Archive for the 'Real Estate News' Category
FHA Loans – Income and Employment Requirements
Posted by Paul Gonzales | Leave A Comment »
This is the third in a series of four posts that deal with important aspects of FHA financing. The first post provided an overview of the program while the second post detailed FHA credit requirements. This post will discuss the income and employment requirements necessary to obtain an FHA home loan.
Income Documentation
For employees this is quite straightforward. Copies of the most recent paystubs covering at least one month and W2s for the previous two years are required. Complete Federal income tax returns for the previous two years may be required as well.
For self-employed people signed copies of personal tax returns for the previous two years are required. If the business is a legal entity such as an “S” or “C” corporation, partnership or other legal entity then two years of business tax returns are also required. A signed year-to-date Profit and Loss statement (P&L) will be needed to complete the income documentation. FHA guidelines state that 25% or more ownership in a business is considered self-employment.
Types of Income for Employed People
The lender will review the paystubs together with the W2s and tax returns to establish a baseline amount of income as well as stability of the income. In general, if base income is increasing they will likely be able to use the current income amounts. On the other hand, income that is declining over the past two years will result in an averaging of the income. A significant decline in base income will require a written explanation.
- Overtime – to be counted it must have been relatively constant for the past two years as well as currently. There must be the prospect that it will continue and the employer will be required to state that it is likely to do so on a written Verification of Employment. If used it will be averaged over time and added to the base income
- Bonuses – the rules are similar to considering overtime.
- Commissions – will be averaged over the prior two years and must demonstrate reasonable stability; tax returns will be reviewed and unreimbursed business expenses will be deducted from the income
- Child support, alimony and spousal maintenance – such income can be included provided that it can be shown to continue for at least the next three years. It must be documented by a divorce decree, court order or separation agreement and actual receipt of the income documented by cancelled checks, bank statements or other positive means.
- Retirement income – Pension and Social Security income is acceptable and must be documented by award letters, IRS form 1099s and current “pay advices” (stubs). Again, there must be the prospect of continuing for at least the next three years
- Insurance and government income – workman’s compensation, long-term disability or other similar income must be documented and expected to continue for at least three years
Self-Employed Income
Income and expenses will be analyzed from the past two years tax returns and current P&L. The earnings will be averaged over this time period. Income that appears stable or increasing will be considered, whereas declining earnings may not be considered acceptable.
Minimum Length of Employment
Stable employment in the same general field of work or business for two or more years is considered minimum. Going from being an employee to self-employed, even in the same line of work, gets special scrutiny. A person who has been self-employed for at least one year AND has at least two previous years of employed experience in the same field may be considered. Formal training or education in the same line of work during the prior two years may be considered in lieu of employed experience.
The next post in this series will discuss the financial assets and down payment requirements for obtaining FHA financing.
For more information contact Paul Gonzales, Manager, Countywide Mortgage Inc (760) 746-7388 or paulforloans@aol.com
Related Posts: CW Mortgage, Financial news, Home Loans, Homeowners, Mortgage News, Real Estate News
Ahhh, Simplicity Returns
Posted by Rachel LaMar, J.D. | Leave A Comment »
Have you felt it? There is a new movement all across the nation that I call the reversion to simplicity. Companies, homeowners and people everywhere are heeding the need to simplify their lives and reassess what is valuable. From this new way of thinking great ideas are coming forth that will make a stronger planet and teach valuable lessons to the next generation. For more on this movement please click here: http://www.rachellamarrealestate.com/blog/?p=519.
Related Posts: "Going Green" in Real Estate, Home Improvement, Lifestyle, Real Estate News, rachel lamar
Jeff Cole-Featured Agent Spotlight By Foreclosure.com
Posted by Jeff Cole | Currently 2 Comments »
Agent Spotlight: JEFF COLE, REO SPECIALIST
For Jeff Cole, what started as a passion for real estate investment is now a hugely successful — and still growing — real estate business.Jeff started as an investor in 1984 and became a full-time agent in 1995. He has spent the last 15 years fine-tuning his skills, being a top agent at both Prudential and Coldwell Banker and finally joining his latest venture in 2006 at Windermere Exclusive Properties in San Diego County.With an average DOM of 30 days, BPO accuracy of 99.8 percent to sales price and an impressive volume of $166.65 million, Jeff is managing just fine in today’s tough economic climate.”We have been busier in this market than many agents I believe mostly because I understand well the business of real estate and have an uncanny sense to see opportunity in every market,” says Jeff.
Jeff’s business is currently about 60 percent REO and 40 percent regular resale. He opened his REO division in 2007 in anticipation of the current housing market situation. Since then, Jeff has been the top Windermere Agent in San Diego County every single year. He has also received the “Five-Star Best in Client Satisfaction” award for those same three years. How did he manage it?Jeff puts it simply: “I love to help people reach their goals.”Jeff’s quality customer service includes Web-optimized listings on more than 40 major Web sites within 24 hours and include premium photography. He also has a “less than two hours” call return policy that clients love.
