FHA and VA Home Financing
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FHA VA Blog

March 13th, 2014 10:44 AM



Inventory is low and that can cause stress in trying to find a home. With that being said, for some reason some people out there looking are forgetting the most important factor in putting in an offer on a property.  They are NOT getting pre-approved prior to going under contract! 

I honestly can't stress enough the importance of getting pre-approved, NOT pre-qualified, pre-approved!  There is a huge difference between the two approaches.  Getting pre-qualified does NOT include physically looking at your financial documents (paystubs, W2's, tax returns, bank statements, etc.).  I get it that you may not want to send these financial documents in to a lender prior to going under contract because you are just wanting to get the house and figure you can deal with all of the details later.  I am just going to warn you now, you are making the assumption that you will qualify or that there are no real concerns in qualifying.  Rather than letting the lender review your financials thoroughly and understand your individual situation (i.e. recent entry to job force, move to Colorado, job changes, debt paid off and so on).

Getting a mortgage is the most important step in preparing to buy a home.  You can't buy a house without the financing correct?  Unless your paying cash.  Just because you disclosed your financials over the phone (income, work history, etc.) and maybe even had your credit ran, this is getting pre-qualified, which does not give you security that you are approved for a mortgage.  An experienced lender will review your financial documentation through the eyes of an underwriter and project what else will be needed by underwriting, ask for it, and review that as well.  They will be thorough, and that may seem slow to you if you are hastily trying to write an offer and didn't properly prepare in advance.  Your goal is to write an offer and close on a house, or simply to write an offer and flip your life upside down?

I say this because already 3 times this month I've been contacted and asked to "save" a deal.  The reason is because a previous lender didn't do their due diligence and pre-approve a client before giving them a lender letter.  Of course, I am more than happy to help and in most cases I'm able to "save" the deal.  In reality most of the stress the clients get put under trying to transfer all the needed documents and usually under a very tight time crunch, all could have been avoided.

My suggestion is that if you are looking to purchase a home, make sure you get pre-approved, NOT pre-qualified!  Take the extra time upfront to gather the needed documents, find a lender and get pre-approved prior to looking at properties and putting in an offer and going under contract.

If you have any questions please make sure to contact us.  We are always here to help.

~Cheers
Ray Williams


Posted by Ray Williams on March 13th, 2014 10:44 AMPost a Comment (0)

February 26th, 2014 4:07 PM


Your credit score is vital!  I can't stress it enough.  Your credit score is your key to getting a mortgage.  Whether you want to refinance or purchase.  If your credit score is not in good standing then the hopes and dreams of home ownership are non-existent.  There is no sugar coating this, you will not qualify for a home mortgage if your score is too low.  It just is what it is. 

Sure you may hear something on the radio or see something flash across your computer that you can get a loan with a credit score of under 600.  The question would be "what kind of loan?" What are the rates, terms and requirements?  You are at a higher risk and would need to make sure to read between the fine lines.

The biggest mistake I usually see is that most individuals don't know their credit score.  And I'm referring to your FICO score.  You may not know that a past parking ticket can show up on your credit report,  or that the late payments you had on a bill will show up and affect your credit.  Or how about the collection or judgment that is on your credit that you were never aware of? 

If you can take away anything from this, my request is that you take this...Check your credit!

I'm not talking about the creditkarma or freecreditreport.com.  Many times those services have hidden fees and don't offer you your true FICO score. 

You are allowed to receive a FREE copy of your credit once a year.  So go to each credit bureau and get it, Transunion.com, Experian.com & Equifax.com.  You don't need to sign up for a regular service and get monthly monitoring, just get your one free copy every year.  Review your credit report and make any needed corrections.  The last thing you want is something sneaking up on you and your credit keeping you back from purchasing a car, renting an apartment/home or get pre-approved for a mortgage.

If you need any assistance please don't hesitate to contact us.  We are always happy to help.


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Posted by Ray Williams on February 26th, 2014 4:07 PMPost a Comment (0)

 

The 203k loan has been around for a while, it is just until recently that is has gained some exposure.  Many are looking to either buy an older home that has great "bones" but needs some updating and work, or those who have a great home but need more space and would rather keep the home they have then to sell and buy a new one.  A 203k is a great loan option for both those situations. Below is a list of some improvements and/or renovations that you might want to consider a 203k loan. 

