When Cash Is No Good…

I’ve written about this before, but I see this issue every week. …so, I wanted to touch on this again in an effort to make your next home purchase easier.

Using cash for a down payment on a home is very difficult to pull off.

If you have cash saved up for a down payment on a home – and you were planning on using it for a down payment – it will present a problem when it comes time to getting a mortgage.

The mortgage world is all about documentation.

…The guidelines on cash are designed to prevent the seller from giving you the down payment.

So, if you have a down payment – you will have to show where it came from… …checking = good, …savings = good, …gift from relative (fha/va/usda) = good, …retirement account = good, …cash = NO GOOD.

The best solution for this?… Put the cash in the bank. …Leave it there for 60 days. …After 60 days sitting in the account – it doesn’t matter where it came from.

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.

How To Buy A House With A Judgment On Your Credit…

Have you been told that you can’t get a mortgage until you pay off your judgement?

If  so, I have some good news for you.

It is possible to get a mortgage and not have to pay your judgement off first. (It wasn’t possible until recently – but we just got some relief on this!)

Here’s how it works…

1) This would be for FHA loans.

2) If the judgement is already attached to the title of the home – then I can’t help you and the judgement would have to be paid off.

However, in a purchase situation the judgement would most likely not already be on title.

3) Here’s the biggie: A judgment may remain unpaid if you (the borrower) have a repayment plan in place with a minimum of two payments made prior to the date of the purchase contract!

…how about that!

It may not sound like much, but this is big!

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.
 

Benefits Of Using Private Mortgage Insurance…

The FHA loan product is becoming less appealing.

This is due to FHA continuing to raise their mortgage insurance rates, and their recent changes to make the annual MI permanent.

There is an alternative!  …You can always go with a conventional mortgage using private mortgage insurance.

Here are some benefits of using a conventional mortgage with private MI…

-
Affordable: In many cases, private MI is more affordable than other mortgage finance options.

Low Down: Private MI allows a borrower to put down as little as 3% to 5% on a home.

Predictable: Private MI premiums are fixed and remain at predictable levels throughout the period the insurance is in force on the mortgage loan.

Cancellable: A mortgage loan that carries private MI can be cancelled when the homeowner acquires 20% equity in the home.

Payment Options: There are a range of payment options with Private MI. (monthly, annual, lender paid, etc.)

Federal law assures consumers that they can enjoy the benefits of Private MI knowing that lenders will cancel it when it is no longer needed.

The law includes two basic consumer protections:

It requires lenders to inform home buyers—both at closing and annually—about their right to request mortgage insurance cancellation and how to do it.

It requires lenders to automatically cancel insurance for those who do not request cancellation.
How the Private MI Cancellation Law Works:

Initial disclosure—For loans originated on or after July 29, 1999, lenders must give borrowers a written notice at closing that explains they have PrivateMI on their mortgage and that they have the right to have it canceled at a certain point.

Annual disclosure—Lenders must send borrowers an annual reminder that they have Private MI and have the right to request cancellation once they’ve met cancellation requirements. This requirement applies to all loans with cancelable Private MI, not just those obtained after July 29, 1999.

Borrower-initiated cancellation—For most loans originated on or after July 29, 1999, a lender must cancel Private MI at the request of a borrower whose mortgage balance is 80 percent of the original value of the house. The borrower must be up to date on mortgage payments and have no other loans on the house. The lender must be satisfied that the property value has not declined.

Automatic termination—For most insured loans originated on or after July 29, 1999, Private MI will be canceled automatically when the mortgage balance is at 78 percent of the original value of the house. The borrower must be up to date on mortgage payments. Otherwise, insurance will be canceled automatically once the borrower becomes current.

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.
 

How To Use A Gift On A Conventional Loan…

Did you realize that a borrower using a conventional mortgage, and putting down less than 20% – can use a gift for the entire down payment?

Many realtors and even loan officers believe that on a conventional loan the borrower can get a gift, but they must still have at least 5% of their own funds.

This is only true for second homes, or two to four unit principle residences.

…for a single family home there is no minimum contribution from the borrower’s own funds.

Here’s how to document it…

1) A gift letter that specifies…

a) Dollar amount of gift.

b) Date funds were transferred.

c) Donor’s statement that no repayment is expected.

d) Indicate donor’s name, address, telephone number and relationship to borrower.

2) The lender must verify that sufficient funds to cover the gift are in the donor’s account. Typically done with a current statement.