His stellar customer service record is enhanced by a solid list of credentials that include both the Certified Foreclosure Agent and Certified Short Sale Agent designations from Agent University.”I feel strongly that continued education is the key to staying ahead in this business and Agent University has useful courses,” Jeff tells us. “It gives me one more selling advantage over other agents and helps keep the saw sharp.”His profile on Foreclosure.com has also helped increase his market exposure.”Sharon Johnson with Foreclosure.com has been very helpful setting up my profile and making suggestions to grow my online exposure,” says Jeff. “Foreclosure.com is a useful tool to get my name in front of the distressed property consumer.”
With quality customer service skills and the education to fine-tune his business, it’s a small wonder that Jeff excels in this or any other market. He truly sets an example for the rest of us.
Great job, Jeff!
Related Posts: Agent Services, Awards and Recognitions, Education, Join Windermere, Real Estate News, Windermere Agents
Quick Tips from Brian Olenik
Posted by Brian Olenik | Leave A Comment »
QUICK TIPS
WHAT IS TITLE INSURANCE?
The title insurance policy protects the insured against actual
loss, including any costs, attorney’s fees and expenses provided
under the policy, resulting from the Covered Risks set forth in
the policy. A real estate owner or lender might experience a
loss due to liens, encumbrances, or defects in the title to said
property (or the incorrectness of the related title search).
3 KEY POINTS TO REMEMBER:
1) The Title insurer not only guarantees clear title, but it promises
to defend the purchaser’s title in the event there is a problem
with the title, and to compensate the insured (purchaser or
lender) up to the amount of liability on the policy.
2) Legal Fees? The title insurance policy contains provisions for
the payment of legal fees and court costs in defense of a title
claim against the subject property (provided it is covered under
your policy).
3) And the last important point . . .
The title insurance policy contains provisions for payment of
losses which result from a covered claim.
Thank you for making Brian Olenik &
Corinthian Title Company part of your closing team!
For More Details Visit: www.BrianOlenik.com
BRIAN OLENIK
858.776.7683
BRIAN.OLENIK@CORINTHIANTITLE.COM
Related Posts: Real Estate News
FHA Loans – The Basic 203(b) Home Loan
Posted by Paul Gonzales | Leave A Comment »
This post will be the first of four brief articles covering the most important aspects of what has become the darling of the real estate market – the venerable FHA home loan.
Established in 1934, the Federal Housing Administration, as stated on its website “…. has served as an economic backstop working hand-in-hand with lenders to provide consumers with access to safe and affordable loans, even during times of tremendous market volatility as with the current subprime situation“.
This post will describe some highlights of the most common type of FHA financing, known as the Section 203(b) loan.
Subsequent posts will detail credit requirements; income and employment; and finally, assets, down payment and cash required to close.
Maximum Loan Amount
The current limit is the same as it was in 2009, varies county-by-county and is the lesser of 125% of the median house price in a given area, or the following amounts:
- Single family unit – $729,750
- Two family unit – $934,200
- Three family unit – $1,129,250
- Four family unit – $1,403,400
Property Types Allowed
As noted above, FHA financing is available for single-family homes, condos and PUDs as well as 2 to 4 family properties provided that they are owner-occupied. Second homes and investment properties are not allowed. Condominiums must be FHA approved and HUD recently made it somewhat easier for a lender to initiate the approval process if necessary.
Other Notable Features
- Can be used to purchase or refinance a primary residence
- Minimum allowable down payment is 3.5% of the purchase price (for homebuyers with FICO scores below 580 the minimum down payment will be 10%)
- Down payment can be gifted
- For now the “Upfront Mortgage Insurance Premium” (UFMIP) is 1.75% of the purchase price; however this will be increased to 2.25% April 5, 2010. FHA still allows this premium to be rolled (financed) into the loan
- Seller can credit up to 6% of the purchase price to closing costs (HUD plans to lower the maximum amount of Seller credit to 3% later this year, the date to be announced)
- No financial reserves required for 1 or 2 units, 3 months reserves for 3 to 4 unit properties
- Allows non-occupant co-borrowers (for example, Mom and Dad can be on the loan to help qualify, even though they will live elsewhere)
- Allows cashout refinancing to 95% of value ($417,000 maximum; 85% over $417,000)
- No prepayment penalties
- A borrower can have only one FHA loan at a time (fairly obvious since these are strictly owner-occupied loans and a person cannot have two “primary” residences. Exceptions: you are relocating, selling your home to purchase a new home, or a divorce situation.
- U.S. citizenship is not required: the borrower must have a valid Social Security Number, hold Permanent Resident Alien status or be eligible to work in the United States and hold the appropriate work visas.
Watch for the next article in this series to be posted very shortly which will detail the credit requirements for obtaining an FHA home loan.
For more information contact Paul Gonzales, Manager, Countywide Mortgage Inc (760) 746-7388 or paulforloans@aol.com
Related Posts: Buyers, CW Mortgage, Condos & Townhomes, Financial news, Home Loans, Homeowners, Interest Rates, Mortgage News, Real Estate News, San Diego
