Author Archive

Did you know that you can get a VA Home Loan over the $417,000 limit? With Mortgage Insurance rates for jumbo loans being so high, a “VA Jumbo Loan” might be the most affordable option!

VA Home Loans require that the Veteran make a down payment equal to 25% of the Balance over $417,000. This means that if the Sales Price on a property is $550,000 the calculation looks like this:

$550,000 – $417,000 = $33,250  That means you are making about a 6% down payment!  In addition to this, there’s no monthly PMI. On a Jumbo Conforming loan (where you made a 10% downpayment) your mortgage insurance premium could be $317.00 a MONTH!

With a VA Home Loan, the funding fee would be 1.5%.  This means on our $550,000 sales price, with a loan amount of $516,750 the Funding Fee adds less than $45.00 a month to your payments!! WOW!

Every situation is different – but if you qualify we would strongly suggest that you consider a VA home loan for your next purchase!

There are several considerations when a single parent comes to us to discuss purchasing a home and their financing options.

FHA is a great mortgage program for many single parents because of it’s flexibility. There are some qualifying details that are specific to Single Parents that you should consider:

• Child Support and Alimony must be documented for the past 12 months.  We will need to see cancelled checks, documented deposits in your account, or court records from the State showing that you’ve received at least 12 months of support in order to count it as a “stable” income source.
• It must be continuing for at least 36 more months after closing.  So if support will continue until your child is 18, and the child is 16 – we can not count that income.
• You can get a gift for the down payment
• You need to have a credit score of 620
• You can put a parent, or other family member on the loan to help you qualify
• We can not count rent you might receive from a roommate

If you were obligated on a mortgage with your ex-spouse, and you were NOT removed from the mortgage, we will count that payment against you. Often times, an attorney will advise you to quick claim deed the property to your ex-spouse.  This only takes you off of the DEED, if you were on the NOTE – you are still obligated for the mortgage.  Your spouse would have to refinance and take you OFF of the note, or sell the property,  to truly take that obligation off of you.

Court Recorded Seperation Agreements, stating that the other person is responsible for the debt, does NOT take the liability off of you.

If there’s a CAR payment, or another type of debt that you are still on the note for… and you can provide 12 months of cancelled checks showing where the other person is making the payments… we can SOMETIMES get that payment waived (in other words we might not have to count it as a debt when we are qualifying you).

EVERY TIME  mortgage interest rates dip to a point that’s approximately 1% lower than they were 18 to 24 months ago – homeowners begin looking for an opportunity to refinance.

I’ve been in the mortgage business since I was 15 (and yes, I’m older than dirt) so I estimated the other day that I’ve seen 8 refinance cycles in my professional career… and everyone is pretty much like the last one.

The interesting thing about where we are in this refinance cycle is that rates do not seem to be going UNDER a certain threshold. This normally happens when we hit a “Bottom.” Let me explain – Mortgage Interest Rates do not exactly follow the 10 year Treasury Bill, but it’s pretty close.  (It’s more difficult for consumers to find the FNMA / GNMA MBS pricing).  So if the 10 year Treasury is at 3.25% one day – and the next day it’s at 2.89%, you figure rates might go lower.  The lower the yield generally leads to lower mortgage interest rates.

For the last month what’s happened (in our market) is that the RATE has not gotten lower… however the amount we can contribute to cover closings costs changes with the market… sometimes we can cover $500 in closing costs, and when the market moves in our direction, we can pay more… but the RATE is not getting lower.  Even if you wanted to pay POINTS to get a 4% (4.375% APR) 30 year fixed rate mortgage - I’m not sure you could find someone who could do it! The banks do not seem to have a “desire” to hold 30 year fixed mortgages lower than they are now… and frankly, I can’t say I blame them!

What I’m saying is this:   I’m not seeing mortgage interest rates for the best credit and property in the BEST real estate markets go below where they are right now. Let’s say you have a 5.75% mortgage interest rate, and you originally borrowed $250,000 on a 30 year fixed rate mortgage in August of  2007.  Your current balance, if you’ve made all of your payments on time, is approximately $241,000.  You could have @ $6500 in closings costs to refinance in NC, if you ONLY want the lowest rate!  Granted, you might lower your Principal and Interest payment from $1458 to $1218 a month.  So you’re saving $240 a month – but you’ve raised your balance to $247,500. It will take you a little over 2 years to “recover” that $6500 you are adding to the balance.

Most people we talk to are “gun shy” when it comes to erroding ANY equity in their home – they simply do NOT want to be in a position of owing more than they can sell for (even though in NC we are in a pretty good position!).

Because of that – most of the folks we work with are either getting a 20 or 25 year term… or they are saving $160 a month on their mortgage with a refinance, and not adding anything to the balance.

USDA Rural Home Loans are one of the most popular programs available! They are 10%, no money down loans and require no monthly Mortgage Insurance… but there are a couple of “tricks” to obtaining these loans!

You must meet the Maximum Income Requirements for your area.  The MAXIMUM income is determined per county, and is based upon how many family members reside at the residence. In the Raleigh/Cary Area (which includes Garner and Johnston County in North Carolina) the MAXIMUM income for a family with 1-4 members is $88,400 and the MAXIMUM income for a family with 5-8 members is $116,700.  This means that BEFORE TAXES (your “Gross” income) can not be a penny over this amount… even if you are not using the income from a college son who is living in the home… his income is being counted in the mix.  To find out the Maximum Income Limits for your area, click here.

Figuring out the family income, and if you meet the requirements is pretty straightforward – where most people find difficult about USDA homes, is finding a PROPERTY that qualifies for this financing! USDA is a loan designed for RURAL areas.  It doesn’t mean that you have to find a FARM… but it does mean that you will need to located a home that sits in a LESS densly populated area.

That’s where Zillow can help!

Look at the Maps Below… the properties shaded in “Orange” do NOT qualify for USDA Home Loan Financing… however – all of those OTHER areas do!

So once you know, for instance, that one side of Ten-Ten qualifies for this program, it’s pretty easy to go to Zillow, and put in Garner, NC.  All of a sudden, houses pop up, and you can pretty easily see which ones qualify!  Here’s a great house on Grissom Farm Road!  That’s pretty cool hugh??

To find maps of the areas near you that qualify for USDA Home Loans, click here