Kristina Yorke

The other day I had a client tell me, I would like 100% financing and we will ask the seller to pay my closing costs when I make an offer so I don't have to out any money into the transaction.

This statement, as nice as it sounds, has become a thing of the past. Yet there are many homebuyers who still have hopes for purchasing a home without putting any money into the transaction. Unfortunately, this change came because lenders have identified that when buyers who do not put any of their own funds into the transaction, they find it easy to walk away and allow the home to go into foreclosure.

Is there anything that buyers can do to help them when they are low on cash for the down payment and closing costs? Yes there is!

First of all home buyers need to research their options for mortgage financing. There are many banks that are limited on the programs they offer. These banks only offer 1 or 2 options that require a 5-10% down payment plus closing cost. This leaves the buyers to think that they just can not afford a home. There are many financing options available but a buyer needs to work with someone who can provide all the options for financing. Working with a mortgage broker, who is not limited to one banks programs but can offer all financing available to that buyer, helps them to truly see what the best solution is for their purchase. The broker will show the buyer options that best suite their needs utilizing all the programs available in the mortgage market such as FHA, Conventional, USDA or VA financing.

Another thing the mortgage broker can provide to lower the money required to purchase a home is city or county funded down payment assistance. These are usually interest free loans that help pay most of the client down payment. The down payment assistance loans are determined by the income of the potential homeowner and the location of the home. There are some other restrictions involved that, when explained in detail, will help aid the buyer in finding a home that meets the criteria to qualify for down payment assistance. Down payment assistance loans do not cover all of the down payment, like all lenders, the city or county funding the down payment money requires that the buyer puts some of their own funds into the transaction to reduce the risk of default. This figure can range from $500 to 2% in St Petersburg and Pinellas County. Buyers should ask this question when working to determine if they qualify so they can save for the required amount.

When using an FHA or VA mortgage gift funds is another option that can help a buyer with their down payment and closing costs. The gift funds need to come from a family member, close friend, employer, local church, wedding registry or acceptable uninterested parties to the transaction. The gift funds can cover all of the down payment and closing cost. The contributor will need to prove they have the means to provide the monies and that the funds came from their account. This can be done by a cashier's check or bank statements and a withdrawal letter.

Lastly, the buyer can ask the seller to pay all of their closing cost up to 6% of the purchase price when using an FHA, VA or USDA mortgage and up to 3% when using a traditional conventional mortgage loan. This option is great to combine with one of the other options above to reduce the costs as much as possible.

With a little money saved and a buyer who is educated on all their options, home ownership can become a reality. So, when you think you can not afford to buy a home look into some of your financing options with an expert in financing, a mortgage broker, who can offer all of the possible solutions to help assist you to buy the home of your dreams.

St Petersburg homeowners, Do you have an FHA mortgage?? Want to save money every month? Check out the features of an FHA Streamline Refinance listed below.

FHA Streamline Refinances are hassle-free and have easy guidelines.

- No income verification

- No credit score requirements

- No out of pocket expenses

Existing FHA Loan 190,000 Interest Rate 6.5% Payment Principal & Interest 1221.95

Existing FHA Loan 190,000 Interest Rate 7% Payment Principal & Interest 1286.20

Proposed FHA Loan 200,000 Interest Rate 5% Payment Principal & Interest 1092.43

Monthly Saving of 129.52 with a 6.5% interest rate

Monthly Saving of 193.77 with a 7% interest rate

Interesed in how an FHA Streamline Refinance can help you?

Apply to determine your savings at St Petersburg Mortgage today!

The FHA streamline refinance benefits those borrowers who plan on staying in their home for 5 years or more. APR on new proposed loan is 5.85%

After hearing all the great incentives to buy a home in 2009 - low mortgage interest rates, attractively low home prices and the $8000 the tax refund provided to first time home buyer through the new economic stimulus package - you are now ready to buy your first home. Only one problem, you need to know where to start and what to be aware of. The information listed below should help prepare you for your first steps in the wonderful adventure of purchasing a home.

What are the initial steps to take as a first time home buyer? If you call a real estate agent they will tell you in order to begin looking at homes you will need to determine the purchase price that you qualify for. To do that you will need to apply for a home mortgage and get a pre-approval letter which will allow you to preview homes in your price range and submit an offer on the house you would like to buy.

What is a pre approval letter and what do I need get one? When asking this question you have to understand two things about mortgage financing. First, buying a home is not like buying a car or getting approved for a credit card, it requires you as the borrower to prove your credit-worthiness to the lender and second not all mortgage companies are working at the same level of diligence.

