NH Housing Home Buyer Seminar on Tuesday Feb 21st & Wed 22nd. Time: 5:30 – 8:30. Epsom Public Library – 1606 Dover Road – Epsom, NH. This is open to the public and is available for no charge. There will be a large amount of material presented on various topics related to the home buying and financing processes. Reserve your seat at www.GoNewHampshireHousing.com
or call Carol or Renee at 225-5626.
Home Buyer Seminar
February 15, 2012 By Leave a Comment
Avoiding a credit score drop…
January 11, 2012 By Leave a Comment
You’ve prequalified for a mortgage and you think you’re all set. You find the perfect house and you call your loan officer to set up the loan. The loan officer pulls a new credit report and tells you that your score has gone down and now your rate will be higher, or worst, you no longer qualify. What a nightmare scenario this is and it happens all the time. I received a call this week from someone who had this experience with another lender and was looking for me to help them out. Most mortgage programs do have minimum scores (usually either 620 or 640) and if you drop below those scores, you will not qualify. Most mortgage programs have a higher rate for people with scores below 680 too. So having your score drop is a serious problem.
The way to avoid a score drop is simple: once the mortgage company has obtained your credit report, get a copy of it. From that point forward, do not open or close any accounts. Make all your payments on time. Additionally, note the balance on your credit cards and do not allow the balances to increase. If the balance on your credit card goes up, your score can go down immediately. If you open a new account, your score can go down. If you close an account, your score can go down. If you pay off a collection account, your score can go down. Regarding collection accounts, if the loan officer is suggesting you need to pay off collection accounts (but your score is ok), then wait and pay them off at closing. That way you won’t risk having your score lowered.
The other side of all of this is that if your score is low, there are ways to increase it. Have your loan officer explain it all to you!
Best wishes for a wonderful 2012! Homeownership is more affordable today than any time in the last decade!
Renee@NHmortgages.com
New RD upfront & monthly mortgage insurance goes into effect Oct 1
September 10, 2011 By Leave a Comment
There’s a change ahead in financing for first time buyers and others who qualify for the RD (Rural Development) loan which is sometimes also referred to as a Farmer’s Home Loan or USDA loan. The good news is the loan will still require no down payment — that’s right — no money down is needed with this loan. And you will still be able to negotiate for the seller to pay all of your closing costs!! But, for the first time ever, there will be an additional monthly fee which has an annualized rate of .3% of the loan amount. It is not killer but it will cause every payment to be higher. The higher the payment, the fewer people qualify.
Right now is an awesome time to buy a house if you are a first time home buyer. You can buy a home with the same amount of upfront cash as you might need for a security deposit if you were to rent — and sometimes less! Not only are great programs like the RD available but there are grants through the State to help offset the expense of buying a home.
With the high volume of foreclosed homes there is also an opportunity, for qualified buyers, to purchase a home and also finance a needed repair or repairs so that the new buyer will move into the and have the funds to immediately complete necessary repairs.
Renee
Mass Housing
June 24, 2011 By Leave a Comment
If you are a first time homebuyer in Massachusetts then you may want to consider Mass Housing. There are income limits (generous) but if you fall below the income limit and have the appropriate credit score, the interest rates are below market and the mortgage insurance is favorable. Call for more details.
Financing for Marginal Credit – which loan can you qualify for?
June 13, 2011 By Leave a Comment
If you have less than perfect credit, you may assume that you need a large down payment to get approved, but that is not the case. If you are eligible for a VA loan or an RD (Rural Development) loan, you may be able to get approved for a loan with no down payment! Or you may be able to use an FHA loan and purchase with a down payment of just 3.5%! Or there may be other loans available through your state or local housing authorities that allow you to buy with little or no down payment. These types of loans may be better suited for home buyers with less than perfect credit. Conventional loan programs have large adjustments to the interest rate for credit scores below 740 where programs like FHA and RD don’t make rate adjustments unless the score is below 660. To find the best mortgage loan for your credit profile, it is essential to select a lender who is comfortable with the less than perfect credit scenarios.
How to Get Approved with Marginal Credit
Most lenders today require a minimum credit score of 620. Additionally, the ideal credit report should have 3 open lines of credit and no outstanding past due or collection debt. If your credit score is below 620, your lender should be able to analyze your credit report to determine if there is anything that can be done to immediately improve your credit score. There may be simple actions you can do to get a “rapid rescore”. For example, if your current balance on a credit card exceeds the credit limit, you are losing a lot of points. By paying down the balance on the account, you can increase your score. Most lenders use software programs to help them identify if your score can be raised and what you need to do to make it happen –then you can then qualify for a home loan.
Even some people with a credit score above 620 may not be eligible for a mortgage loan because their credit profile is not adequate. That is, if you have less than 3 open credit lines or if you have collection or past due accounts, you may not be able to get a loan even if your score is above 620.
