How To Know If Your Buyer Is Viable

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We often have Realtors with eager buyers who want to view homes before the buyers have been pre-approved by us. To ensure no time is wasted on non-viable buyers, Realtors need to ask a few questions about the criteria that make buyers viable: (1) Credit; (2) Income; (3) Equity – Down Payment. Credit: Ask about […]Read More

Borrowers Should Postpone Vacations During Short Escrow Periods

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We have a surprisingly large number of borrowers who use our fast closing periods to get their offers accepted, but then somewhat cavalierly wander off on vacation after their contract is ratified :). This makes it all but impossible for us to close on time if we have an escrow period under 21 days. Hence, […]Read More

How Long Is a “Pre-Approval Letter” Valid? Does It Expire?

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We are often asked how long our pre-approval letters remain valid, or if they expire. Our pre-approval letters do not expire as long as all major qualifying factors remain the same. These factors include credit scores, total debt payments, income and cash available for a down payment and closing costs. This is why we send […]Read More

17 Day Close – Conventional and FHA Only; Nobody Closing Jumbos “Fast”

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We tout our “Super 17” or 17 Day Closings often, but we need to emphasize that this is only for Conventional and FHA Loans, and not for Jumbo Loans. Nobody is closing jumbo loans fast. This is really important b/c our borrowers and Realtors are often confused about this. All jumbo lenders and investors are […]Read More

How To Lower Debt Ratios 101

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Experienced Mortgage Analysts (or Loan Officers) have many tools to lower debt ratios to help borrowers qualify for a larger loan. Here are a few that all loan officers should know: 1. Put less money down, and use down payment funds to pay off consumer debt. Mortgage debt has lower payments than consumer debt b/c […]Read More

Using Departing Residence Rents; Equity Cushion; Appraisal Issue

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Many homebuyers want to buy a new home before selling their existing residence. And, in most cases those buyers need the rental income from their current residence to qualify for their new purchase. Lenders no longer require “equity” in the departing residence before rental income can be used to qualify. And lenders will only use […]Read More

Angry, Frustrated & Suspicious Borrowers In The Age of Social Media

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I once spent an extremely frustrating weekend defending a competitor to two exceptionally irate borrowers. Their transaction blew up at the 11th hour b/c an investor refused to sign off on an unexpected condition. So the lender, RPM Mortgage, was forced to go to another investor, delaying the transaction. The borrowers were irate b/c the […]Read More

Cash to Close – Part 27; Beating The Dead Horse Again

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We hit this often but it is the cause of so much confusion and delay that we are addressing it again. Lenders need to carefully estimate how much cash will be necessary to close (for closing costs, reserves and down payments), and they need to fully educate borrowers in regard to “cash to close.” Most […]Read More

Major Purchases Prior To Close Are OK If Cash Is Ample; No Financing

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Borrowers are usually told not to make any major purchases prior to buying a home or while they are in contract. This is b/c major purchases can either deplete necessary cash reserves or require additional borrowing or financing that might impact qualifying (the new debt might push debt ratios too high). If a borrower has […]Read More

Reminder About Necessary Bonus & Overtime History

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We often get borrowers with substantial income in the previous tax year who do not qualify for the financing they desire. This is because a large portion of their income was comprised of either Overtime Pay, Bonus Income, Commissions, or Stock Options (exercised), and there is no “history” of earning such income in prior years. […]Read More

Calling Listing Agents and Touting Offers/Buyers

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Now that the housing market is in full swing, I want to remind everyone that we are happy to call listing agents on our borrower’s behalf. We got several borrowers into contract this week only after speaking with the listing agent at length. B/c we fully pre-underwrite and pre-approve every one of our borrowers, we […]Read More

High Loan-To-Value Financing for Well-Healed Borrowers In Hot Markets

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We often discuss high loan-to-value (LTV) financing (90% to 96.5%) with borrowers who would otherwise put down 20% or more. This is b/c they are making offers in very hot markets where there are simply not enough comparable sales to support the expected contract price. High LTV financing allows borrowers to put less money down […]Read More

Buying New Home Before Selling Old Home; Considerations

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We frequently have borrowers come to us who want to buy a new home before selling their current home, so they are not left homeless. Here are the considerations and options (we address this often b/c it comes up so frequently). 1. Debt Ratios: Borrowers will need enough income to qualify for both the new […]Read More

