Michael Byrne

Bridgewater Mortgage programs abound: jumbo financing remains available to qualified borrowers to purchase a house and to do rate, term and cash-out refinancing for loan amounts of more than 729k. Fannie Mae has raised loan limits for Bridgewater Mortgage programs up to $729k, and the FHA Loan Limit is $729,750 as well. USDA Rural Development loans are avilable in some areas around Bridgewater as well. Great rates are available for all types of loans in your area, contact me at 908 531 6170 for a customized quote. As an area resident, here are some tips (as well as questions to ask a prospective lender regarding their loan parameters) to help you qualify for a loan as well as documentation required to get to closing on a Bridgewater Mortgage loan in a timely fashion:

•1. Review your credit rating. Jumbo loans now often want a minimum 680, 700, or even a 720, or higher credit score. A 620 credit score is the minimum for FHA and VA mortgage loans currently. Fannie Mae mortgage loans have credit adjustments for credit scores starting at scores under 740. You can ask your Bridgewater Mortgage loan officer to review your credit report with you or go to a free credit reporting service to review a copy of your credit report. You will want to check your credit for errors and any late payments, high balances, or loans for which you have co-signed (like student loans). For more information, contact a reputable loan officer. Ask your lender what their credit score policy is for your particular loan.

•2. Check your home's value. Nothing is more disappointing than someone's home not appraising for enough to qualify for a refinance or purchase, particularly when the borrower feels the value should be higher. For the record, the borrower always feels the value should be higher. Zillow or other related online valuation websites are an OK place to start, and you also may want to consult a real estate professional if you are refinancing to gauge the market trends in your area. Local papers often list recent sales prices and addresses as well. I strongly urge anyone buying a home to use a buyer's agent to represent them for their purchase. As a Bridgewater Mortgage professional, I can happily refer you to a reputable real estate agent in your area, who will look out for your interests.

•3. Check your income. A jumbo Bridgewater Mortgage loan may not include bonus income at all, or may require a low loan-to value (usually under 75%) to include bonus income. If you are self employed or have a small side business, review your actual claimed income or loss. Lenders now check with the IRS for what your total claimed income is prior to closing a loan, via a form 4506. If you have W-2 income but substantial business losses, this could present an issue on a fully documented loan. Check with your lender beforehand and present 2 years worth of SIGNED tax returns. Presenting a signed return verifies that it is indeed what you filed with the IRS.

•4. Review your asset "reserves." While some lenders do not even verify asset reserves for jumbo loans, most want to see some money left over in savings after closing. A lender wants to see PITI reserves, or a certain number of months total mortgage payments, in savings. These reserves can be in the form of an IRA, 401k, stocks, checking, savings, etc. Bridgewater Mortgage lenders want to see 2 months of ALL PAGES of asset accounts. Accounts such as an IRA or 401k are usually counted as 60-70% of their face value towards reserves due to withdrawal and tax penalties/liabilities, if applicable. Many lenders require 6-24 months or more PITI reserves, depending on the loan's size

•5. Decide what type of loan you want. 40, 30, 20, and 15-year fixed loans have different rates and payments. If you plan on staying in your home less than 10 years, you may want to entertain an adjustable rate mortgage for a lower interest rate. An interest-only loan may be attractive if you plan on making lump sum payments, or simply want to make minimal payments. Interest-Only and Adjustable Rate Mortgages are not for everyone, as we have learned over the last few years. Learn how an ARM Mortgage works. Get ARM details in writing from your lender.

Have your documentation ready. Your Bridgewater Mortgage lender isn't singling you out if they ask (in addition to income/asset information) for a recent phone bill with your address and phone number, a copy of a legible drivers license, homeowners insurance declaration page, credit inquiry letter, and even a credit explanation letter. This is standard now for documenting a loan file.

Westfield Mortgage programs abound: jumbo financing remains available to qualified to purchase a house and to do rate, term and cash-out refinancing for loan amounts of more than 729k.. Fannie Mae has raised loan limits for Westfield Mortgage programs up to $729k, and the FHA Loan Limit is $729,750 as well. As a former Westfield Blue Devil myself, here are some tips (as well as questions to ask a prospective lender regarding their loan parameters) to help you qualify for a loan as well as documentation required to close on a Westfield Mortgage loan in a timely fashion:

Review your credit rating. Jumbo loans now often want a minimum 680, 700, or even a 720, or higher credit score. A 620 credit score is the minimum for FHA and VA mortgage loans currently. Fannie Mae mortgage loans have credit adjustments for credit scores starting at scores under 740. You can ask your Westfield Mortgage loan officer to review your credit report with you or go to a free credit reporting service to review a copy of your credit report. You will want to check your credit for errors and any late payments, high balances, or loans for which you have co-signed (like student loans). For more information, contact a reputable loan officer. Ask your lender what their credit score policy is for your particular loan.

Check your home's value. Nothing is more disappointing than someone's home not appraising for enough to qualify for a refinance or purchase. Zillow is an OK to start, and you also may want to consult a real estate professional if you are refinancing to gauge the market trends in your area. Local papers often list recent sales prices and addresses as well. I strongly urge anyone buying a home to use a buyer's agent to represent them for their purchase. Review with your Westfield Mortgage lender what the maximum loan to value is for your particular loan program. All lenders will scrutinize an appraisal, and many lenders require a review appraisal or a second full appraisal for large loans.

