What Is Involved In A VA Loan?

by Justin Miller on February 22, 2012 in VA with No comments

 

 

 

 

 

 

 

 

 

 

This is a great mortgage to use to purchase your Fort Lauderdale or South Florida home.  A VA mortgage is for veterans, reserves,  and national guard.  In order to get a VA loan you have to get your Certificate of Eligibility.  That can be done by you or your lender which hopefully is me.  Here is a list of FAQs on VA Mortgages.

It requires no money down and up to 4% in seller contributions towards your closing costs and prepaid items.  The VA does NOT have any mortgage insurance but it does have a one time Upfront Mortgage Insurance Premium depending on how much you are putting down and if you are a veteran, reserve, or national guard.

FHA To Announce Premium Increases

by Justin Miller on February 22, 2012 in FHA Loans with No comments

Here is another reason to buy now!  Last week, President Obama released his budget for fiscal year 2013. As part of the overall budget, and as the commentary reminded folks of yesterday, HUD stated that it will be implementing a 10 basis point increase to annual premiums for single family loans, and a further 25bp increase for loans over $625,500. So even though the FHFA has already implemented this for Freddie & Fannie, it is only a matter of time until the change hits government production.

Conventional, FHA, USDA…Oh MI!

by Justin Miller on February 16, 2012 in Conventional Loans, FHA Loans with No comments

Conventional, FHA, USDA…Oh MI!.

What Is A Reverse Mortgage

by Justin Miller on February 15, 2012 in Reverse Mortgages with No comments

You might not think this would be a popular program in Fort Lauderdale and South Florida due to the large declines in property values but there are still plenty of people with equity and who own their homes free and clear.

Let’s define what a reverse mortgage is by using the definition from Wikipedia:

A reverse mortgage is a form of equity release (or lifetime mortgage) available in the United States. It is a loan available to seniors aged 62 or older, under a Federal program administered by HUD. It enables eligible homeowners to access a portion of their equity. The homeowners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit, or some combination thereof. The homeowners’ obligation to repay the loan is deferred until owner (or survivor of two) dies, the home is sold, they cease to live in the property, or they breach the provisions of the mortgage (such as failure to maintain the property in good repair, pay property taxes, and keep the property insured against fire, etc). The owner can be out of the home for up to 364 consecutive days (i.e., into aged care).

 

What You Need To Know About The FHA 203(k) Rehab Loan

by Justin Miller on February 15, 2012 in FHA Loans with No comments

This is a great loan especially for those buying in Fort Lauderdale and South Florida since so many homes are foreclosures and short sales that are in need of work.  The work is needed to be done in order to get financing and also for improvements the buyer wants to make.

So who can qualify for this and how does it work?  It has to be your primary residence,  you can’t have any other FHA mortgages, have the credit, income, and assets, and be within the counties loan limits.

It is an FHA mortgage which requires 3.5% that allows for repairs and improvements to be made to the property.  It is best to try to keep the total costs at $35,000 or less because you qualify for the 203K Streamline Rehab which is an easier process.  If you go over that amount it’s not a big deal.

Here is a description from HUD’s (FHA) website on how it is different – “Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made……..

There is a lot to know on this product so make sure to consult a Mortgage Professional like myself that is an expert on it.  You can also visit HUD’s website online to read up on it yourself.

What You Need To Know About Mortgage Interest Rates

by Justin Miller on February 13, 2012 in Interest Rates with No comments

Did you ever see an ad on TV for a car and couldn’t believe how low the monthly payment was so you rushed to the dealership to find out it was too good to be true?  The same thing happens with mortgage interest rates.

The purpose of an advertisement is to get you to call and there is an asterisk for just about everything.  If it is too good to be true it normally is and if you don’t read the fine print you could end up hurting yourself.

In the world of mortgage interest rates lots of times the quoted rate includes paying discount points to buy the rate down, requires a large down payment, has an unrealistic timeframe for the interest rate lock period (the shorter the lock period the better the interest rate), etc.  And sometimes someone advertises an interest rate that doesn’t yet exist hedging the market hoping rates improve and even worse they are purposely quoting a rate below what they can offer knowing you most likely won’t be getting a loan that day.

