Quick Tips On The Mortgage World

Monday, February 24, 2014

USDA Down To 580 Now…

Two quick loan tips…

1) Did you know we can do USDA loans down to a 580 credit score now? …We can!

However, you should be aware that the underwriter will want pretty clean credit over the last 12 months. …No new derogatory activity in the last 12 months.
…and, remember you can do up to 6% seller concessions are allowed on USDA loans!

2) If you are purchasing Investment property in Texas – we finance up to 85% of the purchase price. …You only have to put down 15%!

This program would go up to 417k loan limit in Texas. You would also need a 720 credit score. Max debt to income ratio on this program is 45%, and you will need 6 months reserves.

That’s it for today!

Have a good day! …and thanks for reading.

Brett

Wednesday, February 19, 2014

USDA News And A Mortgage Tip…

Couple of things…

1) USDA has increased their income limits recently. If you would like to see if your family income is under the USDA threshold for your area you can either contact my office and we’ll run it for you.

…or, you can run it yourself here.
2) Loan Tip: Many people are unaware of this, but NSF charges on your bank statement can derail your loan.

NSF charges are a potential deal killer for the underwriter.

If you have insufficient funds charges in your bank statement it signals to the underwriter that you are having a hard time managing your money.

One possible solution is to ask your lender (hopefully me!) to replace your statements with a verification of deposit.

That’s it for today!

Have a good day! …and thanks for reading.

Brett

Monday, February 17, 2014

New Loan For The Self Employed…

Since 2008 happened there has been a void in the mortgage market.

When I say a “void” I mean there hasn’t been a loan available to serve a specific section of the mortgage market.

This “void” has been the following…

A person who is self employed (either owns their own business, or is a 1099 commissioned earner).

They have good to great credit.

They “maximize their deductions” so to speak and don’t necessarily show alot of income. Thus, they can’t prove alot of income.

There just hasn’t been a loan for these people since 2008.

Until now.

We now have a unique program designed for this exact borrower!

Here are some details about this program…

1) Borrower can use 12 months of Bank statements to prove income (from deposits – must be personal bank statements).

2) Conventional loans to $1 Million.

3) 700 FICO, 5/1 ARMs only, Purchase/R&T/Cash Out!

4) 75% LTV Primary Residence. This means you need 25% equity on a refi, or you have to put down 25% on a purchase.

5) Self Employed Only.

…and, believe it or not rates are pretty darned good on this program!

If you or someone you know fits into this category – give me a call or shoot me an email! I would love to help you out!

That’s it for today!

Have a good day! …and thanks for reading.

Brett

Wednesday, February 12, 2014

Easy Way To Get Credit Disputes Removed…

I want to talk to you about the impact of disputed accounts on Conventional loans.

There’s two ways you get a disputed account.

…either you dispute the account yourself with the credit bureaus.

…or, you higher someone to dispute the account for you.

When your credit is pulled the prospective lender will see that your account has been “disputed”.

Your prospective lender should go ahead and run your file through the Conventional automated underwriting engine.

Automated underwriting will either recognize the “dispute” and ask you to verify it’s not yours, or remove the dispute.

Or, automated underwriting will not recognize the “dispute”. If it doesn’t recognize your dispute – you don’t have to worry about the dispute.

However, usually it will recognize your disputed account. You will have to remove the dispute. This can be time consuming, and it can also be tricky.

Here is a link with a letter that you can use to remove your disputed account. …use it in good health! …and, good luck.

If you need help, or more advice on how best to get the disputes off – please give me a call or shoot me an email.

That’s it for today!

Have a good day! …and thanks for reading.

Brett

Monday, February 10, 2014

5 Ways To Get Somone Else To Pay Your Closing Costs…

When you buy a house there are three sets of costs you will incur (other than your down payment)…

1) Closing costs. These are mortgage company fees, title fees, appraisal, survey, recording fees, etc. Typically these fees will add up to around 1% to 2% of a loan.

2) Prepaid taxes. For a purchase loan the lender will collect 3 months of taxes and put into your new escrow account.

3) Prepaid Insurance. You will have to purchase a full 1 years insurance policy to be paid for at closing. The lender will also collect 3 months of insurance to be put into your new escrow account at closing.

When you add the prepaid taxes and insurance together they usually come to another 1.5% to 2% of a loan amount – depending on the taxes in your area.

…So, combined between the closing costs and the prepaid taxes and insurance you are talking about 3% to 4% of the sales price. This is additional money you have to bring at closing to buy your house.

…and this is on top of your down payment (assuming you are using a loan program with a down payment).

The idea here is to get someone else to pay your closing costs and prepaids at closing.

There are five different possibilities as far as who can pay these costs. I’ll go through each one here…

1) You. …You are the borrower and you can pay these expenses yourself. Although I wouldn’t recommend it.

2) The seller. In my opinion this is your best bet. You simply ask the seller to pay these costs at the time you make your offer.If you are using a normal Texas Real Estate contract – you would write in the seller help amount on page 5 under section 12.The reason it’s your best bet is that it’s the best combination of lowest rate, and least money out of your pocket at closing.

3) Gift. You can get a gift from a family member to pay your closing costs. The guidelines are different with each program for gift giving – so check with me before you attempt to go this route to make sure it’s appropriate for your loan program.

4) Grant. If you have access to a state or government grant program you can use this to pay these costs. There are some programs in Texas that you can use, and I have access to. Check with me to see if you qualify for these programs.

5) Loan officer and/or realtor. You can get help with paying your closing costs and prepaid expenses from the loan officer, and the realtor can help as well.

If you or someone you know has a question about how to structure purchase financing please give me a call or shoot me an email. I want to help you!

That’s it for today!

Have a good day! …and thanks for reading.

Brett

Thursday, February 6, 2014

A Way Around High Ratios On Manual FHA Loans…

If your loan officer is telling you that you would qualify for a manual FHA loan, if only your ratios didn’t exceed the FHA benchmark guidelines.

…don’t fret. There may still be hope for you.

If you can produce two of these compensating factors then you have a shot at overcoming a hight debt to income ratio on a manual underwrite.

Here is the list of Compensating Factors…

Compensating Factor	Description
Housing Expense Payments	Ability to pay housing expenses equal to proposed monthly over the past 12-24 months
Down Payment	Ability to make down payment of 10% toward the purchase
Accumulated Savings	Ability to accumulate savings, and conservative in using credit
Previous Credit History	Ability to devote a greater portion of income to housing expenses.
Compensation or Income Not Reflected in Effective Income	Income that is not reflected but directly affects his/her ability to pay the mortgage. i.e. food stamps and similar public benefits.
Minimal Housing Expense Increase	Only a minimal increase in the borrower’s housing expense.
Substantial Cash Reserves	Cash reserves at least three months worth after closing. Not equity in other properties, and proceeds from a cash-out refinance.
Substantial Non-Taxable Income	The borrower has substantial non-taxable income.
Potential for Increased Earnings	Potential for increased earnings, indicated by training or education in profession.
Primary Wage-Earner Relocation	The primary wage-earner is relocating, and the secondary wage-earner has an established employment history, is expected to return to work, and has prospects for securing employment in the new area.

That’s it for today!

Have a good day! …and thanks for reading.

Brett