Let's take a look at the several factors involved in proving your credit worthiness.

Credit - In recent past lenders were allowing credit scores as low as 550 to 580 but currently the market has tightened up their requirements and now require borrowers to have 620 or better. This number is determined by using the middle score of the 3 bureaus - Equifax, Experian and Transunion. Lenders also like to see that there are no late payments in the past 12 months. If there is a late payment it needs to have a good strong letter of explanation to back it and usually only 1 late payment is acceptable within a 12 month period.

Income - Lenders will look at the past 2 years of W-2's and 1 recent months worth of paychecks for the payroll employee and 2 years of personal and business tax returns for the self employed borrower. The lender also wants to see 2 years of employment history in the same line of work to ensure continued satisfactory employment.

Down Payment/Closing Costs - There are 4 main types of loans that a first time home buyer can utilize with varying down payment requirements. The two most commonly used financing options are the FHA and Conventional mortgage loans. An FHA loan requires a 3.5% down payment and a conventional loan requires anywhere from 5%-10% down payment. The other 2 mortgage loans feature no down payment requirements - the VA loan which is issued only to those who served in the military and the USDA home loan that is for homes in rural developments. All of these loans require the buyer to pay closing costs. Closing costs run anywhere from 4000 and up depending on the inspections, appraisal, insurances, title fees, state & local taxes and lenders fees. In some scenarios a buyer can ask the seller to pay their closing costs to help reduce the amount of cash required to purchase the home. Some buyers choose to use the money family members have decided to give as a gift for their down payment and/or closing costs when buying a home.

In order to receive a pre-approval letter you must complete a mortgage application with the correct information about the employment, income and cash reserved for the down payment and closing costs. The mortgage consultant will pull your credit and if acceptable, you must provide the proof of your cash to close and all the proper income documentation which will need to be reviewed. Once reviewed only then can a pre-approval letter be issued. The reason that I stated above that all mortgage companies do not work in the same level of diligence is for this very reason. Until you provide your income documentation you are not pre-approved for a mortgage. Many times I hear that buyers have an approval letter but they haven't given their documents to the lender. This means the lender is taking the buyers word that they have given the correct income information. While doing the best to give the right information, buyers do not understand all the details that are involved when determining how much income they have available for their loans approval. Since there are so many factors involved, a true pre-approval letter can not be issued until the mortgage consultant has received your income documents.

Another note - when buying your first home, it is always wise to go over your monthly expenses and determine what monthly payment would be comfortable. Let your mortgage consultant know right up front what your target is for a monthly payment. This will help you to avoid spending more just because you get approved at a higher purchase price.

First Time Home Buyers did you know that mortgage interest rates in St Petersburg FL and nationwide have dropped to near all time lows which makes mortgage payments more affordable?

If you are a First Time Home Buyers in St Petersburg FL, take advantage of the following three important factors when purchasing a home.

1. Low Home Purchase Prices
2. Low Mortgage Interest Rates
3. $8000 tax credit for First Time Home Buyers

Many First Time Home Buyers have easy qualifying options. The most popular program in this market is FHA mortgage financing. FHA loans require only 2 years employment in the same line of work, credit above a 600 and 3.5% down payment which can be a gift or funded by down payment assistance.

Taking advantage of these great opportunities and including the $8000 tax credit provided by the Economic Stimulus Bill, now is truly the time to buy a home inSt Petersburg FL for First Time Home Buyers.

Apply for your St Petersburg Mortgage here

Click here for more information on St Petersburg FHA mortgage loans

To understand Down Payment Assistance for First Time Home Buyers click here

In normal situations HUD allows only one FHA Mortgage loan per borrower. Below are four unique exceptions to this rule.

1) Increasing Family Size- If the borrowers current residency no longer meets the families needs due to an increase in the number of legal dependents then the borrower is allowed to obtain another FHA insured mortgage loan and purchase a new house while renting or selling the existing home with an FHA mortgage loan.

2) Jointly Owned Properties-If one borrower is leaving the home secured with an FHA mortgage and the co-borrower is staying in the home, then borrower is permitted to purchase a new home with an FHA mortgage, if qualified, while still being on the note of the first home loan.

3) Non-Occupant Co-borrowers - A non-occupant co-borrower is allowed to own a home with an FHA mortgage and co-sign on the purchase of a home using FHA financing.

4) Relocation - If a borrower is relocating for employment purposes and is not going to sell their home that has an existing FHA mortgage that person may be eligible for a second FHA mortgage loan