While the country remains fixated on the problems of the overall housing market, many people are facing a
much more personal issue - what to do with their own home when a change is needed. Whether it is the birth of
a child, an elderly parent moving in, a job change, or just time for something different, making the decision to
move or remodel is rarely an easy one. With the overall housing market not as healthy as it was a few years ago,
the questions move beyond the number of bedrooms, the local schools, and local amenities. One must consider
how long it may take to sell the home, especially if the needs are pressing. Additionally, will there be improvement
projects to complete that would make the house easier to sell. Remodeling has its own set of questions,
including how long you might need to stay in the home to recoup the investment from a major project.
Whether remodeling or moving is in your near future, some significant mortgage analysis will be required.
Two of the most important issues will be the equity in your home and your credit situation. Generally, the
more equity in your home, the greater your options become. Your home's equity can be accessed for a remodeling
project either through cash-out refinancing of your current
mortgage or a second mortgage or line-of-credit. When selling
and buying a new home, your equity can be used for your new
home's down payment and closing costs. Your credit situation
will impact what type of interest rate you'll pay, how much you
can borrow, and the type of loans you should consider.
Given current market conditions, an honest and thorough analysis
of your financial situation should be completed before you
get serious about moving or remodeling. Please give me a call
to schedule a time for us to meet. I'll help make sure that you
understand all the financial options available to you.
Ok, so you're a Realtor or loan officer with a client that just told you that they completed a short sale in the past year. Your first thought is probably something along the lines of "See ya", "Good luck" or maybe at best "I'll put you in my tickle file and call back in two years".
The facts are that conventional loan guidelines treat a short sale or what is sometimes referred to as a pre foreclosure as an actual foreclosure. Currently those guidelines state that a borrower isn't eligible for a conventional loan for the next 5 years. Yikes! Ok, so what's next? How about a FHA loan? FHA, as forgiving as it is states that a foreclosure or short sale needs to be completed 3 years prior to an FHA application is started.
So what's left? Rural Housing to the rescue! Rural Housing loans do not have any time line for a borrower to be able to apply and get a RH loan. RH loans are the most forgiving loans out there right now. Basically a borrower can buy a home with zero down, get normal and customary sales concessions for the area (usually at 6%), there is no PMI upfront or on a monthly basis, the rates are just about the same as FHA and conventional, and all this can be accomplished with borrowers that have recent less than perfect credit scenarios.
I know what you must be thinking by now, "Why haven't I heard of this yet"? RH loans for all their forgiving underwriting guidelines do have some particular items that make it a bit less common than other loans. First and foremost the property needs to be in an eligible area (AKA not the most congested cities around you). Second is that it would be ideal if your borrowers had a 660 credit score, 620 will work for most. Officially RD has no minimum credit score, but the lenders that fund these loans do. Third, the borrowers will need to earn less than the RD limits for the county based on the number of people they plan on having living in the home. Lastly the home should be a conventionally framed (stick built home), no trailer homes!!!
Now, although the RD program has some very basic guidelines, the lenders that we have to send them into to have them underwritten, may have guidelines over and beyond what RD has. It is important that your broker has relationships with multiple lenders that underwrite RD loans. One lender may very well approve a RD loan that another turned down.
I hope you have found this article helpful and hope you close more deals because of it.
DanielLitvin
President
Advantage Lending Corp
Rochester Michigan
RESPA, the 2010 GFE, MDIA, and general reform. Yes it happened and it takes some understanding to be able to stay in the game and know what your doing, but isn't that the point a more educated mortgage lender? I'm not saying that it's fun, but this is the world we now have to live in to stay in this business.
Either way I have noticed that mortgage applications are increasing. Mostly first time home buyers looking to take advantage of the market and of course, "Obama Money". Things are looking good for 2010 and i wish all my other Real Estate and Mortgage professionals out there the very best of success this year.
Daniel Litvin
Advantage Lending Corp is looking to fill 8 new seats in down town Rochester Michigan. If you or any one you may know is looking to make a move and wants to work some where that offers great commission splits, friendly environment, and has a desire to learn how to take their game to the next level, please contact Daniel Litvin.
Daniel Litvin 248-608-9120 x230
415 S. Main Suite B
Rochester MI 48307
I recently had a purchase transaction where I ordered the appraisal from JP Morgan Chase's approved appraiser list. After receiving the appraisal and turning it into the lender, Chase ordered a second appraisal and kindly let me know that i get to pay for that one too! You can only imagine my excitement, gosh that's $300 bucks less in my pocket....YIPPIE!
Chase and other lenders are no longer standing behind their approved appraisers. They are questioning the appraisal, ordering reviews, asking for additional comps, even if you use their "approved" appraisers they list in their website.
5/3 Bank & Chase are now looking to have all loan officers wholesale and retail order appraisals blindly through their preferred appraisal vendor company. Supposedly doing this will make the fear of a stretched or not so accurate appraisal disappear and the loans fly through underwriting. Basically this removes the loan officer from ordering the appraisal from any one they may know and having any type of influence on the outcome of the value.
Now I can understand the banks desire to ensure an uninfluenced appraisal value, but come on! The loan I wrote about above was a purchase of a condo for $175,000. The appraisal came in at $180,000, the SEV was $149,000 (do the math, that means $298,000 value from the city), and was ordered from a Chase approved appraiser!!! Oh yea did I mention the borrower has a credit score over 800, a LTVof 80% and a debit ratio of 38% total back end ratio!!!
I suppose I'm just angrily ranting since I just lost an extra $300, but this appraisal review process should be reserved for loans and properties more deserving.
Dan Litvin www.AdvantageLendingCorp.com
Expert advice, personal service and the right program with the best rate is what you get when you contact Dan Litvin at Advantage Lending Corp.
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