Category Archives: LOAN SPECIALIST

The five things you might not know about VA LOANS

VAloansPromoYLV-650-002As banks tighten lending standards, demand has increased tremendously in recent years for Veterans Affairs mortgages, known as VA loans.

The VA loan remains one of the few mortgage options for borrowers who don’t have down payments. Available to more than 22 million veterans and active military members, VA loans are somewhat easier to qualify for than conventional mortgages.

The U.S. Department of Veterans Affairs is not a direct lender. The loan is made through a private lender and partially guaranteed by the VA, as long as guidelines are met.

The VA has guaranteed nearly 500,000 loans this year, says John Bell, assistant director of loan policy at the VA. That’s 30 percent more than the number of VA loans issued last year and nearly three times the number of VA loans issued in 2008.

If you think you may be eligible for a VA loan, here are some must-knows about the program.

Eligibility

Most members of the military, veterans, reservists and National Guard members are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply.

Active-duty members generally qualify after about six months of service. Reservists and members of the National Guard must wait six years to apply, but if they are called to active duty before that, they gain eligibility after 181 days of service.

“Most reservists are qualifying under active duty,” says Michael Frueh, loan guaranty director for the Department of Veterans Affairs.

Reservists, members of the National Guard and active-duty members generally are eligible after 90 days of service during war periods.

“If you were on any type of foreign soil, more than likely you are eligible,” says Grant Moon, a veteran and president of VA Loan Captain Inc., a loan referral company.

Potential borrowers must obtain a certificate of eligibility before applying for a loan. The form can be submitted online.

Advantages of a VA loan

The days of no-down-payment mortgages are long gone, but not for veterans. Loans guaranteed by the VA can be obtained without any down payment.

Another plus: A VA loan doesn’t require mortgage insurance, as do Federal Housing Administration and conventional loans with less than 20 percent down payment. The benefit translates into significant monthly savings for VA borrowers. For instance, a borrower who takes a $200,000 FHA-insured mortgage pays more than $200 a month for mortgage insurance alone.

Fees

Although the costs of getting a VA loan are generally lower than other types of low down payment mortgages, they still carry a one-time funding fee that varies, depending on the amount of the down payment and the type of veteran.

A borrower in the armed forces getting a VA loan for the first time, with zero down payment, would pay a fee of 2.15 percent of the loan amount, Frueh says. The fee is reduced to 1.25 percent of the loan amount if the borrower makes a 10 percent down payment. Reservists and National Guard members normally pay about a quarter of a percentage point more in fees than active-duty members pay.

Those using the VA loan program for the second time, without a down payment, would pay 3.3 percent of the total loan amount.

“And if you receive disability compensation, the fee is waived,” Frueh says.

Underwriting requirements

Veterans Affairs does not require a minimum credit score for a VA loan, but lenders generally have their own internal requirements. Most lenders ask for a credit score of 620 or higher, Moon says.

“There are players that would go lower, but they would probably charge a higher interest rate,” he says.

Borrowers must show sufficient income to repay the loan and shouldn’t have excessive debt, but the guidelines are usually more flexible than for conventional loans.

“We always tell underwriters to do their due diligence, but this is a benefits program, so there is some flexibility,” Frueh says.

 VA guidelines allow veterans to use their home-loan benefits a year or two after bankruptcy or foreclosure.

“We look at the whole credit picture, what was the reason for the credit bankruptcy and where the borrower is now,” Bell says.

VA loans are available only to finance a primary home. A VA loan cannot be used to purchase or refinance vacation and investment homes.

The limit on VA loans vary by county, but it’s $417,000 in most parts of the country and up to $1,094,625 in high-cost areas.

What if I stop paying the mortgage?

Another advantage of a VA loan is the assistance offered to struggling borrowers. If the borrower of a VA loan can’t make payments on the mortgage, the VA can negotiate with the lender on behalf of the borrower.

“We have dedicated staff nationwide committed to helping veterans who are experiencing financial difficulty,” Bell says.

VA’s financial counselors can help borrowers negotiate repayment plans, loan modifications and other alternatives to foreclosure, he says.

Last year, the VA helped about 73,000 veterans avoid foreclosure, he says.

Source: bankrate.com by Polyana da Costa

Need help with a your VA Loan? One of our Loan Officer is ready to help you.

818-810-4646

Advertisements

Attention: FHA to lower cost of mortgage insurance

FHAlowerinsurance-001

In a move designed to bring more first-time homebuyers into the housing market, President Barack Obama said Wednesday the Federal Housing Administration (FHA), the government insurer of home loans, will lower its annual insurance premiums from 1.35 percent to 0.85 percent.

In a statement, the White House said the move was part of the president’s efforts `”to expand responsible lending to creditworthy borrowers.” The president is scheduled to talk about improvements in the housing market at a speech on Thursday in Phoenix, one of the hardest-hit markets of the housing crash.

Stocks of the nation’s home builders rose on the news Wednesday, while those of mortgage insurers fell.

