68% in NJ.
There are many questions you might be asking at this time, particularly surrounding your home. We are here to help. Let's first break down some of the basics.
"I think I want to stay in my home...what do I need to keep in mind?" First, take into consideration the size of the home, utilities, payments, family needs. Does staying in the home truly make sense? You will likely now be entirely responsible for the house payment, taxes, insurance, upkeep, maintenance and other related bills. Your household income may be decreasing, and your overall expenses may be increasing if you are subject to a court order for support, so it is important that you are aware and thorough in determining what your actual expenses will be in keeping and maintaining the home on your own.
"My spouse is entitled to share in the equity we have in our home...how is this handled?" The equity in the home needs to be determined by an appraiser - call us if you need a recommendation and referral. The appraised value less the eventual costs of selling (commissions and seller closing costs) equals the equity to be split between the parties. This is the amount you will be obligated to give to your ex-spouse. And in general, any money you or your spouse contributed to the home from your own pre-marital assets must also be accounted for in determining the final division of equity.
With the divorce, your spouse may put a marital lien on the property or there may be a court ordered mandate for distribution of the equity, possibly including interest on that amount. This means that you will likely have a specified amount of time to obtain the funds needed to give the ex-spouse their portion of the equity. This can be done by cashing out the equity in the home with a new mortgage, selling the home or by using other assets you have to "buy out" their stake in the home.
If you choose to stay in the home, you have two financing options to pay your ex-spouse. You can either refinance your home to get cash out, or you can obtain a new second mortgage or home equity loan. This is where you will want the advice of a trusted mortgage professional.
Even though you may now be qualifying for the loan without a spouse's income - with your own good credit and income, you can usually qualify on your own. Often, child support and alimony is viewed as stable income, if it has been received for three months and is likely to continue for at least three years.
"What if I am the one leaving the home?" It is important to know that even though the divorce decree awarded the home to your spouse, you are still obligated for this debt in the eyes of the mortgage company.
Many people assume that by filing a Quit Claim Deed removing themselves from the title, they are no longer responsible for the mortgage. A Quit Claim Deed only eliminates your name from the title of the property, but not from the mortgage loan. The benefit of a Quit Claim Deed is that if the spouse on the title passes away, the property will go to his or her heirs rather than to the ex-spouse.
"How might this scenario impact my credit - and what can I do?" Unfortunately for many, divorce is a time of great financial hardship and credit challenges. Because you are obligated on the mortgage until it is paid in full or refinanced, it is imperative that the person responsible for the payment remains current. One possibility you have to remove your name from obligation is to contact the company which currently holds your mortgage, and ask to do a "Qualifying Name Delete Assumption." This process will leave the existing loan in place, but would relieve the non-occupying spouse from their obligation on the loan. Give us a call, and we can explain more about this process, or help you determine if a refinance may make more sense instead.
"If I want to go buy another home - am I going to be out of luck while I am still listed on the old mortgage?" Although it is difficult and not usually advised to purchase another home until your divorce is final, we are happy to look over how you expect the financial situation to be finalized, and help you get ideas as to what you will qualify for. Remember that in most situations, child support and alimony must have been received for three months, and be likely to continue for at least three years in order to use this income for qualifying. Even if you are still listed as a co-borrower on the mortgage for the prior home, if the divorce decree states that you are not obligated for the mortgage, many mortgage programs will allow you to be qualified without this obligation. However, any late payment issues on the mortgage held by your ex-spouse will impact your credit scores, as the mortgage is still a joint liability in the eyes of the credit bureaus until you are removed via a refinance, sale or other method as described above.
"What if I do want to purchase another home before the divorce is final?" This may be possible, but be aware that your spouse may have a marital interest in your new property, and it will need to be handled by your attorney with a Quit Claim Deed being given from your ex-spouse to you. You will also have to qualify with the full debt from the current home, because there would not yet be a final divorce decree assigning ownership. Be very careful with this situation, especially as the financial situation you expect...may not be the final result, once the decree is entered.
Taking the time to talk with us during this process and before you decide to start looking at a new home can help eliminate many of the concerns or questions that often surface in these situations. We understand this may be a very difficult time, and you have many decisions to make. We can provide you with a free financial consultation, credit check, and mortgage strategy review - so that you have the answers and information you need to make good decisions.
