Archive for the ‘USDA Rural Guaranteed Loan’ Category
(Note: This article was written by Mark Madsen and associate of mine and published on My Fha Mortgage Blog last month. I felt the information was valuable to my readers so I have re-published here for your information.)
While many experienced real estate agents have a general understanding of the mortgage approval process, there are a few important details that frequently get overlooked which may cause a purchase to be delayed or denied.
New regulation, updated disclosures, appraisal guidelines, mortgage rate pricing premiums, credit score, secondary approval layering, rescission deadlines, property type, HOA insurance requirements, title and property flip rules are just a few of the daily changes that can have a serious impact on a borrower’s home loan financing.
With today’s volatile lending environment, it’s obviously important for home buyers to get a full loan approval which clearly defines all contingeas they pertain to each unique home buyer’s scenario prior to spending any time looking at new homes with an agent.
Either way, we’ve listed a few of the top things your agent should keep in mind while showing you new properties:
Caution – Agents Beware:
Property Type –
Need to sell one home before moving into another? Is a property considered a second home if it’s in the same city? What if I’m buying a home for my children to live in, it is still considered an investment property?
These are just a few of several possible residence related questions that should be addressed by your agent and loan officer at the initial loan application.
Mortgage Rates are typically locked for a 30 day period, and one of the only ways to get a new rate is to switch mortgage lenders. Rates also have certain adjustments for property / residence type, credit score and down payment which could have a big impact on monthly payments and therefore approvals.
A 1% increase in rate could literally mean the difference between an approval or denial.
Underwriters watch the news as well. Borrowers who work in a volatile industry during hard economic times may have to jump through a few extra hoops to prove that their employment and income is secure.
Job changes, periods of unemployment or property location in relation to the subject property are other things to consider that may cause a speed bump in the approval process.
Title / Property Flip –
A Flip is considered a property that has been purchased by an investor and quickly sold to a new buyer within a 30-90 day period. Generally, an investor will do a little rehab work, fresh paint, landscaping…. and try to re-sell the property for a significant profit margin.
While it seems like a perfectly fair transaction, many lenders have strict guidelines in place that prevent borrowers from obtaining financing on properties that have a previous owner with less than 90 days of documented ownership.
These rules change frequently, and are specific to particular property types, so make sure your agent is aware of all the boundaries associated with your approval letter.
Some lenders require Condos and Town House communities to have sufficient insurance and reserves coverage pertaining to specific ratios on units that are owner occupied vs rented.
It may also take a few weeks and cost up to $300 to receive an HOA Certification, so make sure your Due-Diligence period is set accordingly in the purchase contract.
Appraisal ordering guidelines are changing quite frequently as regulators implement many new consumer protection laws created to prevent future foreclosure epidemics.
Unfortunately, some of the new appraisal regulations have proven to slow the home buying process down, as well as confuse lenders about the true estimate of neighborhood values.
VA, FHA and Conventional loans programs all have separate appraisal ordering policies, so make sure your agent is aware of which loan you’re approved for so that they document any anticipated delays in the purchase contract.
For example, if an appraisal takes three weeks and the average time for an approval is two weeks, then it probably isn’t smart to write a purchase contract with a four week close of escrow.
Do you have these or other questions? I am Fred Chamberlin, Senior Mortgage Consultant at Alpine Mortgage Planning, 1200 Executive Pkwy., Eugene OR 97401. I am here to help you with the mortgage loan process and also help you avoid stress. The mortgage process is changing rapidly, make certain you are working with someone that can keep up with the changes. You can reach me at 541-342-7576/541-221-3455 cell or by e-mail. Trust experience to help you with your Eugene/Springfield mortgage questions. One final note, this is not limited to Lane County but can be used anywhere we are doing business. Call today!
Is all of your interest reported on your 1098? Maybe not if you had a Taylor Bean & Whitaker mortgage
Those that follow my blog know that I have written several times about the trials and tribulations of having a Taylor Bean & Whitaker loan at the time that HUD came in and closed them down. The last post had to do with Form 1098s and how to get them on your mortgage but I have recently found out that the information given by TBW on their website and from Bank of America are wrong. WRONG! WRONG! WRONG!
I refinance my VA loan with a streamline refinance last year and when I did so, I paid a funding fee to VA to do so. That funding fee is considered the same as mortgage insurance and should be reported on the Form 1098. In my case, this didn’t happen. I did calculate that the Form 1098 that I received from Bank of America did include the interest I paid in my one payment to TBW, but didn’t include the interest I paid as prepaid interest on my loan.
The following is from Publication 936 from the IRS:
You can treat amounts you paid during 2009 for qualified mortgage insurance as home mortgage interest. …….Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service and private mortgage insurance….
Mortgage insurance provided by the Department of Veterans Affairs is commonly known as a funding fee…….Rural Housing Service….as a guarantee fee….can be either be included in the amount of the loan or paid in full at closing….reported in box 4 of the Form 1098.
So, if you got a new FHA, VA or USDA loan during 2009 and Taylor Bean and Whitaker was the lender, you may not have all of your deductible interest reported on your Form 1098 from Bank of America or other lender that took over servicing of your loan when HUD closed TBW. The amount of this funding or guarantee or up front mortgage insurance can be found on your closing statement (HUD1) from the title company. I hope this information helps with your tax return filing.
