The VA home loan guaranty program allows lenders to offer long term affordable housing with zero to low down payments for veterans. It’s one of the benefits you receive as an acknowledgement of gratitude for your service……..
In 1930, Congress and the President established the “GI Bill” which allowed the Veteran Administration (VA) to coordinate benefits for its service people. One of these programs, known as the Home Loan Guaranty Program, was created to help returning veterans and their families assimilate back into civilian life after sacrificing so much personally for their country.
Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.
“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.
These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.
So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.
And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.
If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.
š
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.
Showing posts with label Mortgage Investors Group. Show all posts
Showing posts with label Mortgage Investors Group. Show all posts
Tuesday, November 11, 2008
Wednesday, August 6, 2008
Thursday, July 31, 2008
VA Loans – BTW Oak Ridge will be host to the 2nd Annual East Tennessee Business Conference for Veterans
August 5th, Oak Ridge will be host to the 2nd Annual East Tennessee Business Conference for Veterans. The purpose of the conference is to increase business opportunities for disabled veterans and veteran owned small businesses. It also seems like a good time to remind veterans of homeownership opportunities available to them…..
In 1930, Congress and the President established the “GI Bill” which allowed the Veteran Administration (VA) to coordinate benefits for its service people. One of these programs, known as the Home Loan Guaranty Program, was created to help returning veterans and their families assimilate back into civilian life after sacrificing so much personally for their country.
Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.
“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.
These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.
So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.
And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.
If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.
---
NaVOBA is the Voice of the Veteran Business Movement
2nd annual east tennessee veterans' business conference
The Y-12 National Security Complex and The University of Tennessee Center for Industrial Services Procurement Technical Assistance Center (UT CIS-PTAC) join with a host of East Tennessee agencies for the second annual East Tennessee Veterans Business Conference. The theme of this conference is Increasing Opportunities for Veteran-Owned Businesses.š
[Website Here]
----------
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.
In 1930, Congress and the President established the “GI Bill” which allowed the Veteran Administration (VA) to coordinate benefits for its service people. One of these programs, known as the Home Loan Guaranty Program, was created to help returning veterans and their families assimilate back into civilian life after sacrificing so much personally for their country.
Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.
“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.
These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.
So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.
And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.
If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.
---
NaVOBA is the Voice of the Veteran Business Movement
2nd annual east tennessee veterans' business conference
The Y-12 National Security Complex and The University of Tennessee Center for Industrial Services Procurement Technical Assistance Center (UT CIS-PTAC) join with a host of East Tennessee agencies for the second annual East Tennessee Veterans Business Conference. The theme of this conference is Increasing Opportunities for Veteran-Owned Businesses.š
[Website Here]
----------
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.
Friday, July 4, 2008
Happy 4th of July! VA Loans – Thank You for Your Service
The VA home loan guaranty program allows lenders to offer long term affordable housing with zero to low down payments for veterans. It’s one of the benefits you receive as an acknowledgement of gratitude for your service...
In 1930, Congress and the President established the “GI Bill” which allowed the Veteran Administration (VA) to coordinate benefits for its service people. One of these programs, known as the Home Loan Guaranty Program, was created to help returning veterans and their families assimilate back into civilian life after sacrificing so much personally for their country.
Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.
“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.
These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.
So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.
And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.
If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.
š
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.
VA Loans, Veteran Administration, GI Bill, home loan financing, credit reports, Home Loan Plain Talk, Mortgage Specialist, Kristin Abouelata, Mortgage Investors Group
Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.
“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.
These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.
So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.
And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.
If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.
š
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.
VA Loans, Veteran Administration, GI Bill, home loan financing, credit reports, Home Loan Plain Talk, Mortgage Specialist, Kristin Abouelata, Mortgage Investors Group
Saturday, April 12, 2008
Mortgage Amortization...Avoid Paying the Piper Too Much
When obtaining a home mortgage, understanding what amortization is and how it can affect your pocketbook is an important concept to understand……
Amortization. Big word. And an important word in the loan world. It doesn’t matter whether you’re getting a loan for a boat, car or home - it’s an important concept to grasp. Of course, I’m going to focus on how understanding your loan amortization is important when considering home loan financing. It can mean a big difference in the amount of cash you shell out toward your home mortgage over time.
