Archive for the 'Home Loans' Category
Zero-Down VA Loans Up To $697,500 In San Diego County
Posted by Kevin Kueneke | Leave A Comment »
Continued good news from the recently passed Housing and Economic Recovery Act (HR 3221). The Veterans Administration (VA) has increased the VA guaranty amount. 
The VA will now guaranty up to 25% of the FHA one-unit high-cost county loan limit. This means that a veteran can borrow up to $697,500 in San Diego County with zero down payment. However, this $697,500 must include the VA Funding Fee (click here to see if funding fee is applicable). Effective January 1, 2009, the new VA zero-down loan limit will be 115% of the local area median home price which may be as high as $625,500.
You might ask then, through the end of the year, what is the maximum sales price in San Diego County? For a veteran with full entitlement and first time use of their guaranty, this equates to a sales price of about $682,800…with no money down! For reservists or national guard, the sales price would be about $681,100. If the veteran is exempt from paying the funding fee, then the sales price can be the full $697,500.
This is truly beneficial as it allows active duty servicemen, servicewomen, and veterans to purchase homes in high cost areas without having to come up with the standard down payment. Also, the mortgage interest rates are no longer set by VA so that the veteran can actually get a fair market rate. Keep in mind that the VA Funding Fee at these loan amounts is quite sizable since it is a percentage of the base loan. However, it is typically financed and can actually be paid by the seller.
Questions? Call me directly at (760)500-1919 or email me today to find out how much home you qualify for…it might be more than you think.
Related Posts: Buyers, CW Mortgage, Home Loans, Homeowners, Interest Rates, Mortgage News
The Housing And Economic Recovery Act: Tax Credit!
Posted by Kevin Kueneke | Currently 1 Comment »
The recently passed Housing and Economic Recovery Act (HR 3221) has many nuts and bolts. Quite possibly the best part of the legislation is the new tax credit. This tax credit is for First Time Homebuyers (no ownership of a principal residence in the past three years; vacation or rental property ownership is o.k.) whose loan closed between April 9, 2008 and June 30, 2009.
The highest amount of the tax credit will be $7,500 for individuals earning up to $75,000 and couples earning up to $150,000. The credit is still available for those individuals earning up to $95,000 and couples up to $170,000, however to a lesser degree.
A tax credit is superior to a tax deduction. A tax deduction is added to all of the other deductible items on Schedule A (medical expenses, charitable contributions, home interest, property taxes, unreimbursed employee expenses, etc.) and then that amount is deducted from the adjusted gross income, giving you the bottom line income from which the income tax is calculated. 
A tax credit is taken after all of the deductions are calculated, the adjusted gross income is calculated, and the income tax is determined – then the $7,500 comes off of that amount! If the taxpayers owe less than $7500 in taxes, the difference between what they owe and the $7500 is payable to them as a tax refund. Owe $10,000? Now you only owe $2,500. Owe $5,000? Now you get a $2,500 refund.
This tax credit is not necessarily a gift…it is an interest-free, 15-year loan. The taxpayer must pay back 6.67% of the credit amount each year until paid in full. This equates to about $500 per year for the maximum credit of $7,500.
If the homebuyers sell their home within 15 years, and the gain on the home is less than the amount of the credit, then the remaining portion of the tax credit is forgiven. If the gain is greater than the remaining portion of the tax credit, then the balance will be due for that year’s income taxes.
Aside from income limitations, the credit is for 10% of the sales price of the home up to a maximum of $7,500. This means that the maximum credit starts at a sales price of just $75,000!
The reality is that many people will benefit from this program. Have more questions? Please feel free to contact me via phone (760)500-1919 or email me and I will be more than happy to discuss your particular situation.
Related Posts: Buyers, CW Mortgage, Home Loans, Homeowners, Mortgage News
Hope For Homeowners
Posted by Kevin Kueneke | Currently 3 Comments »
Part of the recently passed Housing and Economic Recovery Act (HR 3221) is the new Hope for Homeowners program. This is an FHA sponsored short-sale refinance intended to allow distressed homeowners keep owner occupied homes from going into foreclosure. Although lenders are not required to participate in the program, there will still be plenty of homes saved. Here are some basics:
• Principal residence only. 
• Existing loan must have been obtained on or before January 1, 2008.
• Borrowers can be up to date on their mortgage or in default, but they must prove that they will not be able to keep paying their existing mortgage (mortgage debt ratio must exceed 31% of monthly income) AND they must certify that they did not intentionally default on the mortgage for the purpose of obtaining the HOPE loan.
• Calculation of the new loan will be based on the borrower’s ability to make mortgage payments determined by FHA and the loan-to-value limited to 90% of the appraised value.
• The existing lien holder must waive any prepayment penalties and fees, including attorney and foreclosure fees if foreclosure proceedings have already begun.
• The existing lien holders must agree to accept the proceeds as payment in full of all indebtedness under the new loan (no 1099 from the lender for lost proceeds); all encumbrances must be removed.
• Those lien holders of existing subordinate mortgages will be entitled to future appreciation of the property. Standards and policies of the shared appreciation will be developed by FHA.
• The new loan must be a 30 year fixed rate mortgage.
• The interest rates and origination fees will be determined by the new Federal Housing Finance Agency, but will be comparable to market rates.
• The new loan amount cannot exceed $550,400 which is 132% of FHLMC loan limit established in 2007.
• The borrowers cannot put a new second lien on the property for 5 years after the refinance takes place.
• Income must be documented by income tax returns for the most recent two years.
