Turnersville, NJ

USDA Loans – Rural Housing Loans

The Single Family Housing Guaranteed Loan Program (USDA Loans) will likely be exhausted by the end of April, 2010. This is a message that was delivered from the National Office in Washington D.C. as of today.

It was then stated that once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.” This is because the agency is not certain when additional funding will be available. And this might not be known until October, when the new budget comes out. This is important to know and to understand.

This is a good reminder for all borrowers, realtors, and loan officers that aren't aware of this. If you are a buyer that has been pre-qualified for a USDA loan, you need to speak to your loan officer as soon as possible. If you are realtor that has a buyer or the listing agent that has received a pre-qualification letter stating that the buyer has been pre-qualified for the USDA loan, someone needs to contact that borrower so they can contact their lender.

On another note, please beware of those web sites that offer USDA Loans,yet these sites make you think that you are dealing directly with the USDA themselves. I have come across several out there that look and feel like it was directly from the USDA them self. I wrote about it here : Misleading advertising when it comes to shopping for mortgages and USDA loans and FHA loans - Misleading advertising as government agency sites.

For more information on USDA loans, please read :

USDA Loans - The Rural Housing Loan - The Basics

UPDATE : For anyone that wants to read more about this, please read this post by Gerry Suarez. He goes into some detail about the seriousness of this. Please read :

USDA Rural Development loans expecting to run out of funds by late next month

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

An important question about ETHICS

Advertising and Statements : We know that we like to sound the best in front of our client. Many like to market themselves as the best, the cheapest, the quickest, etc, etc. But many of us know that these are generally catchy headlines to attract more business. Just another way for that person or company to get in front of their competition.

I am sure many of these misleading statements are true to a certain degree. But do they make you believe that it's 100% true 100% all of the time? In my opinion, yes they do. In my opinion, I think this is sneaky when one uses these tactics, knowing damn well that it is not clear adverting and for a reason.

Overall, I am sure many of you are thinking... "so what"... who am I hurting? It's true to a certain degree. I want to share some examples with you...

Ken Cook wrote this awesome post about ethics and integrity. It's a must read if missed.

Over promise and hope it happens - a question of ethics

Examples of misleading advertising

"I can sell your house the quickest" or "I can get the most money for your home"

"10 day closings - We guarantee your closings in 10 days"

"I will beat and or match your interest rate"

"I am the best"

"I can guarantee and or promise ____________"

Honestly, do you think these are misleading statements?

Summary :

Were has integrity gone? How do you hold yourself in the highest regard, that you have pride when advertising yourself and or your product? Do you cross that imaginary line? Especially in regards to some of the things that I mentioned above. Are you not clear in what you state? Is it misleading? A few of my opinions in regards to what I mentioned above.

"I can beat any interest rate" - common sense from an industry professional such as myself knows this is flat out advertising.

"Ten Day Closings - Closings guaranteed in ten days - Guaranteed 10 day closings" - Again, as a mortgage professional, there are many holes to this statement. This kind of statement is what I call a blind statement. Yes, I can close a loan in days, but not all loans. I will get into more details about how this company advertises this in Part 2.

"I can get the best price for your house" - What is the best price? Are you just saying this to get my attention?

So how do you market yourself? Do you just play the marketing game as so many others do?

Sure, guarantees are backed with verbiage and fine print. But that is my whole point. The main part of these kinds of advertisements are to get your attention. How many people read the fine print? Or in some cases, even understand it. And if that individual and or company tells you that you don't fall under that specific statement, guarantee, etc, etc... do they still work you over for your business? You bet your only dollar on that. Many ads are attention getter's.. It comes down to their methods and their integrity. Question to you all... how come terms such as "service" and "level of service" is not mentioned in these ads and or guarantees? Because the avergage person gravitates to such words as "I guarantee" and or "I promise".

Ken Cook said this best in his post ... "Sure, it's just semantics. That's the point. People are easily misled and the people who mislead them may or may not be displaying the highest integrity."

How does one advertise? Is it misleading? Important things to beware of !!! Part 1 of 2

Misleading types of advertising - Illegal? Unethical? Part 2 of 2

Shopping for mortgages - The Public Image of Advertising that is misleading !!!! - Part 1 of 2

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Mortgage Interest Rates - When people shop for mortgages, one of the first things they want is to know the interest rate. Not only that, they want the best and lowest rate. When your average loan officer hears this, they usually don't want to lose you as a client, so they might low ball the rate a little. It doesn't matter if they put this quote on the good faith estimate. It's just an estimate on a piece of paper that until you have a property and have locked into this rate, some loan officers won't honor this estimate. And in order to secure this rate, you should have been given an interest rate lock-in agreement.

Overall, what you think might be the best, might not be the best. Shopping and comparing is not always easy and needs to be done on the same day. What I want to talk about is your mortgage payment and what you should be thinking about.