Amortization is the repayment, systematically, of calculated principal and interest to a lender over a designated period of time. Calculating an amortization schedule is a not an easy task. Thankfully, some really smart mathematical whizzes came up with tools that do it for us automatically. You can just punch in the numbers and print out a schedule. You can find online tools to assist you if you’re sitting at home and curious to see your current schedule. Or dig through your folder of loan closing documents. You should be able to dredge up a copy. And if you’re considering a home loan, your lender should be able to provide you with amortization schedules for different financing scenarios.
What does an amortization schedule look like? Pages and pages of numbers that finally end up reflecting your loan balance paid off. It points out to you, payment by payment, exactly how much of your monthly loan payment is directed toward principal reduction, lender collected interested, and escrow payments (if you have your lender pay your taxes and insurance for you). Also, you can see on the Truth In Lending statement just exactly how much money you’ll be paying out of pocket over the full amortization period if you only make your minimum monthly payments. It’s enlightening. Or some say, nauseating. The fact of the matter is that 85% (or more) of your house payment on the first pages of the amortization schedule go mainly toward interest fees. It’s not till the back few pages that your payment really starts chipping away at principal.
So how can you avoid paying so much more money back to a lender than you’re actually borrowing? By making extra principal payments monthly. You may be surprised to know that by paying additional money towards principal monthly, (make sure to write a separate check and mark it “principal payment”), you can chip off years of your loan repayment schedule and keep money in your pocket. For instance, if you have a 30 year fixed mortgage for $150,000 at 6%, paying an extra $50 per month will save you $26,673 in interest and pay off your loan approximately 4 years early. You can also achieve similar results by making a lump sum principal payment a year (maybe budget part of a yearly bonus toward this goal). Why this scenario works is that by reducing the principal more quickly over time, there’s less of a lump sum debt to calculate interest against. Make sense?
So stay in once a month, skip that new pair of shoes or Wii game. Put the money toward your principal. Or when pre-qualifying for a home, include an extra principal payment in your budget. Lower your “payment comfort level” a tad to allow for an extra monthly principal payment you intend to make. You’ll really see the benefit of doing so in the long run!
š
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.
Amortization is the repayment, systematically, of calculated principal and interest to a lender over a designated period of time. Calculating an amortization schedule is a not an easy task. Thankfully, some really smart mathematical whizzes came up with tools that do it for us automatically. You can just punch in the numbers and print out a schedule. You can find online tools to assist you if you’re sitting at home and curious to see your current schedule. Or dig through your folder of loan closing documents. You should be able to dredge up a copy. And if you’re considering a home loan, your lender should be able to provide you with amortization schedules for different financing scenarios.
What does an amortization schedule look like? Pages and pages of numbers that finally end up reflecting your loan balance paid off. It points out to you, payment by payment, exactly how much of your monthly loan payment is directed toward principal reduction, lender collected interested, and escrow payments (if you have your lender pay your taxes and insurance for you). Also, you can see on the Truth In Lending statement just exactly how much money you’ll be paying out of pocket over the full amortization period if you only make your minimum monthly payments. It’s enlightening. Or some say, nauseating. The fact of the matter is that 85% (or more) of your house payment on the first pages of the amortization schedule go mainly toward interest fees. It’s not till the back few pages that your payment really starts chipping away at principal.
So how can you avoid paying so much more money back to a lender than you’re actually borrowing? By making extra principal payments monthly. You may be surprised to know that by paying additional money towards principal monthly, (make sure to write a separate check and mark it “principal payment”), you can chip off years of your loan repayment schedule and keep money in your pocket. For instance, if you have a 30 year fixed mortgage for $150,000 at 6%, paying an extra $50 per month will save you $26,673 in interest and pay off your loan approximately 4 years early. You can also achieve similar results by making a lump sum principal payment a year (maybe budget part of a yearly bonus toward this goal). Why this scenario works is that by reducing the principal more quickly over time, there’s less of a lump sum debt to calculate interest against. Make sense?