We'll help you sort out the options and strategies you have at hand, and do our part to help you at this time...and down the road. We understand that it's not just a house - it's your home.
Victor M. Jaramillo
Omega Financial Services
Phone: 908-933-0253 Ext. 328
Tempting Tax Credits for First-Time Home Buyers
What could you do with $8,000? How about using it to finance a home? In order to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers.
Just last year, home buyers and owners were able to take advantage of the housing and Economic Recovery Act's $7,500 tax credit. This credit served as a 15 year interest free loan for those who purchased their home after April 9, 2008 and before July 1, 2009. With the new and improved $8,000 tax credit plan in place, buyers have the opportunity to receive a good chunk of cash which, unlike the last year's tax credit, does not have to be repaid.
If you're interested in taking advantage of this opportunity, you only have a short while to act. Determine whether or not you qualify for this tax credit by reviewing the following requirements and by contacting Omega Financial Services today at 908-933-0253 or online at fhaomega.com.
Are You Eligible?
First-Time Home Buyer:
Have you leased your home for the past three years? If so, then you may qualify for the tax credit, as the plan defines a first-time home buyer as a "buyer who has not owned a principal residence during the three0year period prior to the purchase."
Purchase Date:
Buyers are encouraged to act fast as the cutoff date for this $8,000 credit is December 1st, 2009; not at the end of the year, as you might expect.
If you purchased your home before the New Year, you're out of luck, though you may qualify for the housing and Economic Recovery Act Tax Credit. Contact us today at 908-933-0253 to learn more about your tax credit and mortgage program options.
Principle Residence:
According to the plan, a "main home" is "any home that will be used as principle residence," and includes "single-family detached home, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats." Multiple home owners, or those looking to purchase their second, third, or even fourth home, will not qualify for this particular tax credit.
Income Limits:
Those buyers with a modified adjusted gross income (MAGI) of less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return will receive the full tax credit amount. If it is more, the tax credit amount is reduced until your MAGI meets or exceeds $95,000, at which point you are no longer eligible for the credit. Call your Omega Financial Services mortgage professional at 908-933-0253 to discuss your current financial situation and to determine whether you make a good tax credit candidate.
Stay Put:
In order to qualify for the tax credit, plan to stay put in your new home for a minimum of three years. Buyers cannot move, sell or otherwise leave their home for at least three years after they purchase.
Price:
The plan states that the buyer receives 10% of the purchase price of the home or $8,000, whichever is less. So the monetary amount you're awarded is determined by your new home's price. In order to receive the maximum credit of $8,000, the buyer must purchase a home for $8,000 or more.
Participating in the tax credit program is simple. Determine your tax credit amount by completing the IRS Form 5405 and claim the tax credit on your federal income tax return. With home prices and mortgage rates at all time lows, buyers incentives and tax credits greatly contribute to your goals of homeownership. Discuss your home loan, tax credit and buyer incentive options with your Omega Financial Services professional and to discover the grogram that is best for you.
Keeping You Informed
Omega Financial Services is dedicated to keeping you informed of the latest market trends and mortgage options. Visit us online at fhaomega.com, or call today at 908-933-0253, to obtain custom loan options designed to fit you needs and help you obtain you home ownership goals.
Victor M. Jaramillo
Omega Financial
(908) 933-0253 Ext. 328
Today I will make a difference. I will begin by controlling my
thoughts. A person is the product of their thoughts. I want to be
happy and hopeful. Therefore, I will have thoughts that are happy and
hopeful. I refuse to be victimized by my circumstances. I will not let
petty inconveniences such as stoplights, long lines, and traffic jams
be my masters. I will avoid negativism and gossip. Optimism will be my
companion, and victory will be my hallmark. Today I will make a
difference.
I will be grateful for the twenty-four hours that are before me. Time
is a precious commodity. I refuse to allow what little time I have to
be contaminated by self-pity, anxiety, or boredom. I will face this
day with the joy of a child and the courage of a giant. I will drink
each minute as though it is my last. When tomorrow comes, today will
be gone forever. While it is here, I will use it for loving and
giving. Today I will make a difference.