  1. Home improvements-as little as new carpet & paint to larger tasks such as refinish basement, remodel a kitchen, bathrooms, including upgrade to appliances and fixtures
  2. Energy efficiency upgrades
  3. Structural repair
  4. Additions to home
  5. New siding, roof & windows
  6. Air conditioning/HVAC

Again, these are just some of the them, there are definitely a few other situations or needs you may have that can be done with a 203k.  First off, there are two types of 203k loans, the full (aka, the standard) and the streamline.  The difference in the two is the amount of repairs needed as well as if there is structural work needing to being done.  The streamline is for $35,000 and under of repairs (including fees & contingencies).  The standard is for $35,000 and above.  The other key factor for the standard is “structural”, if any structural work is needed then it will automatically be a standard 203k, no matter what the amount of repair.  Also you can only do landscaping work with a standard, not a streamline.

Whether you are needing the full or the streamline, they both require a significant amount of involvement.  The 203k sounds very appealing and a viable option for those who don’t have the funds to put into their home for such upgrades and/or repairs BUT the 203k may not be for everyone. 

You need to be able to take the time to find a GC and/or contractors to get the work done, communicate and be involved with the work on the home.  It will take time, patience, and organization.  Not everyone is cut out to be a “Foreman” so to speak and control the operations.  Although it does help to hire a great GC and/or contractor that you trust and feel comfortable, one that is on the same page as you.  Make sure to put all the plans out on the table and discuss any questions and concerns upfront. 

If you have questions or would like to know more about the FHA 203k, please contact us.  We do specialize and have experiences with both the full and the streamline 203k.  If you would like to see if you qualify for the 203k please complete our secure online loan application.

~Cheers

Ray Williams

Branch Manager-Mortgage Maestro Group at Summit Mortgage Corporation

 

Posted by Ray Williams on February 3rd, 2014 2:06 PMPost a Comment (0)


So I have been working with a buyer on their VA application. They had numerous accounts in dispute on their credit report. The challenge that this creates is that the underwriting engines can't read your credit as "valid", it can kick you out as a "refer". Now this doesn't mean we can't help you. But it does mean more documentation and paperwork for you.

So this client chose to put in to have all of their disputes removed. Today was go day! and low and behold all disputes are removed and we have an approval. So this will mean less paperwork and an easier time with the underwriters for this client.

Sound advice is important when you select your lender. Make sure they "get it". And watch those disputes on your credit. Not to say don't, but I am saying to be very mindful and get professional advice before blindly disputing information on your credit.
 
If you have any questions please don't hesitate to contact us, we are always here to help.

Be Well~

Ray Williams
Branch Manager
The Mortgage Maestro Group
@ Summit Mortgage

Posted by Ray Williams on January 14th, 2014 1:13 PMPost a Comment (0)

December 31st, 2013 11:03 AM

Those who are looking to get a VA loan coming up should already know, there is no real loan limit for VA loans. This means, if you are buying a home say $600,$700,$800,000 you can obtain VA conforming (normal) interest rates.

Now it doesn't mean you can put no money down, but you would be surprised how little you would have to put down, on what is normally a jumbo loan for you.

From there, if your loan is conforming amounts the major metro area have been INCREASED to $425,000 this coming year. So that is great news!

From there, if you have questions about outlying areas let me know.

"Happy New Years to my Veteran brothers and sisters and peace be with you!"

~ Ray Williams

Branch Manager Summit Mortgage- Denver

Mortgage Maestro Group 

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Posted by Ray Williams on December 31st, 2013 11:03 AMPost a Comment (0)

As you may have already heard, guidelines will be undergoing some more changes in the New Year. Some of the changes may make it more difficult in obtaining a mortgage so you need to be prepared. If you are looking to purchase a home this coming year, you should start preparing and getting your financials in order at least 6 mos. to a year prior to purchasing, if possible. I’ve listed below are few areas of communication that cannot be left out. These are situations that need to be disclosed up front and should ideally be discussed prior to going under contract on a home.

1. Bankruptcy- You need to know the date it was discharged and you will need to gather all documents regarding your bankruptcy, which includes all court documents.

