Mortgage Guidelines - 2/3 - Arizona Mortgage Team

HVCC: Eyes Wide Shut

May 6, 2009 11 Comments

Ah, the mortgage business.

If you were to meet me for lunch or dinner, sit down with me and chat about the mortgage business and how things are today, at some point in the conversation the topic of “HVCC” (Home Valuation Code of Conduct) would surely come up.

When discussing the topic of HVCC, these are just a few of the possible reactions that you might get from anyone who works as a Realtor or Loan officer and is dealing with HVCC:

Gagging
Choking
Waving arms wildly
Going into a tirade

Ok, sure — there may be some who are happy about this, but I just haven’t met anyone who actually has something positive to say about it.

In short, the HVCC takes away the ability of the loan officer to order an appraisal for your loan. Currently if you have an FHA loan, the loan officer can still order the appraisal, but I think it isn’t too far fetched to think that someday that may not be possible any longer and all appraisals will be ordered through an Appraisal Management Company. In this case a mortgage bond may just be your best bet.

Appraisal Management Companies are not “bad” per se – but I can assure you that customer service is not really their cup of tea. AMC? Think DMV. As in Department of Motor Vehicles.

Here is a must-see video for anyone in the Real Estate field who is still a little fuzzy on how the HVCC will impact them:

If you were to ask me about my my personal opinion on the HVCC over our lunch break while we were eating lunch? I would ask you this question:

Have you ever arrived at the scene of an auto accident before the ambulance/fire trucks arrived? Remember that feeling you had in your stomach?

Now you know how I feel when you ask me questions about HVCC.

UPDATE: My friend Mark Madsen does a great job of explaining it as well — see what he has to say about the HVCC and what impact it may have.

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Filed Under: Mortgage Guidelines, The Business of Mortgages Tagged With: HVCC, HVCC Appraisal

Mortgages For Canadian Citizens: Now Available

April 3, 2009 5 Comments

We now have financing available for Canadian citizens who want to buy a 2nd home here in Arizona. I haven’t been to Canada recently, but someone told me that it can get awfully cold up there during certian times of the year. What better way to thaw-out than buy a home somewhere where you can pretty-much-wear-shorts-every-day-in-January if you want?

Starting about 6 months ago, lenders were pulling out of financing these loans, but we are starting to see some of them come back now. Not a lot of lenders,mind you — but at least one!

Mortgages For Canadian Citizens: Guidelines

Must be a second home
Will loan up to 75% loan-to-value
International credit report required
Verification of mortgage on primary residence
Last 2 pay stubs and 2 years of T4′s required
2 months bank statements
Drivers license and copy of passport
If self employed, last two years of Canadian tax returns along with a profit/loss statement and balance sheet.

Simply put, this is pretty much a full documentation loan for people with good credit. The interest rate on this 30 year fixed rate loan currently is 6.25% with a 3 year 1% hard prepay penalty. This means that if you refinance or sell the home inside of one year, the lender will charge a 1% fee. The interest rate changes from time to time, but not every day.

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Filed Under: Arizona Home Financing Options, Buying a New Home in Arizona, Mortgage Guidelines Tagged With: canadian citizen mortgage, canadian mortgages

Fannie Mae HomeStyle Renovation Mortgage Program: An Investors Dream

April 3, 2009 7 Comments

If you are an investor who is looking to purchase a home that is currently owned by Fannie Mae but the home needs renovations – Fannie Mae has a great loan program designed just for this situation that is a close cousin to the Fannie Mae HomePath mortgage program but designed just for investors.

It is called the Fannie Mae HomeStyle Renovation Mortgage program.

The HomeStyle Renovation mortgage program allows borrowers to combine the cost of the home with the costs for renovation or remodeling.

At closing, all funds for renovation will be escrowed in an interest-bearing account. After all renovation work is complete, any remaining funds in the escrow account will be used to pay down the principal balance of the mortgage.

Fannie Mae HomeStyle Renovation Mortgage Highlights:

Up to 95% LTV
Renovation funds escrowed in an interest bearing account
Soft costs (architectural services, engineering, permit fees, etc.) may be financed
Loans are underwritten to FNMA guidelines

HomeStyle Renovation Mortgage: More Information

Borrowers can basically do any repairs / renovation to the home that they want as long as the appraisal supports the value, the improvements are common for the area (pools, for example), the repairs can be completed within six months, and the repairs do not exceed 50% of the after improved appraised value.

