Direct Link:
http://www.youtube.com/watch?v=gTY1UVPRk8g
A lot of people ask this question and it’s a great question.
And the answer is- That depends. You see, guidelines are always changing and will continue to change over the next few years.
In fact they JUST changed! So here is how it stands today…
CONVENTIONAL
Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.
Foreclosure – Home was given back to the bank – no owner participation.
- 7 years from the date the foreclosure was completed and transferred back to the bank if the borrower had NO extenuating circumstances. Minimum FICO of 680 required.
- 3 years from the date the foreclosure was completed and transferred back to bank with acceptable extenuating circumstances, AND 10% down payment. Primary home purchase and rate/term refinance only. Non‐owner and second homes not allowed
Short Sale / Deed in Lieu of Foreclosure -
Short Sale- Home sold, but sales price didn’t cover amount owed.
Deed‐in‐Lieu- Home returned to lender in exchange for canceling the loan.
- 7 years from date sale closed and transferred to new owner or transferred back to the bank for less than 10% down payment and minimum FICO 680.
- 4 years from date sale closed and transferred to new owner or transferred back to the bank with 10% down payment and minimum FICO 680.
- 2 years from date sale closed and transferred to new owner or transferred back to the bank may be possible with acceptable extenuating circumstances and 10% down payment.
Bankruptcy Chapter 7- Debts are discharged through BK, client does not pay any debts owing.
- 4 years from date of discharge - 2 years from discharge date may be possible with acceptable extenuating circumstances
Bankruptcy Chapter 13- Debts are paid back on a monthly scheduled payment plan by client.
- 2 years from date of discharge or
- 4 years from dismissal date
FHA (DETERMINED BY DATE OF CREDIT APPROVAL)
Foreclosure, Deed‐in‐Lieu of Foreclosure
Foreclosure: Home was given back to the bank – no owner participation.
Deed in Lieu: Home returned to lender in exchange for canceling loan.
- 3 years from date foreclosure was completed and transferred back to bank.
- Less than 3 years, but not less than 12 months from date foreclosure was completed and transferred back to bank may be acceptable depending on the results of acceptable extenuating circumstances.
Short Sale- Home sold, but sales price didn’t cover amount owed.
- 3 years from date sale closed and transferred to new owner. - No waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale, AND borrower is not taking advantage of declining market conditions. Subject property may not be in the same geographic region.
Bankruptcy Chapter 7- Debts are discharged through BK, client does not pay any debts owing.
- 2 years from date of discharge with re‐established credit paid as agreed or no new credit obligations incurred.
- Less than 2 years, but not less than 12 months from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances, and the borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.
Bankruptcy Chapter 13- Debts are paid back on a monthly scheduled payment plan by client.
- 1 year payout period under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory; and all required payments made on time.
VA (DETERMINED BY DATE OF CREDIT APPROVAL)
Foreclosure, Deed‐in‐Lieu of Foreclosure Foreclosure: Home was given back to the bank – no owner participation.
Deed in Lieu: Home returned to lender in exchange for canceling loan.
- 2 years from date foreclosure was completed and transferred back to the bank.
- 12‐23 months from date foreclosure was completed and transferred back to bank; if credit re-established and paid as agreed, and was caused by acceptable extenuating circumstances.
Short Sale: Home sold but sales price didn’t cover amount owed.
- 2 years from date sale closed and transferred to new owner. - No waiting period if borrower has no late payments on any mortgages and consumer debts within the last 12 month period preceding the short sale, AND the borrower is not taking advantage of a declining market.
Bankruptcy Chapter 7- Debts are discharged through BK, client does not pay any debts owing.
- 2 years from date of discharge.
- 12‐ 23 months from date of discharge if credit is re‐established and paid as agreed; and was caused by acceptable extenuating circumstances.
Bankruptcy Chapter 13- Debts are paid back on a monthly scheduled payment plan by client.
- 1 year payout period under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory and all required payments made on time.
When you are ready to get back into the housing market or for more information please contact me at 510-282-5456 or info@garrick.biz.
Related Articles:
Feds Announce Bay Area Real Estate Mortgage Interest Rates to Stay Low Until 2014
Home Affordable Refinance Program Update HARP 2
Restoring FHA Loan Limits
http://the-buzzz.com/2011/11/17/restoring-fha-loan-limits-in-alameda-ca/
I receive a lot of questions regarding what fees a Veteran is allowed and not allowed to pay in a real estate transaction in Alameda. Here is a summary of allowable and unallowable costs from one of the lenders I frequently work with.
ALLOWABLE CLOSING COSTS
A Veteran may pay any of the following reasonable closing costs and fees:
If a fee is not listed above, assume VA does NOT permit the veteran to pay it
NON-ALLOWABLE BORROWER-PAID CLOSING COSTS
Generally, the veteran may NOT pay any of the fees listed below, but the seller or lender may pay the non-allowable fees. However, if no origination fee is charged and the fee is not listed in the section below that itemizes fees the Veteran may never pay, the Veteran may pay non-allowable costs up to 1% of the purchase price. The veteran may also pay a combination of non-allowable fees and an origination fee, provided the combination does not exceed 1% of the purchase price.