So stay in once a month, skip that new pair of shoes or Wii game. Put the money toward your principal. Or when pre-qualifying for a home, include an extra principal payment in your budget. Lower your “payment comfort level” a tad to allow for an extra monthly principal payment you intend to make. You’ll really see the benefit of doing so in the long run!
š
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.
Thursday, April 10, 2008
FHA and Down Payment Assistance: It’s Truly Gifted
Down Payment Assistance programs are designed to assist a home buyer with their 3% minimum investment on an FHA loan. It’s a nice gift to get!
If you qualify for an FHA loan to buy a home, traditionally you should be prepared to come up with 3% of final sales price in out of pocket funds to put down on the transaction. It’s a requirement. You can’t really get around it in on a home loan purchase. You can finance 97.75% of the loan amount, but you still have to have the remaining 1.25% of the aforementioned to put toward closing costs. Anyway you look at it, you need 3%.
Well, all is not forsaken. There is another way to come up with the 3% that doesn’t require hawking grandma’s pearl necklace or selling your 2nd car. There are down payment assistance programs out there to lend a helping hand. They can be considered a “gift”, and they are available for FHA loans that are single family and 1-4 unit dwellings. The two big names are AmeriDream, Inc. and The Nehemiah Program, and they provide these gift funds to qualified homebuyers.
How much in gift funds can be made available to you? 1% to 6% of the final contract sales price or a flat gift amount not to exceed 6% of the final contract sales price. And, in addition to the gift from AmeriDream or Nehemiah, the seller can contribute between 1% and 6% of final sales price toward the borrower’s closing costs. So, here’s the big secret, you can basically obtain an FHA loan with little or no down payment if you qualify.
How is this scenario possible? Well, it all depends on the deal you’re getting on the house. Basically, the seller is financing the down payment gift by not netting as much on the sale of the home. The seller or the lender also must pay the “down payment processing fee”, so your closing costs are going to go up $350-500. But, if you are buying a home below the lender’s appraised value, it can work!
Here’s an example. Say John and Susie Homebuyer have excellent credit but no cash to put down on a property. They are working with a great realtor who finds a home for sale that’s worth $120,000, but it’s generally acknowledged the seller will accept around $100,000 for it. The closing costs will run about $4500 (including the gift processing fee) and John and Suzie must invest $3,000 (3% of $100K) of their own money in the transaction per FHA guidelines. So, John and Suzie offer the seller $107,500. The seller agrees to participate in the Down Payment Assistance program and contribute $3,000 toward the buyer’s closing costs. This contribution becomes the “gift.” In addition, the seller agrees to pay $4500 in closing costs. The seller nets $100,000 from the transaction as anticipated, and the buyers pay the 3% down payment via a “gift” from AmeriDream or Nehemiah. The appraisal comes in comfortably above asking price and everyone’s happy.
The down payment assistance programs mentioned are large and respected community development programs, and they are a great deal for homeowners if they qualify and the seller agrees to contribute. With sellers willing to make sales concessions lately, it’s an excellent market for AmeriDream or Nehemiah. It’s critical that your realtor understand that you want to utilize these programs when you negotiate. Make sure they are aware of it and if need be, have your loan officer and realtor communicate with one another prior to house hunting. It’s also useful to have your lender prepare a good faith estimate for you prior to making an offer on a specific home so you can make sure all your numbers work and the offer is worded correctly with all the proper forms attached. And the good news is the programs still work with some of the competitive first time homebuyer programs out there like Tennessee Housing Development Agency with below market rates (but you don’t have to be a first time homebuyer).
So, who says you can’t get 100% financing anymore?
Let My Experience Work For You!
If you qualify for an FHA loan to buy a home, traditionally you should be prepared to come up with 3% of final sales price in out of pocket funds to put down on the transaction. It’s a requirement. You can’t really get around it in on a home loan purchase. You can finance 97.75% of the loan amount, but you still have to have the remaining 1.25% of the aforementioned to put toward closing costs. Anyway you look at it, you need 3%.