It can be a balancing act when you are trying to get the lowest interest rate when your main focus should be what type of mortgage payment that you would be comfortable with. One of the first questions that I ask is what kind of mortgage payment you would be comfortable with, or at least a range. I have been criticized by a few loan officers in the past for mentioning this and they had their own reasons. But believe it or not, about 95% of the buyers that I speak to, already have a quick idea. This shows that they have been pro-active in their thinking and not trying to buy the most house that they can afford.

A quick lesson in mortgage interest rates. Sure, the lower the rate, the lower your mortgage payment. But should it really matter if you tell me that you are comfortable with a $2,500 mortgage payment and I tell you that your interest rate is 15%? Sure, it would mean that you could only buy x,y,z house. But your main focus was on the payment that you are comfortable with.

In my opinion, interest rates can play a mind game in several ways.

Many people in our industry have been told to rate. Too many people get hung up on trying to get the lower rate. Sometimes in your mind, a lower rate means that you can afford that payment. When in reality, you should start with what payment you can afford.

Another issue is that some consumers try to out do their neighbors and friends. It becomes bragging rights, in regards to who got the best deal. Unless you both pull out your credit reports, you HUD-1 settlement sheet (to see how much you paid), and bought the exact same house; this still won't tell you who got the best deal.

Lastly, each consumer is different. There is not one person out there that will ever have the exact same scenario as the next. And 2 months down the road, who can say that the rates would be the same or that they are the same.

ADVICE : Trust the professional that you decide to go with. Always ask questions and if you don't understand something, don't hesitate to ask. "No question is a bad question."

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- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

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- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

FHA Hope for Homeowners has finally arrived. The Housing and Economic Recovery Act of 2008 amended the National Housing Act to authorize a new temporary FHA mortgage insurance program called HOPE for Homeowners. This is also know as the H4H program.

This program, even though introduced on HUD's web site over a month ago, takes effect October 1st, 2008. This is all included in Mortgagee Letter 2008-29. It's very detailed, with 13 pages of details and guidelines which I am about to explain the important basics.

Eligibility is always important and determining this has many facets to the FHA Hope for Homeowners program.

Determining Eligibility :

Borrower Eligibility

• Any borrower can be current or delinquent to refinance for the FHA Hope for Homeowners if they :
  • • have made a minimum of 6 full mortgage payments on their current mortgage that is in 1st lien position.
      
    • and have not intentionally defaulted on their mortgage or any other debt. Intentionally defaulted means that the borrower had available funds that they could use to pay for these debts without hardship.

• Borrowers must reside in the property and can't have ownership interest in any other property(s) such as second homes or investment properties and even to include being a non-occupant co-borrower on another property.
  

• The borrowers total monthly payment for the debt-to-income ratio must be greater than 31% as of March 1, 2008. The total payment is to include principal, interest, taxes, insurance, association fees, ground rents, special assessments, and all subordinate liens. (there are guidelines in mortgagee letter 2008-29, on how to obtain evidence that the DTI was 31% or higher on or after March 1, 2008.
  

Mortgage Eligibility

• The mortgage being financed must have been originated on or before January 1, 2008.
  

• Here is something key... the note holder of the mortgage being refinanced must :
  • • Waive all prepayment penalties and late fees
    • Must agree to accept the proceeds of the new H4H mortgage as full payment
    • And release their outstanding mortgage liens

Property Eligibility

• As stated in the beginning, the property must be the borrower's primary and their only residence that they have interest in. If their is a non-occupant co-borrower involved, they will need to quit claim their interest prior to the borrower applying for the HOPE for Homeowners program.
  

• Only 1 unit properties are eligible, to include condos, and co-ops.

Underwriting Guidelines

• The normal FHA debt-to-income ratios are 31%/43%. These respectively can't exceed 38% for the front ratio and 50% for the back ratio.
  

• In order to exceed the normal debt-to-income ratios, there is a 3 consecutive month 'trial modification' period prior to the loan application. This is so the borrower can demonstrate their willingness to make a mortgage payment on the H4H program that would not exceed 38/50.
  
• Non-occupant co-borrowers can be added in order to meet these underwriting guidelines. Yes, this contradicts what I stated under property eligibility.

Equity and Appreciation Sharing

• Shared Equity Mortgage
  • • As a condition to the new HOPE for Homeowners program, the borrower must share a portion of the initial equity with HUD. This is defined as the difference between the appraised value and the new mortgage amount not exceeding 90% of that appraisal. This is to be recorded as a second lien by the originating lender.

• Shared Appreciation
  • • As another condition of this new program, the borrower must share with HUD 50 percent of any future property appreciation upon sale, a refinance, or disposition of the property. There is a chart showing what is paid out to HUD per year. HUD's percentage decreases as the years of ownership decline.