I will not let past failures haunt me. Even though my life is scarred
with mistakes, I refuse to rummage through my trash heap of failures.
I will admit them. I will correct them. I will press on. Victoriously.
No failure is fatal. It's OK to stumble - I will get up. It's OK to
fail - I will rise again. Today I will make a difference.
I will spend time with those I love. My spouse, my children, my
family. A man can own the world but be poor for the lack of love. A
man can own nothing and yet be wealthy in relationships. Today I will
spend at least five minutes with the significant people in my world.
Five quality minutes of talking or hugging or thanking or listening.
Five undiluted minutes with my mate, children, and friends.
Today I will make a difference.
From the Authors of The Secret
Hello Friends,
We are looking for Vendors to participate at our 1st Network Event.
What to find at the Event:
Buyers/Sellers
Free Food
Training
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We will have a room full of customers looking to buy/sell/and learn from the professionals in our area: Attorneys, Real Estate Agents, Mortgage Consultants.
Your suggestions are highly appreciated.
Sincerely,
Victor M.J.
Omega Financial Services, Inc.
1872 Morris Avenue
Union, NJ 07083
(908) 933-0253 Ext. 328
(908) 964-0295 Fax
(908) 296-0966 Cell
vjaramillo@omegafunding.net
Here is what I got after some research with a client of mine.. I hope it helps.. When FHA needs second appraisals
Quoted directly from Mortgagee Letter 2008-09, dated April 4, 2008, effective 1/1/09 "Second Appraisal Requirements/Loan-to-Value Limits for Cash-Out Refinances: The instructions in ML 2008-09 regarding when a second appraisal is needed, and the requirements for that second appraisal, as well as the 85 percent limitation on cash-out refinances when the loan balance will exceed $417,000, remain in effect." "In addition, FHA will now require a second appraisal for all cash-out refinances where the LTV, exclusive of the UFMIP, will exceed 85 percent of the appraiser's estimate of value. This second appraisal requirement applies regardless of the loan amount or the location of the property, i.e., whether the property is in a "declining area" or is not. This second appraisal requirement for cash-out refinances is effective for all case number assignments on or after January 1, 2009 and is to adhere to the instructions set forth in ML 2008-09. Please also note that cash-out refinances with LTVs exceeding 85 percent will be over-selected for post-endorsement technical reviews (PETR) to assure the quality of the underwriting."
Print this out and tape it near your computer to remind yourself...
Sincerely,
Victor M. Jaramillo
Sales Manager/Mortgage Consultant
President's Club
Omega Financial
1872 Morris Ave.
Union, NJ 07083
(908) 933-0253 Ext. 328
(908) 964-0295 Fax
(908) 296-0966 Cell
www.FHAOMEGA.com
Lic. Mortgage Bankers by the NJ dept., of Banking & Insurance
Equal Housing Lenders
Lions Club Member, 98
vjaramillo@omegafunding.net
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The most important thing to understand is that the loan approval process is 100% dependant on your documentation. To insure a smooth transaction, it is imperative that you have all of your documents.
Now Available Up to $5000.00 Pre-Fund Stimulus Rebate!
The First-Time Home Buyers Tax Credit Loan ("TCLP") Program provides a loan to pay downpayment and/or closing costs to Agency Home Buyer Program first-time home buyers who meet all of the requirements of the Home Buyer Program and who are eligible for the credit as permitted by the federal law establishing the credit and the guidance provided by the IRS in the General Instructions that accompany IRS Form 5405 and who apply for a TCLP loan on or after April 8, 2009 and close on the home purchase between April 8, 2009 and December 1, 2009. The TCLP loan will not exceed $5,000 ($4,000 in the case of married filing separately) and will be secured by a second mortgage. The borrower will pledge to apply the refunds received from the first-time home buyer tax credit toward the repayment of the TCLP loan.
Simply read more about this and other exciting programs available at:
http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/
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What is the LWYW homebuyer program
The LWYW program is a home mortgage incentive program that provides low-interest mortgage loans to homebuyers purchasing homes in towns where they are employed. The goal of LWYW is to build stronger communities by promoting homeownership and encouraging people to live closer to their jobs. This, in turn, will reduce the need for cars and increase the use of alternative transportation such as walking, biking and public transit.