College = Job History; CD Flexibility w/ Seller Credits

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Reminder #1: Borrowers fresh out of college usually do not need a 2 year work history to qualify for mortgage financing. They usually just need an offer letter and 30 days of pay. Technically, their degree program needs to relate to their employment, but lenders are pretty flexible in this regard. Reminder #2: Seller Credits […]Read More

Credit Re-Fresh; Don’t Pay Cards to Zero or Close Them Out

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We recently had a borrower who stopped making mortgage payments on one of her properties after we pre-approved her. A few days before funding, we ran a “credit refresh” only to find out she had late mortgage payments and her score had dropped to 617 (we had to pull the funding and re-structure her loan). […]Read More

Importance of Escrow Post TRID w/ Fast Close

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We like to push JVM’s super-fast closing periods as a major selling point for buyers, as most people know. Our fast escrow periods and airtight pre-approvals make financed purchases equivalent to cash offers. A major holdup in the closing process, however, can be Escrow, making it extremely important to choose your escrow office carefully and […]Read More

Calling Listing Agents & Touting Appraisers, Pre-Underwrites & Speed

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Many of the Realtors we work with have us call listing agents every time they make an offer, and for good reason – b/c it works. When we call listing agents, we tout the fact that we completely pre-underwrite every borrower and have a complete file in-hand (so there will be no surprises). We also […]Read More

Screening Potential Buyers for Viability with Basic Questions

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Realtors refer potential buyers to us every day, and we are more than appreciative. Many times, however, the borrowers are not even close to qualified for a variety of reasons. We do not mind screening such borrowers, but we often feel bad for Realtors when we find out they spent substantial time with buyers who […]Read More

Calling Listing Agents and Touting Offers/Buyers

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We frequently remind Realtors and borrowers that we are happy to call listing agents to tout the strength of our pre-approved buyers. This makes it more likely that our buyer’s offer will be accepted for a variety of reasons. First of all, we personally know or have worked with many listing agents in the area […]Read More

Eliminating Private Mortgage Insurance or PMI

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Here are three options for eliminating the private mortgage insurance (PMI) obligation associated with a conventional loan (FHA MI is permanent). Option #1 – Refinancing: If your property appreciates to the point where we can garner a new appraisal to support a value high enough to reduce your loan-to-value (LTV) ratio to 80% or less, […]Read More

Home Equity Line = Best “Bridge Loan;” Cheaper, Easier, More Cash

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We mention this often, but Home Equity Lines of Credit are the best “Bridge Loans” for buyers who want to buy a new home before selling their current home. They are the cheapest, easiest and fastest way to access cash to use for the purchase of a new home. U.S. Bank for example will lend […]Read More

Post-Close HELOC to Reclaim Liquidity; 90% CLTV

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We often encourage buyers to put down 20% or more not just to avoid mortgage insurance, but also to make their offers much stronger and to allow us to close in 14 days (80/10/10 financing with two loans requires 21 days). Buyers are often reluctant to deplete their liquidity, borrow from 401ks, or access gift […]Read More

“Title Only” Is OK; On Title But Not On Loan

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Almost every lender is OK with “Title Only” transactions. These are transactions with a buyer who will be on the purchase contract and on title to the property at close, but not on the loan. This is relatively common in fact. We often leave buyers off of a loan if he does not have enough […]Read More

Job History: 30 Days or 6 Months OK; Rarely Need Two Years

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Borrowers usually do NOT need to be on a job for two years. We need a two year employment history for loan applications, but borrowers can have multiple jobs. Borrowers can be on a new job for as little as 30 days and still use the income to qualify, if the borrower just moved from […]Read More

3 of 20 Offers in Oakland were JVM Financed; Why It Matters?