2. Foreclosure and/or short sale- Must disclose date of foreclosure and be prepared to disclose all foreclosure documents

3. Student Loans- You will need to have current or have paperwork documenting your payment schedule if you are in deferment or forbearance (can get this from student loan servicer), be prepared that your lender may also need to document that your payments are current.

4. Funds for down payment-This is better to discuss this early in the process because there are strict guidelines regarding sourcing funds for down payment especially if getting gift funds. Your lender can help you prepare for what documents will be needed to provide and to properly source the funds.

5. Co-Signer-If you are a co-signer on a loan it is helpful to know this beforehand so your lender can see if this will be something that may need to be addressed and if you should require any documentation from the loan.

Again, this is just a list of the most common areas that can cause problems. If they are not disclosed to your lender in the beginning, they will show up during your loan processing and underwriting and could cause a delay and/or a decline of your loan approval. It is better to prepare yourself and make sure you have all your ducks in a row before you put an offer on a home.

If you are unsure about anything that may be of concern for loan application and/or approval, make sure to ask your lender. There are no "stupid" questions when looking to get approved for a mortgage. This is probably the biggest financial decision you will make in your lifetime so make sure you educate yourself and ask many questions. You want to feel secure and safe knowing that you are working with someone you trust.

If you have any questions, you are always welcome to contact us. We are here to help in any way we can.

~Cheers,

Ray Williams

Branch Manager
 

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Posted by Ray Williams on December 30th, 2013 12:34 PMPost a Comment (0)

December 12th, 2013 11:03 AM

Again, not to be confused with "mixed martial arts" but the Metro Mortgage Assistance Plus Program. 

This unique program that offers a 4% grant for down payment assistance and/or closing costs.  Over the past couple weeks two new areas have been added.  The city and county of Broomfield and the city of Thornton. 

If you are looking to buy, NOW is the time.  Heading into the New Year there will be some guideline changes going into affect for FHA as well as Conventional loans.  Check back soon because we will be posting the upcoming changes for 2014.

If you have any questions please feel free to contact us

~Ray Wiliams

Branch Manager


Posted by Ray Williams on December 12th, 2013 11:03 AMPost a Comment (0)

December 10th, 2013 4:59 PM

For the first time in some time, FHA has lowered it's FHA loan limits for the Metro Denver and surrounding areas.

Check it out! Not by much, but slightly.

6 Major Metro Counties- 

**(Adams, Arapahoe, Broomfield, Jefferson, Denver, Douglas)

  • 1 Unit- $391,000
  • 2 Unit- $500,550
  • 3 Unit- $605,050
  • 4 Unit- $751,900

BOULDER County

  • 1-Unit $408,250
  • 2-Unit $522,600
  • 3-Unit $631,750
  • 4-Unit $785,100

Make sure to check other applicable counties changes if you are taking out an FHA loan soon! https://entp.hud.gov/idapp/html/hicost1.cfm

Talk Soon~

Ray Williams

Branch Manager

Summit Mortgage- Denver

 

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Posted by Ray Williams on December 10th, 2013 4:59 PMPost a Comment (0)

The 203k loan has been around for a while but it seems to be gaining more exposure. I think this is because more people are researching options in which they can fund a repair and/or rehab work into their homes or those who are wanting to purchase a home that needs repairs and/or updating.

When do you consider getting a 203k loan?

It is a good option for getting the home you love that is just in need of a little (or a lot) of TLC or your existing home that needs a little updating, without using a credit card (which would have a much higher interest rate) or a HELOC (Home Equity Line of Credit), which you may not have enough equity or other qualifications to be accepted for one.

Certain investors will require a minimum $5,000 of improvements made to the house. From there, the FHA loan limits dictate how much you can put into the house. So in essence you can get creative and really do some major improvements. Make sure to ask your lender about your specific situation.

My main point is that there is a loan option out there if you find a home that needs some paint, carpet, furnace, etc. Or if you love your existing home but need to add an addition, a room, pop the top, upgrade your kitchen, bathroom, garage, etc. and don't have the funds to do it. In essence you become the designer of your home.

Give us a call and/or contact us if you have any questions. Click here to find out more on the FHA 203k loan.