Some other key points......

• This program can only be used on a FHA 30 year fixed loan.
  

• The Upfront Mortgage Insurance Premium (UFMIP) is 3.00 percent regardless of the LTV (loan to value) And the monthly mortgage insurance is 1.5 percent of the base loan amount. This is significantly higher than the normal monthly charge which is .5 percent.
  

• The FHA nationwide maximum mortgage limit is $550,440. You still need to follow the FHA maximum county limits. And the LTV for this new FHA Hope for Homeowners program can't exceed 90 percent, which is to include the UFMIP (upfront mortgage insurance premium)
  

Summary : Talk about how this is much better than most programs introduced in the last 18 months...especially the one that was taunted as saving America, which was the FHA Secure loan. I truly think the FHA Secure loan was just a plea of help and mostly propaganda, trying to show that the government was trying to help, and that HUD was trying to help.

It finally sounds like HUD finally put their heads together and came up with something good. The biggest challenge will be those that hold the borrowers current note, will they free up some of the old mortgage balance/principal. And keep in mind, this program makes no lender or investor currently holding a borrowers mortgage to conform to the FHA HOPE for Homeowners Program.

Loss Mitigation or Bust -- What is great about the new HOPE for Homeowners program is that HUD has realized that they need to make it interesting to those lenders that would be asked to take a loss, in order to participate in this FHA program.

As I mentioned in the Equity and Appreciation Sharing section above, FHA will be keeping a portion of the current equity and any future profit from the home. Well, FHA/HUD will actually share half of this equity and appreciation. That alone should give an incentive to the current lien holder to participate in this program. If not, aren't they gambling with the foreclosure gods? If you read this comment from below, you will see how the current lien holder would have a better chance to save money instead of losing money. What wasnt mentioned was the fact that the lender would still have to pay a commission to the realtor also. In my scenario, that could be another $8,000 to $16,000, making the foreclosure process even more expensive to the lien holder than participating in this new FHA program. Besides, there is less risk now for that lien hold also.

- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

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For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

Fears in the market.... ?? Are you hiding because of such fears in today's market place? I think many of us were scared 6 months to a year ago. The media was talking about how bad it was out there. We had the so-called mortgage meltdown. But was it really that bad? I think it all comes down to how sure of yourself, that you feel comfortable in buying, when it comes to purchasing a new home. May you be a first time hombuyer, someone moving up, or an investor. I have said this many of times, but you need to speak to a mortgage professional and a real estate professional, those that are looking out for your best interests. If these people don't take the time in understanding your needs and wants, actually help you make a plan, and walk you through that plan, then seek someone else.

Rich Sweum wrote this post the other day titled, At What Cost another 50 basis point Rate Cut? I truly believe that we can't keep cutting the Fed Rates. There will be some people that will disagree with this. Rich received an e-mail from a realtor talking about the economy, that it could hurt her commissions, and that we need to help and make it work now. (you can read this in Rich's comments) Basically, robbing Peter now to pay Paul later. Better yet, robbing from our own selves now, and pay us back later..... if that theory truly would work, life would be a bed of roses. It's a huge gamble and not a gamble that I am willing to take now. Why? Too many unknowns still out there, that if we keep digging deeper, how long will it take us to dig out of this mess. The biggest concern that could set us back, foreclosures. Another fear, jobless claims. Just today, the jobless figures came out and the stock market responded negatively at first, but is positive now. This will continue for the next several months. The investors are just not sure and pull money from here and dump it there. Basically a sea saw effect.

Summary : I gave a brief description in regards to the difference between the mortgage interest rates and the Fed Rate. This is what I stated.... "When the Fed rates adjust, it basically increases or decreases the amount of money circulating within the economy. The Fed is acting as the throttle and the break for economic growth and inflationary control. If the Fed can keep interest rates low, there will be more money in the economy. This type of control allows banks to either lend more money when rates are low because credit is cheaper or lend less money because the cost of credit is high." In my honest opinion, this can act as a band aide for now. The media and Wall Street are trying to curb fears in the market place now, because of fear of a recession, another post in itself. We need to allow the market to work itself out. There are still plenty of people out there that can buy and want to by. But because of the media sometimes, they get scared. Hence why speaking to a mortgage professional that is knowledgeable not only with mortgage products, with the market, but understands your goals and understands how to help you plan, is the key in being successful.

Overall, rates are low and home values are low. People, rates were even low the last 2 months. A very good mortgage planner can help you curb your fears if you lay it all on the table. Giving you more insight than sometimes found on the internet or even from someone local that just wants your business. Don't forget, the lowest rate offered on paper when shopping doesn't always exist. And you won't always get good service from someone that just offers that piece of paper without properly explaining it. When you get a chance, please read Mortgages & Homes -- Best time to buy is now !!!!!!