. We have the best FHA, VA and Conventional mortgage rates and the lowest fees available!

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Veteran Administration Home Loans Above $417,000

September 15, 2010 By Leave a Comment

With recent changes,  it might make sense for a Veteran to consider using their VA Benefits when they are purchasing a home above $417,000!

Loans UP TO $417,000 are 100 percent, no money down loans with no monthly mortgage insurance. There’s a one time Guarantee Fee charged by the VA for insuring the loan (to see what your fee would be click here).

Now, for Veteran’s purchasing a home OVER $417,000 you might get better terms.  To Calculate the down payment VA Jumbo Loans:

Take the purchase price, which for example purposes is $600,000.  Subtract the maximum VA Guarantee amount of $417,000.  In this case, $600,000-$417,000 = $183,000.  The Veteran is required to make a down payment of 25% of the amount above the VA Guarantee (in this case $417,000).  $183,000 x .25 = $45,750 downpayment, or just over 7.5%!

On a $500,000 purchase price with everything else being the same, $500,000 -$417,000 =$83,000.   $83,000 x .25 = $20,750 Down payment, or just over a 4% down payment!

In addition, the Funding Fee is LOWER when you make a downpayment! 8o) Plus!  Veteran’s have cheaper closing costs!

With the housing market offering such great values, and mortgage interest rates at an all time low… this might be the perfect scenario! We are talking to tons of veterans who moved here with less cash in their pocket from the sale of  a previous home, and this is the perfect solution!

If you are considering a purchase in NC, and you want more information on VA Mortgage Loans, please call Steve and Eleanor Thorne 919-649-5058.  We have the best mortgage rates available, and the lowest fees!

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VA Home Loans Could Have Fewer Options

September 14, 2010 By Leave a Comment

SunTrust Bank announced that as of the middle of October they will be eliminating it’s VA Government Sponsorship Program and “will not purchase VA loans from VA Government Sponsored clients. What does this mean to Veterans and why would a bank make this decision?

First off, SunTrust is not saying THEY won’t do VA loans, only that they will not purchase VA loans from mortgage brokers or mortgage bankers. The loans must be originated by SunTrust.

This is significant to note because SunTrust has been one of the more conservative lenders, and what they do… many other banks follow through on.

Credit requirements for VA Mortgage Loans (which are 100% no money down loans) have tightened in the past six months. Although VA does not set a minimum score – most lenders are requiring a 640 credit score (higher than USDA and FHA) to get the best pricing.

If you are considering a VA Mortgage Loan, please call Steve and Eleanor Thorne, 919-649-5058. We have the lowest fees, and the best mortgage rates available!

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Does Obama Know Something We Don’t About the Economy?

September 3, 2010 By Leave a Comment

I read a TON of Economic Newsletters, watch CNBC, and Congressional hearings… I’m an economic junkie who misses Louis Rukeyser!  I’m always looking to see if I can figure out which way rates are headed.

So when the President came on the news this week to announce that the war in Iraq was over, and the pundits started asking why it was only a 15 minute address – I was kinda’ let down, because I had also been expecting that he would take this chance to give folks a “Positive Message” when it comes to the markets.

Without that Presidential Guidance, I’m back to the Economic Numbers for insight.  And here’s what they are telling me:

  • “… the public is no longer investing in stocks, but rather in bonds.  So far this year through July, bond mutual funds have attracted $224.4bn in net inflows including reinvested dividends.  ” — Ed Yardeni, September 1, 2010.” Which means a Consumer Spending spree is not going to get the Economy going.
  • “The Fed terminated the purchases of $1.25 trillion in GSE mortgages and mortgage-related paper in March.  Simultaneously, the housing-purchases credit subsidy ceased in April.  Housing went into relapse, as most economists expected.  Simply put, subsidize something and you get more of it; remove the subsidy and you find that you have borrowed economic activity from the future, and now you get less of it.” Cumberland Advisors  Which means ANOTHER Tax Credit is not going to get the Economy going.
  • Case Shiller Numbers indicate that the Housing PRICEs actually went UP during the 2nd quarter.  “While some may see these price gains from the trough as a sign of bouncing along the bottom, most experts believe home prices nationally will fall again, but not necessarily immediately.”  Which means the Housing Market is not going to get the Economy going.
  • Private sector employment decreased by 10,000 from July to August on a seasonally adjusted basis…  and today’s non-farm payroll job’s numbers showed 54,000 jobs lost in August (many of those from the Census Jobs that are gone).  So there’s not a surge of Employment to get the Economy going.

So was it just that the President didn’t have any positive news… or does he know something we don’t know? One of my favorite charts is the Four Bad Bears.

