Cool Country: Rural Housing Loans

The USDA offers a fantastic program that allows for 100% financing. What’s the catch? Your house you want to buy has to be in the right part of the county…

Remember that old Donnie and Marie Osmond song, “I Was Country, When Country Wasn’t Cool”? I know, I’m dating and embarrassing myself all in one fell swoop. I loved their variety show when I was a kid. Weird as it may seem, that song comes to mind when I think of Rural Housing loans. The United States Department of Agriculture (USDA) offers a home loan guaranty program in Tennessee that is truly affordable and beneficial for moderate to low income families/borrowers. The only catch is you have to be on the right part of the map. Rural areas only, please. But you’d be surprised as to what constitutes “rural”. Did you think Powell was rural?

I think this program is often overlooked because lenders forget that some properties qualify for it. And it’s super easy to figure out. If you go to http://www.rurdev.usda.gov/, you can click on a link that allows you to determine if a specific property address is eligible. Lately, I’ve been happy to discover this program is available for more of my customers than I would have initially guessed.

Why are Rural Housing loans so cool? First and foremost, they allow for 100% financing. Yep, the elusive 100% financing still exists (at least in some counties). Another very attractive feature is the program allows you to finance Rural Housing’s 2% guarantee fee (required) into the loan amount as well. So if you buy a $100K home, you can borrow $102K. And perhaps the most exciting feature? You have no monthly mortgage insurance with this product. That’s right, no monthly mortgage insurance. Now you see what makes this product so affordable.

Of course, you have to be able to qualify. You obviously can’t be making a ton of money and qualify for this type loan. It varies from county to county, but for example, in Knoxville, a 2 person family can’t earn more than $56,600 a year. You have to have been on the job or have recently produced a professional/educational degree or certification during the past two years. And it goes without saying these days, you need a clean credit history. You can’t buy a McMansion or anything. Your loan size is limited by what you can afford. As a general rule of thumb don’t expect to go over $150K.

The seller can pay all of your closing costs or you can get a gift from a family member to pay your closing costs. You can’t buy an investment property-you need to plan to live in the house. And although it’s a terrific product for first time homebuyers, you don’t have to be one to qualify. However, if you are a first time homebuyer, chances are you can fund this loan through Tennessee Housing Development Agency (THDA). That’s a double whammy. You see, THDA offers a fabulous interest rate for first time homebuyers.

So dust off your blue jeans and drive around the county roads with your realtor. You may just find your dream home nestled down at the end of a country lane. Now, wouldn’t that be cool?

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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.

Mortgage Question: Can we be sure we will be approved?

Hi

I have a questions, we ( hubby and I) due to past problems and the very large rent we pay, have low scores. We want to purchase a home and get out of the rental deal (2700 per month). We have been gifted a good down payment of 20-25 percent. Can we be sure we will be approved?? I dont want to put money down to find out we cannot get a commitment.

Also, what are the most important items to pay off, old charge off? what would the cut of time be for those?

Thank You
Bonnie
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Hi, Bonnie. How low are your credit scores? You can go FHA with a minimum of 560 credit scores. Old charge offs should be paid, however, if it is up to the UW's discretion. Medical debts are forgiven.

You could become pre-qualified with a manual underwrite. This means you would provide evidence of three non-traditional trade lines that you have paid on time for the last twelve months. For instance, KUB, Comcast, Verizon...anything that doesn't typically show up on a credit report. You have to provide a 12 months statement from the creditor or actual cancelled checks. Cancelled rent checks or auto insurance payments are other examples of non-traditional lines of credit.


Good luck!
Kristin

Mortgage Question: Changing Escrow

I have a question or two for you. I have my house note through ------.

I would like to find out if I can stop paying into my escrow account and
take on the financial responsibilities of paying my insurance, taxes,
etc.

Is this possible and can I do it without having to refinance?

Betty

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Hi, Betty. This situation is totally up to your servicer (------, I am
assuming still accepts payments?). If taxes, in particular, go unpaid,
the tax lien would be paid prior to the mortgage lien (in the event of
default).

Normally on the secondary market, there is a .25 charge in price to
waive escrow. Your servicer may choose to charge you a fee for allowing
you to pay your own escrow. I would assume much would depend on your
mortgage history and perhaps, credit score.