Well, all is not forsaken. There is another way to come up with the 3% that doesn’t require hawking grandma’s pearl necklace or selling your 2nd car. There are down payment assistance programs out there to lend a helping hand. They can be considered a “gift”, and they are available for FHA loans that are single family and 1-4 unit dwellings. The two big names are AmeriDream, Inc. and The Nehemiah Program, and they provide these gift funds to qualified homebuyers.
How much in gift funds can be made available to you? 1% to 6% of the final contract sales price or a flat gift amount not to exceed 6% of the final contract sales price. And, in addition to the gift from AmeriDream or Nehemiah, the seller can contribute between 1% and 6% of final sales price toward the borrower’s closing costs. So, here’s the big secret, you can basically obtain an FHA loan with little or no down payment if you qualify.
How is this scenario possible? Well, it all depends on the deal you’re getting on the house. Basically, the seller is financing the down payment gift by not netting as much on the sale of the home. The seller or the lender also must pay the “down payment processing fee”, so your closing costs are going to go up $350-500. But, if you are buying a home below the lender’s appraised value, it can work!
Here’s an example. Say John and Susie Homebuyer have excellent credit but no cash to put down on a property. They are working with a great realtor who finds a home for sale that’s worth $120,000, but it’s generally acknowledged the seller will accept around $100,000 for it. The closing costs will run about $4500 (including the gift processing fee) and John and Suzie must invest $3,000 (3% of $100K) of their own money in the transaction per FHA guidelines. So, John and Suzie offer the seller $107,500. The seller agrees to participate in the Down Payment Assistance program and contribute $3,000 toward the buyer’s closing costs. This contribution becomes the “gift.” In addition, the seller agrees to pay $4500 in closing costs. The seller nets $100,000 from the transaction as anticipated, and the buyers pay the 3% down payment via a “gift” from AmeriDream or Nehemiah. The appraisal comes in comfortably above asking price and everyone’s happy.
The down payment assistance programs mentioned are large and respected community development programs, and they are a great deal for homeowners if they qualify and the seller agrees to contribute. With sellers willing to make sales concessions lately, it’s an excellent market for AmeriDream or Nehemiah. It’s critical that your realtor understand that you want to utilize these programs when you negotiate. Make sure they are aware of it and if need be, have your loan officer and realtor communicate with one another prior to house hunting. It’s also useful to have your lender prepare a good faith estimate for you prior to making an offer on a specific home so you can make sure all your numbers work and the offer is worded correctly with all the proper forms attached. And the good news is the programs still work with some of the competitive first time homebuyer programs out there like Tennessee Housing Development Agency with below market rates (but you don’t have to be a first time homebuyer).
So, who says you can’t get 100% financing anymore?
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call
direct: (865) 567-0113
Toll Free: 1-800-489-8910.
For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.
Truth and Lending, Mortgage Rates, home loan financing, credit reports, Home Loan Plain Talk, Mortgage Specialist, Kristin Abouelata
Saturday, April 5, 2008
Tuesday, February 26, 2008
Mortgage Loan Approval Sometimes Need A Human Touch
The mortgage industry can usually tell you in a matter of minutes if you are approved for a loan by inputting your information into an automatic underwriting system. But what if your credit profile doesn’t fit inside the standard guidelines? You may be eligible for a manual underwrite, where a real person eyeballs your credit file…….
In the mid 1990’s, the mortgage industry saw the credit score and its predictive power to assess a borrower’s ability to repay a mortgage step into the limelight as one of the most indicative factors for loan approval. After conducting statistical test after statistical test, Fannie, Freddie and Ginnie, the 3 big lending institutions, mandated that the credit score should be used in conjunction with manual underwriting to assess loan approval. Not too long after, automated underwriting systems (AUS) were developed that expedited and streamlined the underwriting process even further for lenders. A loan officer today simply inputs a borrower’s key information into the preferred underwriting automatic engine, such as his/her credit score, income, amount being borrowed, cash reserves, employment and housing history, and the value of the property. A response is returned by the underwriting engine recommending approval or denial for the loan.