If you have questions about your current loan or are looking to refinance, contact me (Fred Chamberlin, the Eugene Loan Guy). If you have a VA loan, let’s discuss the possibility of a streamline refinance, rates are doing well. I would be happy to help you mortgage needs. If you have questions about mortgage loans please contact me at 541-342-7576/541-221-3455 cell or by a-mail. I am a Senior Mortgage Advisor at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am here to help you with your mortgage needs.
Do you know the ins and outs of mortgage lending? Do you know the difference between an FHA and an FmHA loan? Do you have a trusted advisor to help you buy your new Eugene or Springfield home? Have you been disappointed with the knowledge base of those you have talked to about a loan in Cottage Grove or Creswell or Florence?
Not everyone has the knowledge to help you with finding the right loan for you. Not everyone has the skills to make a borderline loan work. Not everyone is willing to take the take to help you get to the point where you can become an Oregon home owner. I believe I can and do on a daily basis.
I am Fred Chamberlin and have been a mortgage consultant for over 20 years, most of it in the Eugene/Springfield area. I have many satisfied and happy clients around the state and would like to help you in your quest for the right mortgage loan. I am always looking forward in the mortgage business because things are changing rapidly, not like some of my colleagues that seem to be looking in the mirror (like below) instead of working through the next challenge:
The mortgage business is TODAY! Yes, there are a lot of changes but that is why you need someone that is on top of the changes. I am not telling you that because of what I did yesterday, you should come to me for your mortgage needs. I am telling you that because of what I am doing tomorrow, you should come to me for your mortgage needs.
Find out today what you can afford to purchase. Get pre-approved before you start looking for your new home. FHA and FmHA (USDA) is a great way to purchase a home but have the experienced help you need to get it done. You can reach me (Fred Chamberlin) at 541-342-7576/541-221-3455 cell or by e-mail. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am your local lender. Call today.
Statistics are interesting things. One of my favorite sayings is that, “Figures never lie, but liars figure.” I don’t know who said it, but it is really true. Now, I don’t know if these figures are the ones that never lie, or are done by liars, but I found them quite interesting when thinking about how people in the Eugene and Springfield area of Oregon buy homes.
The 2009 National Association Of Realtors Profile Of Buyers And Sellers report was released in December 2009 and it showed that:
- 90% of home buyers used the Internet to help find their home
- 78% of buyers purchased through a real estate agents
- 85% of sellers used an agent to sell
The big deal about these stats is the previous year profiles that show the growth of the web and how it plays an ever increasing role in how buyers shop. In 2008 those using the web to find a home was 87%. Prior to that it was 84%, and it shrinks little by little the further back you go. (This figure was 2% in 1995.)
Each year more people are using the web to shop for a home. If you aren’t a presence on the web as a Realtor®, that means that only 10% of the buying public will probably see your information. If you aren’t partnered with a loan officer that has a web presence, you are missing out on the opportunity to share leads and referrals from the web.
How do you, as a Realtor® find out if your loan officer has a presence on the web? Try searching either through Google, Bing, or Yahoo. What kind of homes do you mostly market and what is your clientele? Do you specialize in FHA borrowers in Springfield? Try searching for FHA Loans in Springfield. Do you specialize in $1,000,000 homes on College Hill? Try searching for that. Find someone with the web presence that is complementary to your focus and see if they know their business. How about homes in Creswell or Cottage Grove that qualify for USDA financing? What will your search results be for that one? It really is time to take the web marketing to the right point for your business.
Needless to say, I am hoping that some of those searches bring you to me(Fred Chamberlin, the Eugene Loan Guy). I would be happy to help you with your web presence as part of my service. If you have questions about mortgage loans please contact me at 541-342-7576/541-221-3455 cell or by e-mail. I am a Senior Mortgage Advisor at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am here to help you with your mortgage needs.
Mortgage rates, mortgage rate, mortgage rates! What is going to happen? According to the Federal Reserve Survey, mortgage rates are 1% lower today than they would have been because the Fed has been purchasing mortgage backed securities (MBS). That all stops the end of next month.
Since March of last year, the Fed has been buying over $20 billion in MBS until they started cutting back in October will less going out each month. You can check out a chart showing the purchase in my weekly newsletter here.
The markets were closed yesterday and it will be interesting to see what happens this week. Right now, mortgage rates are doing well, but I expect them to be going up in the next month or so. Also, we have the Home Buyer Tax Credit going away on purchases after April 30. Hopefully we have enough momentum to see the real estate market continue.
If you have questions about mortgage loans please contact me at 541-342-7576/541-221-3455 cell or by e-mail. I am a Senior Mortgage Advisor at Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am here to help you with your mortgage needs.
Homebuyer Tax Credit Update!
Today, November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time. Although I have been a supporter of extending the tax credit, I was surprised that the Congress actually got it done. Not only that, but the First Time Home Buyer Tax Credit has been expanded.
To learn what the new tax credit means to you and your clients, take a look at the concise overview below:
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call 541-342-7576/541-221-3455 or email me today.
In addition, you may be able to benefit from additional housing related provisions, including the following:
Tax Incentives to Spur
Energy Savings and Green Jobs
This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation. The use of an FHA 203k Streamline for either purchase or refinance may be an excellent way to take advantage of this program.
Landmark Energy Savings
This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing
This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance
This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call 541-342-7576/541-221-3455 cell or email me. I’ll be happy to sit down with you.