From one of my Banker buddys News letter something to ponder:
Is It Time to Refinance?
Three Questions to Consider
Leonard Baron, MBA, CPA, and author of Real Estate Ownership, Investment and Due Diligence 101
So you've read that interest rates are near historic lows and you want to figure out if you can refinance. Financing has become significantly harder to do and more expensive in the past few years, thanks to the financial crisis. But refinancing is still possible and may make financial sense.
In this article, we will run through some of the basic issues you should contemplate to help give you a framework for deciding whether to refinance. The best person to help you sort through this framework and help you reach a final decision about when to refinance is your mortgage lending professional. But doing a little homework beforehand will help you ask your mortgage professional the right questions.
Here are three questions to consider when you are thinking about refinancing:
Planning on moving? The first item to consider is whether you're going to own the house in question for at least two to four more years–the longer the better. If you're not planning on owning for at least a couple years, refinancing may not be a net benefit to you. HOWEVER: The bigger the mortgage, and the bigger the differential between your current mortgage interest rate and the rate you might get by refinancing, the more refinancing might make sense even on a shorter term basis like two years. So rather than dismiss the idea, this is a good topic to discuss with your mortgage professional in terms of your unique situation.
Can you even qualify for a refinance? It can be tough to refinance these days. If your loan-to-home-value ratio is too high–meaning that your property doesn't appraise at a high enough value in comparison to the amount that is still outstanding on your loan–it may be harder to refinance. The bank may also consider you to be a higher risk if you're self-employed, have a high debt-to-income ratio, or if you have credit issues. But the only way to know for sure is to check with your mortgage lender to examine your options.
What are the costs versus the reduction in interest rate? If you are qualified for financing, your lender will also let you know what interest rate you can secure and how much it will cost you to refinance. You can then do a rate versus loan fee comparison to see if refinancing makes sense. For example, if you refinance a $300,000 loan it might cost $6,500 once you add up points, escrow, title, appraisal, etc. If your loan is dropping by one-half of a percentage point you will save $1,500 per year, which is about $1,000 after taxes. So if you are paying $6,500 to save $1,000 per year, it will take you 6.5 years to earn your money back. That may or may not be a good deal for you, depending on how long you are planning to stay in your home. The bottom line is add up all the costs you will incur by refinancing (remember to exclude items like prepaid interest, taxes and HOA fees that you pay whether you refinance or not) and compare these to your cost savings. This will help you determine whether now is the time to refinance.
Generally speaking, it can be time consuming and challenging to properly dissect the costs versus benefits of refinancing a property. That's why it's a good idea to talk to your trusted lending professional, who understands the right questions to ask and can help you work through the details to make an informed decision.
If you have any questions about your personal situation, contact the professional who supplied you with this month's issue of YOU Magazine. Take action now, so you are protected when you need it most.
Leonard P. Baron, MBA, CPA, is a San Diego State University Real Estate Lecturer, a long-term real estate owner, author of Real Estate Ownership, Investment and Due Diligence 101 and loves kicking the tires of a good piece of dirt! At ProfessorBaron.com you can download his free "Real Estate Buying Due Diligence Checklist" under Chapter 1: Due Diligence. No sign up or registration needed–just download it!
Contributing author Wendy Mihm is the founder of FinancialRx.com, for women who are busy, competent and have it all together–except for maybe one thing: their family's finances. See more information on the website to get your financial house in order.
Thursday, September 8, 2011
Friday, September 2, 2011
Monday, May 30, 2011
Not Just Dinner O' the Day: Officially Homesick
Not Just Dinner O' the Day: Officially Homesick: "Memorial Day has made me homesick...that begs the question can I be homesick for somewhere that I was not born and raised? I was raise..."
Thursday, April 14, 2011
Paying off Collections read on From Ty Crandall
Pay off a collection and lower your scores
Paying off a collection DOES lower your credit scores. Many people are surprised to hear this, but it is completely true.
