Eric Painter

Lower credit scores for FHA are here and manufactured homes!

Ericp — Fri, 23 Jul 2010 22:50:25 +0000

For the past year a mid-score of 620 was required to fund a loan. Currently a mid-score of 580 would qualify for a FHA loan due to a shift that lenders are making to make FHA available to borrower’s with less than perfect credit scores. Loans with mid-score of 580 are tightly underwritten. FHA loans to a borrower with mid-score of less than 620 will have slightly higher interest rates along with a longer turnaround time of at least 45 days to closing. Although this option is available to borrowers, it is my practice to assist the borrower in improving their credit scores as much as possible.
Manufactured homes have also returned for some FHA programs. Manufactured homes will require minimum mid-score or 620. These loans will also be tightly underwritten with a slightly higher interest rate and 45 to 60 days till closing. The delay is due to the limited amount of investors that will purchase these loans. The additional underwriting requirements or “overlays” allows the investor to pick the best loans to purchase. It is not an uncommon practice for lenders to be strict or have additional conditions when lenders are limited. Investors will also place a limit on the age of properties and locations in addition to other underwriting conditions.
Please contact me for additional information regarding these loans or with any mortgage questions.

Mortgage Market Guide for the week of Jul 12, 2010

Ericp — Mon, 12 Jul 2010 19:46:18 +0000

In This Issue

Last Week in Review: News from “over there” helps Stocks over here.

Forecast for the Week: Manufacturing and inflation news heat up the headlines… and could rock rates.

View: What do you need to know about your gas and electric bills? Special Video View!

Last Week in Review

Click here to read full newsletter

Jumbo loans are making a come back.

Ericp — Sat, 10 Jul 2010 06:01:47 +0000

Jumbo loan guidelines are beginning to loosen up for borrowers who need loans up to 900,000 in Arizona, California, and Florida. Some lenders are not allowing loans up to 80%. loan to value for purchase and rate and term refinances. Guidelines will continue to be tight to insure borrower’s ability to repay debt and maintain the credit required to support loans of this size. Currently the minimum credit score for a jumbo loan is 720 with a maximum debt to income ratio of 45%. The debt to income ratio is based off gross income, your income prior to taxes or deductions. Prior to the increases, jumbo loans were limited to 75% loan to value for most purchases and rate and term refinances. The current conforming loan limits are $417,000 and loans greater than this figure are considered a Jumbo loan.

With time, lenders will be offering programs to borrowers who are not in the Fannie Mae, Freddie Mac, FHA and VA bucket. The ability to obtain home loan financing may not be as simple as it was during the height of the industry but guidelines will relax.I do not foresee the restoration of Stated Income loans however if they do, this loans will be limited to self employed borrower’s with an abundance of cash reserves. Option Arm loans should not be allowed to return. These loans provided borrower’s the option to pay their loan based on a 30 year term, 15 year term, interest only payment, less than interest payment or a negative amortization payment. The negative arm payment actually added principle to the loan with each payment. Yes, the balance of the loan would increase. Crazy Right??

Today the trend tends to focus on the borrower’s ability to pay their debt and mortgage. After the loan has been issued to the borrower, the lender cannot control the borrower’s financial habits however education has been provided to the borrower’s. Borrowers must be educated and understand that although they may qualify for a home loan does not necessarily mean the borrower’s can afford the payment. Only the borrower knows their budget and whether the monthly payment is within their means.

WISH Program, a Down Payment Assistance Program for First Time Home Buyers in Pima County.

Ericp — Sat, 10 Jul 2010 04:50:22 +0000

The WISH Program, a down payment assistance program, aids First Time Home Buyers in Pima County who are at 80% or below of the median income levels. The Down Payment Assistance matches the buyers down payment 3 to 1. For every $1,000 the buyer makes towards the down payment, the WISH program will provide an additional $3,000 to be used towards the down payment. The Down Payment Assistance is a silent second mortgage which does not require payments or accrued interest. After 5 years the lien for the down payment, the second mortgage, is forgiven.

2010 Income Limits for Pima County

2010 Income Limits (80% of Median Income)

1 Person $33,050 2 Persons $37,800 3 Persons $42,500

4 Persons $47,200 5 Persons $51,000 6 Persons $54,800

To qualify for the WISH program, Home-buyer Education and counseling classes are required. Individuals must be a first time home buyer and have one month’s PITI (principle, interest, taxes and insurance) in reserves after closing. Buyers may not have more than $10,000 in liquid assets after their contribution.

The property must be owner-occupied or vacant at the time of purchase. A home inspection is required and the property must be located in Pima County.

The WISH Program works with Your Way Home Arizona which is another down payment assistance program. Contact me today to see if you qualify for the WISH Program or additional down payment assistance programs.

For the week of July 5th, 2010

Ericp — Wed, 07 Jul 2010 15:59:56 +0000

Independence Day I hope you and your family enjoyed the Independence Day holiday weekend. And, I sincerely hope you have been enjoying your complimentary subscription to the MORTGAGE MARKET GUIDE WEEKLY.

Due to the July 4th holiday, the next full issue will arrive on Monday, July 12. In the meantime, check out the article below about protecting yourself and your family from the sun as you celebrate the summer.