When a potential homebuyer has a credit report that does not meet today’s standards for a mortgage loan, they need to create a game plan to get their credit back on track. This means understanding where and what the issues are and then addressing them head on.
Each person is entitled to a free credit report through www.annualcreditreport.com . We recommend starting with that or by obtaining your credit report through a lender you are comfortable with. There is another website you can go to www.creditkarma which will also give you a reading on where your credit stands.
If you do not have 3 open lines of credit, start to improve your credit profile by obtaining one or two or three accounts so you do have 3 open lines of credit. You may also be able to get a relative to add you to one or more of their accounts as a joint user. If you go this route, make sure that the balance on the account is low (because the debt will be counted against you if you are a joint user) and make sure the payment history is excellent (because the payment history will affect your score).
If you have past due accounts, start by getting a grip on each of those accounts. Determine who the original creditor was and when the original default date was (if the default date was 7 years ago or more then you can petition to have the account taken off your credit report). If the creditor sold the debt, it might appear that the default date is more recent than it actually is. You may be required to pay these accounts off in order to obtain a mortgage so you should fully understand what each one is. You may be able to negotiate a settlement for less than the full balance if you are willing/able to pay the collection debt off. Another option is to enter into a payment agreement where you make a small monthly payment each month for a fixed # of months. In extreme cases, where the collection debt is significant, you may want to consult with a debt consolidator or an attorney (to consider bankruptcy). Each loan type has a certain tolerance for outstanding past due collection accounts; you may or may not be required to pay off your collection debt in order to qualify for a mortgage.
If you’ve sold your house with a short sale or had a foreclosure or bankruptcy, you will probably be facing a minimum of 3 years before you can get a mortgage. Your credit will be looked at carefully once the 3-year period elapses. Be sure that you have paid everything on time every month. Be sure you have at least 3 open credit accounts.
If you’ve had credit problems, please consult with a mortgage lender who can help you determine what you need to do to get on track. Develop a plan – you may be 3 months away from having acceptable credit or 3 years away – but if you have a plan you will get there.
Renee Duval, an Amazing Loan Lady, Merrimack Mortgage Company, Concord, NH NMLS#97967
Using Rehab Loans to Purchase a Distressed Property
April 20, 2011 By Leave a Comment
With such a high level of distressed properties flooding the real estate market, there are great opportunities for a good deal among these available homes. But many people cannot afford to come up with the down payment and closing costs and then also come up with the money to complete the needed repairs after closing — or can they? What if the down payment were really low (FHA only requires a 3.5% down payment) and what if the seller agreed to pay closing costs and what if the lender would give the borrower the money to do the repairs after closing? Now we’re talking…
Lets use a practical example. Lets say there is a great opportunity to purchase a house for $200,000 but the house needs a new roof, new carpeting and a paint job. The first step is to put in an offer and have the seller accept it. In this case we are assuming that price is $200,000. Then you would get quotes from contractors to do the work needed. Lets assume the roof would cost $10,000 and the carpeting would cost $5000 and the paint job would cost $5000. The total work needed is $20,000. The lender requires an additional 10% contingency (in case you run into unexpected expenses after the project is started. All this adds up to $22,000. The lender will take the $22,000 and add it to the $200,000 sales price making the acquisition cost $222,000.
The required down payment is based on the acquisition cost of $222,000. At closing, the seller would be paid the $200,000 that is owed to him/her and the remaining $22,000 would be put in an escrow account (although some of it can be received upfront to get started with the project). The contractors do the work and then the lender pays them. The buyer ends up with a great house with no worries.
Tax Credit Extended for Returning Veterans
February 1, 2011 By 2 Comments
Tax Credit Extended for Returning Veterans…
You may qualify for up to an $8000 tax credit if you or your spouse were on qualified official extended duty outside the United States for at least 90 days during the period beginning January 1, 2009 and ending before May 1, 2010, and were a member of the uniformed services or Foreign Service or an employee of the intelligence community (defined below) during the time period in above.
In order to qualify for the tax credit you must have an accepted offer to purchase a home by April 30, 2011 and close before July 1, 2011. Get the facts from the IRS: www.IRS.gov Search for Form 5405
In addition to receiving the tax credit, eligible Veterans can obtain a VA mortgage. Here’s some basic info on VA mortgages:
1. No Down Payment is required.
There is no down payment needed for a VA loan. The veteran can choose to make a down payment. But it is not a requirement
2. All Closing Costs can be paid by the seller.
The VA loan has similar closing costs as other loan programs. Things like Homeowners Insurance, Title Insurance, Inspection Fees, Appraisal Fees, Escrow Fees, Taxes etc. But with a VA loan, the buyer can negotiate for the closing costs to be paid for by the seller. With a VA Loan it is possible to make no down payment and have the seller pay all your closing costs. The Veteran can get in for no money at all!