The only types of repair that I would not recommend under the HomeStyle Renovation mortgage program are water damage, mold, and any structural repairs to the foundation and/or load bearing walls. These types of repairs have a tendency to escalate into much larger projects once the builder does the demo and determines what the actual repairs are needed to fix the damage to the property.

Have more questions about the HomeStyle Renovation mortgage? We are happy to help.

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Filed Under: Arizona Home Financing Options, Mortgage Guidelines Tagged With: Fannie Mae HomeStyle, HomeStyle

Home Path Mortgages: Great HomePath Mortgage Deals From Fannie Mae

April 3, 2009 8 Comments

We are currently working with a couple of people who are buying a home that is owned by Fannie Mae and are getting approved for the new HomePath mortgage program. As mortgage guidelines have gotten tighter over the last couple of years, it is nice to see a program come out that actually has features like no appraisal and no mortgage insurance.

If you are interested in buying a home that is owned by Fannie Mae as your primary residence that is not in need of repairs, the “regular” Fannie Mae HomePath mortgage program is right for you.

You will often see homes that are eligible for this with the logo seen above somewhere on the sales sheets and information about the HomePath program will usually be in the remarks section of the MLS.

HomePath mortgage financing highlights include:

Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
You may qualify even if your credit is less than perfect
Available to both owner occupiers and investors
Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
No mortgage insurance
No appraisal required — the sales price is the value
No declining markets policy
No loans under $20,000
No more than 10 financed properties
No prepayment penalties

If you are interested in buying a home that is owned by Fannie Mae as your primary residence that is in need of repairs, the HomePath renovation mortgage program is the one that you will want to look into.

You will often see homes that are eligible for this program with the above logo on the sales sheets and will usually find more information in the remarks section of the MLS.

HomePath renovation mortgage highlights:

Financing to fund both your purchase and light renovation
Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate)
Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer
No mortgage insurance

If you are considering buying a home that is currently owned by Fannie Mae, be sure to look into the HomePath mortgage financing program. I don’t remember the last time that I saw a loan program that said “no appraisal, no mortgage insurance and a 3% down payment!” But then again, I don’t remember a time when Fannie Mae owned so many homes. No wonder so many great deals are being had. Don’t miss out!

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Filed Under: Arizona Home Financing Options, Buying a New Home in Arizona, Government, Interest Rates, Mortgage Guidelines, The Business of Mortgages Tagged With: Home Path, Home Path Financing, Home Path Mortgage, HomePath Mortgage, HomePath Mortgage Loan

Arizona FHA Loans: Maximum Cash Out Is Now 85% LTV For Arizona FHA Loans

March 26, 2009 1 Comment

For the last few years, one of the most popular Arizona FHA loan programs was the Arizona FHA 95% cash out loan. This loan program would allow eligible homeowners to get up to 95% of their homes value in cash to be used for pretty much any reason they wanted (pay off bills, home improvements, vacations… you name it).

For any Arizona FHA mortgage loans where the FHA case number is dated April 1, 2009 or later, the maximum cash out allowed has been lowered to 85% of appraised value. Details were released a few days ago in the official FHA Mortgagee Letter 2009-08 (it opens as a Word document).

A few highlights of the new FHA 85% cash out program include:

It is officially on a “temporary basis” until HUD has a chance to analyze and review it’s portfolio and the housing market. That said, I would expect this to be in place for quite a while.
The property must have been owned by the borrower for at least 12 months in order to qualify for 85% of the appraised value. If owned less than 12 months, the maximum loan is the lesser of 85% of the appraised value or the sales price.
A second appraisal is required if the loan amount is higher that $417,000 and the property is in an area of declining values.
Three and Four unit properties must still pass the self sufficiency test in order to be eligible.
You must be current on your mortgage – delinquent borrowers are not eligible for the 85% cash out program.

Many people have been expecting this change – so it didn’t really come as a surprise. There is starting to be talk about the FHA insurance fund having financial problems with the amount of money in the insurance fund and the amount of money being paid out in claims (or projected to be paid out) — and this is just one way that FHA is attempting to reduce their exposure to these possible future claims.

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Filed Under: Arizona Home Financing Options, FHA Loans, Mortgage Guidelines, Refinancing in Arizona

Arizona FHA Loan Limit Changes 2009

February 25, 2009 Leave a Comment

As a result of the stimulus package passing, there are now new Arizona FHA loan limits. This is good news for many people who are currently in an FHA loan wondering if they can participate in the Arizona FHA streamline program because their current FHA loan was higher than the “old” 2009 loan limits.