If you would like to buy a house in the town where you currently work, then LWYW might be right for you. Employees benefit from attractive mortgage rates, more flexible loan application review and underwriting criteria, and reduced commuting times to work. Municipalities benefit from having a committed workforce living nearby
Municipalities Currently Participating in the LWYW Program include
FHA Loans - Documents Needed for FHA Loan Employment Information Savings Information Credit Information Personal Information If a Refinance or you own Rental Property Additional documents may be needed upon review of your file and on a case-by-case scenario.
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The most important thing to understand is that the loan approval process is 100% dependant on your documentation. To insure a smooth transaction, it is imperative that you have all of your documents gathered prior to you initial loan application. Following is a list of all the documents you will need. Please feel free print this screen and use this as a checklist.
FHA Loans - Income Qualifications One of the first questions we will ask will consider is how much of your total income you will spend on housing. This information helps the lender decide whether you can comfortably afford a home. When you are qualifying for a loan, a we will use your gross income. That means all the money you earn before taxes, including overtime, commissions, dividends and any other sources --as long as you can show a steady two year history for these sources. Your monthly housing expense as a percentage of your monthly income is called the housing expense (a.k.a.: front-end) ratio. FHA suggests to spend about 29% of your income on your house payment (including the mortgage, property taxes, mortgage insurance and hazard insurance). Calculate what your new monthly mortgage payment should be by using the formula: Gross Monthly Income multiplied by 29% = Mortgage Payment. Sometimes you have to stretch that percentage when you buy a house -- and that's one of the benefits of easier qualifying FHA home loans. To qualify, you're allowed to spend up to 35% of your income on your house payment, as long as everything else in your application shows that you can handle the "stretch." One important thing FHA will do is compare your housing expense now to the expense you'll have if you buy a home. The smaller the increase, the stronger your application looks. FHA Loans - Credit Qualifying for FHA Loans In addition to your ability to pay for a mortgage (as indicated by your debts and income), FHA will look at your ability to repay as indicated by your credit report. Your willingness will be judged by your credit report records -- that is, how well you've paid your loans and other debts in the past. If you are unsure what your credit report is like, you may want to begin by getting a free credit report that you can view immediately online by going to freecreditreport.com ( we are not associated with this company) or you can call us to run your credit for you. To help you understand why credit is important and why FHA will look at your credit, please try to understand the following: Whenever you borrower money (credit cards, auto loans, student loans, etc.) you are making a commitment to that creditor to pay them back on the terms mutually agreed upon. If you are late making the payment then you broke the commitment and the lender can indicate this on your credit report. The lender does not know why you are late, they just know that you broke the commitment agreed upon. They are not responsible on helping you manage your bills and debt, as they simply make and offer and the borrower accepts the terms. This is why your credit is very important in qualifying for a home loan. Although you are supposed to have perfect credit, FHA will allow for minor past credit issues, as long as there is a "reasonable" reason why there was an issue. FHA will look mostly at the last two years of your credit history. If there are some credit issues, we may be able to overcome them with sufficient explanations and supporting documents of why the issues occurred. Following is some the the reasons FHA will accept: As long as it seems to make sense, and it is not just because you did not make the payment or because you had too much other debt. You should not rule yourself out of qualifying for FHA loan to buy a home or refinance your existing mortgage because of credit issues until a mortgage professional has reviewed your credit. There are some credit issues that you must allow for a certain time (seasoning) to past before you can qualify for a FHA loan. They are follows: Also FHA would typically require that any outstanding collection accounts, judgments, charge off's be paid off in full before closing your loan but not necessarily before "approving" your loan. If you have a "Federal Tax Lien" that is in a repayment agreement, you do not have to pay it off in full but you must be able to qualify with the monthly payment of the repayment agreement. "State Tax Liens" typically must be paid in full prior to closing your FHA loan. Another advantage of FHA loans is that FHA does not require a credit scoring item called a FICO (Fair Issac Company) score. So if