Negative credit items on your reports cause less damage the older they are. This is because the older the bad item is the less risk you are to a debtor.
The credit score monitors the date-of-last-activity to "date" the account on your report. The older it is, the less impact it has on your score.
When you pay ANY payment to a collection or debt company, you automatically update that date-of-last-activity to TODAY.
As the account was getting older and older, your scores were suffering less and starting to increase. But when you make a payment on the account and update the date-of-last-activity, you update the account to TODAY and the scores go down.
Here is where many of our clients think that paying off the debt helps the credit scores. Well, that is not what happens at all.
The credit score is a mathematical calculation to determine your risk of going 90 days late on an account within the next 2 years.
When you default on an account, it is listed as a "9" status on your credit reports.
This is the worst status you can have and has the greatest adverse effect to your scores because if you default on that account your risk is very high of defaulting on another account within the next 2 years.
When you pay down or pay off a collection, your status is still "9" on that account and you still face the exact same risk of defaulting on another account within the next 2 years.
The balance might be paid to 0, but it is not an active balance. This means your high credit and available credit don't affect the scores as it is in a collection status.
Paying off collections WILL lower your credit scores, the only way to help the scores are to have them DELETED
Paying off a collection DOES lower your credit scores. Many people are surprised to hear this, but it is completely true.
Negative credit items on your reports cause less damage the older they are. This is because the older the bad item is the less risk you are to a debtor.
The credit score monitors the date-of-last-activity to "date" the account on your report. The older it is, the less impact it has on your score.
When you pay ANY payment to a collection or debt company, you automatically update that date-of-last-activity to TODAY.
As the account was getting older and older, your scores were suffering less and starting to increase. But when you make a payment on the account and update the date-of-last-activity, you update the account to TODAY and the scores go down.
Here is where many of our clients think that paying off the debt helps the credit scores. Well, that is not what happens at all.
The credit score is a mathematical calculation to determine your risk of going 90 days late on an account within the next 2 years.
When you default on an account, it is listed as a "9" status on your credit reports.
This is the worst status you can have and has the greatest adverse effect to your scores because if you default on that account your risk is very high of defaulting on another account within the next 2 years.
When you pay down or pay off a collection, your status is still "9" on that account and you still face the exact same risk of defaulting on another account within the next 2 years.
The balance might be paid to 0, but it is not an active balance. This means your high credit and available credit don't affect the scores as it is in a collection status.
Paying off collections WILL lower your credit scores, the only way to help the scores are to have them DELETED
Sunday, March 27, 2011
Monday, March 21, 2011
Friday, March 18, 2011
Keep those collection Letters they are like Gold from my credit guy Ty Crandall
There are many laws that govern creditors. Collection companies are mainly governed by a law called the Fair Debt Collection Practices Act.
This law has MANY restrictions on what creditors can't do by law.
Some of these prohibited actions include threatening to garnish wages, calling you at work, calling you at odd hours, sending you mail with writing indicating there are a collection company, and many others.
You can see an article on this law Here.
Insure you keep all letters received by collection companies and keep a record of their phone calls. These letters and calls will reveal many of the collection companies' violations.
Those violations can then be used as leverage to FORCE the creditors to delete your negative items off your report.
This is referred to as Debt Validation, and is the MOST EFFECTIVE type of 100% Legal Credit Repair available.
Watch out though, there are only a few companies nationwide who do Debt Validation instead of just sending letters to the bureaus.
But make sure you save those letters and keep a record of those calls.
That information is like GOLD that can be used to drastically improve your credit profile.
Questions on credit repair and your Mortgage process feel free to call Mr.W ill from Jacksonville
This law has MANY restrictions on what creditors can't do by law.
Some of these prohibited actions include threatening to garnish wages, calling you at work, calling you at odd hours, sending you mail with writing indicating there are a collection company, and many others.
You can see an article on this law Here.
Insure you keep all letters received by collection companies and keep a record of their phone calls. These letters and calls will reveal many of the collection companies' violations.