We used to tell you “no” that you couldn’t participate in the FHA streamline program if your FHA loan was higher than the “old” 2009 loan limits – but now the answer is “yes”.

The other group of people who will be happy about the increase in the FHA loan limits are those people who are currently shopping for a home between the $260 and $340k range – because now they can get and FHA loan. Looking at the history of the last month or so of what Arizona mortgage rates have done, I think it is safe to say that you should reasonably be able to lock in a FHA 30 year fixed rate in the low 5% range.

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Filed Under: Arizona Home Financing Options, FHA Loans, Mortgage Guidelines Tagged With: FHA Loan Limit Changes 2009

FHA Streamline Refinance: Can You Streamline If Your Current FHA Loan Is Above The 2009 FHA Loan Limit?

January 16, 2009 1 Comment

In 2008, the FHA loan limit for Maricopa county was $346,250. In 2009, the FHA loan limit for Maricopa county is $271,050.

A few people that I have spoken to recently are in a situation where they got an FHA loan in 2008 for an amount that is greater than the FHA 2009 loan limit and they want to do an FHA streamline refinance.

Can you do an FHA streamline refinance if your current FHA loan is above the current FHA loan limit?

No.

Not as of today.

That is the bad news.

The good news is that lenders expect FHA to issue an official announcement allowing people who are currently in an FHA loan that is above the 2009 FHA loan limit to be able to participate in the FHA streamline program.

As always, we will keep you posted when the official announcement is made.

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Filed Under: Arizona Home Financing Options, FHA Streamline Refinance Program, Mortgage Guidelines

What Will Lenders Accept As Income?

November 24, 2008 2 Comments

If you are planning on getting a loan today, be ready to document and verify your income. In general, lenders are going to want to verify two years of history for all income sources – full-time or part-time. If you are self employed, you will need to show two years in the same business and provide federal income tax returns.

Here is a quick checklist of additional income sources that may be considered:

Part-time income can be counted assuming that you have been receiving the income for at least two years without interruption and that it is anticipated to continue.
Overtime and bonus income that has occurred for the past two years and that will probably continue can be counted.
Retirement income
Military income
Veteran’s benefits
Social Security income
Child support
Alimony
Interest/dividend income
Rental income

In general, when calculating income a good rule to remember is the 2/2/2 rule. If you are wondering if the underwriter is going to “count” it as income, you should have at least 2 W2 pay stubs or have tax returns for 2 years and expect any part-time/over-time to continue for at least 2 years.

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Filed Under: Arizona Home Financing Options, Mortgage Guidelines

New Standard Good Faith Estimate Effective January 2010

November 12, 2008 1 Comment

Today it was announced that HUD has adopted a new 3 page Good Faith Estimate as part of its RESPA reform package that will be standard among all lenders and go into effect in January of 2010.

The new standard Good Faith Estimate is part of a RESPA Reform package that has been in the works for years. Before the announcement, HUD reviewed approximately 12,000 comments and in considering these comments made changes to what was going to be a 4 page Good Faith Estimate.

According to Brian Montgomery, HUD’s Assistant Secretary of Housing:

“We have carefully considered the concerns expressed from every corner of the mortgage market in developing this rule. I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don’t understand all the fine print of their mortgages and this, in many respects, is at the heart of today’s mortgage crisis.”

Personally? I think it is a good idea. It will help standardize information that the consumer is getting from different lenders so that the consumer can make an informed choice and more easily match up the Good Faith Estimate with the Final HUD-1.

See the new Good Faith Estimate Form.

See the new HUD-1 Settlement Statement Form.

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Filed Under: Government, Mortgage Guidelines, The Business of Mortgages Tagged With: New Good Faith Estimate

HVCC: Eyes Wide Shut

Mortgages For Canadian Citizens: Now Available

Fannie Mae HomeStyle Renovation Mortgage Program: An Investors Dream

Home Path Mortgages: Great HomePath Mortgage Deals From Fannie Mae

Arizona FHA Loans: Maximum Cash Out Is Now 85% LTV For Arizona FHA Loans

Arizona FHA Loan Limit Changes 2009

FHA Streamline Refinance: Can You Streamline If Your Current FHA Loan Is Above The 2009 FHA Loan Limit?

What Will Lenders Accept As Income?

New Standard Good Faith Estimate Effective January 2010

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