If your loan receives a denial from an AUS, the buck doesn’t necessarily stop there. Life happens to people, and oftentimes it’s going to take a real live person understanding the nuances of a file to make an underwriting decision. That’s when your lender may suggest submitting your file to underwriting for a manual review. After all, not everything in life can be automatic, right?
A perfect scenario for a manually underwritten file would be someone who has no credit scores. No credit scores? Yes, it is possible. I’ve had customers who, being old school and always having paid for everything in cash, had never established traditional credit lines that reported to credit reporting bureaus. In a case such as this one, I had to submit non-traditional lines of credit to underwriting, something a machine can’t assess. This means I had my customer bring in bills he had paid on time for the past year to create a credit history. Typical ones used are car insurance, utility bills, cell phone bills and cable bills. You can expect to have to provide 3-4 different trade lines if you haven’t established a traditional credit history and score.
“The most typical reason we see a file submitted to us for manual underwriting is for either no credit score or an error reported on a credit report,” reflects Patricia Haynes, onsite Government Underwriter at Mortgage Investors Group. “For instance a judgement that doesn’t really belong to the borrower. Maybe it’s really Dad’s judgement reflected on the son’s report because Junior and Dad have the same name. That’s when I can overwrite an AUS decision because I have the documentation to support my decision to do so in front of me.”
Another very common reason to submit a loan for a manual underwrite is when your customer’s credit score is below 620 and gets an AUS denial. If this is the case with your loan, be prepared to provide more than average documentation about your credit history, as well as written explanations as to why your credit score has suffered recently. Maybe two years ago you had a financial meltdown due to a medical illness, but in the last twelve months, you can prove you are back on your game and have been repaying debt. However, your credit scores haven’t exactly caught up with your actions. An underwriter is going to piece together the different aspects of your file and see if it makes sense. Your home lender should be able to review your file and guide you as to what documentation an underwriter will want from you to grant you loan approval.
Naturally, if your credit score is really low and you have very little explanation for your state of credit affairs other than you failed to pay your bills on time, don’t hold your breath for loan approval. An underwriter can see through smoke and mirrors. After looking at files as long as they have, they can basically sniff out a loan that has merit from the ones that are too risky.
So, even as our world gets more and more automated every day, it’s nice to know that you can’t replace genuine common sense, even in the mortgage industry. And it’s nice to know that you can plead your case for credit worthiness to a real live human being.
#
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.
In the mid 1990’s, the mortgage industry saw the credit score and its predictive power to assess a borrower’s ability to repay a mortgage step into the limelight as one of the most indicative factors for loan approval. After conducting statistical test after statistical test, Fannie, Freddie and Ginnie, the 3 big lending institutions, mandated that the credit score should be used in conjunction with manual underwriting to assess loan approval. Not too long after, automated underwriting systems (AUS) were developed that expedited and streamlined the underwriting process even further for lenders. A loan officer today simply inputs a borrower’s key information into the preferred underwriting automatic engine, such as his/her credit score, income, amount being borrowed, cash reserves, employment and housing history, and the value of the property. A response is returned by the underwriting engine recommending approval or denial for the loan.
If your loan receives a denial from an AUS, the buck doesn’t necessarily stop there. Life happens to people, and oftentimes it’s going to take a real live person understanding the nuances of a file to make an underwriting decision. That’s when your lender may suggest submitting your file to underwriting for a manual review. After all, not everything in life can be automatic, right?
A perfect scenario for a manually underwritten file would be someone who has no credit scores. No credit scores? Yes, it is possible. I’ve had customers who, being old school and always having paid for everything in cash, had never established traditional credit lines that reported to credit reporting bureaus. In a case such as this one, I had to submit non-traditional lines of credit to underwriting, something a machine can’t assess. This means I had my customer bring in bills he had paid on time for the past year to create a credit history. Typical ones used are car insurance, utility bills, cell phone bills and cable bills. You can expect to have to provide 3-4 different trade lines if you haven’t established a traditional credit history and score.