“This action will make home ownership more affordable for over two million Americans in the next three years,” said Julián Castro, U.S. Department of Housing and Urban Development Secretary. “Since 2009, the Obama administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

Mortgage bankers praised the decision. “It couldn’t come at a better time,” said David Stevens, CEO of the Mortgage Bankers Association. “February is the beginning of the spring market. I think it will have a definitive impact particularly in the first-time homebuyer market.”

For the typical FHA applicant, the reduction in premiums means a savings of about $80 on their monthly payment, according to CoreLogic’s chief economist, Sam Khater.

“So it’s positive news from a consumer welfare perspective, especially for first-time homebuyers, which account for the majority of FHA’s business,” he said, adding, “However, I think the marginal impact on sales will be small because potential buyers make the decision to purchase based on trigger events, such as a new job, marriage, kids, etc. Changes in affordability only impact how much home they can buy.”

The FHA had been the only low down payment product available, with a minimum 3.5 percent down, but recently Fannie Mae and Freddie Mac announced a new 3 percent down payment product that would require private mortgage insurance. The product would compete directly with the FHA and could have offered some borrowers a cheaper option if they had a good credit score.

“We believe the cut is strategic. Our view is that FHA was at risk of losing enough market share—especially of higher-quality borrowers—to the GSE 97 percent down mortgage that it could have put at risk the ability of the FHA fund to reach its 200 basis point reserve requirement this year as it had forecast. By cutting the premium, FHA would increase its share of the market and should be back on track to meeting the reserve requirement despite the cut in revenue,” wrote Jaret Seiberg, an analyst at Guggenheim Partners.

The reduction will likely come under scrutiny by some on Capitol Hill, as the FHA is still building its capital reserves and is not yet above the mandatory 2 percent minimum. It is back in the black, after having bled cash for two years.

The FHA’s volume had soared at the beginning of the housing crash, making up for the lack of credit in the private market, but that came at a price. In order to rebuild its fund, it more than doubled its annual insurance premium and raised average credit scores. That made it harder for borrowers today to afford an FHA loan.

Lowering the premium will bring volume back to the FHA, but it will also bring back risk.

“That is clearly the tension with any lending program that encourages low down payment,” said Stevens. “But we are in a different position. We are clearly in an environment where home prices are very stable with steady growth. You don’t have the dynamics to create any type of housing bubble.”

Mortgage volume has been lagging, even with interest rates falling to near record lows. The Obama administration is clearly looking for new ways to boost homeownership, as investor activity wanes and the market is left to mortgage-dependent buyers.

“Now that we’ve made it harder for reckless buyers to buy homes that they can’t afford, let’s make it a little bit easier for qualified buyers to buy the homes that they can afford,” said Obama in an August 2013 speech, also in Phoenix. At the time he did not make mention of the FHA, which was still in the red, but instead touted refinance programs and less red tape for lenders.

Obama is also expected to address the issue of putbacks at the FHA, which is when lenders are forced to buy back bad loans. The regulator of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency, has already sought to clarify these rules, which have created huge costs for lenders and consequently higher costs for borrowers. Source: cnbc.com

Your Loan in the Valley

Get more Real Estate Business!

Pre-qualify Prospects and Referring Partners so you get more Real Estate Business

ID-100260430Generating new clients is a key to success in any business. So you want to make sure you are focusing on clients that are ready to move forward and not wasting time others. When you are talking a lead or potential prospect, ask yourself these questions as a way to qualify them. If they meet all five, you have yourself a solid prospect and you will be on your way to doing business with them. If someone doesn’t meet all FIVE requirements, they are probably not a good match and your time would be best spent speaking to other potential clients.One thing to keep in mind, especially when speaking with prospects, is that some of them will be very well off and others have been through a very difficult time and are going to be defensive. Always be as pleasant as possible and don’t take things personally.

1) Cooperate: When speaking with them, are they amiable and willing to cooperate? Although they may be facing challenges because of today’s market or because of credit issues, that is fine, but if they get belligerent or angry with you, you do not have to work with them.

2) Plea for Help: Do they want to be helped? Find out their “hurt” and show them how your product or service is the “cure”

3) Realistic: Do they have realistic expectations? Does the prospect realize that the current value of their home may not be the same as it was few years ago? If financing is involved, do buyer prospects realize that loan programs are not the same today as they were 2 years ago.

4) Conversation: Are they willing to have a conversation with you? Do they even answer the phone or have they been avoiding you for weeks? Are they short with you and give clipped, one word answers or do they at least provide a little dialogue? Follow the rule of three, once you have left them 3 messages if they do not respond throw them away and move on.

5) Action: Do they want to move forward anytime within the next 2-14 days? Are they motivated and ready to move forward now?

Qualifying your prospective clients quickly and effectively is a skill that is sure to bring you massive success in any industry. Source: propertysolutions123.com

Your Loan in the Valley

Grant Programs for First Time Homebuyers

ID-10033148CalHFA has launched three new programs, and each may be combined with CalHFA’s various down payment assistance programs for first time homebuyers in the housing market.

