Use Future Rents to Qualify

Posted on January 24, 2012 by Matt Steinmetz

Did you know that you can use future rents to qualify for a new home purchase?  For example if you currently own a home and want to buy a new home, converting your current home into a rental, the projected rent that you will receive counts toward qualifying income on the new home.  Of course the debt from the current house is still I’m play but the rents can make it a wash, so you aren’t hit with both mortgages. 

A few things to mention are that we don’t require you to have landlord experience, but we do need to show 20-25% equity I’m the home you are vacating in order to use rents to qualify.

Comment below if you have questions and share this with the buttons below as well.

Matt Steinmetz

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What Not To Do During Your Loan Processing

Posted on January 23, 2012 by Matt Steinmetz

What Not To Do

To some it’s obvious and to others it’s not, but the following items are critical during the loan process.  If you have questions about these or are in the middle of your loan process and have to do one of these let me, or your loan officer know (always tell your loan officer) so you can be sure you are not affected negatively.

IMPORTANT

It is critical to the success of your loan package that you avoid doing any of the following until after your loan has closed escrow:

1. Do not change or quit jobs.

2. Do not switch banks, make cash deposits or move your money around.  If you do please keep a complete crystal clear paper trail that shows all money transfers and deposits between accounts.

3. Do not pay off bills. You should continue to pay the amount required, but do not assume that paying a debt off will alwasy benefit your score or loan approval.

4. Do not make any major purchases.  Adding debt can be detrimental.

5. Do not close credit accounts or apply for any new credit cards or loans.

If you must do any of the above, PLEASE CONTACT YOUR LOAN OFFICER IMMEDIATELY. Audits are done just prior to funding and you may be placing your loan in jeopardy if you do not notify your lender of any changes.

Hope that helps!  Please share and leave comments here.

Matt Steinmetz

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Standard Items Needed for Loan Approval

Posted on January 22, 2012 by Matt Steinmetz

Standard Items Needed for Loan Approval

The following items are normally needed during the loan process.  Your lender may require more or less but this gives you a basic idea of what to expect.  All of these items may not apply to you, for example if you are not divorced you can ignore that requirement.

  • Most current paycheck stubs (cover 30 days) for all jobs, disability, etc
  • W-2 or 1099s for years 2009 and 2010 for all employers and all income received
  • Complete copies of your Federal tax returns with all of the schedules for 2009 and 2010 (page 2 signed)
  • Divorce decree/marital property settlement or Legal Separation paperwork if applicable
  • Most recent 3 months bank statements for all bank accounts (all pages)
  • Current quarterly statements of investment accounts (retirement, 401K’s) (all pages) if being used for down payment, reserves, or for paying closing costs
  • Complete bankruptcy papers, including final discharge document if applicable
  • Landlord name, address and phone number for last 2 years (if you rent)
  • Proof of current homeowner’s insurance policy on your home
  • Mortgage statement for your Current Mortgage(s) (for all properties) and all houses
  • Clear and enlarged copy of Drivers License for each borrower
  • Copy of Trust paperwork if title is held in a Trust or Income comes from a Trust

Let me know if you have any questions!

Matt Steinmetz

 

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Fannie Mae Property Alerts Near You

Posted on January 18, 2012 by Matt Steinmetz

In the market for a new home? Get property alerts on homes for sale in your desired neighborhood. Sign up here http://t.co/pnfiIuP4. — FannieHomePath (@FannieHomePath)

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Mortgages Get More Expensinve

Posted on January 16, 2012 by Matt Steinmetz

 On December 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011. Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Freddie Mac & Fannie Mae by no less than 10 basis points from the average guarantee fee (g fee) charged by these companies in 2011 on single-family mortgage backed securities. This increase will be remitted to the U.S. Treasury rather than retained as reserves by Freddie Mac and Fannie Mae.

