So many people when they decide that they are ready to purchase a house, find out that the money side of things puts a spanner in the works. There are so many restrictions and changes in the lending industry, that what used to work simply doesn't any more and a borrower who in the past could qualify for $200,000 can now only qualify for $150,000. And the reasons why vary.
Obviously the borrower who is self employed may have a hard time qualifying as the attractive allowable write offs can reduce income that we can use drastically. For the schedule C borrower We have to use the adjusted gross and depending on the time of year will probably have to have an audited profit and loss in order to prove the income is still continuing. 2 years self employed income is pretty mandatory.
A larger not so obvious problem is the borrower who thinks they have co-signed on a car loan, but because the other individual pays the monthly payments we dont have to count the payment against them. This is not necessarily so. Our borrower may never make the payments (and can prove it), but if they show up in first position on the note/loan, we have to count the full payment against them.
More on this topic to come . . . . .
Tuesday, July 6, 2010
Wednesday, September 9, 2009
Highest and best use of your money
So a lot of customers come to me asking for a rate. oh and by the way they dont want any of that pesky mortgage insurance even though they may not have a 20% down payment.
Well condsider this. Say you think that you would like to put down 10% (which will incur some type of mortgage insurance) and it will pretty much clean out your savings account. But you figure that you will be much better off interest rate wise overall than if you put less down.
Interestingly enough, FHA is a great alternative. You only put down a minimum of 3.5% of the purchase price. However, the interest rates will often be as much as 0.5% better than a conventional mortgage with the above scenario.
But better than that, you have left some money in the bank for those odd emergencies that can crop up without increasing your monthly mortgage payments by a huge amount. Or perhaps you have a credit card that is charging a large amount of monthly interest that would be better paid off, than putting the money into the down payment.
Food for thought!!!
Well condsider this. Say you think that you would like to put down 10% (which will incur some type of mortgage insurance) and it will pretty much clean out your savings account. But you figure that you will be much better off interest rate wise overall than if you put less down.
Interestingly enough, FHA is a great alternative. You only put down a minimum of 3.5% of the purchase price. However, the interest rates will often be as much as 0.5% better than a conventional mortgage with the above scenario.
But better than that, you have left some money in the bank for those odd emergencies that can crop up without increasing your monthly mortgage payments by a huge amount. Or perhaps you have a credit card that is charging a large amount of monthly interest that would be better paid off, than putting the money into the down payment.
Food for thought!!!
Wednesday, August 26, 2009
Tuesday, August 4, 2009
What's Up With Condo's?
So condo's have been getting harder to finance since Fannie Mae said that they wanted full certifications for every transaction. It has been a relief to find that many condo's are financiable using FHA loans instead. Not only from the point of view that they don't have to have a certification if they are on the approved list, but also because you can put down as little as 3.5% (otherwise you would be restricted to probably 10% down payment).
However, all is about to change. In fact if you own a condo that you are currently trying to sell, you might want to get very realistic about the pricing and get it done before October 1, 2009.
The reason for this is very simple. FHA will no longer have an approved condo list. All condo projects, unless they received a certification after October 2008, will need to be recertified if they get a purchase contract after October 1, 2009. The worst part of this is that you can't get it done now, nor can the HOA get it done at all. It has to be through a lender or a builder.
So when October 1 comes around all hell will be let loose as buyers who would like to buy a condo with FHA financing have to wait for HUD (Housing and Urban Development) to approve the complex. You can only imagine how quickly a government department with 100's of applications is going to get that done!!
Now I'm always more optimistic after a restorative cup of tea, but it will be interesting to see exactly how this plays out.
The long and short of it is, if you want to buy or sell a condo with FHA financing, DO IT NOW and save yourself some angst!
So condo's have been getting harder to finance since Fannie Mae said that they wanted full certifications for every transaction. It has been a relief to find that many condo's are financiable using FHA loans instead. Not only from the point of view that they don't have to have a certification if they are on the approved list, but also because you can put down as little as 3.5% (otherwise you would be restricted to probably 10% down payment).
However, all is about to change. In fact if you own a condo that you are currently trying to sell, you might want to get very realistic about the pricing and get it done before October 1, 2009.