Those violations can then be used as leverage to FORCE the creditors to delete your negative items off your report.
This is referred to as Debt Validation, and is the MOST EFFECTIVE type of 100% Legal Credit Repair available.
Watch out though, there are only a few companies nationwide who do Debt Validation instead of just sending letters to the bureaus.
But make sure you save those letters and keep a record of those calls.
That information is like GOLD that can be used to drastically improve your credit profile.
Questions on credit repair and your Mortgage process feel free to call Mr.W ill from Jacksonville
Tuesday, March 15, 2011
Thursday, March 10, 2011
Don't Be fooled on Collections on your credit report
Collection companies have done a great job over the years of convincing consumers that paying off collections will raise the credit scores.
You might be surprised to learn that paying off collections will actually LOWER your credit scores.
Collections are reported on your credit as an I9, or collection account. This means the account has already been "written off" and assigned to collections by the creditor.
Once an account is reported this way on the credit report, the damage to the credit scores is irreversible UNLESS that item is removed completely from the report.
If the account is paid off, the collection company only reports that the account now has a $0 balance, but they do NOT delete the item off the report.
The account has already become a collection, and your risk of defaulting on another account is already very high due to that collection.
So your credit score will NOT go any higher if it is paid off because paying off a collection after the fact doesn't lower your risk at all of defaulting in the future.
But what does happen is that the DATE OF LAST ACTIVITY is updated to the date you paid off the account. So if that account was sent to collections 3 years ago, the date of last activity is 3 years old and the impact to your credit score is not as much.
But if you pay off that collection today, you just update the date of last activity to today's date. The credit bureaus then read this as a recent account, and your scores go DOWN as a result.
Crazy isn't it? You just try to do the right thing and pay it off and they lower your scores as a result.
If you are going to pay off a collection, make sure you get a Pay To Delete letter. This means they agree to DELETE the item in return for your payment.
Or, hire a professional credit company to have the items deleted without having them paid off.
Most collection companies do break the law, and therefore many of those accounts are fairly easy to get deleted IF you work with a good company.
Have your collections deleted, and DON'T pay them off. Then you will have a healthy credit profile and healthy financial future.
You might be surprised to learn that paying off collections will actually LOWER your credit scores.
Collections are reported on your credit as an I9, or collection account. This means the account has already been "written off" and assigned to collections by the creditor.
Once an account is reported this way on the credit report, the damage to the credit scores is irreversible UNLESS that item is removed completely from the report.
If the account is paid off, the collection company only reports that the account now has a $0 balance, but they do NOT delete the item off the report.
The account has already become a collection, and your risk of defaulting on another account is already very high due to that collection.
So your credit score will NOT go any higher if it is paid off because paying off a collection after the fact doesn't lower your risk at all of defaulting in the future.
But what does happen is that the DATE OF LAST ACTIVITY is updated to the date you paid off the account. So if that account was sent to collections 3 years ago, the date of last activity is 3 years old and the impact to your credit score is not as much.
But if you pay off that collection today, you just update the date of last activity to today's date. The credit bureaus then read this as a recent account, and your scores go DOWN as a result.
Crazy isn't it? You just try to do the right thing and pay it off and they lower your scores as a result.
If you are going to pay off a collection, make sure you get a Pay To Delete letter. This means they agree to DELETE the item in return for your payment.
Or, hire a professional credit company to have the items deleted without having them paid off.
Most collection companies do break the law, and therefore many of those accounts are fairly easy to get deleted IF you work with a good company.
Have your collections deleted, and DON'T pay them off. Then you will have a healthy credit profile and healthy financial future.
Monday, February 28, 2011
Tuesday, February 22, 2011
Raise you credit scores
Wouldn't it be nice if you could just ad an account to your credit report and it automatically has a 2 year PERFECT pay history?
Well, you can AND it is 100% legal.