Two of the CalHFA’s new programs are first mortgage loans, the CalPLUS Conventional and the CalHFA Conventional, offering a maximum LTV of 97%. The third new program is CalHFA’s Energy Efficient Mortgage combined with an additional Energy Efficient Mortgage Grant to allow for energy efficient improvements.  All three of the programs are available to first time homebuyers, with exceptions if the borrower is purchasing a home located in a Federally Designated Targeted Area*.

Each of the programs can be combined with CalHFA down payment assistance programs and other assistance programs including the California Homebuyer’s Down Payment Assistance Program (CHDAP), the Extra Credit Teacher Program (ECTP), and the Mortgage Certificate Credit (MCC) program.

The CalPLUS Conventional Loan Program is already combined with the Zero Intererst Program (ZIP), which is a deferred second loan with zero interest.  The maximum amount of the ZIP loan is 3% of the CalPLUS first mortgage.

The CalHFA EEM Grant may be a maximum of 4% the first mortgage total loan amount and includes the Up Front Mortgage Premium (UFMIP).

All three of the programs require a minimum credit score of 640, and debt-to-income (DTI) not to exceed 45%.  With the assistance of other down payment assistance programs or grants, all programs may have a maximum combined loan-to-value (CLTV) of 103%. Source: prweb.com   photo by photostock

Speak wiht a Loan Officer today! 818 810 4646

Your Loan in the Valley

TalkAgentsBANNERDOWN

California Homebuyer’s Downpayment Assistance Program Product

HOMEbuyersWP

CALIFORNIA HOMEBUYER’S DOWNPAYMENT ASSISTANCE PROGRAM

PRODUCT

• Owner Occupied Purchase, 1 unit dwelling only (5 acre maximum & property cannot be income producing)

• Up to 3% of Sales Price or value whichever is less @3.25% simple interest with deferred payments

Note: repayment of the principal and interest on subordinate loan shall be due and payable at the earliest of the following:

1) transfer of title,

2) Sale of the property,

3) Payoff or refinance of 1st TD,

4) Recording of a Notice of Default.

• Borrower must be a first-time homebuyer (cannot have owned a property in the last 3 years)

•Homebuyer education must be completed by all borrowers.

• Max $250 processing fee allowed for 2nd TD (2nd loan package must be submitted & disclosed)

 

PRODUCT REQUIREMENTS

• Sales Price limit applies per County

• Household income limit applies per County

• Please check limits at http://calhfa.ca.gov/ or CHDAP manual.

(may be subject to change annually)

(Note: Household income is defined as the annualized gross income of a mortgagor and any other person who is expected to liable on the mortgage, be vested on title and live in the residence)

 

UNDERWRITING CRITERIA

• DU Approved/Eligible required – Manual UW is NOT allowed

• Max. 43% DTI (based on qualifying income not household income)

• Non-occupant co-borrowers are not allowed

• FHA/VA/USDA – min. 640 qualifying credit score required

• Conventional @95% LTV or below – min. 640 credit score required

• $1,000 min. required investment for 680 qualifying credit score or higher (Gift allowed DU approval)

• $1,500 min. required investment for 640 – 679 qualifying credit score (Gift allowed with DU approval)

• 3 years 1040’s or IRS 1040’s Transcripts required (signed 4506-T required in file)

• 2 Year Home Warranty required (except new construction)- If paid by borrower cost can be used toward the min. required investment

• All documents must be dated within 60 days of submission to CALHFA (includes credit report, VOE’s/VOD’s, paystubs & bank statements)

(Note: Community property law may imply an interest in a property if when the non-purchasing spouse owns an O/O property)

 

REQUIREMENT FORMS

• Homebuyer Education Certificate (all borrowers)

• Tax Return Affidavit

• Military Service Questionnaire

• Borrower Affidavit of Household Size

• Borrower’s Certification & Authorization to release information

 

INTERNAL PROCESS

1. A purchase contract must be fully executed prior to reservation

2. Lender to reserve CHDAP funds prior to submission of 2nd TD package to CALHFA (90 day expiration or 180 day expiration required for new construction)

3. Loan can be locked with CALFHA when all PTD conditions are signed off by CHDAP U/W (60 day expiration required for locks)

4. All loans must be approved, closed, delivered & purchased prior to reservation expiration date.

 

HANDBOOK AND FORMS PLEASE VISIT

http://calhfa.ca.gov/homeownership/programs/index.htm

TALK WITH A LOAN SPECIALIST TODAY

Your Loan in the Valley

818 810 4646

 

TALK TO A LOAN SPECIALIST ABOUT YOUR OPTIONS

LoanOfficerJose

Your Loan in the Valley

15650 Devonshire St. Ste 312, Granada Hills,  CA 91344

818 810 4646

www.yourloaninthevalley.com