you have no credit at all you may still qualify for a FHA loan. If you have some credit you will typically need a minimum middle credit score of 620 to qualify for a FHA loan. If you are not sure what your credit score is, you can click here to order your credit scores online. This allows more home buyers to qualify to purchase or refinance a home. When you apply to get pre-qualified for a FHA home loan, we will order a credit report for you. The credit report will show your record of payments on loans, charge cards and other similar debts. If you have never had a loan or a charge card, you can show that you have a good record of payment on your utility bills and rent payments. We will review your credit report with you. Should you have some credit issues that prohibit you from qualifying for a FHA loan now, we will show you how to correct the issues so that you we can help you qualify to purchase a home or refinance your mortgage in the future or you can contact visit this law firm specialized in credit repair
FHA Loans - FHA Debt Ratio's Guidelines Following are the two types of debt ratio's that will be use: Following is the typical debts used to determine your qualifying ratio's: Front-End Ratios Back-End Ratios- the minimum required monthly payments on all of the following: Following are monthly liabilities that are not used to calculate debt ratio's: The percentage of debts to income is called the debt-to-income (a.k.a.: back-end) ratios. A good goal is to spend no more than 38% of your income on all debts, including house payment. However, under FHA home loan guidelines you're allowed to spend up to 41% of your monthly income on housing and other debts -- if the rest of your loan application shows you can handle it. An example of the income to debt calculation is as follows: Income = $3,000 New Mortgage Payment = $900. Minimum Monthly Payments = $300 "Mortgage" divided by "Income" = 30% "Mortgage + Monthly Payments" divided by "Income" = 40% In this scenario, your front-end is 30% and back-end is 40% which is acceptable for a FHA loan. These ratios can also adjusted or exceeded if there are item(s) you can payoff, lower interest the interest rate, lower the loan amount, etc. FHA is the most flexible lender regarding debt ratio's. Never rule yourself out of buying a home until you have spoken to a mortgage professional. Learn exactly how much of a FHA loan you can qualify for by calling us directly (908) 296-0966
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FHA has designed its program to assist people to purchase homes and refinance existing mortgages. Therefore the income qualifying guidelines are more flexible than traditional Fannie Mae & Freddie Mac Conventional Home Loans.
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In addition to your income, an FHA lender will look at your minimum monthly debts to calculate your income to debt ratios. The debt ratio's is what will determine "how much" of a FHA loan you can afford to qualify for.
FHA Loan - Savings Qualifications
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As for your savings, FHA is the easiest of all types of loans to qualify. FHA does not require that you have a savings or checking account and the money you will be using for your purchase does not have to be "seasoned" (meaning in the bank for the last three months), like conventional loans.
FHA will allow for a homebuyer to receive the down payment for the purchase of a home as a "Gift" (meaning you do not have to pay it back), from a family member or non-profit organization.
When purchasing a home with FHA financing and you are receiving a "Gift", you must provide the complete papertrail of the money's being giving to you. Typically, we will need the persons bank statement whom is giving you the money (to prove that they had it to give int he first place)
Additionally, if you have a 401K or retirement account, you may be able to draw or borrow from these funds for your down payment. If you must borrower against an account, you must be able to qualify with the monthly repayment amount.
If you have a bank account(s), you will need to provide three months of the complete bankstatments. FHA will review them to insure that you are balancing and managing your bills properly. Also they will look to see that the debts match up to your monthly payments and that the deposits are close to what you are netting on you paycheck. If there are any large deposits, they will need to be explained.
An occasional "NSF" may suffice if there is proper explanation as to why it occurred. At the time of your loan application, you should have your last three months bank statements with you.
If you have recently sold an item or have your money saved at home, you can still purchase a home now using your money. You will simply have to provide documents verifying the sale of the item or write a budget letter explaining how and why you save your money at home.
Should you be purchasing or refinancing a 3 or 4 unit property, FHA requires that you have a minimum of 3 months of the future mortgage payments in savings. These savings are called "Reserves".
Learn about how your Ratio's will affect your loan qualifications with a FHA real estate mortgage loan by contact us directly.