Permission from D Short

As you look at this chart – this “Bear” looks just like the other three. Maybe we ARE heading into a little dip – but it’s not really that’s alarming!  When you stop just looking at the headlines, and you look at the long term trend… things are not sky rocketing up, but they don’t look that bad! We are going to have a slowly improving picture!

Mortgage Interest Rates typically get LOWER when there’s BAD NEWS in the Economy… and they go UP when there’s good news. Believe it or not – the last three days we’ve had higher rates!  The Dow is Happy!

That’s not good news if you are waiting to Refinance!  NOW is probably the time to do it!

If you are considering a Refinance, call Steve and Eleanor Thorne, 919-649-5058  We have the best rates available, we offer FHA Streamline Refinances, Conventional financing, USDA Home Loans and VA Mortgage Loans!

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One Borrower Has Income One Borrower Has Credit Score

August 18, 2010 By Leave a Comment

When one borrower has most of the income… the other borrower has good credit scores… there ARE options for purchasing a home. Look at the question we had yesterday:

“We want to purchase a home, and I want to know if we can get it.  My husband currently has a mid credit score of 538,  and mine is 678.   He makes about 52,000 and I make 25,000.  I’m still in graduate school full time.  We saved  $4,000 for closing cost so far.  We want the house by the end of October 2010 Can we get a loan?”

Option 1:

Purchase a home using FHA, and have a non-owner occupied co-borrower on the loan with the borrower who has good credit scores. If you know that you can make the payments on your own, then having a parent, or other family member, on the loan will not be a burden to them.  After you’ve made 12 months of payments (and by all account mortgage interest rates will still be low a year from now) you can refinance the loan and take the family member(s) off. [Read more...]

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First Time Home Buyer Raleigh NC FAQs

August 14, 2010 By 1 Comment

We work with a TON of First Time Home Buyer’s, and we often find that they need the same basic information to avoid costly mistakes:

- I’m paying $1250 a month in Rent, can I keep my house payments at that same dollar amount? Great News!  When you buy a house, you can get a raise!  (for more info click here).

-  Can I buy a house if I’ve had some credit Boo-Boos? Okay this is tricky – but the answer is YES!  It’s just a matter of how long it will take to get your scores up to 620 (OR 580 if you qualify for NC Housing Finance Agency Money!).  We have a TON of information on Credit Scores, and how to get them higher!  Click here! [Read more...]

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FHA PMI Changes 10/4/2010

August 13, 2010 By 2 Comments

FHA Continues to make changes to their PMI Rates.  Because of the number of defaults – the monthly rates and the upfront rates for FHA Mortgage Insurance continues to change.  We keep this information on the site for folks who received a FHA Mortgage loan on, or around October of 2010.  We do have the most up to date information on the rates – in the event you are CURRENTLY looking for a FHA mortgage loan and want to know what the FHA PMI rates are today.

For about the 5th time in the last 36 months FHA is changing the way it charges Mortgage Insurance.  While this is a pretty major shift in the Way Mortgage Insurance is calculated for FHA, it’s only about a net $20 per $100K borrowed difference.

HISTORY of FHA’s PMI (Mortgage Insurance)

First off, it’s not called PMI. FHA doesn’t MAKE mortgage loans, they insure them.  The mortgage insurance that they charge is referred to as MIP (cleaver I know, Mortgage Insurance Premium).  I refer to it in my blog posts as FHA’s PMI... well because from a Consumer’s standpoint it works just like PMI, and most people are familiar with that term.

MIP has been charged TWICE to borrowers for YEARS. FHA collects an UpFront Mortgage Insurance Premium that’s gone from 1.5 to 1.75 t 2.25 to 1% of the loan amount.  In years past they’ve refunded part of this UpFront Premium… so if you took out a loan in say 2002, and then you paid that loan off through a refinance in 2004… you received a substantial chunk of that premium back.

Then the Economy went south, and with the changes they made in 2008, they did completely away with the refund…

The other way FHA collects the premium, is in the MONTHLY MIP premium.  In year’s past, that MIP collected on a monthly basis for loans with less than a 5% downpayment was.55%.  For loans where the borrower made more than a 5% downpayment, the MIP was .50%.

How These Changes Compare to the new October 2010 MIP Rates

Okay, because I can pretty easily do the math in my head, let’s compare the “old” rates for FHA Mortgage Insurance to the “new” rates based upon a $100,000 sales price with a “fictitious” mortgage interest rate of 4.25%.