Check your income. A Westfield Mortgage loan may not include bonus income at all, or may require a low loan-to value (usually under 75%) to include bonus income. If you are self employed or have a small side business, review your actual claimed income or loss. Lenders now check with the IRS for what your total claimed income is prior to closing a loan, via a form 4506. If you have W-2 income but substantial business losses, this could present an issue on a fully documented loan. Check with your lender beforehand and present 2 years worth of SIGNED tax returns. Presenting a signed return verifies that it is indeed what you filed with the IRS.

Review your asset "reserves." While some lenders do not even verify asset reserves for jumbo loans, most want to see some money left over in savings after closing. Usually, a lender wants to see PITI reserves or a certain number of months total mortgage payments in savings. These reserves can be in the form of an IRA, 401k, stocks, checking, savings, etc.

Westfield Mortgage lenders want to see 2 months of ALL PAGES of asset accounts. Accounts such as an IRA or 401k are usually counted as 60-70% of their face value towards reserves due to withdrawal and tax penalties/liabilities, if applicable. Many lenders require 6-24 months or more PITI reserves, depending on the loan's size.

Decide what type of loan you want. 40, 30, 20, and 15-year fixed loans have different rates and payments. If you plan on staying in your home less than 10 years, you may want to entertain an adjustable rate mortgage for a lower interest rate. An interest-only loan may be attractive if you plan on making lump sum payments, or simply want to make minimal payments.

Interest-Only and Adjustable Rate Mortgages are not for everyone, as we have learned over the last few years. Learn how an ARM Mortgage works. Get ARM details in writing from your lender.

Have your documentation ready. Your Westfield Mortgage lender isn't singling you out if they ask (in addition to income/asset information) for a recent phone bill with your address and phone number, a copy of a legible drivers license, homeowners insurance declaration page, credit inquiry letter, and even a credit explanation letter. This is standard now for documenting a loan file.

FHA Adjustable Rate Mortgage, is often the best route for consumers to go when refinancing their homes or purchasing a new home. This is particularly helpful for buyers looking to purchase a "step-up" or "starter" home, where they plan to live for 5 years or so. One of the main reasons an FHA Adjustable Rate Mortgage makes sense is the rate differential between a 30 Year Fixed FHA loan and the 5/1 ARM, which is generally .75% to 1%. On a $400,000 loan, this translates into savings of $180-$240 per month.

Many consumers hear FHA Adjustable Rate Mortgage and shudder at the thought of an ARM loan, given the recent spate of ARM's adjusting upward. But a closer look at the type of ARM an FHA Adjustable Rate Mortgage is, particularly the 5/1 ARM, gives some insight as to how relatively conservative the program actually is when compared to other ARM programs. Here is a quick primer on ARM loans and notes on where an FHA Adjustable Rate Mortgage stacks up:

Index: The index in which you have an adjustable rate mortgage plays a large part in how your rate can adjust, as the yield or interest rate is added to the margin to determine your new rate, subject to any Caps in place. Many mortgages have an index based on the 1 Year Treasury Bill, LIBOR (London Interbank Daily Offered Rate), or the COFI(Cost of Funds Index). The MTA is the Monthly Treasury Average over a given timeframe. An FHA Adjustable Rate Mortgage uses the 1 Year Treasury Bill(CMT) as the index.

Here are the approx. yields of many Market Indices for ARM Loans as of 9/30/2009:

Prime: 3.250%

1 Yr Libor 1.43%

1 Yr T-Bill 0.460%

11^th Dist COFI 4.244%

12 Mth MAT .758%

Margin: The margin is a percentage that is added to your Index to determine your fully indexed rate. Many Prime ARM loans have margins ranging from 2.25% to 3.5%. Unfortunately, there are Subprime ARM loans with margins ranging from 4.25% to 9.25% or more. The ARM loans with high margins are the "toxic" ARM loans you read and hear about in the news all the time, because the loans adjust upward to the maximum of the caps each adjustment. An FHA Adjustable Rate Mortgage has a margin of just 2.25%, one of the lowest in the industry.

Caps: Caps refer to the maximum amount your new rate can adjust in a given period. Usually there is a First Adjustment Cap, a Subsequent Adjustment Period Cap, and a Lifetime Rate Cap. Caps of 2/2/6 would mean a rate could adjust as much as 2% in the first adjustment (regardless of the fully indexed rate), 2% any adjustment thereafter (regardless of the fully indexed rate), and 6% over the life of a loan (regardless of the fully indexed rate). Some loans may have a "floor" for adjustments as well, meaning that your rate may not decrease a certain amount from the initial rate. An FHA Adjustable Rate Mortgage has caps of just 1/1/5, again one of the lowest in the industry.

If you currently have an FHA Adjustable Rate Mortgage 5/1 ARM based on the 1 year Treasury Bill (.49%) with a margin of 2.75% and 1/1/5 Caps, well, you are in good shape! .49% (Index) + 2.75% (Margin) = 3.24% Fully Indexed. (You may have a floor in your adjustment).