FHA Loan Closing Costs To easily understand the closing costs description below, you may want to download a sample "Good Faith Estimate" to view the form in it's entirety by clicking >> Here. The form is broken into six separate sections. Each section is located below. The item number on the right side is from all legal HUD / Respa compliant forms. Please click on "Explanation of Fee" to learn more about the fee. Loan Fee's Below is a sample of a section of each section of a Good Faith Estimate that covers the loan fee's and charges of the lender. These fee's in this section are charged by the lender. Following is a description of the normal non-reoccurring closing costs for a FHA loan. These fee's are typically paid by the buyer or owner. It may be negotiated that all or part of these fee's may be paid by the home seller or lender. 801. Loan Origination: This fee is usually known as a loan origination fee but sometimes is called a "point" or "points." It covers the lender's administrative costs in processing the loan. FHA regulates this fee to a maximum of 1% of the loan amount. Often this is expressed as a percentage of the loan. Generally, the buyer pays the fee, unless otherwise negotiated. 802. Loan Discount: Also often called "points" or "discount points," a loan discount is a one-time charge imposed by the lender or broker to either lower the rate at which the lender or broker would otherwise offer the loan to you or may be used to lock-in the interest rate for an extended period. This fee may vary. 803. Appraisal Fee: This charge pays for an appraisal report made by an independent FHA appraiser. Typically range from $300 - $500. 804. Credit Report Fee: This fee covers the cost of a credit report, which shows your credit history. The lender uses the information in a credit report to help decide whether or not to approve your loan and how much money to lend you. Typically $40 - $55. 805. Lender's Inspection Fee: This charge covers inspections, often of newly constructed housing, made by employees of your lender or by an outside inspector. (Pest or other inspections made by companies other than the lender are discussed in line 1302.) 806. Mortgage Insurance Application Fee: This fee covers the processing of an application for mortgage insurance. 807. Assumption Fee: This is a fee which is charged when a buyer "assumes" or takes over the duty to pay the seller's existing mortgage loan. 808. - 809. Mortgage Broker Fee: Fees paid to mortgage brokers would be listed here. A CLO fee would also be listed here. 810. Loan Processing Fee:This fee is for the administrative cost of processing your loan files required paperwork. 811. Underwriting Fee: Fee charged by investor for underwriting the submitted loan file and all of its paperwork. 812. Wire Fee: Fee charged by investor for wiring out the required funds to close the loan. 813. Flood Certification: Every FHA loan request a flood report to insure that it is not located in a flood zone. If property is in flood zone, owner required to obtain flood insurance. Prepaid Items The following fee's are reoccurring pre-paid fee's. You may be required to prepay certain items at the time of settlement / closing. Some of these items would be accrued interest, mortgage insurance premiums, and homeowners / hazard insurance. 901. Interest: Lenders require borrowers to pay the interest that accrues from the date of settlement / closing to the first monthly payment which is prorated daily based on the new loans interest rate. 902. Mortgage Insurance Premium: FHA Mortgage Insurance Premium fee is 1.5% of the loan amount. This fee may be financed into the loan amount. If you pay the FHA loan off within the first seven years, you may be entitled to a prorated refund of the MIP. 903. Hazard Insurance Premium: Hazard insurance protects you and the lender against loss due to fire, windstorm, and natural hazards. Lenders often require the borrower to bring to the settlement a paid-up first year's policy or to pay for the first year's premium at settlement. 904. Flood Insurance: If the lender requires flood insurance, it is usually listed here. Escrow Impound Account Reserves All FHA loans require the establishing of an escrow impound account. This account allows your property taxes and homeowners / hazard insurance to be included in your monthly payment and paid annually as needed. 1001. Hazard Insurance: Usually 2 months prorations of your annual homeowners / hazard insurance policy. 1002. Mortgage Insurance: Usually 2 months of the monthly FHA mortgage insurance premium. This monthly fee is calculated as .5% of the final FHA loan amount divided by 12 for the monthly prorations. 1003. City Property Taxes: Some cities have assessed property taxes which would be collected here. This will vary from city to city. 1004. County Property Taxes: The amount of property taxes collected will vary and would be prorated based on the number of payments made on the new loan to until your property taxes are due. May be from zero to eleven months in advance. 1005-1007. Other Prorations: These would be any other fee's such as HOA dues. 1008. Aggregate Adjustment: The lender is not allowed to collect more than a certain amount. The individual item deposits may overstate the amount that can be collected. The aggregate adjustment makes the correction in the amount on line 1008. It will be zero or a negative amount. Title & Other Fee's This fee's are all other fee's associated with obtaining a FHA loan. Although these are not lender fee's, lenders must provide a quote of the estimated fee. These quotes may vary significantly. Title charges may cover a variety of services performed by title companies and others. Your particular settlement may not include all of the items below or may include others not listed. 