The Whats, Hows, Whys, & What Thes?? of the Mortgage Market!

The uncertainty and confusion surrounding the mortgage and real estate markets are quite extraordinary. Obviously questions arise on a daily basis from people regarding the actual truths. The media does not accurately portray the reality of the market; if you do not want to speak with me I highly suggest you speak with a mortgage professional that has experience to answer any questions. Some common questions lately:
• Can I still pull cash out on my primary residence?
• Can I pull cash out on an investment property?
• If my home has declined in value I cannot refinance?
• I am self-employed there are no loans for me?
• Is it too late for the First Time Homebuyer Credit?
• Can I do 100% financing?
• Can I buy a condo with an FHA loan if it is not an FHA approved building?

I will answer these as straightforward and accurately as possible to the exact time and day I write this. However in this volatile environment guidelines seem to change every nanosecond. Another reason to contact me to answer any questions you may have.

Can I still pull cash out on my primary residence?
Yes, if there is enough existing equity you can pull up to 80% loan to value, meaning leaving 20% equity in the house. For example if a borrower owes $300K and the home is worth $425K, the borrower can increase the current loan to $340K. There are specific rate adjustments related to credit score - but this is the general idea.

Can I pull cash out on an investment property?
Yes, up to a 75% loan to value, similar to the above situation.

If my home has declined in value I cannot refinance?
Not true at all! There are a few options depending on the specific situation. If a homeowner originally had 20%, but no longer, in the past mortgage insurance would have to be added. Now there are two options, depending if the loan is owned by either Freddie Mac or Fannie Mae. Mortgage insurance is not required in the refinance with the appropriate approval up to 95% loan to value with no significant rate hits.
Homeowners can check both these websites to see who owns their loan:
FANNIE MAE:http://loanlookup.fanniemae.com/loanlookup/
FREDDIE MAC:https://ww3.freddiemac.com/corporate/

I am self-employed there are no loans for me?
Actually as long as the last two years of tax returns support income after all adjustments, it is still possible. Issues arise if there is a serious decline in income from one year to the next, otherwise it is still possible. I always request to review tax returns prior to ensure income is sufficient.

Is it too late to take advantage of the $8000 First Time Homebuyer Credit?
Not necessarily, as of now this is set to expire November 30, however the Senate has approved an extension with a few additional nuances to the plan. The new plan extends the credit until April 30 to write a contract and closing must occur prior to June 30. In addition, current homeowners of the last 5 years can also qualify for a $6500 tax credit. The Senate bill would also raise the adjusted gross income cap to$125,000 for single filers and $225,000 for joint filers. We now await the House approval or amended plan.

Can I do 100% financing on a purchase?
Well close to it, FHA allows for a 3.5% down payment plan. This loan has been a powerful driver for first-time buyers, it is a 30 year fixed rate, no adjustments. The rates are at all time lows: 5%-5.5%, depending on the borrower. VA loans will allow for 100% financing as well, but obviously only veterans can use this.

Can I buy a condo in a non-FHA approved building?
As of now spot approvals are still allowed until December 7 of this year. Basically we can gather the pertinent building information and request for a single approval. These have worked beautifully thus far, hopefully it will continue.