Don’t be misled, I have read reports that by  time the fee hits the street (by the time you get your loan) that fee is increased by several times.  Most lenders are charging 40-80 Basis points per loan.  What is a Basis Point? In short 100 basis points (bps) = 1% of your loan amount.  So 40bps = .40% of you loan amount.  Thinking about a $200,000 mortgage, this G-Fee has increased the cost by $800. 

Home buyers are being tasked with the job to cover the cost of the payroll tax cuts…  Is this robbing Peter to pay Paul?  Smoke and Mirrors?  Why are we increasing the cost for home loans when the housing economy is in need of help it’s self? 

Matt Steinmetz

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Government Hurts First Time Buyers

Posted on January 10, 2012 by Matt Steinmetz

The bill passed in Dec. 2011 that extended tax cuts had some hidden items, of course.  One of them was the g fee which is a fee for conventional loans that is of course passed on to the consumer.  Aside from this increasing rates and or fees, it has hit the first time buyer market.  Bond programs that are widely used for this market have now said that conventional financing cannot be used with bond programs anymore due to this g fee.

As I find out more I will update this post, but what is important today is this, if you have a bond loan with conventional financing in processing, please verify it is still available.

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How You File Taxes Matters

Posted on December 27, 2011 by Matt Steinmetz
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This video by Matt Steinmetz covers some details about how tax returns affect you qualifying for a mortgage loan.

Please share with the buttons below and leave a comment.

 

 

 

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Jumbo Loan Question

Posted on December 23, 2011 by Matt Steinmetz

I am not too well versed in the servicing and secondary side of the mortgage industry so perhaps there is someone among us who can explain to me why we can’t split a Jumbo loan to be serviced by say two (or more) servicers (lenders) in order to lower risk, make money more accessible and perhaps cheaper?  The cheaper part may not be realistic since there may be need for a 3rd party like a trustee or receiving party who then sends the appropriate portion to each servicer, but it seems to me that there is money to be made here.

I’d love to hear more about why this can’t be done from some industry experts.  Please comment below or feel free to contact me via social media or email. 

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FHA Flipping Update II

Posted on December 23, 2011 by Matt Steinmetz

A few short hours after my last post which says the flipping waiver will expire this month and BAM it gets extended!!!

Here is the verbiage from FHA:

FHA Extends Waiver of Anti-Flipping Regulations Through 2012:
 
In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations. 
 
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
 
The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  All other terms of the existing Waiver will remain the same.  The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.  The Waiver continues to be limited to sales meeting the following conditions:
·         All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
 
·         In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.
 
·         The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
 
Matt Steinmetz
Concord, Ca
Contra Costa County

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FHA Home Flipping Policy

Posted on December 22, 2011 by Matt Steinmetz

In February, FHA extended the FHA property flipping waiver until December 31, 2011.  As of now, this waiver has not been extended again and will expire on 12/31/11.
All loans that are utilizing the waiver to get around the 90 day seasoning required by FHA on flip properties (mainly being used now by investors who are fixing/flipping homes)  must have a FULLY EXECUTED purchase contract and must have a FHA case number assigned on or before 12/31/11.  No extensions will be given to this deadline.  Any loans with case numbers & contracts January 1st or later will require 90 days seasoning prior to the borrower making loan application, with the only exceptions being the following:

4155.2 4.7.h Exceptions to the 90-day Restriction

The only exceptions to the 90-day resale restriction described in HUD 4155.2 4.7.e are for

• properties acquired   by an employer or relocation agency in connection with the relocation of an   employee
• resales by HUD   under its Real Estate Owned (REO) program
• sales by other   United States Government agencies of single family properties pursuant to   programs operated by these agencies
• sales of properties   by nonprofits approved to purchase HUD-owned single family properties at a   discount with resale restrictions
• sales of properties   that are acquired by the seller by inheritance
• sales of properties   by state and federally-chartered financial institutions and government   sponsored enterprises
• sales of properties   by local and state government agencies, and
• sales of properties   within Presidentially Declared Disaster Areas.

If HUD decides to extend the waiver, we will notify you ASAP.

Happy Holidays!

Matt Steinmetz

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