1101. Settlement or Closing Fee: This fee is paid to the settlement agent or escrow holder. Responsibility for payment of this fee should be negotiated between the seller and the buyer. 1102-1104. Abstract of Title Search, Title Examination, Title Insurance Binder: The charges on these lines cover the costs of the title search and examination. 1105. Document Preparation: This is a separate fee that some lenders or title companies charge to cover their costs of preparation of final legal papers, such as a mortgage, deed of trust, note or deed. 1106. Notary Fee: This fee is charged for the cost of having a person who is licensed as a notary public swear to the fact that the persons named in the documents did, in fact, sign them. Usually $40 - $120. 1107. Attorney's Fees: You may be required to pay for legal services provided to the lender, such as an examination of the title binder. Occasionally, the seller will agree in the agreement of sale to pay part of this fee. The cost of your attorney and/or the seller's attorney may also appear here. If an attorney's involvement is required by the lender, the fee will appear on this part of the form, or on lines 1111, 1112 or 1113. 1108. Title Insurance: The total cost of owner's and lender's title insurance is shown here. 1109. Lender's Title Insurance: The cost of the lender's policy is shown here. 1110. Owner's (Buyer's) Title Insurance: The cost of the owner's policy is shown here. Recording and Transfer Fee's These fees are city, county and state fee's. They may be paid by you or by the seller, depending upon your agreement of sale with the seller. The buyer usually pays the fees for legally recording the new deed and mortgage (line 1201). Transfer taxes, which in some localities are collected whenever property changes hands or a mortgage loan is made, can be quite large and are set by state and/or local governments. City, county and/or state tax stamps may have to be purchased as well (lines 1202 and 1203). Additional Settlement Charges: These may be other third party fee's for services rendered in order to satisfy all loan, buyer, and seller requirements. All FHA loans require a termite report and clearance. Again, these fee's are negotiable between buyer and seller. 1301. Survey: The lender may require that a surveyor conduct a property survey. This is a protection to the buyer as well. Usually the buyer pays the surveyor's fee, but sometimes this may be paid by the seller. 1302. Pest and Other Inspections: This fee is to cover inspections for termites or other pest infestation of your home. 1303-1305. Lead-Based Paint Inspections: This fee is to cover inspections or evaluations for lead-based paint hazard risk assessments and may be on any blank line in the 1300 series. If your transaction is a purchase, the total of all of these fee's would then be added to the amount of your down payment, which would total the amount needed to close your transaction. For a refinance, these fee's could be added to your new loan amount, paid out of pocket, or financed into the interest rate with a lender credit. If you have found this page useful and know any family, friends or co-workers that may benefit from the information provided, please Recommend this page Next, learn how much of FHA loan you can qualify for by Getting Prequalified Call us directly at: 908-296-0966
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FHA loan closing costs are regulated by HUD. There are maximum fee limits in place so that the FHA loan program remains affordable to home buyers. Additionally, some loan fee's may not be paid by the buyer / owner and are traditionally paid by the home seller / lender.
FHA Loan Qualifying Summary
FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.
Following is the basic FHA loan qualification guidelines.
These are some of the most basic of FHA guidelines for qualifying for a FHA loan. If you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.
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Testimonials:
Hi Everyone,
You all know by now I am due to close on my house very soon (granted all runs smoothly from here on out....lol) and I wanted to let you all know that I have a wonderful team of people working with me to make this happen. One of the key people in getting me to this point has been my mortgage guy, Victor. Whenever I had questions, regardless of the time of day OR night all I had to do was call or text him and he would respond........and welcome my many many many many questions and take the time to explain in detail the intricacies/components of the not only the mortgage process but he would answer any question I had regarding the entire home purchasing process. I am sending out this e-mail because I feel and believe he is a sincere, honest and genuine person who more importantly knows his stuff! If any of you need a pre-qualification letter, are looking to re-finance, or are looking to obtain a mortgage, be sure to give Victor a call. I am only referring him because I know it's tough to find a person you can trust when looking to make one of the most important purchases in your life. If I didn't receive top notch service from him, I wouldn't send this e-mail out to you all:-) His contact info is below. Be sure to tell him I referred you and also feel free to forward his info on......and no I don't receive any type of money for this. I just want to make sure my family and friends receive great service.