The non-allowable fees are:
For more information about VA financing feel free to call 510-282-5456 or email info@garrick.biz.
Related Articles:
VA Interest Rate Reduction Loan
VA Loan Requirements and Eligibility
Direct Link: http://www.youtube.com/user/RealEstateBuzzz?feature=mhee#p/u/0/8GWw3OWohcI
The Buzzz is growing for the "Home Affordable Refinance Program" revisions, referred to as HARP 2.0. Well HARP 2 is finally coming Spring of 2012!
Related Links:
Feds Announce Bay Area Real Estate Mortgage Interest Rates to Stay Low Until 2014 in Alameda
Harp 2 Guidelines for Refinance Appraisals Waived Alameda,CA
For the past couple weeks mortgage rates have been inching up. That changed today, January 25t
h 2012 when we saw a huge rally in interest rates largely in part to the FOMC statement that rates are staying low until “late 2014”!!!
Let’s flashback to the December 13th meeting…
“The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."
Now this week, January 25th meeting…
“The Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."
According to RateAlert’s David Shirmeyer outside of a dramatic failure overseas we shouldn’t see rates go much lower than where they are. That being said we shouldn’t see rates getting much higher either thanks to the fed announcement.
Mortgage rates are once again at all-time lows! While mortgage interest rates certainly don’t seem like they will go higher overnight there is more risk than reward in waiting once rates get below 4%. Lenders get very busy when rates are this low and often times raise rates just to slow down the volume.
To request accurate information including a quick rate quote online visit "http://www.garrick.biz".
Related Articles:
Obama Signs Bill Extending FHA and VA Loan Limits
Home Affordable Refinance Program HARP 2 to Hit March 2012!
"http://the-buzzz.com/2011/11/01/harp-2-guidelines-for-refinances-appraisals-waived-alameda/"
Direct link: http://www.youtube.com/watch?v=vRyNb2jdHZk&feature=channel_video_title
Are you a first time homebuyer interested in purchasing a 3-4 unit property in Oakland? Good news, with FHA financing you can do just that with a 3.5% down payment! Following are some of the guidelines for qualifying for this financing:
For starters, the property has to be your primary residence- meaning that you must live in one of the units.
Three to four unit self-sufficiency test:
The maximum mortgage for three and four unit properties is limited, so that the ratio of the monthly mortgage payment, divided by the monthly net rental income does not exceed 100 percent, regardless of the occupancy status.
• The monthly mortgage payment calculation for three and four unit properties includes the following:
Principal, interest, taxes, insurance (Principle, Interest, Taxes, and Insurance - PITI), including monthly mortgage insurance, and homeowner association dues computed at the note rate, if applicable.
• Net rental income for three and four unit property is calculated using the following formula:
⇒ the appraiser's estimate of fair market rent from all units, including the unit the borrower chooses for occupancy, and
⇒ minus the greater of the appraiser's estimate for vacancies, or ⇒ vacancy factor used by the jurisdictional HOC. This net rental income calculation is used to determine the maximum loan amount.
In layman's terms, the total rents must be the same or greater of the total monthly mortgage payment, to include taxes, homeowners insurance, and the mortgage insurance. These rents must be determined by an FHA certified appraiser- meaning that you can't use rental leases for this specific test.
So here is the biggest problem with writing an offer on a 3-4 unit building using FHA…
You don’t know what the building qualifies for until you receive the appraisal. In speaking to a few account executives for mortgage banks regarding this issue we believe a good rule of thumb is to use the standard ratio for conventional rental income. That is 75% of the gross rents.
For example if a building grosses $400 take 75% of the income, $3000 and the Principal, Interest, Taxes, and Insurance must be no more than $3000 a month.
Borrowers must still qualify for the mortgage based on:
⇒ income
⇒ credit
⇒ cash to close, and
⇒ projected rents received from remaining units.
⇒ 3 months reserves of borrower own funds (cannot be a gift)
Projected rent may only be considered gross income for qualifying purposes. It cannot be used to offset the monthly mortgage payment.
You still need to also qualify with the normal debt-to-income ratios in regards to your income, in which you can use the rental income. But you can only use 75% of the rental income for the purpose of this qualification. As the primary borrower, you can't use what you would pay for that unit as rent to offset your mortgage. All you are including in order to qualify is your monthly gross income.
Feel free to contact The Werdmuller Group for any questions on the housing and finance markets!
Wendy Werdmuller, NMLS# 242612, info@garrick.biz, 510.846-3006.
Related Articles:
FHA vs Conventional Financing
What’s the Difference Between Getting Pre Qualified and Pre Approved for a Mortgage?
Restoring FHA Loan Limits in Alameda, CA
http://the-buzzz.com/2011/11/17/restoring-fha-loan-limits-in-alameda-ca/
The Truth About 203k Rehabilitation Home Loans
http://the-buzzz.com/2011/05/06/the-truth-about-the-203k-rehabilitation-loan-in-san-francisco/
I am a knowledgeable and professional commercial and residential mortgage originator. I work independantly through First Priority Financial and have a staff ready to serve with a combined 44 years exp
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