- The Borrower
- The Realtor
- The Mortgage Lender
- The Contractor
- The Consultant
- The Plan Reviewer
- The Appraiser
- The Inspector
- To purchase a house on a plot of land and rehabilitate it (the most common)
- To purchase a house on another site, move it onto a new foundation on the mortgaged property and rehabilitate it (less common)
- To refinance an existing mortgage and rehabilitate such a dwelling (also less common)
- What is FHA mortgage insurance and how does it work?
- Why would I want an FHA mortgage?
- Is FHA new? How long has FHA been in existence?
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What Happened to Student Loan Consolidation?
Recently I’ve had a few borrowers who have just graduated from college and are trying to buy their first home or refinance their current mortgage.
Unfortunately their debt-to-income ratio (DTI) is too high due to numerous student loans.
Years ago when I graduated from college, there were loan consolidation programs available — However, in April 2008, Sallie Mae announced that they will discontinue their federal loan consolidation program effective May 9, 2008.
There are a few private loan consolidation programs available so check with your lender to see if your program still qualifies some type of loan consolidation program.
Anyway, I called Sallie Mae to find out what options are available for recent graduates who need to lower their monthly debt obligations but can no longer do a loan consolidation and they gave me a few options that I thought would be worth sharing:
Is it time to Buy, Sell or Refinance? (Answers upside down at the end)
If you live in Arizona and not under a rock (no pun intended of course), you are most likely fully aware that the real estate market is hurting. Sales are down, prices are down, gas prices are up and people are wondering if “driving until you qualify” makes any sense anymore.
What does this mean for you?
Well it depends on what you are thinking about – buying a new house, selling your house or refinancing your current loan.
How To Buy A House In Arizona With No Money Down
Is it still possible to buy a house with no money down in Arizona?
Yes.
There are several non-profit programs out there that allow for some type of assistance for people who want to buy a house. These programs started in the mid-1990’s and are still around today — and it is one of the only ways currently to buy a home with no out of pocket money required!
Nehemiah is one of the largest non-profit organizations that allows sellers to gift money for the down payment and closing costs.
The FHA 203(k) Program — The Most Common Repairs
When considering buying a foreclosed home in Arizona today, it is not entirely out of the question that the home you are looking at might be in need of a few repairs. Or maybe a lot of repairs.
The FHA 203(k) program does not allow luxury items (think $10,000 iron doors) or improvements that do not become a permanent part of the home to be financed in the program. The FHA 203(k) program is really designed for basic items such as painting, drywall work, room additions, decks and landscaping. While there are too many eligible items that are eligible for 203(k) financing, some of the most common seem to be (in no particular order):
The Ten Step FHA 203(k) Application Process
In my experience, there is no exact application process for any loan! Each person seems to have different timelines and each time someone buys a home it is a little different. But, in general the application process for an FHA 203(k) loan looks like this ten-step process and involves these key players:
The FHA 203(k) Program - How It Is Different From a “Regular” Mortgage
The FHA 203(k) program is different than most other home mortgage financing options in that the 203(k) loan accounts for the value that the house is *going to be worth* once repairs are done.
There are 3 eligible situations where an FHA 203(k) mortgage can be done:
Without the 203(k) program, if you wanted to buy a house that needed repairs (the most common situation) or you just wanted to modernize the house – you would first have to obtain a mortgage on the as-is condition and value of the home, go out and find additional financing (HELOC, 2nd mortgage, your mother-in-law), improve the house and then get your ideal long-term mortgage in place.
FHA is becoming a popular Arizona Mortgage option
Most people already know that FHA is short for Federal Housing Administration – it is all over the news in recent months. And as you may also know – FHA doesn’t actually lend anyone money, they only insure loans that are underwritten to certain criteria.
Some of the most common questions that I hear regarding FHA programs include:
What is PMI and do you need it?
If you are buying a home chances are the topic of PMI has come up, and you’ve wondered what it is.
PMI stands for Private Mortgage Insurance, and is an extra fee built into your monthly mortgage payment designed to protect lenders against foreclosure costs. The protection is provided by third-party PMI companies, which work in a way that is similar to other types of insurance companies.
PMI is calculated on a sliding scale based on your LTV (loan-to-value) and your credit score and generally speaking, the more money that you put down when buying your house, the less PMI you will have to pay. So if you put down 15%, you could expect to pay less than if you put down 5%. The general range for PMI factors is .25% to 2%. If you really want to see what a PMI chart looks like, here is one — confusing!
And here’s something else you might not know… not all loans require PMI.
Buying A Home In Arizona: What Can You Afford?
Throughout Arizona, the current market cycle is “buyer friendly” — meaning that there are more sellers than there are buyers.
This is great news if you are in the market for a home!
Many first time homebuyers are unsure of “exactly how much home they can afford”. There are few things as frustrating as finding a home that’s just perfect, only to find out you can’t afford it.
How do you avoid this frustration?
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