Victor M. Jaramillo
Omega Financial (Home of the 1 week closings)
963 Park Avenue
Plainfield, NJ 07060
(908) 757-3001
(908) 543-1059 Fax
Best Regards
D.H.
_________________________________________
Bayer HealthCare LLC
BHC ACCOUNTING CC
MORRISTOWN
NJHMFA's "SMART START" PROGRAM:
Accumulating the funds for downpayment and closing costs is a common barrier to potential homeowners. The Smart Start Program is available to participants in the Agency's first mortgage homebuyer's program who are purchasing homes in Smart Growth areas. The program helps these families by offering a second mortgage for downpayment and/or closing costs up to 4% of the first mortgage.
For More Information, please read below:
The Smart Start Program is available to participants in the Agency's first mortgage homebuyer's program who are purchasing homes in Smart Growth areas. The program helps these families by offering a second mortgage for downpayment and/or closing costs up to 4% of the first mortgage.
http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/fact_sheet/0907_smartstart.pdf
The Smart Start Program is available to participants in the Agency's first mortgage homebuyer's program who are purchasing homes in Smart Growth areas. The program helps these families by offering a second mortgage for downpayment and/or closing costs up to 4% of the first mortgage. Borrowers with sufficient personal assets to close a loan at less than 80% LTVCorporations and Investors are not permitted to act as borrowers. Borrower must maintain occupancy for the life of the loan amount of 2%, 3% or 4% of the first mortgage to qualified Home Buyer Program borrowers purchasing in Smart Growth areas as determined by the Agency's Smart Growth locator. (Visit www.nj-hmfa.com to access the locator tool.) The interest rate on the Smart Start second mortgage is 0%. The Borrower may repay the unpaid principal in full or in part at any time before it is due. This is known as prepayment and no penalty shall be charged. If the Borrower continuously resides in the premises, as his/her principal residence for five (5) years from the date of the closing of the loan, the principal on the Note will have been deemed satisfied and the Lender will provide the Borrower with a cancellation of mortgage or release of lien. If the Borrower conveys, refinances or ceases to occupy the premises as his/her principal residence, full repayment of principal will be due as follows:
• Months 0 through 24, the entire principal is due.
• After the 24th month, 25% of the principal on the Note will be deemed satisfied and the
remaining balance will be reamortized.
• After the 36th month, an additional 25% of the principal on the Note will be deemed
satisfied and the remaining balance will be reamortized.
• After the 48th month, an additional 25% of the principal on the Note will be deemed
satisfied and the remaining balance will be reamortized.
• After the 60th month the entire Note will be satisfied and discharged.
follow the same guidelines as the First Time Home Buyer Program.
Loans submitted using FHA, VA and/or RECD guidelines must adhere to FHA or HMFA guidelines (whichever is lower) regarding purchase price limits or mortgage loan limits. Depending on the Smart Start loan amount elected and will be fixed for the life of the loan in
accordance with the following schedule:
2% Smart Start loan results in first mortgage Home Buyer Program rate + .375%
3% Smart Start loan results in first mortgage Home Buyer Program rate + .50%
4% Smart Start loan results in first mortgage Home Buyer Program rate + .75%
The 40 year first mortgage requires an additional add-on of .125%.
FIRST MORTGAGE PRICING:
The 30 year first mortgage interest note rate will vary
PURCHASE PRICE LIMITS:
Purchase price limits exist for both the statewide and target
INCOME LIMITS:
Income limits are determined by the area of purchase as well as family size
LOAN TERMS:
The Agency will make Smart Start downpayment and/closing cost loans in the
OCCUPANCY:
Property must be occupied as the borrower's primary residence within 60 days
AVAILABLE FUNDS:
As allocated by HMFA.
ELIGIBLE BORROWERS:
Eligible households are those who qualify under the Home Buyer Program.
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