What is QM and how will it affect mortgages in Las Vegas?

Many people are asking what will happen when QM aka: DF14 (Dodd Frank 2014 rules)
 hits the street in January 2014 and it will be business as usual for us...

What you may have heard: 
Word on the street is that many borrowers who otherwise would have qualified will not qualify after QM is in place.  A misnomer is if the government doesn't want to be involved in mortgages, they are going to make it really difficult to get a mortgage that they have to insure.

First of all let me start by easing your minds... Most of this rule has been followed by most lenders for quite a while now, you just didn't know it.

What to expect: 
Some portions of the rule are simply not going to affect any of us; no more 40 year terms, no more stated income loans, no more interest only loans; those are about 6 years too late!

More important are the items which could affect new home loan applications after January 2014, the biggest of which is ATR – Ability To Repay. Within the ATR rule, the item that stood out most was the cap on DTI (debt to income) ratios at a max of 43%. Now, had it not been for the 7 year reprieve that was built into the rule we may have been in trouble. The rule basically states that as long as Fannie/Freddie, FHA/VA and USDA don’t come out with their own restrictions on DTI AND you receive an automated underwritten approval then the 43% DTI restriction won’t apply for the next 7 years.  Again, business as usual for us...

Where this will come into play is if you have a manually underwritten file or a file that received a  DU/LP Refer, the DTI cannot exceed 43% under any circumstance.

Here are some of the other items that are required to ensure we have documented the borrower’s ability to repay:

•Income should be verified through a third party.
 Most lenders already order 4506T on all files
•All debts will be considered as part of the DTI ratio.
•Assets will be verified for a minimum of 2 months.

Here are a couple of additional items that fall under the new rules that take effect January 10, 2014:

•Copy of the Appraisal must be given to the borrower 3 business days prior to closing. This rule has been in place for some time now and we still have the ability to waive the 3 day wait period.
•Maximum cap on fees charged to the borrower as follows:
3% of the total loan amount for a loan greater than or equal to $100,000
$3,000 for a loan greater than or equal to $60,000 but less than $100,000
5% for the total loan amount greater than or equal to $20,000 but less than $60,000
$1,000 for a loan greater than or equal to $12,500 but less than $20,000

2 important points here – this does not apply to investment properties and we do not lend less than $50,000.

So as you can see,  it’s going to be business as usual...

If you or someone you know is a victim of QM, contact me.  We are licensed in 28 states and we will help you. The new QM rules shouldn't hinder you or someone you know from obtaining a mortgage.

Aundrea Beach-Greco
The Beach-Greco Team
Mortgage Advisor, CMP, CMPS
702-326-7866
info@aundreabeach.com
www.TailorMyMortgage.com

Yes, VA Loans Are Available After a Bankruptcy, Foreclosure or Short Sale

Yes, You Can Get a VA Home Loan After a Bankruptcy, Foreclosure or Short Sale

Yes, you can get a VA home loan after a bankruptcy, foreclosure, short sale, or deed in lieu. You only need to wait two years from the date of the “event” (foreclosure, short sale, etc). The two year rule also works for a discharged bankruptcy. It is important to note that this two year wait period is the shortest for any type of Conventional/Government home financing. The FHA program requires a three year wait period after a foreclosure. Both Fannie Mae and Freddie Mac require a 7 year wait period after a foreclosure. With both agencies the wait time could be shorter if there were “extenuating circumstances”, but proving extenuating circumstances is not an easy task. 

Flexible Credit Qualifying for VA Financing

Not only is a VA home loan more lenient when it comes to prior credit issues, but also is just a better program all the way around, at least for those Veterans with entitlement available for the program.  VA allows Veterans to purchase a home with no down payment.  

FHA, a government loan program available to anyone looking to buy a home, requires only 3.5% down payment. However, the monthly mortgage insurance on an FHA loan is also very high. VA, even with no down payment, has no monthly mortgage insurance. On a $400,000 loan amount, the difference in payment just because of the FHA mortgage insurance would be approximately $450 per month. (The FHA mortgage insurance factor for loans at 96.5% loan to value is 1.35%. 1.35% x $400,000 divided by 12 = $450 per month).

Re-Established Credit is Critical

If a Veteran really wants to enter the real estate market after a major credit derogatory, it is critical that they work on repairing and rebuilding their credit. They should make sure the “event” is reporting correctly on their credit report. Many times after a foreclosure, the foreclosed lender will continue to show a balance on the mortgage. This is not correct. After foreclosure the balance should be $0. A short sale will sometimes appear on the credit as a foreclosure. It should read SETTLED_LESS THAN FULL BALANCE.

Get a copy of your credit report immediately.  If you see errors on your credit, then contact a credit specialist for the best way to correct it right away. If you would like a FREE credit report and consultation, contact me.  Also, open new accounts in order to rebuild your credit. This should all be done before the two year wait period is up. A Veteran who has planned ahead and re-established their credit will be in position to buy a home at the end of month 24 after their foreclosure, short sale, or bankruptcy.

