Jumbo Loans up to $1.5 Million — Only 5% down and no Mortgage Insurance!! Purchase or Refinance

Thanks for stopping by my website.

One of the lenders I work with just announced an awesome 5% down payment and no mortgage insurance program for loans up to $1.5 Million for purchases and refinances!! I’ll post some of the details below. Reach out if you or someone you know would like to learn more about it and I can connect you with her!

760 credit score required
Primary home occupancy
SFR, Townhome, PUD, and Condo
Purchase and Rate/Term refinance

5% down payment makes upgrading or downsizing much easier.

 

FHA Flipping Rule & VA Loan Amount Updates

Just received this great loan update from Peggy Valley of Summit Funding:

 

FHA

Here is some additional information on the new FHA rule out this week. If there are more changes, I will be letting you know.

 

1)      FLIPPED property owned less than 90 days – no FHA loan availability

2)      Flipped property owned 91-180 days – 2 appraisals required

a)      If the property value is more than 5% above the acquisition price the seller will need to justify the increase. This can include receipts, list of improvements, etc.

b)      The underwriter will have discretion as to how they look at the improvements and may ask for more detail.

c)       Also, they added another caveat – a flipped within a year of acquisition will be under extra scrutiny per FHA guidelines. If the property has been sold more than once they will  look at the history and the lowest price for the property.

So bottomline, FHA must have been having some issues with flipped properties over the past few years to make the above changes. Extra work will be required.

 

VA

VA loan limits:

1)      The VA loan limit for Alameda and Contra Costa County has been reduced from $1,050,000 to $625,500 effective midnight December 31, 2014.

2)      In order to meet and use the current guidelines the borrower MUST a) be in a ratified contract, b) have a loan application issued, and c) a VA case number pulled.

3)      So what makes for an application in today’s day and age you might ask? Ratified contract, fees from the title company, and the application electronically signed or manually signed, case number is a number being pulling by the bank so that means during regular business hours, no midnight work.

4)      The impact is that the borrower will have to come in with more funds. For example, currently if the borrower is purchasing $1,050,000 there would be zero down. With the new guidelines, same  sales price, the borrower would have to come in with $106,125 or 10.12% for downpayment.

5)      You may ask, then why use VA loans. Great question and here are the awesome answers:

a)      On a recently priced loan the borrower got a rate of 3.875% for 30 yrs AND $3300 in credits. Can’t get that anywhere else on a loan over $1M

b)      There is no mortgage insurance

c)       There is no second with an index that moves.

d)      Higher ratios are allowed

e)      AND a veteran can pay  up to 1% of the loan amount toward termite/non-allowables, etc. as long as they didn’t pay an origination fee.  None of my clients do.

f)       So the loan is a win-win for all parties

 

Peggy is a very experienced and dedicated loan agent with awesome follow-up and competitive loan products. You can reach her at peggy.valley@summitfunding.net or by calling 925-890-5255. She is very approachable,  but I would be happy to make the introduction for you if you want, just let me know. 

 

 

FHA Changes Effective January 1, 2014

Effective January 1, 2015, FHA will have let their 90 day waiver on flipped properties lapse. This means that after January 1, 2015, a borrower wanting to purchase a flip will have to wait 6 mos + 1 day to purchase.

I suspect this is going to bring an uproar in the real estate industry. I will keep you updated as things change.

So what does this mean for borrowers – for those wanting to purchase a flip they will need to be in a ratified contract, have a loan application in process AND have a case number pulled by 12/31/14. This will be difficult since everyone will be pretty much closed on 12/30/14.

 

This change will affect both buyers as well as sellers who are flipping properties. In my opinion, it will likely slow the sale of flipped homes and even lower the price of them in areas where FHA financing is the norm and so is flipping property since supply and demand will be affected.

Feel free to contact me if you would like to discuss this change and how it may affect you or your area.

(parts of this update were  excerpted from an email provided courtesy of Peggy Valley at Summit Funding, peggy.valley@summitfunding.net, 925-890-5255. The opinion is mine, however)

FHA Loan Limits Will Be Reduced in High Cost Areas as of January 1, 2014!!

I just got this breaking news from one of my preferred loan consultants, Amy Costa at iMortgage amy.costa@imortgage.com

This is huge because just last week the last 3% down conventional loan product I knew about that another one of my preferred consultants Lisa Parin and First Priority Financial lisa.parin@fpfmail.com offered and my clients were using went away and now people in high cost areas who planned to only put 3 1/2% down using an FHA loan on their home purchase will lose over $100K in their possible buying power come Januare 1, 2014!

Per the email I received from Amy today,

Loan limits for the following county’s as of January 1, 2014:

 San Joaquin –   $304,750  ( Was $488,750)
Contra Costa –   $625,500 ( Was $729,750)
Alameda –          $625,500  ( Was $729,750)
Stanislaus –       $276,000  ( Was $423,750)
The revisions will be effective for all FHA case numbers assigned on or after January 1, 2014 through December 31, 2014. If you need limits for other counties, just contact Amy or Lisa and they can let you know.
Please keep in mind, Amy and Lisa have competitive Conventional products available with only 5% down. MI companies are getting a little more lenient and 80/10/10 products are coming back into the market. These, along with more aggressive Jumbo products, will replace the FHA loans lost with the reduction of loan limits.
It’s very important that buyers re-evaluate their current pre-approval to ensure that it will be valid come January 1!
 
