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Showing posts from June, 2016
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FAQS & VA LOANS


Thinking about getting a VA loan? Have some questions? Odds are the answers can be found in our VA FAQ post.
Are VA loans just for veterans?
No, VA loans are available for not just veterans but active duty personnel with at least 181 days of service, members or veterans of the National Guard and Armed Forces Reserves with at least six years of service as well as unremarried spouses of those who have died as a result of a service related injury.
What are the closing costs for a VA loan?
That will vary based upon the area, the selected lender and other third party charges. Your loan officer can give you a cost estimate over the phone or through an email. However, the veteran is only allowed to pay certain costs and is restricted to only pay for an appraisal, title, origination fees, credit report and recording charges. Lender fees such as processing and underwriting are considered “non-allowable” fees, for example.
How does the VA view credit?
The VA doesn’t require a m…
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EVERYTHING YOU SHOULD KNOW ABOUT FHA MORTGAGE INSURANCE

Of the three government-backed mortgage programs, the FHA loan is by far the most popular. There are no income limits for FHA loans, the property can be located pretty much anywhere anyone can access the program. The government guarantee with FHA loans provides that should the borrower ever go into default the lender will be compensated for the loss. As long as the loan was approved using standard FHA guidelines, the guarantee will apply.
This guarantee however isn’t free. In exchange for allowing a down payment as low as 3.5% of the loan amount the borrowers pay for a mortgage insurance premium. With FHA loans, there are two such premiums, one upfront and an annual premium paid in monthly installments. Today, the upfront premium is 1.75% of the amount borrowed. If the FHA loan is say $300,000 the premium is $5,250 which can then be rolled into the loan amount for a final loan of $305,250. Your principal and interest payment will…
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MAKING YOUR MORTGAGE PAYMENT EASIER



When borrowers want to lower their monthly mortgage payment, the automatic response is to refinance, and that’s correct. When interest rates fall, it can make sense to refinance to the lower rates and savings on principal and interest each month. A quick conversation with a loan officer can guide borrowers into making the correct decision and decide if refinancing, along with its associated costs, makes sense. But there are other ways to make your mortgage payment easier beyond lowering an interest rate. Your principal and interest, taxes, and insurance should all be evaluated.
What is the term on your current loan? Most mortgage loans in today's’ market have loan terms from 10 to 30 years in five year increments. Mortgage lenders offer 10, 15, 20, 25 and 30 year terms. If you have a shorter term loan but want to lower your monthly payment, extending your loan to a longer term will cause your payment to drop. The drawback with this strategy is m…
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SHOULD YOU TAKE ADVANTAGE OF THE FHA STREAMLINE REFINANCE?
In short, probably. You’ll want to speak with your loan officer if a refinance makes sense for you right now but if it does there is probably no easier loan to qualify for than the FHA streamline refinance. What’s an FHA streamline? The streamline is a low-document refinance program and while it differs from a standard FHA refinance loan, very rarely should the standard refinance be used and instead choose the streamline. Why?
As long as your interest rate is lowered or you’re switching from an adjustable rate you’ll quickly discover how easy the streamline actually is. First, there is no employment verification required. That means there will be no need to dig up your two previous W2 forms. You don’t need to provide your pay check stubs showing how much money you make each month. In fact, you’re employer wont’ be contacted at all.
Second, there is no refinance needed in order to establish property value. A standard refinance …
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WHAT ARE THE TOP FIVE BENEFITS OF REFINANCING?
For those who have a mortgage, at some point they think about replacing that loan with a new one by refinancing. Good loan officers constantly monitor their client’s existing loan to see if refinancing could work to someone’s benefit. And it’s not always because rates have fallen. Here are the top five benefits of a refinance.
Lower Monthly Payment- This is the most obvious and common reason to refinance, to lower a monthly payment and pay less interest over time. When rates fall a loan officer can compare your current monthly payment with current market rates and compare those savings to the closing costs involved to see if it might be time to refinance your mortgage.
Change a Loan Term- Mortgage lenders offer loan terms ranging from 10 to 30 years in five year increments. The most common term is for 30 years which provides the lowest monthly payment of the group yet the amount of interest paid over the life of the loan is much greater com…
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HAVE MORTGAGE RATES BECOME CHEAPER?


