Quick Tips On The Mortgage World

Wednesday, June 25, 2014

Spouse With Bad Credit – Can We Use Their Income?

I get asked this question allot by borrowers…

“My spouse doesn’t have very good credit, but can I use her income on my loan application?”

Answer: “No.”

If we ad the spouses income, then we have to take his/her credit too. In fact, they would become an equal borrower on the loan.

If you are in this situation, and need more income on your loan to get approved – give me a call or shoot me and email. We can brainstorm on some solutions for you to add some income on your loan.

That’s it for today!

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

Brett

Monday, June 23, 2014

Anatomy Of A No Cost Refinance...

Yes, it is possible to refinance at no cost.

I wanted to take a minute and tell you exactly how a no cost refinance works.

There are two pools of funds you have to address when you refinance…

1) Closing costs.

2) Pre paids. (taxes, interest, and insurance)

A no cost refinance will cover your closing costs. You would still be responsible for the pre paids (although we can roll them into the loan) – because you would pay these costs whether you refinance or not. Now, if your current loan is escrowed you would be reimbursed the balance in your escrow account after closing. So, this would be a wash for you.

Let me give you an example of how a no cost refinance works…

Let’s say your current rate is at 4.75%. …and let’s say normal closing costs on your refinance loan would be $4,000.

There are two ways to approach this refinance…

1) You can take the very lowest rate in the market at the time. …Let’s say it’s 4.00%. If you elect to go this route – you would either have to pay the closing costs yourself, or we could roll them into the loan. Either way you are paying for the closing costs.

2) You could take a slightly lower rate – say 4.5%, and we (the lender) can pay the $4,000 closing costs for you.

Option 2 is a true no cost refinance. You were able to lower your rate and monthly payment for free. It didn’t cost you any money to do it!

If you would like for me to review your current situation for a no costs refinance – I’ll do it for free! …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

Wednesday, June 18, 2014

Mortgage Rate News…

Mortgage rates have been trending down the past few weeks.

Today at 2pm eastern time the Fed has it’s meeting.

Depending on what the Fed says their policy is for the next quarter one thing is for sure – it will affect the bond markets.

I don’t look for a dramatic change in their current bond purchase commitments. (In spite of the yesterday’s stronger inflation data)

So, we’ll see.

If your mortgage guy hasn’t locked your loan – it’s probably a good idea to do it.

That’s it for today!

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

Brett

Monday, June 16, 2014

A New FHA Program Coming This Fall…

FHA is going to try out a pilot program called HAWK this fall.

The borrower will have to complete a counselling course to be eligible for the program.

The benefit will be lower mortgage insurance.

FHA proposes that Homeowners who complete housing counseling before signing a contract to purchase a home, and who complete additional pre-closing housing counseling will receive a 50 basis point reduction in the upfront FHA mortgage insurance premium (MIP) and a 10 basis point reduction in the annual FHA MIP.

This would be significant, because right now FHA’s MI has priced themselves out of many loan scenarios.

I’ll let you know when you will be eligible to begin the counselling.

That’s it for today!

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

Brett

Wednesday, June 11, 2014

USDA Eligibility Maps Have Changed Again…

I wanted to let you know that Rural Development has made modifications to their eligibility maps in some areas.

These changes were released as part of the Farm Bill and the Consolidated Appropriations Act 2014, and were released on May 6, 2014.

In Texas, eligible rural areas for USDA housing programs have been adjusted in certain communities in the following communities, effective immediately:

· Burkburnett, Wichita County
· Eagle Pass, Maverick County
· Lakeway, Travis County
· Barrett, Harris County
· Tomball, Harris County
· Freeport, Brazoria County
· Katy, Harris County
· Orange, Orange County
· Dickinson, Galveston County
· Alvin, Brazoria County
· Garfield, Travis County

To determine whether a specific property is located within the boundaries of an eligible rural area, please go to the USDA Income and Property Eligibility Site. Under “Property Eligibility,” select “Single Family Housing,” then enter the address.

That’s it for today!

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

Brett

Monday, June 9, 2014

The Proper Way To Pay Option Money…

When you give someone option money at the onset of a lease option agreement – you are going to have to prove you gave that money when you get a loan to buy that house.

How do you prove it?

If it’s certified funds you need to keep a copy of the certified check.

If it was a personal check – you need to keep a copy of the cancelled check (front and back).

Don’t give cash!

Anything less than this – the underwriter will not give you credit for giving that money.

That’s it for today!

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

Brett

Wednesday, June 4, 2014

One Way To Get Cash Out Of Your Home Above 80%…

Did you realize that in the State of Texas you can’t get cash out of your home above 80% of its appraised value?

In other words if your home was worth $100,000 – the most cash you could get out on a loan would be $80,000.

This 80% rule is a Texas law for owner occupied homeowners in Texas.

…However, there is one loan that will allow you to get more than 80% of your cash out. It’s called an Owelty loan.

You can get an Owelty loan when you are getting a divorce, and one of the conditions of your divorce is that you have to pay your ex a portion of the equity in your home (even if it exceeds 80%).

I’ve done many Owelty loans. We treat them as a regular rate and term refinance (not cash out rates – which are higher).

So, if you are in this situation, or you know someone who is – and your loan officer has told you that you don’t have enough equity to cash out the ex-spouse, just tell them that you need an Owelty loan.

…or, better yet – just give me a call and I can help you!

That’s it for today!

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

Brett

Monday, June 2, 2014

Total Money You Can Expect To Put Down On A Home…

Before you go house hunting make sure you have enough money available to get your loan approved and your house closed.

…I know it sounds simple, but many people don’t realize the amount of funds they will need to get into a house.

Here is a simple breakdown of your out of the out of pocket costs you could expect by loan program.

1) VA: 100% loan. No down payment.

2) USDA: 100% loan. No down payment

3) FHA: Minimum 3.5% down payment.

4) Conventional: 5% minimum down payment, or 3% down if your score is over 680.

…but you can expect more out of pocket than just the down payment. There are two other costs you can expect to pay when you purchase a home…

1) One, is prepaids. This is pre paid interest, taxes, and insurance. Typically your prepaids will run 1% to 2.5% of a sales price.

2) Then there are your closing costs… Typically closing costs (from all entities – title, appraisal, mortgage, survey, etc.) will add another 1.5% to 3% to a sales price.

Be prepared for these additional costs. However, there are a couple of ways to help you lower the closing costs and prepaid expenses.

The best way is to ask the seller to help you. However, there are limits to the amount the seller can help you.

Please review this recent blog post on the max seller contributions by loan program: http://berkshirelending.com/best-way-to-get-the-seller-to-pay-your-closing-costs/

Please talk to me before you ask the seller for any help. This way you will know what your options are.

That’s it for today!

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

Brett