“The most typical reason we see a file submitted to us for manual underwriting is for either no credit score or an error reported on a credit report,” reflects Patricia Haynes, onsite Government Underwriter at Mortgage Investors Group. “For instance a judgement that doesn’t really belong to the borrower. Maybe it’s really Dad’s judgement reflected on the son’s report because Junior and Dad have the same name. That’s when I can overwrite an AUS decision because I have the documentation to support my decision to do so in front of me.”
Another very common reason to submit a loan for a manual underwrite is when your customer’s credit score is below 620 and gets an AUS denial. If this is the case with your loan, be prepared to provide more than average documentation about your credit history, as well as written explanations as to why your credit score has suffered recently. Maybe two years ago you had a financial meltdown due to a medical illness, but in the last twelve months, you can prove you are back on your game and have been repaying debt. However, your credit scores haven’t exactly caught up with your actions. An underwriter is going to piece together the different aspects of your file and see if it makes sense. Your home lender should be able to review your file and guide you as to what documentation an underwriter will want from you to grant you loan approval.
Naturally, if your credit score is really low and you have very little explanation for your state of credit affairs other than you failed to pay your bills on time, don’t hold your breath for loan approval. An underwriter can see through smoke and mirrors. After looking at files as long as they have, they can basically sniff out a loan that has merit from the ones that are too risky.
So, even as our world gets more and more automated every day, it’s nice to know that you can’t replace genuine common sense, even in the mortgage industry. And it’s nice to know that you can plead your case for credit worthiness to a real live human being.
#
Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.
Friday, February 15, 2008
Do you have a question on home financing?
Do you have a question on home financing?
I have been writing an article each week on home financing for various publications, and I am looking for topics that interest you. If you have a question, please post a comment. I am hoping to generate timely subjects for my weekly articles. And if you don’t find your reply in an article, I will get you an answer.
Thanks!
Kristin Abouelata / Home Loan Specialist
I have been writing an article each week on home financing for various publications, and I am looking for topics that interest you. If you have a question, please post a comment. I am hoping to generate timely subjects for my weekly articles. And if you don’t find your reply in an article, I will get you an answer.
Thanks!
Kristin Abouelata / Home Loan Specialist
Wednesday, February 13, 2008
Is Your Arm Adjusting and Your Mortgage Going Through the Roof? – FHA to the Rescue!
ARM Loans and foreclosures seem to be the news of the day. This is a very real problem and thankfully the FHA has come up with a temporary program known as “The FHA Secure Initiative,” that may give some relief.
A gentleman called me the other day about what he could do about his adjustable rate mortgage (ARM) that would soon be adjusting or in plain talk, reflecting a significant payment increase. Like so many homeowners, he did not anticipate the tightening of underwriting requirements and being stuck with his dramatic mortgage payment reset he couldn’t possibly afford.(go to the articles section of www.kristinmortgage.com for more information on ARM loans). Most of us sweat when we go to the grocery store and find out we spent $250.00 on groceries instead of our budgeted $150.00. Facing a huge jump in our mortgage payment would give a large majority of us heart palpitations! This situation is difficult for those with ARM loans about to reset. To make matters worse, many of these homeowners are boxed out of conventional financing because of recent, more stringent underwriting guidelines imposed.
What can be done?
The Federal Housing Administration (FHA) has released a new initiative which enables homeowners to refinance their mortgage when faced with adjusting mortgages that they can no longer afford. The program, known as “The FHASecure Initiative,” is a temporary program, and applications must be signed no later than December 31, 2008. I am going to repeat this point because it is important. An application must be signed no later than December 31, 2008. If you even think this program is something you should consider, do your homework now. Get a mortgage specialist to help you through the details of where you are today, what could happen tomorrow and what you can expect from this FHASecure Initiative program. If you do not have a mortgage specialist go to your bank, ask a friend or realtor for a name of a mortgage specialist, or call me.
The FHASecure Initiative allows lenders and homeowners to refinance mortgages which may result in delinquency once the loan is reset, or in some special circumstances, even if the loan has already become delinquent.