The reason for this is very simple. FHA will no longer have an approved condo list. All condo projects, unless they received a certification after October 2008, will need to be recertified if they get a purchase contract after October 1, 2009. The worst part of this is that you can't get it done now, nor can the HOA get it done at all. It has to be through a lender or a builder.
So when October 1 comes around all hell will be let loose as buyers who would like to buy a condo with FHA financing have to wait for HUD (Housing and Urban Development) to approve the complex. You can only imagine how quickly a government department with 100's of applications is going to get that done!!
Now I'm always more optimistic after a restorative cup of tea, but it will be interesting to see exactly how this plays out.
The long and short of it is, if you want to buy or sell a condo with FHA financing, DO IT NOW and save yourself some angst!
Monday, June 15, 2009
A Good Week
So last week was a great week! Why, (I hear everyone clammouring)? Couple of reasons. I had a closing that really stands out among all my closings. A first time homebuyer couple who have waited a couple of years before they purchase. Boy have they benefited from waiting. They'll be getting the tax credit when they amend their 2008 taxes, or in 2009 if they decide to take the credit then. They got an unbelievable interest rate (high 4%'s). But most importantly they are financially in a better place and position to buy a house.
But this wasn't the reason it was a great closing. It was great because they were so excited about having a home of their own. So much so that we took pictures of them with their new keys! It was awesome. In the lending arena where all the news is so negative, it just goes to show that good things are happening.
The other reason for the good week is because I'm going to be on TV. It was a very wierd experience and quite nerve wracking - I know why I decided not to be a movie star!! But the great thing about the piece that I did is that it is trying to show that there is good stuff going on in the real estate world. All the news does is post the doom and gloom. Even advertising draws it in (car ads saying you can return the vehicle if you loose your job). The reality is that Denver is doing really well, but we don't really hear about that. So watch for it on KPJR-DT Channel 38 at 11:00am and remember it's my first effort so try not to be too critical!
But this wasn't the reason it was a great closing. It was great because they were so excited about having a home of their own. So much so that we took pictures of them with their new keys! It was awesome. In the lending arena where all the news is so negative, it just goes to show that good things are happening.
The other reason for the good week is because I'm going to be on TV. It was a very wierd experience and quite nerve wracking - I know why I decided not to be a movie star!! But the great thing about the piece that I did is that it is trying to show that there is good stuff going on in the real estate world. All the news does is post the doom and gloom. Even advertising draws it in (car ads saying you can return the vehicle if you loose your job). The reality is that Denver is doing really well, but we don't really hear about that. So watch for it on KPJR-DT Channel 38 at 11:00am and remember it's my first effort so try not to be too critical!
Monday, June 1, 2009
They Brought It Back!
Hud has brought back the ability to use the $8000 tax credit for the down payment on an FHA loan. So far, as I mentioned before, CHFA is the only agency that has a program available to do this, but I'm sure other non profits will jump on the band wagon and have programs fairly soon. I'll keep you posted on that.
On another note, I had a great closing today. Why so good? Well this was a deserving young couple whose only problem was that their income went from a salary to self employed (same industry, same income). They were refinancing to reduce their monthly payments by $400 or so. The huge monthly savings were due to the fact that they bought their house for less than the appraised value, so I would be able to reduce their mortgage insurance as well as the interest rate. However, with all the restrictions we have these days it has been like pulling teeth as part of the income is considered unusable, which means that it appears that they are spending too much on their house payment. The long and short of it is, that after battling through major obstacles and objections with the underwriting and mortgage insurance company we closed today!!
It really felt great!!
On another note, I had a great closing today. Why so good? Well this was a deserving young couple whose only problem was that their income went from a salary to self employed (same industry, same income). They were refinancing to reduce their monthly payments by $400 or so. The huge monthly savings were due to the fact that they bought their house for less than the appraised value, so I would be able to reduce their mortgage insurance as well as the interest rate. However, with all the restrictions we have these days it has been like pulling teeth as part of the income is considered unusable, which means that it appears that they are spending too much on their house payment. The long and short of it is, that after battling through major obstacles and objections with the underwriting and mortgage insurance company we closed today!!
It really felt great!!
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