Cheers~

Ray Williams

 

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Posted by Ray Williams on December 3rd, 2013 6:33 PMPost a Comment (0)

November 7th, 2013 4:23 PM
 

Recently my team came across a very complicated .  Our client is self-employed with a new business that they started two years ago.  The keyword "difficult", not impossible.  The client had numerous layers to his business surrounding his pay structure and tax filings.  We had many discussions and cooperation with the client's CPA.  Lets just say we had our work cut out for us. Most lenders would look at this file and dismiss and/or decline. If you are self-employed and have only had your business for a couple of years or have complex business filings for tax purposes, can make it feel almost impossible to get approved for a mortgage. 

But even with all these factors up against us we were still able to get our client approved! He was able to refinance his home and save money on his monthly mortgage payment. 

All too many times you hear horror stories about people not being able to get a mortgage, if you are self-employed and/or at your job for less than two years. I feel you should always ask, check your options, meet with a strong lender and don't always walk away if a lender says they can't help you.  There might be one who can.  Now this is not always true and it does vary on each individual's situation but don't you think its worth asking? Never assume you are not eligible for a loan without taking the time to find out more information and calling around to other lenders. 

Make sure to fully disclose your complete situation, your lender needs to know if you have had a foreclosure, bankruptcy, defaults on any student loans, etc.  Especially when you are self-employed because the income used to qualify you is based off lending guidelines, not IRS guidelines, so give your lender the tax returns and let them do their thing.  These are very important circumstances that will eventually come up later in the loan process if you choose not to disclose upfront. And they can prevent you from qualifying for a loan.  So it is best to put everything out on the table so your lender knows how they can help you.

The point of sharing this story is so you can take this information and use it for yourself or pass it along to someone you know that this would be helpful for.  If you are unfamiliar with what a VA Loan is and if it is right for you, take some time to research this amazing loan program for eligible Veterans.  And as always, if you have any questions please contact us, we are always here to help.  

Until next time~

Ray Williams

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Posted by Ray Williams on November 7th, 2013 4:23 PMPost a Comment (0)

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Posted by Ray Williams on October 14th, 2013 1:27 PMPost a Comment (0)

October 11th, 2013 2:01 PM

What is CHFA and how can CHFA help you? Well, if you live in Colorado, tomorrow is your chance to find out all you want to know about CHFA! 

For the first time ever, CHFA is having a Resource Fair at their office located at 1981 Blake Street, Denver, CO from 9 am- 11 am.  This event is going to include 10 CHFA approved lenders (we are one of them), as well as, their Home Buyer Education providers to educate and provide information about CHFA's remarkable loan programs, including the MCC!

You will be able to ask questions, gather information (and some breakfast & swag) and educate yourself for your future home purchase or refinance on how CHFA could be of assistance to you.

Make sure to come visit us there!

~Cheers,

Ray Williams

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Posted by Ray Williams on October 11th, 2013 2:01 PMPost a Comment (0)

With the government shutting down there are many of us uncertain and with many questions and concerns of how it will affect us.  Especially if you are in the process of getting a mortgage (refinance or purchase).  How does this affect your loan process and loan approval?

The best answer I can give is that you will need to expect delays.  The main services that will be affected by this shut down will be the ordering of IRS tax transcripts.  The reason this is important, is you will be unable to close on your loan without the IRS tax transcripts having been received.  Other delays could occur with social security verifications, flood certificates, FHA case numbers and a few more services required for loan processing and final approvals. 

This doesn't give you a definitive answer except for the fact you will just need to know that there will be delays and if you are under contract you should discuss with your lender if any part of your loan process will be delayed due to the shut down.  This way they can communicate with your Realtor if any adjustments need to be made to your purchase contract, such as Loan Conditions deadline, appraisal deadline, etc.  Communication is key!

If you have any questions or would like to discuss please contact us.

Staying positive,

Ray Williams

 

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Posted by Ray Williams on October 2nd, 2013 1:41 PMPost a Comment (0)

September 12th, 2013 2:24 PM

Recently I had a very unsettling conversation with another lender regarding FHA loans.  The conversation started with the lender asking if our company/branch does FHA loans.  My answer was "yes, of course", then it proceeded with "Don't you feel FHA is not a viable option because of the new life of the loan MI requirement?" and then continued with them exclaiming that they strongly discourage their clients into getting an FHA loan because of this AND because they are more complicated.