If you’re in the process of either refinancing or out shopping for a home, you’re probably aware by now that interest rates can change from day to day. In fact, sometimes they can even change during the course of a single business day; although that doesn’t happen very often. If you have been waiting for rates to drop a bit further, for whatever reason, it might be a good idea to take a serious look at locking in your rate.
Mortgage rates from one lender to the next are typically very close and often the only difference might be in the fees associated with the loan. To get a sense of how mortgage rates in general are trending, most look at a weekly mortgage rate survey performed by mortgage giant Freddie Mac. This weekly index will show a national average on different loan types such as a 30 year, 15 year and a 5/1 hybrid and rates have been trending downward.
According to the survey on June 16 of this year the average 30 year rate was 3.54% while e…
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HOW DO I SIGN UP FOR A MORTGAGE?


In the past, getting a mortgage meant filling out by hand a four-five page form making sure all 250+ boxes were either completed, checked or initialed. It could literally take someone a half of an hour just to get past the application stage. Today however, as with most things, it’s a bit different and much easier.
Very few loan applications are completed by hand, although some who work with a local loan officer, can schedule a face to face meeting to not only make sure the application is properly completed, but to get answers to questions immediately. Yet most lenders, both local and national, prefer the completion of an online application. The loan officer can send a link to you that will take you to their application page and you can complete the application in one sitting, or you can fill out parts of it and come back later; although today that’s rare because the online application process is much more streamlined compared to what it was years ago.
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WHY MILLENNIALS SHOULD RECONSIDER AND BUY A HOME

Recent surveys over the past year or so have all come to the same basic conclusion- millennials aren’t buying homes. Those twenty-somethings may want to buy, but for any variety of reasons they continue to mostly rent, but a recent survey by the Consumer Reports National Research Center provides a bit of insight. What’s holding them back and why should they think seriously about buying now and not later? After all, buying and owning real estate is the best way to create long term wealth and financial security.
According to the report, saving up for a down payment seems to be the biggest obstacle for at least one-third of those surveyed. Yet if that’s the main reason, and it’s a good one, there are options for those who do want to buy. That group accounts for 71 percent of those polled. But that shouldn’t be that much of a problem if they explore an FHA loan which only asks for a low down payment.
This age group is also carrying more deb…
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BEST US CITIES TO BUY A HOME

There really is no shortage of “Best Of” lists for pretty much anything we might imagine. Companies everywhere push out survey results which in turn will become reading material in various publications and on websites. And when you search for “best US cities to buy a home” you’ll find multiple lists based upon various factors. Such lists might concentrate on best cities to buy a home for first time buyers. Some lists might be geared toward those who are nearing retirement or for properties located in vacation spots.
Your personal list must also take into account your personal lifestyle choices. Do you want to live in a big city that boasts a professional baseball and football team? Do you want to live near the beach? If so, your “best of” city won’t include Denver or Austin, for example. Certainly your job will dictate where you live. Beyond that, here is a brief composite of some of these cities that are regularly named “best of” in various surveys.
Aust…
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WHAT TO LOOK FOR WHEN SHOPPING FOR A MANUFACTURED HOME LOAN

Buying a manufactured home today isn’t what it used to be. The image of a metal cabin sitting on top of a parked trailer might be the initial vision of some but today the difference between a manufactured home and a traditional “stick built” home is barely noticeable. In fact, some might even have to be told the home is a manufactured one because at first glance it looks like any other. Yet even though there are cosmetic and construction differences, financing with a mortgage can take a little twist if the lender or bank isn’t familiar with loans used to buy manufactured housing.
When someone visits a manufactured housing dealer they will also be introduced to a lender who specializes in manufactured homes. While this is certainly okay don’t allow yourself to be herded into some sort of “package deal” where you get some sort of a discount if you get the home at the same place you got the loan. Negotiate the price of the home se…
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ARE VA LOANS HARD TO QUALIFY FOR? ARE THERE ANY PAYMENT OR TOUGH CREDIT REQUIREMENTS?VA loans might be mysterious to some, maybe perhaps that a certain segment of our society qualifies for them, but getting a VA loan is the very best option for those who qualify for a mortgage to buy a primary residence and want a program with no down payment and reduced closing costs. But they’re relatively easy to qualify for and the only time it’s not easy occurs when a lender processes a VA loan but has very little experience with the program. All too often a VA loan application is turned down by an inexperienced VA lender which a VA-approved lender would otherwise grant an approval.
It might also be that the notion of VA loans being hard to qualify for is due to their very low delinquency rate. Of all the loan programs in the marketplace today, including those underwritten to Fannie Mae and Freddie Mac standards, the VA loan program stands alone in regards to performance. The delinquency rates for…
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DO JUMBO LOANS QUALIFY FOR HARP 2.0?