Authorized user accounts are the only legal way to back-date your credit reports and add past positive credit history.
An authorize user is when a family member calls their existing credit card company and ask to have you added as a user. This allows you to use the card, but you are not required to have your credit pulled to qualify for the account.
What does happen is that once you become an authorized user the account is then added to your credit profile. And YOU receive the full benefit of the long-standing positive pay history account.
This means your credit scores goes up just as if you had a 2 year perfectly paid account on your credit for years. And the impact to your scores is immediate and substantial.
You must be added to a FAMILY MEMBER'S account only. The new score model FICO 08 will NOT give you credit unless the account is linked to an immediate family member.
And make sure you get added to a long-standing account, with positive credit history, and that the creditor does report authorized user accounts on the credit report.
Get added as an authorized user today for a nice credit score increase and to insure you have a healthy credit profile and healthy financial future.
From my buddy TY.
Well, you can AND it is 100% legal.
Authorized user accounts are the only legal way to back-date your credit reports and add past positive credit history.
An authorize user is when a family member calls their existing credit card company and ask to have you added as a user. This allows you to use the card, but you are not required to have your credit pulled to qualify for the account.
What does happen is that once you become an authorized user the account is then added to your credit profile. And YOU receive the full benefit of the long-standing positive pay history account.
This means your credit scores goes up just as if you had a 2 year perfectly paid account on your credit for years. And the impact to your scores is immediate and substantial.
You must be added to a FAMILY MEMBER'S account only. The new score model FICO 08 will NOT give you credit unless the account is linked to an immediate family member.
And make sure you get added to a long-standing account, with positive credit history, and that the creditor does report authorized user accounts on the credit report.
Get added as an authorized user today for a nice credit score increase and to insure you have a healthy credit profile and healthy financial future.
From my buddy TY.
Friday, February 18, 2011
Credit scores why 30% is the magic number See what Ty says on credit
When it comes to your credit report 30% is a magical number.
All credit scoring models rate your scores higher if your accounts have less than 30% balances in relation to their high credit limits.
This includes your credit cards, car loans, mortgages, and all other accounts including installment loans.
This is also why your credit scores will go DOWN when a new mortgage or car loan reports on your credit. And as you pay those accounts lower each month your scores steadily increase.
So if you REALLY want to spike your credit scores, pay down your credit card accounts so the balances are lower than 30% of your limits.
OR, simply call your creditors to apply for a credit limit increase. You can also get approved for higher limit accounts to help increase your scores.
The secret is to keep the balances below 30% of the credit limit to insure you have a healthy credit profile and healthy financial future.
Ty Crandall
Elite Credit
(877) 346-1010
ty@elitecreditinc.com
www.PerfectCreditFast.com
All credit scoring models rate your scores higher if your accounts have less than 30% balances in relation to their high credit limits.
This includes your credit cards, car loans, mortgages, and all other accounts including installment loans.
This is also why your credit scores will go DOWN when a new mortgage or car loan reports on your credit. And as you pay those accounts lower each month your scores steadily increase.
So if you REALLY want to spike your credit scores, pay down your credit card accounts so the balances are lower than 30% of your limits.
OR, simply call your creditors to apply for a credit limit increase. You can also get approved for higher limit accounts to help increase your scores.
The secret is to keep the balances below 30% of the credit limit to insure you have a healthy credit profile and healthy financial future.
Ty Crandall
Elite Credit
(877) 346-1010
ty@elitecreditinc.com
www.PerfectCreditFast.com
Tuesday, February 1, 2011
Flipped homes
Re: Conventional Flip Policy
IMPORTANT NEWS…
Background: Property flip transactions refer to the process of purchasing an existing property,
then immediately reselling it for a profit. Property flips are not necessarily illegal unless the
transaction includes an act of fraud or misrepresentation such as an inflated appraised value.
Property flip transactions most often, but not always, involve distressed properties acquired at a
discounted price, then resold at an increased sales price to an uninformed buyer. To provide
some clarity around the underwriting of loans that may be flips, FAMC has implemented the
policy described below effective immediately.