3) Copy of donor’s check and borrower’s deposit slip into borrower’s account.

If have additional questions on how to transfer the gift funds please email me or give me a call. …before you do the transfer!

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.

An Option For Your Down Payment…

If you would like to purchase a house, but your main obstacle is a down payment – here is an idea for you…

It’s possible to sell a personal asset (car, boat, jewelry, baseball card collection, etc.) to raise the money for your down payment.

Here is what you would need to provide the mortgage company if you decide to sell a personal asset…

1) Evidence of your ownership of the asset.

2) Estimate of the asset’s value (Kelly Blue Book, professional appraisal etc.)

3) Bill of sale.

4) Copy of the check from the purchaser of the asset.

5) Copy of the deposit slip showing you put the funds into your account.

Keep this in mind if you or someone you know is having trouble coming up with a down payment on a house!

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.
 

Quick Credit Tip, And 4 Things You Didn’t Know About Me…

Quick Credit Tip:

When it comes to getting a mortgage the difference between a credit collection account and a judgment is significant.

The biggest difference is that a collection account generally won’t have to be paid off as a condition of mortgage approval.

…However, a court ordered judgment MUST be paid off before a mortgage can be approved.

The reason is that the mortgage company sees the judgment as a significant risk to their lien position from a title perspective.

Four things you didn’t know about me…

1) I train in a Martial Art called Pekiti Tirsha Kali. It uses blades (swords, knifes) in a fighting art.

I know it’s kinda different. I actually started it with my boys on the recommendation from a Hall of Fame Pro Football player to teach my boys better footwork for football.

I liked it and now my boys and I do it because we enjoy it. (we practice with sticks not swords)

2) I’m married with three boys. 16, 14, and 8.

This might sound strange to some, but my happiest days are when I can just hang out with my family at home all day on the weekends.

3) I paint. I use acrylic paint, because it dries fast. Oil takes forever to dry.

Right now I’m working on a portrait of my middle son.

I like painting faces. They are much more interesting to me than painting a landscape. When you paint someone’s face. …Every little detail of it. You get to know them in a way that I don’t believe it’s possible otherwise. …Try it sometime and you’ll see what I mean.

4) I go to a gym and workout 5 days a week. …Lifting weights mostly. I lifted weights in high school and really never stopped. I’m 5’10″ tall and I weigh about 205 lbs.

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.

Two Things You Need To Know To Get A USDA Loan…

If you are considering a USDA loan there are two things you should be aware of…

1) There are geographic restrictions. Not every area is eligible for USDA financing.

The best thing to do is enter the address of the home or area you are interested in and see if it’s eligible for USDA financing.

Here is the link to check your address: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1

2) USDA has household income caps. In other words it’s possible to make too much to qualify for a USDA loan.

You will need to enter your total household income into the link below and see if your family qualifies.

Here is the link to check the income for your area… http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1

USDA is a great program. …100% financing with a low fixed interest rate.

If you have any other questions or want to see if you qualify just give me a call or shoot me an email!

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.
 

New: Three Important FHA Changes…

I wanted to take a minute and make sure you understand three important recent changes to FHA loans…

1) As of April 1, 2013 annual mortgage insurance premiums have gone up.

a) For 30 year loans over 95% LTV = 1.35%.
b) For 30 year loans under 95% LTV = 1.30%.
c) For 15 year loans between 78% and 90% LTV = .45%.
d) For 15 year loans over 90% LTV = 70%.

2) MIP Term changes with FHA loans starting June 3, 2013: The Federal Housing Administration also made a second MIP-related announcement — the agency is reversing its policy which allows FHA-backed homeowners to cancel mortgage insurance premiums once the outstanding principal balance of an FHA loan reaches 78 percent of the original balance.

Going forward, the FHA will disallow the removal of MIP throughout the life of a loan, if the loan’s starting loan balance is higher than 90% of its appraised value. This is true for purchases and refinances.

For loans in which the loan-to-value begins at 90 percent or less, mortgage insurance premiums must be paid for 11 years. This change goes into effect June 3, 2013.

3) Other changes…

For FHA loans with credit scores lower than 620 and debt to income ratios higher than 43% – now requires a manual underwrite. This will result in few people being able to qualify for FHA loans in this circumstance.

That’s it for today!

Have a good day today!  …and thanks for reading.

Brett
To see if you qualify for a mortgage right now – CLICK HERE and fill out this simple application.

To sign up for my weekly mortgage quick tips – CLICK HERE.