HARP 2.0 has been a very successful program and is set to expire at the end of this year but HARP didn’t start out as a success. As the economy was struggling to gain footing during the recession Congress put together a special mortgage program that allowed homeowners who were underwater refinance their current loan and take advantage of the lower rates available. However, conventional loans require some equity before a loan can be refinance and cannot exceed 90% of the current value of the property. As property values fell during the latter half of the last decade that left many who could not refinance because they were “upside down” with their mortgage. They owed more than the home was worth.
The Home Affordable Refinance Program was introduced in 2009 and allowed homeowners to refinance up to 125% of the current value of the property. This meant the lender using the HARP program would also order a property appraisal to determine value. While thi…
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HOW CAN I PREPARE AND QUALIFY FOR A CONVENTIONAL LOAN?

Conventional mortgage loans are cousins of their government-backed loan programs such as FHA, VA and USDA programs. Conventional mortgages use guidelines set forth by mortgage giants Fannie Mae and Freddie Mac and are by far the most common type of loan used to buy and finance a home in today’s environment and have been for quite some time. But if this is your first home and you’re curious about how a lender will review your loan application and what they look for, here are some tips to help you better prepare for a conventional loan and make qualification a breeze.
Check Your Credit-  If you haven’t done so in a while or you’ve never done it, it’s time to look at a copy of your credit report. You can get a free report provided by all three main credit repositories of Equifax, Experian and TransUnion at annualcreditreport.com. You won’t be able to see the same credit scores lenders use but you will be able to get a general idea abo…
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WHAT ADVANTAGE DOES A 3/1 FHA ARM HAVE OVER A 5/1?
Adjustable rate mortgage loans historically were the home loan of choice when interest rates were relatively high. For example, if you bought a house say in 1987 you would find that fixed rates were available but they weren’t all that popular because a standard 30 year fixed rate was somewhere around  11.00%. That’s right, 11.00%. That’s why adjustable rate mortgages were the popular choice because they started out much lower than their fixed rate cousins. In today’s market, there is an abundance of fixed rate options called “hybrids” that are fixed for the first few years then change into an adjustable rate mortgage that can change once per year.
Two of the more popular hybrids are the 3/1 and 5/1 FHA adjustable rate mortgage. Borrowers can qualify for a slightly larger loan amount due to the lower starting rates compared to a fixed rate loan and is also advantageous if the buyers don’t intend to own the property for very long and w…
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WHEN SHOULD A REFINANCE HAPPEN ON A FIXED RATE MORTGAGE?
For those that chose a fixed rate over an adjustable rate mortgage to finance their purchase there may come a time when that initial decision might be changed. How so? Mortgage loans today don’t have prepayment penalties on them and they can easily be replaced by refinancing the existing loan into another one. That said, when does it make sense to refinance an existing fixed rate mortgage?
There are two primary reasons why it can make sense to refinance a fixed rate loan- lowering the rate or changing the term. Or both at the same time. Yet for those thinking of refinancing one thing they should not do is simply compare the current market rates with the one they have on their existing mortgage. There seems to be somewhat of a financial myth that occasionally floats around that people shouldn’t consider refinancing unless current rates are 1.00% or 2.00% lower than what they currently have. But that’s not how to decide whether a …
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WHAT RESTRICTIONS ARE THERE WITH A FIRST TIME VA LOAN?
 The mortgage program with the lowest default rate of any also has a few limitations that other mortgage programs don’t have. These restrictions do nothing to bolster the performance of VA mortgages in general but the fact is they are restricted to certain individuals as well as having characteristics that conventional loans such as those underwritten to Fannie Mae or Freddie Mac standards have. What are some of the restrictions for someone using a VA loan for the first time to buy and finance a home?
The first restriction is who can actually take advantage of this loan program. Established in 1944 to help returning soldiers more quickly assimilate into civilian life the VA loan program was part of the original package and allowed veterans to buy a home without the need for a down payment, something that was essentially unheard of. In addition, the veteran is restricted from paying certain closing costs. The combination of no down …
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What Are the Loan Limits for FHA Loans?
How much can you borrow? There are a few limits that tell you how much you can borrow and the primary one compares your monthly payments with your gross monthly income. In this fashion, how much you can borrow is dependent upon how much money you make each month and lenders employ debt ratios to help make that determination. A debt ratio is number arrived at dividing the monthly mortgage payment as well as all credit payments by gross monthly income. In general lenders like to see the mortgage payment be around one-third of gross monthly income.

Loan limits are also set by the Federal Housing Administration and are based upon the local real estate market. Those that live in so-called higher cost areas will be able to borrow more with an FHA loan compared to other areas. For example, in Los Angeles County the maximum FHA loan amount is $625,500 for a single family home and $800,775 for a duplex as long as the borrower lives in one of the units. F…