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Last week, there were twenty offers on a high-end Oakland listing, and three of the twenty offers were accompanied by JVM pre-approval letters. No other lender was represented twice, let alone three times. This matters for a variety of reasons: (1) listing agents know our name, know that we can perform, and are more likely […]Read More

Closing Cost Credits to 6%; Can’t Exceed Closing Costs; No Prepaying

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Closing cost credits from sellers are rare in this very competitive seller’s market, but they do come up from time to time as buyers negotiate them in lieu of repair-credits. This is a reminder that seller credits can go up to 6% of the sales price for conventional and FHA purchases. Jumbo lenders typically limit […]Read More

Don’t Pay Credit Cards Down to Zero Balance IF You Want High Scores

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We recently had wealthy borrowers who needed a higher credit score to qualify for the financing they desired. Hence, we told them we were going to assist with a rapid re-score; we asked them to pay down a credit card balance to a very specific amount that our credit-software said would maximize their credit score. […]Read More

Buying New Home Before Selling Current Home? Get Equity Line

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We have many buyers who want to buy a new home before selling their current home. They often want “bridge loans” to do so. A “bridge loan” is temporary cash out financing against one’s current home that is used to help finance a new home. Our experience with bridge loans, however, has not been good. […]Read More

Real Pre-Approval vs. Perfunctory “Prequals” at On-Line Lenders

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A borrower recently came to us who had been “pre-approved” by a major on-line lender. The borrower came to us b/c the listing agent refused to accept the “pre-approval letter” from the on-line lender, and for good reason. After we sent our “needs list” to the borrower so we could approve him, the borrower asked […]Read More

$100,000 “Wall Treatment” Did Not Increase Value of Home

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We had a borrower years ago whose appraisal came in much lower than she expected and she was irate b/c the appraiser gave insufficient or no value to many of her upgrades and improvements. Specifically, she had spent over $100,000 on a wall treatment in her foyer. The wall treatment, interestingly, was a textured gold […]Read More

Foreign Funds Can Be Used; Paper Trail; Translation; Gift?

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It is very common for home-buyers in California to access foreign funds for down payments and closing costs. Lenders allow the use of foreign funds as long as they can be “sourced” and “paper-trailed.” This, unfortunately, is often easier said than done. It is sometimes difficult to get foreign account statements, and they often need […]Read More

CHDAP: Buying $400,000 Home with $2,000 Out of Pocket; 1/2% Down

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We just approved two buyers this week for our CHDAP (California Homebuyers Down Payment Assistance Program), and it reminded us to blog about the program. CHDAP allows buyers to purchase a home with only 1/2% of the purchase price for a down payment. CHDAP Buyers can purchase a $400,000 home with as little as $2,000 […]Read More

After Job Gap/Time Off – Need 6 Months Back On Job

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We have many borrowers returning to work after extended periods of time off. We often see borrowers leave their jobs to work in other fields, or to take time off altogether (to take a break, raise kids, etc). When borrowers return to a W2, salaried position after an extended break of one year or more, […]Read More

60 Day Rent Backs Allowed; Good for Sellers Who Need New Home

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Quick Reminder: Lenders allow rent-backs for as long as 60 days after close of escrow. Hence, sellers can remain in a home and rent it back from buyers for 60 days, giving the sellers time to find and move into a new home. Jay Voorhees Founder/Broker | JVM Lending (855) 855-4491 | DRE# 01524255, NMLS# 335646Read More

Why We Don’t Share Written Loan Approvals w/ Borrowers & Realtors

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On Monday, we had a borrower and Realtor refuse to remove a loan contingency until they had a chance to review our written loan approval. The written approval from the underwriter was extremely clean with almost no conditions; contingencies could have been removed without any concern. The problem with providing written approvals to borrowers and […]Read More

Once Current House is Pending, Do Not Need to Count Payment In DTI

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We discussed several options yesterday for borrowers who want to buy new homes before selling their current home. Debt ratios are often an issue b/c borrowers will have two mortgage/housing payments when they buy a new house. What most people don’t know, however, is that many lenders will NOT count the current residence’s housing payment […]Read More

How to Buy Now Before Selling Current Home?

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We are repeating a previous blog b/c we are getting so many related questions lately. HOW TO BUY BEFORE YOU SELL (buy a new home before you sell your current home) 1. Bridge Loans. These are temporary loans against a borrower’s current residence that can be used to help finance (provide down payment funds mostly) […]Read More

Lender Credits For Closing Costs Again – Effect on Payment?