All in all, an FHA Adjustable Rate Mortgage is a great option to consider depending on your current situation for either a purchase or refinance. The low index, margin, and caps make the adjustments easier in an inflationary market as well.

If you are considering refinancing, contact a mortgage professional who knows how to naviagte the FHA guidelines and pricing adjustments for various programs.

* Not a commitment to lend. Rates for illustrative purposes only. Other programs available. Equal Housing Lender. Licensed in CA,CO,CT,DE,FL,GA,MA, NJ, NY,PA,TX,SC,VA

New jersey Jumbo Loans Mercer County NJ Jumbo Mtgs Stated Income Mortgages

Reverse Mortgages Pros and Cons: If you are 62 or older and own your own home, you may qualify to continue to live in the comfort of that home and while receiving monthly cash advances and long term financial security. This often is a tough decision to make and it is important to know the Reverse Mortgages Pros and Cons.

Reverse Mortgage Pros and Cons: The Home Equity Conversion Mortgage (HECM) is a special type of home loan called a reverse mortgage, and is backed by the Federal Housing Administration.(FHA) An FHA Reverse Mortgage loan enables you to tap the equity in your home and unlike traditional home loans, a HECM actually pays you.

With that said, there are some important things to be aware of regarding a FHA Reverse Mortgage. Here are some important Reverse Mortgage Pros and Cons:

Cons:

•1. Owner Occupied, Primary Residences Only. If you no longer reside in the home that has a reverse mortgage, you may be required to pay off the loan.

•2. HUD fees are a 2% MIP- Mortgage Insurance Premium upfront which is due at closing. This amount is based on the max claim amount. A.5% monthly fee is also assessed each month. Closing costs are usually 4-5% of the maximum claim amount.

•3. The maximum claim amount is the lesser of the county 203b loan limit or the property appraised value.

•4. All borrowers must be at least age 62 or older, and a citizen or a legal resident to qualify. Some clients who could use a reverse mortgage may have a co-borrower who is under 62.

Pros:

•1. All borrowers must receive credit counseling, and a list of 10 credit Counseling Agencies must be provided to the client. While this can slow the process, it is important that counseling be provided.

•2. There is no credit, asset, or income check for a standard reverse mortgage.

•3. Borrowers can choose a line of credit, lumps sum, or monthly payment. A combination plan can be utilized as well

Reverse Mortgage Pros and Cons: an important "pro" is the payment flexibility. The reverse mortgage allows for different payment plans, or payout plans depending on how you look at it. A client can request a lump sum payment, or a line of credit, or even a monthly payment for as long as the property is occupied by the client. The different plans can be modified as well, whereby a client can receive a small lump sum at closing and a monthly payment. Or a client could have a line of credit coupled with a monthly payment. It is important to discuss your options that you feel would work best for you.

While there are certainly Reverse Mortgage Pros and Cons and an FHA Reverse Mortgage is not for everyone 62 or older, but in many cases it can provide the necessary cash flow, give the client the ability to make home improvements, or simply have an available line of credit to continue to live independently. If you would like more information for yourself, a loved one, or a client; please feel free to contact me directly at 908 531 6170.

Stated Income Mortgage: Despite the contraction of the secondary markets, there are still Stated Income Mortgage (w/ full asset verification) programs available (currently in NJ, CT, and certain counties of NY only) to those who qualify for this type of financing in the vein of which it was originally intended: allowing for self-employed consumers who cannot prove their actual true income via their tax returns. We offer this program on a brokered basis and the terms, rates, and guidelines are subject to change without notice, just like everything else in this world we live in today. Mortgage Brokers: This program is offered by my company direct to consumers only and not by my company on a wholesale level.

The basic parameters of the Stated Income Mortgage loan are as follows: 70% Loan to Value (30% down) for purchases and refinances up to $750,000 for recommended credit scores of 700 and above. This program is not so much credit score driven, as the whole credit picture is taken into consideration. A high credit score lacking the necessary credit tradelines and credit depth may not be seen as favorable. 55% Loan to Value (45% down) with loan amounts up to 1,000,000. A 50% Loan to value is available up to a loan amount of $3,000,000.

This program, once again, is designed for the borrower who truly cannot document their true earnings, thus the name Stated Income Mortgage. Assets are documented and are expected to be consistent with the income stated. By self-employed, a consumer is expected to show a corporate type structure, rather than simply some Schedule C income on a tax return to count as self-employed. This is not a traditional "liar's loan". Expect the appraisal and appraisal review to be on the conservative side, but not unreasonable. A typical requirement for the Stated Income Mortgage verification of self-employement is a letter from your CPA or Tax Preparer, coupled with proof of incorporation.

Basic rates for this Stated Income Mortgage program are competitive: 4.75%-6.5% range for short term ARM financing (3/1, 5/1, 7/1, and 10/1) to 15, 20 and 30 Year Fixed rates, typically with 0-1 discount pt. Rates can vary by loan amount, loan-to-value, and State, and are subject to change without notice. For more information about this product and other available programs, please contact me directly at 908 531 6170.