Indicators: There are several indications that are common to property flipping. Loan files with
property flipping indication(s) will require a higher level of scrutiny during the loan review.
Some examples of indicators include (but are not limited to):
• Several ownership changes within a few months reflected on title or in Core Logic report.
• The appreciation of the subject property exceeds the typical appreciation in the market.
• The seller recently acquired the property for a significantly lower price, or there have been
several transfers of the property according to the tax assessment records.
• No real estate agent is involved in the transaction.
• The property was recently in foreclosure, or acquired at an REO sale at a considerably lower
sales price.
• Parties to the transaction are affiliated or related by birth or marriage.
• Owner listed on the appraisal and/or title does not match the property seller on the sales
contract.
• Sales contract has an unusually large earnest money deposit held by the property seller.
• Unusual fees or credits are reflected on the HUD-1.
• Title commitment references other deeds to be recorded simultaneously.
• Property seller is a corporation such as an LLC.
• Comparable sales used in the appraisal report are properties involving the same seller
and/or the same real estate broker as the subject property in an attempt to artificially inflate
the market.
Page 2 of 2
Exceptions: Examples of acceptable property flip transactions usually are as follows:
• Sales of properties by a US Government agency of single family properties pursuant to
programs operated by these agencies, state or federally chartered financial institution,
mortgage insurer, or federal, state, or local government to a buyer intending the occupy the
property as a primary residence.
• Property sales by relocation agencies or employers related to employee relocations.
• Sales of properties that have been substantially improved through legitimate and verified
renovations since the property was acquired by the seller. Any increase in the sales price
over the seller’s acquisition cost should be representative of the market given the
improvements made to the subject property.
Policy: Property flip transactions will be considered by FAMC for conforming loan amounts on
Owner-occupied, single-family detached residences only as follows:
• Properties acquired by the seller within the last 90 days are acceptable provided the
increase in the sales price is less than 20% and the LTV is less than 80% (see chart below).
• Properties with a sales increase of 20% or more must have been owned by the seller for a
minimum of 91 days prior to the date the borrower entered into the contract for purchase of
the subject property (see chart below).
• If the sales price has increased 20% or more since the most recent purchase, the
underwriter must determine if the increase can be justified.
o If the value increase is due to recent renovations or improvements, the appraiser
must supply interior photos of the renovations and comment on the cost of the
Repairs/renovations and likely contribution to the value increase.
o Receipts, building permits and/or signed contracts must be submitted.
• The property seller must be the owner of record.
• Loans requiring mortgage insurance must be submitted to the MI Company for
underwriting and approval. FAMC will not delegate MI on these loans.
• A complete/full appraisal is required regardless of AU feedback.
• Loan must not reflect any interested-party characteristics.
From one of our Lenders policies
IMPORTANT NEWS…
Background: Property flip transactions refer to the process of purchasing an existing property,
then immediately reselling it for a profit. Property flips are not necessarily illegal unless the
transaction includes an act of fraud or misrepresentation such as an inflated appraised value.
Property flip transactions most often, but not always, involve distressed properties acquired at a
discounted price, then resold at an increased sales price to an uninformed buyer. To provide
some clarity around the underwriting of loans that may be flips, FAMC has implemented the
policy described below effective immediately.
Indicators: There are several indications that are common to property flipping. Loan files with
property flipping indication(s) will require a higher level of scrutiny during the loan review.
Some examples of indicators include (but are not limited to):
• Several ownership changes within a few months reflected on title or in Core Logic report.
• The appreciation of the subject property exceeds the typical appreciation in the market.
• The seller recently acquired the property for a significantly lower price, or there have been
several transfers of the property according to the tax assessment records.
• No real estate agent is involved in the transaction.
• The property was recently in foreclosure, or acquired at an REO sale at a considerably lower
sales price.