To see the full newsletter click here

What happens in Washington doesn’t stay in Washington!

Ericp — Mon, 28 Jun 2010 01:50:55 +0000

Last Week in Review: Washington was at it again, with big news from both Congress and the Fed. Learn what this means for you…and for home loan rates!

Forecast for the Week: Two juicy economic reports bookend the week, bringing highly anticipated news on inflation and the labor market.

View: Hitting the road for July 4th? Want to avoid a speeding ticket? Read on below.

Read full article..

Lower Payments with a 2-1 Buy Down

Ericp — Thu, 24 Jun 2010 15:23:01 +0000

Today’s market continues to be geared towards buyers. Sellers are willing to do what it takes to make their home stand out in the midst of the rest. One way to make a home purchase appealing is through the 2-1 Buy Down program. This program offers the borrower a lower initial payment for a fixed rate loan. The loan terms are not adjustable and the rate cannot vary from the qualifying rate. The interest rate is 2% lower than the 30 year fixed rate for the first year. The second year the interest rate will be 1% lower than the 30 year fixed rate.

Here is how the 2-1 Buy Down program works.

The borrower’s must qualify for a fixed rate mortgage. The seller offers to pay for the 2-1 Buy Down program.

Borrowers loan amount is $200,000 at a rate of 4.75% 30 year fixed (qualifying rate) rate. The principle and interest payment for that loan is $1,043.29 monthly.

The interest rate is 2% lower than the 30 year fixed rate for the first year which lowers the interest rate to 2.75%. The payments for the initial year result in a savings of $816.48, saving the borrower $226.81 a month for the first 12 months of the loan.

The second year the interest rate will be 1% lower than the 30 year fixed rate making the interest rate 3.75%. The payments for the second year result in a savings of $926.23 saving the borrower $117.06 a month for the second year.
At the end of the second year, the interest will remain at the 30 year fixed rate of 4.75%. However, during the elapsed time the borrower has saved $4,126.44 within the first two years of the loan due to the Buy Down program resulting in a lower rate.

The seller pays a fee to participate in the 2-1 Buy Down program. In this example, the fee is just over 2% to the lender at closing. Sellers are willing to participate in this program because it allows an incentive to the buyer making the home pleasing to buyers. Buyers tend to benefit from this program more than buying down the interest rate with discounted points because most home owners do not keep their home for more than 5-7 years. This program is common with new home builders who can offer more incentives and set their homes apart from other sellers.

Contact me today to learn more about the 2-1 Buy Down program and find out if you and the seller will benefit from this program. The program is popular with both Conventional and FHA/VA loans and is a great way to maximize savings by structuring a home loan that fits your needs.

Rates Remain Low, But Don’t Be Fooled

Ericp — Sun, 20 Jun 2010 00:13:17 +0000

In This Issue

Last Week in Review: Don’t be fooled by today’s low rates…

Forecast for the Week: More housing news – plus, why the Fed’s upcoming meeting is so important.

Weekly View: Kids and credit cards – what do you need to know?

Last Week in Review

“NOBODY CAN GO BACK AND START A NEW BEGINNING…BUT ANYONE CAN START TODAY AND MAKE A NEW ENDING.” Those words by the poet Maria Robinson should hold a special meaning – and warning – for anyone thinking about buying a home or refinancing, especially in light of the article by Former Fed Chairman Alan Greenspan which hit the wires last week.

In his Wall Street Journal op-ed piece, Mr. Greenspan stated: “Don’t be fooled by today’s low rates. The government could very quickly discover the limits of its borrowing capacity.” He also added that the present low inflation and low long-term rate environment has fostered a “sense of complacency (within the government) that can have dire consequences.”

What Mr. Greenspan is saying is that the government, rather than cutting budget deficits and showing fiscal restraint is taking advantage of this low rate and low inflation environment to accumulate more debt – and the consequences can be very bad…just look at Greece.

Mr. Greenspan also said Treasury yields could spike, and in a hurry..

Please click here to see the rest of the most currently issue of the Mortgage Market Guide Weekly.

“YES!” NOVA Can Lend on Properties in Flood Zones !!!

Ericp — Fri, 18 Jun 2010 18:01:29 +0000

As you are painfully aware, in May Congress allowed the National Flood Insurance Program’s authorization to lapse again for the second time in several months. Several weeks later NFIP is still without the ability to issue flood coverage to close loans.

NOVA’s Insurance Division, NOVA Insurance Services, understood that not being able to deliver evidence of flood coverage to close our loans on time was unacceptable. They went in search of a solution so NOVA and our referral partners could continue to close these transactions on time. As a result, they have teamed up with the National Catastrophe Insurance Program (NCIP) which provides coverage for perils such as Flood, Earthquake, and Landslide. We now have a flood insurance provider for our customers – regardless of the status of the National Flood Insurance Program.

This alternative option for flood coverage is another way NOVA Home Loans can say “Yes” we can close that loan.

If you have any questions, please don’t hesitate to contact me.

ARM Indexes are going up. It is time today to either lock in another 5-7 year ARM or convert over to a low fixed rate mortgage. Fixed rates are still low. Protect yourself today from rising interest rates.