You have to be so careful especially in the Fort Lauderdale and South Florida area where mortgage fraud runs rampant.  The most important thing to understand is that a mortgage is much more than an interest rate and no matter what product or service you are buying if it’s cheaper you are giving something up.  With a mortgage you won’t know if that is service, advice, expertise, or honesty until it’s too late.

What To Know About The $25 billion Foreclosure Settlement

by Justin Miller on February 10, 2012 in Foreclosure, Short Sales with No comments

The details are in the Wall Street Journal article from today’s paper titled “Q&A: What Homeowners Need to Know on the Deal.”

Who does the settlement cover?
The settlement covers borrowers who have loans that are serviced by one of the five big banks: Ally Financial Inc./GMAC Mortgage, Bank of America Corp., Citigroup Inc.,J.P. Morgan Chase & Co. and Wells Fargo & Co. These banks handle payments on 55% of U.S. mortgages, according to Inside Mortgage Finance………

Appraisals & Distressed Sales

by Justin Miller on February 7, 2012 in Appraised Values with No comments

It’s quite often that a borrower reviews an appraisal that I send to them and they can’t understand why there are short sales and foreclosures included in it.  If there is a recent sales close (same neighborhood or within .5 miles) to the property and within the last 3 months it needs to be included.  A lot of times the appraiser will comment that it was a distressed sale and due to the condition little weight has been giving to it but it has to be included.

Here in Fort Lauderdale and all of South Florida we see this all of the time because there are so many distressed sales.  The article below, “Do Appraisers Use Distressed Sales As Comparables,” give very good examples to answer this question:

Last month, the Appraisal Instituteissued a paper on the subject. In the paper,  the Institute explained that:

“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”

And they explained the possible differences between short sales and foreclosures:

“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

FHA Mortgage: 30 Year Versus A 15 Year Fixed

by Justin Miller on February 6, 2012 in FHA Loans with No comments

I have mentioned my thoughts on carrying a big, long mortgage for years now and I still stand by that however with an FHA loan it can be a little different due to the costs of the monthly mortgage insurance on a 30 year fixed versus a 15 year fixed.

On a 30 year fixed, if you put less than 5% down the monthly mortgage insurance factor is 1.15% and if you put 5% or more down it’s 1.10%.

On a 15 year fixed, if you put less 10% down the monthly mortgage insurance factor is .5%,  if you 10 – 21.99% down it’s .25%, and if you put 22% or more down there isn’t any.

Here is an example: On a $10ok purchase price, with 3.5% down on a 30 year fixed, the monthly mortgage insurance is $91.67 per month but on a 15 year fixed it’s $39.30 per month.  The interest rate is normally about .5% lower on a 15 year fixed.  If market rate is 3.5% on a 15 year that would make your Principle & Interest payment at $696.76 per month plus the $39.30 per month of MI for a total payment of $736.06 per month.  On a 30 year fixed at 4% the Principle & Interest payment would be $437.66 per month plus the $97.67 per month of MI for a total monthly payment of $529.33.

Both the 30 year and 15 year fixed require the one time Upfront Mortgage Insurance Premium (UFMIP) of 1% of the loan amount.  You have to keep the monthly mortgage insurance on until you have 22% equity AND a minimum of 5 years other than if you have a 15 year fixed putting 22% or more down then you have no monthly mortgage insurance from the start.

Every borrower’s circumstances are different so make sure to consult a Mortgage Consultant and/or Financial Planner.  I use Mortgage Coaching software to help my clients determine the best loan for them.

Mortgage Interest Rates Update: February 6, 2012

by Justin Miller on February 6, 2012 in Interest Rates with No comments

Mortgage-backed securities, which move interest rates, are trading higher right now which is good for interest rates.  Interest rates paying NO Points in Fort Lauderdale and South Florida are as follows today on a $400,000 purchase price, 740 credit score, 25 day lock period, primary residence, single family detached home, with escrows are:

  • 3.875% on a 30 year Conforming fixed rate mortgage with 20% down (APR 4.096%)
  • 3.5% on a 15 Year Conforming Fixed rate mortgage with 20% down (APR 3.658%)
  • 3.875% on a  30 year FHA fixed rate mortgage with 3.5% down (APR 4.765%)

Contact me for interest rates on Jumbo Mortgages and Adjustable Rate Mortgages (ARMs) in Fort Lauderdale and South Florida.  Rates are subject to change without notice.

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