• Parties to the transaction are affiliated or related by birth or marriage.
• Owner listed on the appraisal and/or title does not match the property seller on the sales
contract.
• Sales contract has an unusually large earnest money deposit held by the property seller.
• Unusual fees or credits are reflected on the HUD-1.
• Title commitment references other deeds to be recorded simultaneously.
• Property seller is a corporation such as an LLC.
• Comparable sales used in the appraisal report are properties involving the same seller
and/or the same real estate broker as the subject property in an attempt to artificially inflate
the market.
Page 2 of 2
Exceptions: Examples of acceptable property flip transactions usually are as follows:
• Sales of properties by a US Government agency of single family properties pursuant to
programs operated by these agencies, state or federally chartered financial institution,
mortgage insurer, or federal, state, or local government to a buyer intending the occupy the
property as a primary residence.
• Property sales by relocation agencies or employers related to employee relocations.
• Sales of properties that have been substantially improved through legitimate and verified
renovations since the property was acquired by the seller. Any increase in the sales price
over the seller’s acquisition cost should be representative of the market given the
improvements made to the subject property.
Policy: Property flip transactions will be considered by FAMC for conforming loan amounts on
Owner-occupied, single-family detached residences only as follows:
• Properties acquired by the seller within the last 90 days are acceptable provided the
increase in the sales price is less than 20% and the LTV is less than 80% (see chart below).
• Properties with a sales increase of 20% or more must have been owned by the seller for a
minimum of 91 days prior to the date the borrower entered into the contract for purchase of
the subject property (see chart below).
• If the sales price has increased 20% or more since the most recent purchase, the
underwriter must determine if the increase can be justified.
o If the value increase is due to recent renovations or improvements, the appraiser
must supply interior photos of the renovations and comment on the cost of the
Repairs/renovations and likely contribution to the value increase.
o Receipts, building permits and/or signed contracts must be submitted.
• The property seller must be the owner of record.
• Loans requiring mortgage insurance must be submitted to the MI Company for
underwriting and approval. FAMC will not delegate MI on these loans.
• A complete/full appraisal is required regardless of AU feedback.
• Loan must not reflect any interested-party characteristics.
From one of our Lenders policies
Friday, January 28, 2011
Friday, January 21, 2011
Buying a home and seller is paying closing and other, be careful
Contributions exceeding six percent of the sales price or exceeding the actual cost of prepaid expenses, discounts points, and other financing concessions as well as other inducements to purchase, result in a dollar-for-dollar reduction to the sales price before applying the appropriate LTV ratio. LTV Homes loan to its value
These inducements include decorating allowances, repair allowances, moving costs, and other costs as determined by the appropriate HOC. (HOC =Home owner concessions) We also require dollar-for-dollar reductions to the sales price for excess rent credit, as well as for gift funds not meeting the requirements.
Personal property items such as cars, boats, riding lawn mowers, furniture, televisions, etc., given by the seller to consummate the sale result in a reduction to the mortgage. The value of the item(s) must be deducted from the sales price and the appraised value of the property (if not already done so by the appraiser) before applying the LTV ratio.
However, certain items, depending upon local custom or law, may be considered as part of the real estate transaction with no adjustment to the sales price or appraised value necessary. These items include ranges, refrigerators, dishwashers, washers, dryers, carpeting, window treatments, and other items as determined by the jurisdictional HOC. That office determines if these items affect value and are considered customary.
Replacement of existing equipment or other realty items by the seller before closing, such as carpeting or air conditioners, does not require a value adjustment provided no cash allowance is given to the borrower.
In addition, if the seller or builder of the property agrees to pay any portion of the borrower's sales commission on the sale of the borrower's present residence, the amount paid by the seller or builder is an inducement to purchase and must be subtracted dollar for dollar from the sales price before the LTV ratio is applied.