Now more than ever, it will be extremely important to that buyers are working with an experienced, creative loan consultant with access to the best products available.
If you do not already have a trusted experienced and creative loan consultant who can offer a wide variety of products for you, feel free to contact Amy Costa and/or Lisa Parin to see what they have to offer for you and if you would be a good fit for each other.
By the way, I do not get paid any referral fees or anything like that for recommending them, they have just been awesome to work with and have been able to do loans for my clients and others I know when other banks and lenders could not AND they can usually close quicker than others as well which in this competitive market helps buyers’ offers stand out. Let them know you found out about them from me and they will make sure they take real good care of you!
Let me know how it goes!
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Some Active Military & Veterans Can Buy a New Home with a VA Loan Even if Their Current Home is Upside Down and Even if They Have Done a Short Sale on a Property in the Past!

The biggest challenge for people whose homes are upside down (that is, they owe more money on it than it is worth) is buying a new home. Typically, they will one of two alternatives:

1) They will have to short sale their property and wait 2-4 years before a lender will loan them money to purchase another home.

2) Buy another property when their current one is upside down .

In order to do option 2, your payments on the first property have to be current, you have to have a legitimate reason for purchasing a new home (cannot just be buying another home so you can bail on the first home), and you have to qualify for the payments on BOTH the old and new properties! If the underwater property is a rental property and you can provide evidence that you have been renting it out for at least 2 years, then a portion of the rents can be used to off-set the ability to pay for both properties.

Active Military and Veterans have a third option because the VA does not have what they term a Departing Residence Rule; that is, they do not have an equity requirement for the home that the person is leaving. That means that they will loan money to buyers who have an upside down property. Of course, there are some requirements and they all have to do with the new lender doing their due diligence to make sure that the buyer is not planning to do a buy and bail. I never have understood why a new lender would care what the buyer does as long as they pay their new mortgage that they are underwriting, but after the huge numbers of buy and bails that happened in the not so distant past, there have been new guidelines put in place to help prevent that from happening as much as possible in the future.

Here are the main non-credit score related guidelines for the third option per my understanding after speaking with several VA lenders:

1)       The current under water property cannot be secured by a VA loan.

2)      The current property cannot be on the market for sale.

3)      Person must be current on the payments for the underwater property.

4)      The buyers have to adequately answer the buy and bail related questions that the lender asks them (for example, why are they moving. If the person is moving to a comparable home in the same area simply because it is cheaper, that would not pass. There needs to be a reasonable explanation as to why the person needs to move).

5)      Buyer must be planning to rent out their current property OR qualify to pay both mortgages.

6)      If the buyer is planning on renting out the original property, then they will usually have to provide adequate documentation to the lender showing that they have secured a tenant for the home prior to the loan being funded. They used to accept a copy of a signed rental agreement, but since those can easily be forged, they usually require additional proof that you have a real tenant and not just a friend or make believe person on the rental agreement. Things like copies of the deposit check or perhaps evidence of the deposit being cashed or other things may be required.

7)      If the property is being rented, then the amount of the rent can be used to off-set the amount of the “be able to make both payments” requirement.

According to the VA lenders I have spoken to, there is not a requirement regarding how long the property has to be rented before it can be sold, so if being a landlord and renting the property does not work out for you for the long haul, then there would not be a reason that you could not sell it later.

Be aware, however, that if your home us still under water when you decide to sell it,  your short sale lenders for your property may require you to bring some amount of money to the table to do the short sale if they do not perceive you as having a hardship, especially after being able to purchase the new property. One explanation for your financial ability to purchase the property is the $0 downpayment requirement for VA loans and the rent from your tenant, so that latter part should not factor in too much especially if you had a real reason for needing to move…aka…a viable hardship.

In California, if you have original purchase money loans, you can often not pay anything to the short sale lenders to do the short sale because of the loans being non-recourse in the state of California. Refinanced loans and HELOCs, even original purchase money HELOCs, are treated a little differently, so I would advise you to consult with an attorney and tax professional to find out any potential implications for your particular situation. If you are current on all of your payments, old property and new, I can almost guarantee that you will need to pay them something, unless the loans are original purchase money loans and there is not a HELOC involved.

I have some great Active Military past clients whom I helped short sale their primary residence a couple years ago and they moved back into their previous primary residence which they had rented out. Since moving back into their previous home, they have had another child and their home just is not big enough for them anymore, especially when the husband is deployed and they need an extra bed for the additional adult who comes to stay with them to help take care of the children while the mother is working. Just last month, I helped them get into contract on a brand new home big enough to accommodate their family. They plan to rent their current home, just as they did before they moved back into it a couple years ago, so will just need to secure a renter and provide documentation of the rental agreement prior to the loan being funded.

The VA loan limit in Alameda and Contra Costa County is $1,000,000 and is $417,000 in harder hit areas like San Joaquin and Solano Counties. If the property the person is wanting to buy is more than the loan limit, the buyer will have to pay the difference, or if you use the lender my clients are using, you only have to pay 25% of the difference!

If you or someone you know is eligible for a VA loan and currently own an upside down property and need to move, give me a call or send me an email and we can discuss your situation to see if we might be able to get you into a new home using your $0 down VA loan. My cell is 925-577-8692.

I am glad there are at least some lending perks for our military folks right now since they put their lives at risk so we can all have the American Dream.

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