The mortgages in question must involve non-FHA adjustable rate mortgages where the homeowner’s mortgage payment history during the 6 months prior to the reset showed no instances of late payments. If there is sufficient equity in the home, with some further strings attached, you may be able to refinance even if you’re currently behind in payments. The lender must prove that with an FHA refinance, the borrower has enough income and reserves to make payments under FHA’s guidelines. Still confused? Contact a mortgage specialist to help you sort through these guidelines as they apply to your situation. Remember, asking the questions is simply educating yourself and will not obligate you in anyway. It’s about protecting your hard earned investment and safeguarding your credit history.
In the East Tennessee market, FHA will loan money based upon 98.75% of the appraiser’s estimate of value. As well, the maximum mortgage amount allowed for a single family home in our market is $200,160 (higher for multi-family dwellings up to four units). There is no income limit for this product, and individuals with credit scores below 620 may qualify for financing. FHA will allow you to roll the first lien, and second mortgage used to purchase the home originally, closing costs, prepaid expenses, discount points, prepayment penalties, and late charges. In a nutshell, it is a fairly flexible product that might be just what the doctor ordered for some of us.
In summary, this product is an excellent solution for many of those subprime mortgages or ARM products we’ve heard so much about on the news. Hopefully, if you are one of those borrowers, this article can open a door for you were afraid was about to slam shut! Oh, and by the way, did I mention that the FHA Secure Initiative is a temporary program, and applications must be signed no later than December 31, 2008?
Please email your home loan financing questions to Kristin Abouelata, Mortgage Specialist, at question@kristinmortgage.com. Kristin will try to answer all questions on her website www.kristinmortgage.com. Some questions and answers may be published with future articles.
Friday, January 18, 2008
Ch-Ch-Ch-Changes……Why You Might Want to Refinance Now!
Big changes are expected in the mortgage market for 2008. With rates so low, now is a good time to weigh your refinance options…..
Have you been reading the papers or listening to the news lately? (Ok, I guess you have been because you are reading THIS paper. Just call me Master of the Obvious). Rates are low. Actually, rates are really quite low. You may be considering refinancing in the next couple of months. Maybe you need equity from your home but you're hesitant to touch that great rate you got a couple of years ago. Or, maybe you're sure you want to refinance but are waiting for the latest news from the "Fed" before you take the plunge. Well, there are a few reasons why you may want to take action sooner than later.
Fannie Mae and Freddie Mac, the major lending institutions for non-government loans, have recently announced that they will move to risk based pricing in the new year. What is risk based pricing and why do you care? This announcement means that loans with higher risk characteristics will receive a higher rate. In the recent past, risk based pricing was typically reserved for non-conforming loans, or loans that were outside conventional guidelines. In 2008, you can expect to see risk based pricing passed on to conforming loans. What constitutes a higher risk? First and foremost is your credit score. If your loan to value is greater than 70% - your rather healthy credit score of 680 won't get you the same rate that your neighbor's 720 credit score will get him. Same goes for your sister and her 620 credit score. Her mortgage rate will be much higher than yours. Fannie and Freddie will assess tiered "hits" or cost increases to borrowers based upon their credit scores. That could make a huge difference in the rate you will be quoted in December and the rate you would be quoted next year. It may also mean you might not qualify for a loan tomorrow that you would qualify for today. And now lenders will have to pull your credit to actually give you a hard and fast quote. If you have a good idea of what your credit score is, you can compare lender's quotes more effectively. But if you haven't a clue as to what your credit score is, a lender will have to know it in order to be on target with a quote.
And there's more. Although pundits say the rates will stay low (and no, I'm not a pundit), another cost will be passed on to the consumer that will begin to be realized by many lenders very shortly. As a result of recent increases in foreclosure rates, Fannie Mae has decided to increase its margin in order to maintain adequate capital reserves for federal regulators. And Freddie Mac is expected to follow suit, although the announcement is not official as of the date I am writing this column. It may be official by the time you are reading it. Even if rates remain stable through the upcoming period, increased margins mean higher effective rates to consumers. Thus, if you are mildly considering a refinance for whatever reason, you should really decide now if it's right for you. Waiting too long could cost you money.