Similarly, a borrower not paying real estate commission on the sale of a present home constitutes a sales concession, if the real estate broker or agent is involved in both transactions and the seller of the property purchased by the borrower pays a real estate commission exceeding that typical for the area. In these situations, the amount paid by the seller above the normal real estate commission is considered an inducement to purchase and must be subtracted from the sales price of the property being purchased before applying the LTV ratio.
These inducements include decorating allowances, repair allowances, moving costs, and other costs as determined by the appropriate HOC. (HOC =Home owner concessions) We also require dollar-for-dollar reductions to the sales price for excess rent credit, as well as for gift funds not meeting the requirements.
Personal property items such as cars, boats, riding lawn mowers, furniture, televisions, etc., given by the seller to consummate the sale result in a reduction to the mortgage. The value of the item(s) must be deducted from the sales price and the appraised value of the property (if not already done so by the appraiser) before applying the LTV ratio.
However, certain items, depending upon local custom or law, may be considered as part of the real estate transaction with no adjustment to the sales price or appraised value necessary. These items include ranges, refrigerators, dishwashers, washers, dryers, carpeting, window treatments, and other items as determined by the jurisdictional HOC. That office determines if these items affect value and are considered customary.
Replacement of existing equipment or other realty items by the seller before closing, such as carpeting or air conditioners, does not require a value adjustment provided no cash allowance is given to the borrower.
In addition, if the seller or builder of the property agrees to pay any portion of the borrower's sales commission on the sale of the borrower's present residence, the amount paid by the seller or builder is an inducement to purchase and must be subtracted dollar for dollar from the sales price before the LTV ratio is applied.
Similarly, a borrower not paying real estate commission on the sale of a present home constitutes a sales concession, if the real estate broker or agent is involved in both transactions and the seller of the property purchased by the borrower pays a real estate commission exceeding that typical for the area. In these situations, the amount paid by the seller above the normal real estate commission is considered an inducement to purchase and must be subtracted from the sales price of the property being purchased before applying the LTV ratio.
Thursday, January 20, 2011
New Job looking for a mortgage
New Job and a Mortgage ?
If a borrower is about to start a new job and has a guaranteed, non-revocable contract for employment that will begin within 60 days of loan closing, the income is acceptable for qualifying purposes. The lender also must verify that the borrower will have sufficient income or cash reserves to support the mortgage payments and any other obligations during the interim between loan closing and the start of employment. (This condition may be appropriate for situations such as teachers whose contracts will begin with the new school year, or physicians who will begin residency after the loan is scheduled to close.) However, if the loan will close more than 60 days before the borrower's employment begins, the loan is not eligible for endorsement until the lender provides a pay stub or other acceptable evidence that the borrower has begun the new job.
If a borrower is about to start a new job and has a guaranteed, non-revocable contract for employment that will begin within 60 days of loan closing, the income is acceptable for qualifying purposes. The lender also must verify that the borrower will have sufficient income or cash reserves to support the mortgage payments and any other obligations during the interim between loan closing and the start of employment. (This condition may be appropriate for situations such as teachers whose contracts will begin with the new school year, or physicians who will begin residency after the loan is scheduled to close.) However, if the loan will close more than 60 days before the borrower's employment begins, the loan is not eligible for endorsement until the lender provides a pay stub or other acceptable evidence that the borrower has begun the new job.
Tuesday, January 18, 2011
FHA and Flat roofs
FHA no longer mandates automatic inspections for flat or unobservable roofs. In the appraisal report the appraiser will note any evidence of deterioration of roofing materials (missing tiles, shingles, flashing). Deteriorated roofing materials include those that are worn, cupped, or curled. If the roof is not observable, the appraiser will look for and include in the appraisal report any telltale signs of roof problems on the interior, such as damage or water stains to the ceiling area of a room or closet. The appraiser must note in the appraisal report that he/she could not adequately observe the entire roof area (state which area(s) were unobservable). Based on the information reported by the appraiser, the lender's underwriter will determine whether or not a roofing inspection is required.