3. The VA allows up to a 50% debt ratio. Up to 50% of the Veteran’s gross monthly income (including a spouse’s income if they are on the loan) can go toward the new housing payment, car loan payments, student loan payments, other loan payments, minimum payments due on credit cards and other obligations like child support or alimony. This is a fairly generous guideline. The VA does test this guideline by looking at a minimum residual income for each Veteran and the more conservative guideline applies.
4. Credit scores of just 620 are acceptable. Generally if the Veteran pays his debts on time and does not have past due balances or collection accounts, they are all set. If there is collection debt on the credit report, generally it will be required to be paid off at or before closing.
5. Veterans know if they are qualified because they have a COE (Certificate of Eligibility). If you are not sure if you qualify for a VA loan, you can go to the VA’s website and apply for a COE.
6. For more information on VA loans, check out our website at WWW.AmazingLoanLadies.com
FHA and Conventional Home Loans – The Differences Between The Two Loan Programs
January 25, 2011 By 1 Comment
For many people, understanding the many different home mortgage programs can be difficult especially since there are many different mortgage programs that a person can select from.
Two of the most common home loan programs are FHA home loans and Conventional Home Loans.
Many home buyers are unsure whether to go with a FHA loan compared to a conventional mortgage. Each borrower ‘s situation is different so what is good for one person might not be the best option for the other person.
It is important for the home owner to understand the differences between FHA mortgages and conventional home mortgage loans so that you are getting into the right mortgage loan for your particular situation.
For the most part, FHA is designed for a first time home buyers, but anyone can have an FHA mortgage if it is used to finance a primary residence. Conventional home loans can be used to purchase a primary, second or investment home. Both FHA loans and conventional mortgage loans can be used to purchase or refinance a house .
Down Payment Differences
FHA does require a smaller down payment, but the closing costs for an FHA home loan may be higher due to the upfront MI fee which is currently 1% of the loan amount. Conventional home mortgage loans do not have an upfront MI fee. The current FHA down payment minimum is at 3.5% down while conventional loans require at least 5% down.
Credit Score Differences
Credit scores have less impact on an FHA loan which can be great for someone whose credit score is between 620-680. Conventional mortgage rates vary due to credit score. The lower the score, the higher the rate on a conventional mortgage loan. Also, if you credit score is below 680, you might not be able to get approved for Private Mortgage Insurance which is required if your down payment is less than 20%.
FHA does require you to escrow for taxes & insurance while conventional loans do not if you have at least 20% down.
Home Mortgage Loan Size Differences
FHA home limits are set by HUD, and range from the high 200’s to the low 400’s depending on the county. Conventional mortgages have a maximum mortgage limit of $417,000 for most states.
Debt to Income Ratios
FHA loans will allow up to 49% for housing and debt where conventional loans generally allow up to 45%. So the underwriting may be more lenient.
There are many factors to be considered in deciding on a mortgage loan program. It is important to contact a loan mortgage advisor to see which mortgage program best meets your needs and will give you the lowest interest rate and payment!
Distressed properties not so stressful to us!
January 21, 2011 By Leave a Comment
We did it again! After being turned down by another lender because the house he wanted to purchase wouldn’t pass the appraisal process, we helped Mr J to get financing to purchase the home. Here’s how it went: he found a great house for only $75,000. That’s right! A single family home that had needed some work. The appraisal came in at $78,000 so he was able to finance $3000 in repairs. The types of repairs on this house were: fix a section of the roof that was leaking, deal with a damp basement issue (sump pump & ventilation) and take care of some much needed painting. The type of loan we used was Rural Development. Our borrower negotiated for the seller to pay closing costs. He gave an upfront deposti fo $100, paid a $400 appraisal fee and ended up receiving all $500 back at closing — making his total cash investment into the purchase was zero!! His monthly payment — including tax & insurance is just $705/month!!! These are the kinds of transactions I love to do!
NH Housing now offerring 4% grants
December 15, 2010 By Leave a Comment
NH Housing will now provide a cash assistance grant equal to a maximum of 4% of the base loan amount to help borrowers defray the cost of down payment, closing costs, and prepaid escrow expenses associated with purchasing a home. Borrowers must contribute a minimum of 1% (based on purchase price) using their own funds (excluding gifts). No cash back is allowed at closing. Income, purchase price and all other NH Housing guidelines apply. There is no monthly payment on the cash assistance grant portion. If the mortgage is paid off within the first 48 months, the full amount of the grant is due. After 48 months, the full amount of the grant is forgiven. For more information, go to www.NHmortgages.com