Of course, refinancing has to make sense. You need to consult with a reputable mortgage lender who can help you analyze your options and choose what's right for you. You need to weigh the savings against the closing costs and also take into consideration how the refinance may or may not benefit you. But, don't drag your feet. Do your homework. Get your ducks in a row. And finally, the risk based pricing and all that other stuff I discussed will also apply to new home purchases (but not select first time homebuyer programs- they remain the same). Whatever type of mortgage you are considering, now is the time to investigate before the changes occur.
Email your home loan financing questions to Kristin Abouelata, Mortgage Specialist, at question@kristinmortgage.com or call (865) 567-0113.
Let my experience work for you!
Kristin Abouelata / Mortgage Specialist with Mortgage Investors Group
Phone: (865) 567-0113
1-800-489-8910
http://www.kristinmortgage.com/
Have you been reading the papers or listening to the news lately? (Ok, I guess you have been because you are reading THIS paper. Just call me Master of the Obvious). Rates are low. Actually, rates are really quite low. You may be considering refinancing in the next couple of months. Maybe you need equity from your home but you're hesitant to touch that great rate you got a couple of years ago. Or, maybe you're sure you want to refinance but are waiting for the latest news from the "Fed" before you take the plunge. Well, there are a few reasons why you may want to take action sooner than later.
Fannie Mae and Freddie Mac, the major lending institutions for non-government loans, have recently announced that they will move to risk based pricing in the new year. What is risk based pricing and why do you care? This announcement means that loans with higher risk characteristics will receive a higher rate. In the recent past, risk based pricing was typically reserved for non-conforming loans, or loans that were outside conventional guidelines. In 2008, you can expect to see risk based pricing passed on to conforming loans. What constitutes a higher risk? First and foremost is your credit score. If your loan to value is greater than 70% - your rather healthy credit score of 680 won't get you the same rate that your neighbor's 720 credit score will get him. Same goes for your sister and her 620 credit score. Her mortgage rate will be much higher than yours. Fannie and Freddie will assess tiered "hits" or cost increases to borrowers based upon their credit scores. That could make a huge difference in the rate you will be quoted in December and the rate you would be quoted next year. It may also mean you might not qualify for a loan tomorrow that you would qualify for today. And now lenders will have to pull your credit to actually give you a hard and fast quote. If you have a good idea of what your credit score is, you can compare lender's quotes more effectively. But if you haven't a clue as to what your credit score is, a lender will have to know it in order to be on target with a quote.
And there's more. Although pundits say the rates will stay low (and no, I'm not a pundit), another cost will be passed on to the consumer that will begin to be realized by many lenders very shortly. As a result of recent increases in foreclosure rates, Fannie Mae has decided to increase its margin in order to maintain adequate capital reserves for federal regulators. And Freddie Mac is expected to follow suit, although the announcement is not official as of the date I am writing this column. It may be official by the time you are reading it. Even if rates remain stable through the upcoming period, increased margins mean higher effective rates to consumers. Thus, if you are mildly considering a refinance for whatever reason, you should really decide now if it's right for you. Waiting too long could cost you money.
Of course, refinancing has to make sense. You need to consult with a reputable mortgage lender who can help you analyze your options and choose what's right for you. You need to weigh the savings against the closing costs and also take into consideration how the refinance may or may not benefit you. But, don't drag your feet. Do your homework. Get your ducks in a row. And finally, the risk based pricing and all that other stuff I discussed will also apply to new home purchases (but not select first time homebuyer programs- they remain the same). Whatever type of mortgage you are considering, now is the time to investigate before the changes occur.
Email your home loan financing questions to Kristin Abouelata, Mortgage Specialist, at question@kristinmortgage.com or call (865) 567-0113.
Let my experience work for you!
Kristin Abouelata / Mortgage Specialist with Mortgage Investors Group
Phone: (865) 567-0113
1-800-489-8910
http://www.kristinmortgage.com/
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