Hope this is helpful..
m/will
Hope this is helpful..
m/will
Thursday, January 13, 2011
FHA and business Expences
Don’t overlook expense accounts and auto allowance for potential income. Here is what you need to look for:
– The income is only the amount that exceeds the expense.
– For expenses refer to Form 2106, from the IRS 1040 Form for the last 2 yrs.
– Verify from employer that the payment will continue for 3 years.
• Verification can be via a letter on company letterhead
• When there is a loss, this must be counted as a debt.
– Depreciation may be added back
– The income is only the amount that exceeds the expense.
– For expenses refer to Form 2106, from the IRS 1040 Form for the last 2 yrs.
– Verify from employer that the payment will continue for 3 years.
• Verification can be via a letter on company letterhead
• When there is a loss, this must be counted as a debt.
– Depreciation may be added back
Wednesday, January 12, 2011
Selling a car and needing a Mortgage loan.
Wednesday:
When selling an Asset (such as a Car…) the following is needed to properly paper trail the transaction.
– Need proof of ownership of asset
– Acceptable third party verification of market value could be a NADA or Blue book valuation
– Documentation of transfer
– Receipt of funds
When selling an Asset (such as a Car…) the following is needed to properly paper trail the transaction.
– Need proof of ownership of asset
– Acceptable third party verification of market value could be a NADA or Blue book valuation
– Documentation of transfer
– Receipt of funds
Tuesday, January 11, 2011
FHA Loans
FHA Loans Did you know?
Child support is grossed up to 125% of amount received by several lenders.
This is a sticking point with some loans and as long as the support is court ordered and shown as deposited in the repository this may be a life saver if your bordering an a debt to income qualifying stand point.
Child support is grossed up to 125% of amount received by several lenders.
This is a sticking point with some loans and as long as the support is court ordered and shown as deposited in the repository this may be a life saver if your bordering an a debt to income qualifying stand point.
Thursday, January 6, 2011
Behind on your Mortgage and do not know where to turn
This is a very informative Video.
It may take some time, however worth sharing or looking at.
http://www.knowyouroptions.com/ways-home#http://www.knowyouroptions.com/ways-home#
It may take some time, however worth sharing or looking at.
http://www.knowyouroptions.com/ways-home#http://www.knowyouroptions.com/ways-home#
FHA Loans can we have 2 of them
Principal residence – 1 FHA loan allowed per person, except when the applicant has an FHA property and wants to buy a 2nd owner-occupied FHA property due to:
– Relocation – not within reasonable commuting distance
– Increase in family size – current home Loan to its Value is 75% or less as established by an appraisal
– Vacating a jointly owned property (non-occupying co- applicant) generally 1 FHA per person
– Family member has co-mortgage for another family member
For more information give us a call 904-298-3015 we even answer our phones and return all calls in the same day if called in before 5PM.
– Relocation – not within reasonable commuting distance
– Increase in family size – current home Loan to its Value is 75% or less as established by an appraisal
– Vacating a jointly owned property (non-occupying co- applicant) generally 1 FHA per person
– Family member has co-mortgage for another family member
For more information give us a call 904-298-3015 we even answer our phones and return all calls in the same day if called in before 5PM.
Tuesday, January 4, 2011
Some tips on rental income from a room mate
First Tuesday of 2011
Income from roommates in a single-family property to be occupied as the borrower's primary residence is not acceptable. Rental income from boarders is acceptable if the boarders are related by blood, marriage, or law. The rental income may be considered effective income if shown on the borrower's tax returns. Otherwise, the income only may be considered a compensating factor and must be documented adequately by the lender.
See more tips
Income from roommates in a single-family property to be occupied as the borrower's primary residence is not acceptable. Rental income from boarders is acceptable if the boarders are related by blood, marriage, or law. The rental income may be considered effective income if shown on the borrower's tax returns. Otherwise, the income only may be considered a compensating factor and must be documented adequately by the lender.
See more tips
Monday, January 3, 2011
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