Lender Guideline Overlays for VA Home Loans

A Guideline Overlay occurs when a lender does not directly follow the standard VA guidelines. A common overlay is for a VA lender to require a longer wait period after a foreclosure or short sale when the loan amount is greater than $417,000. In many parts of the country this wouldn’t matter much. However, in some high cost counties in other states like Orange County and Los Angeles county, this can be a problem. The ZERO DOWN loan limit in Clark County, NV (2013) is $417,000. This means a Nevada Veteran buying a home in Las Vegas with a VA home loan could borrow up to $417,000 and would not need a down payment. But many lenders wouldn’t approve this if the Veteran had a foreclosure two years prior. This is why it is important that the Veteran get Pre-Approved by a local Nevada VA direct lender before making an offer on a home. The Veteran needs to find a lender who will follow VA guidelines without overlays. Also the lender will be able to provide custom VA home loan scenarios with details on the purchase price, loan amount, payment, and closing costs associated with a VA loan.

Contact me for more details or to get pre-approved.

Aundrea Beach-Greco
Mortgage Advisor, CMP, CMPS
702-326-7866
info@aundreabeach.com

FHA 203K Realtor Tips - How to write a 203K purchase contract

How to Write a FHA 203K Purchase Contract

If you’re a Realtor chances you are, in some capacity, working with foreclosures, short sales or other types of distressed property. You are also battling an inventory shortage that is affecting the ability to find a home, any home, for your potential buyers.

The FHA 203K Loan can help you on both fronts. It allows for buyers to finance neglected properties since property condition is not an issue for renovation loans AND it also increases the pool of potential properties for finicky buyers. They don’t need perfection in their potential homes because they can perfect it themselves, with their own touches as part of their renovation mortgage.

Before I get into the details on what you need to expect, how you write the 203K offer and the other caveats to 203K financing, I want to say one thing – WORK WITH AN EXPERIENCED RENOVATION LOAN OFFICER.

Now that we have that out of the way, on to the task at hand.

Writing a FHA 203K Purchase Offer

• Put 203K in the Purchase Contract – Many lenders require this to be there, but it also lets the seller / listing agent know that those property condition issues that have killed deals in the past are NOT going to be an issue this time around.

• Provide for a Longer Contingency Period – Best practice says allow for enough time to get the Home Inspection AND a Contractor Bid. 70% of my clients underestimate the the cost of the renovation initially.

• Give at least 45 Days to Get Closed – 203K Loans have more 3rd party items, give some additional time for the buyer to get a couple contractors to the house AND give the contractors time to price accurately.

What to Expect During Your FHA 203K Transaction

• Expect the Appraisal to Come Later in the Process than You Are Used To – 203K Appraisals are based on after repair value. You have to have the contractor bid FIRST before we can do the Appraisal

• Expect to Provide More Access to the Property – Inspectors, Contractors and (sometimes) 3rd Party Consultants will all need access to the property.

• Keep CALM – There’s more going on with a 203K Loan. More 3rd parties and more potential for delays. If you’ve heeded my initial advice and have chosen and experienced loan officer you’ll be fine even with a delay or two. You need to keep calm because if something does come up that slows the purchase down your calmness will ensure the listing agent stays cool as well.

All in all FHA 203K loans are not that much more difficult from the Realtor’s side. This is especially the case if you have chosen an experienced RENOVATION SPECIALIST to work with. Have I driven that home enough yet?

Now, get out there and sell someone a foreclosure already! Oh, 203K Loans are not just for distressed property, you can use them on move in ready homes as well. Don’t limit yourself, sometimes your buyer’s need some help seeing the vision.

Need a FHA 203K PRE-APPROVAL? We have you covered in 28 states, just click to contact me and we’ll get back to you within hours to walk you and your clients through the process and pre-approval phase.

Aundrea Beach-Greco
Mortgage Advisor, CMP, CMPS
702-326-7866
info@aundreabeach.com

Only 1/2% Down Payment Needed

Trying to buy a home, but saving the down payment and closing costs a challenge?  Sellers or builders won't contribute to your closing costs?
We have a loan program that can help.
Contact me today to see if you qualify!
702-326-7866
info@aundreabeach.com

Now Is the Time for a HARP Refinance

Underwater on your mortgage and still haven’t refinanced? You may think that you missed the window or are not eligible, but with interest rates still near historic lows and an expanded Home Affordable Refinance Program (HARP) it may be within your reach.

While it’s true that home prices have risen steadily over the past year and a half, approximately 24 percent of American homeowners are still underwater on their mortgages. This is especially true of those living in areas hardest hit by the housing and economic crisis. The Federal Housing Finance Agency (FHFA) estimates that there are between 1 million and 2 million borrowers eligible for HARP who are underwater are paying above-market interest rates. You could be one of them.

Why do a HARP refinance?

Borrowers nationwide are reaping significant savings — either by lowering their payments, reducing their interest rates and/or securing a fixed rate. Homeowners who refinanced through HARP during the first quarter of 2013 will save an average of $4,300 in interest payments during the first 12 months.

Take homeowners Josh and Kelly in Tampa, FL, who were $80,000 underwater on their mortgage. By refinancing under HARP last year, they were able to lower their interest rate by nearly 2 percent, reducing their monthly payments by about $520.