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Yesterday, we recommended Lender Credits for closing costs for borrowers who are tight on cash. We pointed out how such credits result in higher rates, but we failed to mention the effect on a mortgage payment. Our borrower yesterday had a loan of approximately $400,000. If she locked in a rate of 3.75%, with a […]Read More

How To Know If Your Buyer Is Viable

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We often have Realtors with eager buyers who want to view homes before the buyers have been pre-approved by us. To ensure no time is wasted on non-viable buyers, Realtors need to ask a few questions about the criteria that make buyers viable: (1) Credit; (2) Income; (3) Equity – Down Payment. Credit: Ask about […]Read More

24/7 Availability; Sunday Night Emergency Pre-Approvals

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One of our favorite Realtors texted me last night and asked if I could do a fast, Sunday Night pre-approval so they could make an offer this morning. The borrowers were a Google employee and a Smith College Neuroscience professor. They told me that they had high incomes, no debt and perfect credit. I have […]Read More

Salary + Commission: Need History of Commissions

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We have a borrower who averaged $160,000 over the last two years in a commission sales job. He just started a new job with an $85,000 base salary, but with much more commission potential. We may be able to use the average of his previous years’ commissions even though they were earned at a different […]Read More

Closing Cost Credits for Impounds and Transfer Taxes Too

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We frequently remind Realtors that credits for closing costs can be for both recurring and non-recurring closing costs. Credits should always just be for “closing costs” without delineating “recurring” and “non-recurring” costs. Recurring costs = Interest, Property Taxes, Insurance, HOA Dues; Non-recurring costs include all one-time fees such as escrow, title insurance, appraisal, notary, underwriting, […]Read More

Missing Floor Coverings & Issues In Foreclosed Property

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We have a borrower trying to buy a foreclosure with condition issues that include missing floor coverings, missing cabinet doors, and a missing stove. Whether or not repairs have to be made prior to close has to do with: (1) are the issues “health and safety” related; and (2) is a “built in” item missing. […]Read More

Can Use 75% of Rents for Income; 85% for FHA

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We discussed rental income in previous blogs and had questions in regard to how much of the rental income we can use. For a refinance, we use the income from the Schedule E on a borrower’s tax returns, irrespective of market rents. We can add back “non-cash” expenses like depreciation. For conventional purchases, we use […]Read More

Using Rental Income to Help Qualify for Purchase; Market Rent

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Buyers can use future rents to help qualify for purchases whether they are buying single family or two, three or four unit properties. * Borrowers can use the market rents, and not actual rents, for income in most cases. * Borrowers buying a 2 to 4 unit property as owner-occupants can use the market rents […]Read More

Financing “Fixers;” What to Look For? Avoid? Options?

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When it comes to buying “fixers” in relatively poor condition, either FHA or Conventional financing can be used. As long as there are no glaring condition issues (major leaks, sloping floors, water damage, etc.), and as long as no reports or issues are referenced in the MLS or the contracts, “fixers” can be financed. And […]Read More

Closing Cost Credits Too Large? What To Watch For & Do?

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Yesterday, we mentioned that closing cost credits can equal 6% (or even 9%) of the purchase price. Hence, for a $500,000 purchase, it is completely acceptable to have the seller credit $30,000 for closing costs, from a lender’s perspective. Issues arise when closing cost credits exceed actual closing costs. This often happens when there are […]Read More

Closing Cost Credits Can = 6%; 2% for Investors; Commissions Too

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Sellers can credit up to 6% of the sales price, in most cases, as a credit for ALL closing costs – including non-recurring and recurring fees. This includes transfer taxes. Closing cost credits should just be for “closing costs” and not for “non-recurring costs” only. Many people think closing cost credits cannot exceed 3%, but […]Read More

“Pre-Qualification” vs. “Pre-Approval;” No Mas “Big Banks”

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A Realtor sent us a pre-qualification letter yesterday from another lender for one of our borrowers. The letter was shockingly vague and non-committal. It was written that way b/c the lender had not actually gone through the borrower’s complete file. We have gone through the borrower’s file with a fine-tooth comb. The other lender was […]Read More

Condo vs. PUD/Townhouse

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We were asked today about the differences in financing in regard to Condos vs PUDs/Townhouses. “PUD” stands for Planned Unit Development. Condo owners do not own the land underneath their units. Many condos, in fact, do not sit on land but “float” on 2nd or higher floors. PUD/Townhouses always sit on land, as “ground floor” […]Read More