My immediate response was "WHAT"? "REALLY"? This took me by surprise and honestly left me flabbergasted, truly unbelievable.  This also made me wonder how many other lenders feel this way?  Yes, there are a few more documents/disclosures and requirements a lender may need to provide, but for the benefit of a client, it is WELL worth it. Plus, in certain cases FHA may be a clients only option and chance to becoming a homeowner, or refinancing out of a higher interest rate loan.

So why go FHA?

For some it is the only way they are able to qualify for a mortgage.  FHA has more flexibility with credit score requirements, debt ratios, time since derogatory incidents (like foreclosure, short sales, bankruptcies), down payment amounts/sources to name a few key differences.  Not everyone has A+ credit or has 5%-20% for a down payment.  FHA is able to offer the lower down payment because they have a upfront mortgage insurance premium (UFMIP) as well as a monthly mortgage insurance premium (which was recently changed to be for the life of the loan) BUT, look at the benefits.  YOU CAN GET A HOME LOAN if you don't qualify for a conventional loan! 

Something to consider, IF you have a lender who is discouraging you from getting an FHA loan, the question should be "Why?" is it because of the MI being the life of the loan.... is it because an FHA loan is too hard for them to process?  Another thing to ask yourself is if the only reason you are hesitant about getting into an FHA loan because of the monthly MI, my question to you would be "how many homeowners stay in the same mortgage for the full 30 years?".  When rates go lower what is the first thing you are going to want to do?  Refinance!  Or if you know your homes value has increased and you have sufficient equity, what are you going to want to do?  Refinance.  Which means that mortgage insurance being there for the life of the loan is relative to the time you hold that mortgage.  So it is all relative, and cross applicable to Conventional loans with PMI as well.

So don't be discouraged, know your facts.  Talk with someone who is highly experienced with FHA loans.  Find out if it is right for you.

Contact us if you have any questions or apply now to see if you qualify.

Cheers~

Ray Williams


Posted by Ray Williams on September 12th, 2013 2:24 PMPost a Comment (0)

For Immediate Release

Effective August 15th FHA has announced a waiver to policies regarding the waiting periods on obtaining a new FHA mortgage. This could impact millions of Americans positively. However, please understand that with any policy change announcement ALL investors that we lenders work with HAVE to roll out the changes. So this doesn't mean they investors (folks who take your mortgage payments) will participate or immediately change their underwriting guidelines. My advice, take notice, and watch for more information.

So how does this work? Basically right now with an FHA loan if you had a bankruptcy, short sale, foreclosure, deed-in-lieu of foreclosure, you are required to wait until you are eligible to get a new mortgage. Each of which trigger their own waiting period. And if there are more than one situation, you have to clear each events specified waiting period separately.

How this will impact folks?

It will allow you to potentially re-enter the housing market sooner than previously allowed. Mind you even with the changes there is a STILL a waiting period in place of 12 months.

Requirements, how do I know if it applies to me ?

  • Evidence there was a Loss of Employment, Loss of Income, combination of both, which resulted in a loss of HOUSEHOLD income by 20% or more, for at least 6 months
    • Household income = ALL household members residing at the primary residence at the time of occurrence and was a co-borrower of the previous mortgage
  • There has been a recovery (re-establishment of credit) for a minimum of 12 months

Meaning, there are requirements, and they won't look loosely at the situation when you apply. So be ready to document, document, document your situation. Be ready to provide supporting documentation. Be ready to have a thorough background ready for the lender you choose to work with. Be prepared!

You will be required to participate in Housing Counseling ( at least 30 and no more than 6 months prior to applying for a mortgage).

**A list of agencies can be obtained online at http://www.hud.gov or by calling 1 (800) 569-4287 ****

Now, remember that this policy change was announced, but will still require that the servicers/investors we lenders work with roll it out and accept the change. As with all FHA guides, the servicers ultimately make the final call with what policies FHA rolls out.

If you would like more information , please research the FHA policy: FHA Back to Work. From there, watch our website as we will be announcing as we find the servicers begin to participate in this policy change.

To your success~

Ray Williams | Branch Manager | Summit Mortgage Denver | 303-779-0591 | rwilliams@summit-mortgage.com


Posted by Ray Williams on August 18th, 2013 4:52 PMPost a Comment (0)

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