In the past, I know that servicers have been amenable to dropping escrow
servicing. However, in today's climate, it just depends on the grantor.
So, give them a call!

Good luck!
-Kristin

This is why I love my job!

After having to lease a house for the last year, my husband and I were really excited this year to be purchasing a new home. However after reading all the gloom and doom regarding the mortgage industry and the stricter lending requirements, we quickly grew worried. Like most people, we had some challenges over the years. While he had been homeowners before, we felt this time we would be more challenging. Mortgage Investors Group had handled our loans in the past, so we turned to them again.

This was our first time working with Kristin Abouleta, however during our first meeting, I knew we were in good hands. Kristin took the time to explain all of our options, she made sure we understood upfront what we should expect, and most importantly she delivered on everything she said. Kristin and her team kept our minds at ease through constant communication. At the end of the process, our loan closed on time with the rates and term we expected, without any hidden surprises.

We walked into this process thinking it was going to be a huge headache, thankfully Kristin and the MIG team alleviated the pain and made home buying enjoyable for us. I would definitely encourage anyone (in any situation) looking to refinance or purchase a new home to contact Kristin. MIG continues to be best in class in my book!

-Marcee & Chris Townsend (Happy Home Owners)

Want to Make Your Landlord Rich? Renew Your Lease!

When you make your payment to your landlord every month like the dutiful renter you are, you are placing cash in his pocket. Maybe it’s time to consider keeping some of that money for your self…..

No doubt about it. Renting definitely serves a need and a purpose. It also is typically hassle-free. There’s very little maintenance. If something goes wrong, you call someone, and they fix it. But is it always necessary or the smart choice?

Think about it. Every month when you write that check out to Joe Landlord, you are paying your landlord’s mortgage for him (or at least some portion of it). And, in the meantime, you are building equity for him in the property he owns. That’s really quite nice of you. Very thoughtful indeed. So, if he decides to sell that property in the future, do you think he will write you a thank you note for all the money you’ve made for him? That might happen when pigs fly.

Say you pay $1000 a month for rent. Most landlords cover their mortgage when they set the rent payment. Typically, but not always. So if you stay in this place for two years, you will end up making $24,000 worth of mortgage payments for your landlord. That’s mighty nice of you. Now, in turn, think of the property’s appreciation that will occur simultaneously. For instance, when you first started renting the house, it was worth $100,000. Now, two years later, it’s worth $124,000. Since you’ve been so considerate to make his mortgage, oops, I mean your rent payment on time, your landlord is smiling. He’s just accumulated $24,000 in equity. And it’s all thanks to you!

Hmm, that gives you pause for a moment, doesn’t it?

I’m not trying to make you feel bad. Like I said before, renting definitely serves a need and a purpose. Some people can’t qualify for a mortgage. Perhaps they are self employed, and need to build up some type of income history of earnings to get a home. Or maybe their job is transient or unstable, and they don’t want to have to deal with selling a home in a few months. There are many instances when renting makes sense.

However, if you are just being complacent or nervous, then you might reconsider renting. Yes, I said nervous. You see, fear keeps many people from homeownership. The paperwork and numbers can be daunting, even to a person who is buying their fifth house. And if you are a first time homebuyer considering a thirty year debt, it can be overwhelming and cause great anxiety.

But I’ll let you in on a little secret. Homeownership is easily attainable. You just have to set a little cash aside and pay your bills on time. That’s it. No great mystery. And here’s another little tidbit. It’s a buyer’s market right now. That means there are deals to be found and lots of inventory available.

So if you’re a renter, consider paying yourself instead of a landlord. Contact a trusted mortgage lender. There are tons of options that can be explored if you just know where to look. Let your mortgage lender help you figure out how long it will be before you can move out!



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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.

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Commentary: Want to make Your landlord rich? Renew your lease!

By Kristin Abouelata, WBIR Home Loan Specialist

No doubt about it. Renting definitely serves a need and a purpose. It also is typically hassle-free. There's very little maintenance. If something goes wrong, you call someone, and they fix it. But is it always necessary or the smart choice?

(read the article here)