DownPayment Upfront MIP Monthly MIP Loan Amount
With Upfront MIP		 Total Payment
with MIP		 Difference
NEW Method of Calculating MIP
3.5% 1% $75.75 $97,465.00 $555.22 + $24.60
5% 1% $67.96 $95,950.00 $539.97 + $21.64
OLD Method of Calculating MIP
3.5% 2.25% $45.22 $98,671.00 530.62
5% 2.25% $40.47 $97,137.00 518.33

These numbers, at $100,000 Sales Price don’t look that dramatic…  Let’s take the same format, and change the Sales Price so that we can take advantage of the maximum Loan Amount for Wake County, NC $295,000.

So with a Sales Price of $305,000 the numbers look like this…

DownPayment Upfront MIP Monthly MIP Loan Amount
With Upfront MIP		 Total Payment
with MIP		 Difference
NEW Method of Calculating MIP
3.5% 1% $222.95 $297,268.00 $1685.33 + $66.93
5% 1% $210.56 $297,268.00 $1672.94 + $67.08
OLD Method of Calculating MIP
3.5% 2.25% $137.93 $300,947.00 $1618.40
5% 2.25% $125.39 $300,947.00 $1605.86

Well… what do you know?  It’s STILL not that dramatic a difference.  I know my peers are on Facebook, and sending around video saying that this is a “Tax” on home owners.  It’s not.  It’s a way for FHA to get the cash flow they need, while mortgage loans are defaulting.

HERE’s what I think is interesting! You can buy a house with 2723 square feet, in Raleigh, 4 bedrooms, with a 2 car garage built in 2009 for $219,000. With these new FHA calculations, and with today’s interest rates, your down payment is $7,665 (this can be a GIFT) and your TOTAL monthly payment, including Homeowner dues, and taxes and insurance and EVERYTHING is still less than $1050 a month!

If you have pretty good credit (scores above 620) and not more than $350 a month in debt – a family making only $38,000 a year qualifies for this house! Now THAT my friends, is something to get excited about!

If you are considering a FHA mortgage loan in NC, and you want more information about qualifying for a FHA mortgage loan in Cary or Raleigh NC  - please call Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5057.  We know FHA Mortgage Programs, and we have the best Mortgage Rates available!

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VA Guarantee Fees and Co-Signors

June 21, 2010 By Leave a Comment

nc military bases

 

 

 

 

 

 

 

When you have a state that looks like this – you can be sure we see many Veterans purchasing homes!

The Veteran’s Administration does not actually “make” mortgage loans – they guarantee those loans, similar to what FHA does.  They charge a Funding Fee which is generally considered a form of mortgage insurance, intended to reduce the overall cost of the program to taxpayers.  The funding fee fomula is currently 2.15% on no down payment loans for a first-time use.  The funding fee for second time users, seeking a 100% loan is 3.3%.  There are also lower funding fees for folks who are making a down payment (which is becoming more popular).  There are those who are exempt from the funding fee.

*Veterans receiving VA compensation for service-connected disabilities.

*Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.

*Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).

Please note that the VA has the final say on who is exempt.

The VA does have some pretty specific rules regarding co-signors – for information on VA co-signors click here:

If you are considering a Veteran’s Administration Home Loan in NC – please call Steve and Eleanor Thorne 919-649-5058, we have the best mortgage rates and the lowest fees available!

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Options for Refinancing Veteran Loans

May 18, 2010 By 1 Comment

 

 

VA Mortgage Loans have No Downpayment

Bad news in the Economy is GOOD news for mortgage rates – and if you have a VA mortgage loan, it might be time to consider a refinance!  Seriously, if you are over 5.5% – you should call or txt today (919-649-5058).

One of the best options for a Veteran is an Interest Rate Reduction Loan (gotta’ love the military acronyms IRRL)… also referred to as a Streamline. This refinance program is a government backed mortgage loan for active duty and prior service veterans who already have an existing VA loan.

Credit qualifying is not required. This means that even if you have bad credit, as long as you have not had more than 1 thirty day late mortgage payment in the last 12 months, you may still be eligible for a VA streamline refinance.

VA streamline refinancing lets you refinance your existing VA home loan with no out of pocket expenses. All closing cost and pre-paids can be rolled into the loan amount.

No appraisal is required! You can skip up to 2 payments, and get existing escrow account refunded back to you!

The Streamline program is just for Interest Rate Reduction- meaning this is NOT for the Veteran who is wanting to take cash out of the property.  The Cash Out Refinance Program for Veteran mortgage loans have these fetures:

  • The cash-out proceeds can be used for any purpose.
  • A VA home loan refinance under the cash-out program differs from the VA streamline refinance in that an appraisal is required and you must qualify for the loan.
  • Also, unless you are exempt, VA  charges a 3% funding fee for this program, however, the fee can be rolled into the loan amount.

If you are considering a VA refinance, please call Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058.  We know how to make this program work for you!

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