• The borrower cannot have been convicted of mortgage fraud under Federal or State law during the past 10 years.
• The borrower must supply documentation to prove that they only own this one residence. If they own other properties, they cannot utilize this program.
• Borrowers will pay an Upfront Mortgage Insurance Premium (UFMIP) of 3% of the loan amount and an annual mortgage insurance premium of 1.5% of the loan amount. This is higher than the 1.5% UFMIP and 0.5% annual mortgage insurance of “regular” FHA loans.
• Equity Appreciation: upon sale or disposition of the property or subsequent refinance there will be shared equity on a graduated scale; HUD is entitled to 100% of the initial equity if property is sold or loan refinanced in first 12 months, 90% in months 13-24, 80% in months 25-36, 70% in months 37-48, 60% in months 49-60, and 50% months 61 and on. HUD will be entitled to 50% of any appreciation over and above initial 10% equity, regardless of future sale date.
• The program will be implemented October 1, 2008, and expires September 30, 2011.
As stated above, lenders are not required to participate and most likely will not assist certain borrowers whose written down loan amount is less cost effective than a foreclosure. That is, if the new loan amount that the borrowers can actually afford, based on verified income, is significantly lower than the possible post-foreclosure net proceeds, the lien holder will most likely choose to foreclose.
The official HUD website states that FHA will insure up to $300 billion in new loans under this program so for those borrowers that will qualify, this program is obviously good news and very welcome relief.
***As of October 1, 2008, HUD is encouraging all interested homeowners to contact their servicing lender regarding this program***
Related Posts: CW Mortgage, Education, Foreclosures, Home Loans, Homeowners, Mortgage News, Short Sales
Buying A Home Should Be Exciting…
Posted by Kevin Kueneke | Currently 1 Comment »
Unfortunately, the process can also be very stressful. Here are a few things to keep in mind when looking for a home that can help the process go a little smoother and hopefully keep it fun.
Firstly, find a real estate professional with whom you connect. Home buying is both a financial and emotional commitment and it is critical that the real estate professional you choose is not only highly skilled but also a good fit with your personality. Just as important is to find a competent mortgage loan officer, someone that keeps up with the ever changing mortgage market. Many loans that were available six to twelve months ago are not available now. Someone that “does loans on the side” may not be current.
There is no perfect time to buy a home so if you find the right home, do not try to second-guess interest rates or the housing market by waiting longer as you risk losing the opportunity. Worthwhile homes are now being priced to sell and are receiving multiple offers. Mortgage interest rates can increase dramatically in a short period of time drastically affecting your borrowing power. It is very important to plan ahead, get your ducks in a row, and get pre-approved for a mortgage prior to shopping. You must be realistic and know what you can truly afford.
One of the biggest problems I had when I was shopping for my first home was that I had trouble accepting that no house is perfect. There was something wrong with each and every home. If the kitchen was right, the bedrooms were too small. If the yard was the perfect size, the house was on a busy street. Best bet is to make a list of your top priorities and focus on things that are most important to you and let the minor ones go. 
Do not forget to factor in maintenance and repair costs in your post-home buying budget even if you buy a new home because there will always be costs. I had to buy a lawnmower, a rake, yard waste cans, you name it. Worse yet, the existing carpet, which seemed fine with the seller’s furniture on it, looked old and worn once I had moved in my furniture. Then my furniture looked old and worn with the new carpet…
Buying a home, especially your first home, is a big financial commitment and should be well thought out. Preparation is key. Did you ever take a test in school without studying, choosing the “I’ll just wing it” approach? I have and it was no fun.
Plan ahead. Rely on the experts. Keep it fun.
Related Posts: Buyers, CW Mortgage, Find A Home, Home Loans, Interest Rates, Mortgage News
New Fannie Mae Investor Rule
Posted by Kevin Kueneke | Leave A Comment »
Many buyers are choosing to retain their current residences and turn them into rental properties. Ideally, the rent received will be enough to cover the mortgage payment if not more, and in the long run the buyer will enjoy appreciation on the property as well. As far as qualifying for their home purchase, lenders would typically accept 75% of the new rent to help offset the mortgage payment of the retained property instead of counting the entire payment against their debt to income ratios.
Big change to FNMA guidelines: The underwriter must now obtain a statistical appraisal (also known as an AVM) on the borrower’s current residence to determine the percentage of equity in that property. If the borrower has a minimum of 30% equity in the current residence, then normal underwriting guidelines apply. However, if it is determined that the borrower has less than 30% equity in the retained home, the entire mortgage payment, including taxes and insurance, will be counted against them, regardless of down payment on the new home, credit, etc. This can be a deal killer.
Unfortunately, there have been many buyers that provided fake lease agreements so that they could buy their next home, wrongly assuming that the home would rent quickly. After a few months of the retained property sitting vacant, the mortgage payments still being due, and a depressed real estate market, some of these folks chose to walk away from the old home.
If you have a client that plans to rent out their current home and needs that income to qualify, run comps on the retained property to be safe. You do not want to wait until after you already have an accepted offer to find out they do not qualify. This guideline change is affecting almost all conventional loans including Conforming, Conforming Plus, and true Jumbo even though Jumbo loans are not insured by FNMA. Not the greatest of news, but in the long run this can help in the effort to reduce loan defaults.
Should you have any questions especially if you have a client that might be affected by this change, please feel free to call me at (760)500-1919 or email me.
Related Posts: Buyers, CW Mortgage, Home Loans, Mortgage News