And HARP is now simpler than ever. So if you were already turned down before, try again because recent changes to the program are designed to help more homeowners no matter how far your home has fallen in value.

Why now?

While the program has been extended through the end of 2015, the time to act is now!
Interest rates on 30-year fixed mortgages have increased nearly a full percentage point since mid-May, and we do not expect them to return to the historic lows seen late last year and the first part of 2013.

However, mortgage interest rates are still comparatively low. Looking back to the mid-2000s, the average 30-year fixed interest rate was around 6 percent. Freddie Mac’s chief economist expects rates on the 30-year fixed rate mortgage to remain around 4.5 percent for the rest of the year.

Given that nearly half of the 30-year fixed rate mortgages owned or guaranteed by Freddie Mac or Fannie Mae have rates of 5 percent or greater, lots of homeowners stand to benefit from acting now.

Get started

More than 2.8 million families have already benefited from the program, and you could, too. If you are current on your payments and your mortgage is owned by Freddie Mac or Fannie Mae, get started now by following these steps:

1. Determine if Freddie Mac or Fannie Mae owns your loan.
2. Gather your financial information.
3. Contact us.
   Aundrea Beach-Greco :: Mortgage Advisor, CMP, CMPS :: NMLS 333739
   702-326-7866
   info@aundreabeach.com :: www.TailorMyMortgage.com

We are licensed in 28 states.  

Article provided from Tracy Hagen Mooney

Lender Paid versus Borrower Paid Mortgage Insurance

Structure the Best Deal 
With New PMI Options


When evaluating a LPMI program you should consider which option makes more sense.

For more information, contact me:
info@aundreabeach.com 

The Beach-Greco Team
Mortgage Advisor, CMP, CMPS
info@aundreabeach.com
(702) 326-7866
** Aundrea has been lending for over 16 years and still going strong **

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Moving Up? Do It Now!!

Moving Up? Do It Now!!

New reports are revealing that the number of existing home owners purchasing a house is beginning to increase. Some are moving up, some are downsizing and others are making a lateral move. Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer. We want to address this group of buyers in today’s blog post.

There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead.

Assume they had a home worth $300,000 and were looking at a home for $400,000 (putting 10% down they would get a mortgage of $360,000). By waiting, their house appreciated by 12% over the last year (national average based on the Case Shiller Pricing Index). Their home would now be worth $336,000. But, the $400,000 home would now be worth $448,000 (requiring a mortgage of $403,200).

Here is a table showing what additional monthly cost would be incurred by waiting:

If your family sees yourself in this situation, it may make sense to move now than later. Prices are definitely appreciating and interest rates are beginning to rise.

You don't have to wait 3 years to buy a home

Hello All
We have had some pretty exciting news recently from HUD. The new mortgagee letter allows for 12 month seasoning for a foreclosure, Bankruptcy CH 7, CH 13 or a short sale on a new FHA purchase loan.  (Not the usual waiting period of 3 years)

Effective case numbers assigned on or after August 15,2013 through Sept 30, 2016---Borrowers must meet all other applicable FHA eligibility and policy criteria.

Borrower Eligibility:

Borrowers that may be otherwise ineligible for an FHA-insured mortgage due to FHA's waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indication of derogatory credit, including collections and judgments, may be eligible for an FHA-insured mortgage if the borrower:Economic Event- any occurrence beyond the borrower's control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower's Household Income of twenty (20) percent of more of a period of at least six (6) months.Onset of an Economic Event- the month of Loss of Employment/Income.  Recovery from an Economic Event- the re-establishment of Satisfactory Credit for a minimum of twelve (12) monthsAttend Housing Counseling

NOTE: Foreclosures, deeds-in-lieu, Short Sales and Bankruptcies require that 12 months have elapsed since the date of the derogatory item (i.e. date of sale for a short sale, discharge date for a bankruptcy. etc).

Housing Counseling:

To qualify under the guidelines of the Mortgage Letter, borrowers, co-borrowers and Non-Occupant borrowers must:- Receive homeownership counseling or a combination of homeownership education and counseling provided that each participant receives, as a minimum , one hour of one-on-one counseling from HUD-Approved housing counseling agencies- The counseling must address the cause of the economic even and the actions taken to overcome the economic event and reduce the likelihood of reoccurrence. The housing education may be provided by HUD-approved housing counseling agencies, state housing finance agencies, approved intermediaries or their sub-grantees, or through an on line course.

Note: Counseling must be completed a minimum of thirty (30) days but no more than six (6) months prior to application. Housing counseling may be conducted in person, via telephone, via internet, or other methods approved by HUD.Housing counseling may be conducted in person, via telephone, via internet, or other methods approved by HUD. 

A list of agencies can be obtained online at www.hud.gov/counselingservices

Your fico score will still determine if Standard FHA guidelines or FHA Portfolio guidelines will be followed. Any questions please let us know.

Aundrea Beach-Greco

The Beach-Greco Team

NMLS 333739
(702) 326-7866
info@aundreabeach.com