No Income Limits, Lower Priced PMI in Disaster Areas

Hurricane Matthew destroyed our state in October of 2016, and while much of the damage has long been cleared away, the Disaster Area Declaration will remain for two years– terminating October 24, 2019. Because of this designation, you can take advantage of NO INCOME LIMITS on Conventional mortgage loans in CRAVEN COUNTY, New Bern and Vanceboro until this date.  Lower priced PMI in Disaster Areas is something that many NC loan officers are not aware of, so I would be certain to speak with someone who knows all of the programs.

This makes more borrowers eligible to buy their dream home and also enjoy the perks of a Conventional mortgage loan with lower rates and PMI (Mortgage Insurance) that falls off at a certain point in the life of the loan.  With Government loan programs, like FHA, no matter how much equity you have in your home, you will be required to pay PMI.

Private Mortgage Insurance (PMI) is the instrument strictly used for traditional Conventional Mortgage Loans. PMI is also required for refinances where 20% equity has not been reached yet.

Similar to other types of insurance we use everyday, mortgage insurance is paid for ahead of time on the chance that you might need it. Like car insurance, you may pay for it and never need it. However, the major benefit of Private Mortgage Insurance is that you do not need to have it for the length of the mortgage loan.

Once you reach 78% Loan to Value, or 22% equity in your home, PMI automatically terminates. Even better, at 80% Loan to Value, or 20% worth of mortgage payments made, you can request to cancel your PMI. We currently use five PMI Providers, and we work closely with all of them to find you the lowest costs.

HomeReady Mortgage Loans From Fannie Mae

One of the programs designed to help with Disaster Areas is the Fannie Mae HomeReady Program.  Here are few of the highlights of the HomeReady Mortgage program available in Craven County, NC:

• As little as 3% down payment
• No maximum Sales Price
• No Maximum Income Cap until October of 2019
• Lower priced PMI in Disaster Areas
• Down payment sources include gifts, cash-on-hand, and down payment assistance programs.
• Use income from non-occupant co-borrowers to qualify
• Income from non-borrowing household members helps your approval.
• “Boarder income” (income from a roommate) helps you qualify.
• Use rental income from a basement apartment or mother-in-law unit.
• Credit Scores below 640 are acceptable – however the mortgage rates will be higher because of the risk factors.

This program goes way beyond the flexibility of most other loan types, even ones considered ultra-flexible like FHA.

FHA Loans require a 3.5% down payment to buy a house in New Bern, NC.  With the HomeReady Home Loan 100% of the only 3% required for a down payment can come from a gift!  A parent or other relative can fund the entire amount of down payment and closing costs, and Sellers are allowed to pay for closing costs.  We also offer 3% down payment assistance from the State of North Carolina that can be used for this program!

Lower Monthly Payments / Lower priced PMI in Disaster Areas

Another benefit to buying in a Declared Disaster Area is lower-priced PMI (mortgage insurance).  A buyer in a disaster area will pay LESS per month to live in the same house that isn’t in a disaster area. Here’s an example:

We ran two scenarios in the office the other day. The buyer has a 660 credit score and is looking to buy a $325,000 home with a Conventional mortgage loan.

Some NC counties did not completely remove the Household Income Limit for the HomeReady Mortgage Program, and a few pockets of NEW BERN may still have a household income cap. You shouldn’t worry about this too much, though… We are talking about a few select streets in NEW BERN, so it’s pretty likely you will be able to find the home you love and NOT run into an income cap.

USDA Home Loans in New Bern NC

There are also NO Down Payment loans available in New Bern, NC.  The USDA Home Loan Program is a 100% mortgage loan.  SO if you are purchasing a $200,000 home, you can borrow $200,000.  You can not own another home at the time you close, but you do not need to be a first time home buyer to qualify.

The home needs to be within the USDA Footprint in New Bern, and there are areas near the river that do not qualify.

The credit scores on this program for a “Sail Through No Worries” deal are 640 and above.  Below that number, you could see higher mortgage rates, and you could be asked for additional documentation.

In addition to meeting the credit score requirements and being sure that the home you buy in New Bern is eligible for the program, you will also need to meet the Household Income Requirements.  The requirements for Craven County are based upon the annual median income for the county as reported each year.  While they can change the household limits each fall, USDA limits for New Bern have been the same for 2 years.

The USDA Home Loans Maximum Income Limits for Cravan County

• 1 to 4 people in the Household $82,700
• 5 or More in the Household $109,150

If your household income is over the limit, by a little, remember that we do have some flexibility and the USDA underwriting guidelines allow us to make adjustments to gross income based upon deductions on your tax return and child care that you are paying out in New Bern.

These mortgages are fairly cheap to in regards to closing costs, and it’s important to remember that they are for owner occupied mortgages (only). Sellers can contribute almost all of the money needed for the down payment, and in many cases, we can help you coordinate any Seller Contributions to the closing costs, just ask us about how the contract needs to be worded.

If you have questions about how you can get lower priced PMI in disaster areas like New Bern and Craven County, NC please call Steve and Eleanor Thorne 919 649 5058.  Connect with us on Google Plus or Facebook!