Posts

Can Borrowers “Roll Closing Costs Into The Loan?” 1,000 Five-Star Reviews!

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1,000 FIVE-STAR REVIEWS! Several years ago a mortgage bank with a very impressive software platform was recruiting us, but the firm had hundreds of horrible online reviews. We met with them because of their software, but we also brought up the reviews because online reputations are so important in this day and age. The owner […]Read More

13 Factors That Impact Your Mortgage Rate

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We often have buyers or agents ask: “What is your 15-year rate today?” Or “What is today’s interest rate?” We always respond by explaining there is no single rate, because the market moves so often and because there are so many things that affect an individual borrower’s rate. Here are 13 factors that affect almost […]Read More

How To Avoid PMI With Less Than 20% Down

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It is possible to purchase a home with less than 20% down and avoid private mortgage insurance (PMI). Homebuyers have many options when it comes to their loan’s down payment amount. Many borrowers are not aware of the amount of flexibility within the mortgage industry. Big Down Payments Are Not Always Necessary There are many […]Read More

Down Payment Assistance Options For California Homebuyers

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Saving up with the funds for a down payment can be difficult. Luckily, there are some mortgage down payment assistance options available to California homebuyers that are seeking as little as zero down. In California, the two most popular 0% down loan options are: USDA rural loan program and the VA mortgage program for veterans […]Read More

How To Minimize Your Down Payment

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As of June 2020, a 20% down payment on a median-priced home in the Bay Area would cost a homebuyer around $228,205. You could minimize your down payment with these simple tips. Homebuyers don’t have to use a 20% down payment when purchasing a home. However, many choose to do so because a 20% down […]Read More

Five Down Payment Choices for First-Time Homebuyers

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A big part of buying a home is coming up with a down payment, but oftentimes there are many misconceptions surrounding down payment requirements. If you are a first-time homebuyer, there are many options for the details of your mortgage loan and down payment. Here are five things all first-time homebuyers should know about down […]Read More

Optimal Down Payment? Less Than You Think

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All too many homebuyers mistakenly believe that they need to put down as much as humanly possible for several reasons: (1) they want to minimize their housing payment; (2) they want to minimize their debt load; and (3) they want to make their offers appear stronger. We, however, often advise buyers to put down less […]Read More

Rent Credits For Down Payment Funds

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This is a quick reminder that renters can use “rent credits” towards their down payment. The entire down payment can be in the form of a rent credit in fact. The amount of the credit is the cumulative difference between the “Market Rent” and the “Actual Rent” paid. For example, if the market rent for […]Read More

What’s The Minimum Down Payment In The Bay Area?

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When applying for a mortgage loan, clients must indicate a proposed down payment. Homebuyers have several options when it comes to the size of their down payment. The minimum amount required varies from one mortgage program to another. Here we’ll examine minimum down payments required for a conventional mortgage in California. Minimum Down Payment For […]Read More

Pre-Approval #s DOUBLE Year Over Year; Gift Of Equity In Lieu Of Down Payment

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JVM formally pre-approved 268 borrowers for the purchase of a home in June. This was an all-time record for us and up over 100% from last June, when we only pre-approved 124 borrowers. I share this b/c agents ask all the time if our pre-approval numbers are up year over year, and the answer is […]Read More

How to Get a Low Down Payment: A Guide for Borrowers

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For many homebuyers, the down payment is the most significant obstacle on the road to homeownership. This is why so many homebuyers are looking for mortgage loans with low down payment options when purchasing a home. We’ve outlined a few of the ways borrowers can get a low down payment and how they may be […]Read More

Gift of Equity Instead of Down Payment – When Family Sells to Family

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Gift Of Equity This is a reminder that sellers can “Gift Equity” as all or a portion of a down payment. If the entire down payment is a “Gift of Equity,” it needs to comprise at least 20% of the purchase price. If the Gift of Equity is less than 20% of the purchase price, […]Read More

10% Down With No PMI; Overrated?

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Most agents and buyers know that Private Mortgage Insurance (PMI) is usually necessary when a buyer puts less than 20% down. What most people don’t know is that almost every lender offers a “10% down loan with NO PMI,” even though loan officers often market these products as “unique offerings.” 10% down with no PMI […]Read More

8 Ways To Lower Debt Ratios & Qualify for More

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We repeat this topic from time to time because “Debt Ratios” weigh so heavily in our pre-approval process and because tight debt ratios so often prevent borrowers from buying the property they want. I explain what debt ratios are and how we calculate them in this past blog. 8 Ways to Lower Debt Ratios: #1 – Put less […]Read More

Why Cash-Heavy Buyers Should Put LESS Down – Liquidity and Investment Returns!

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We have had so many “cash-rich” borrowers ask us if they should put more money down lately, that we thought we should repeat this popular blog. Long-story-short:  borrowers usually should not put more money down as long as they have optimal financing and are not paying mortgage insurance. Borrowers also should not be so gung-ho […]Read More

8 Ways To Lower Debt Ratios & Qualify for More

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I repeat this topic from time to time b/c “Debt Ratios” weigh so heavily in our pre-approval process and b/c tight debt ratios so often prevent borrowers from buying the property they want. I explain what debt ratios are and how we calculate them in this past blog. 8 Ways to Lower Debt Ratios: Put less money […]Read More

There Is No “30 Year Rate;” Many Factors Influence A Buyer’s Rate

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We often have buyers or agents ask: “What is your 15-year rate today?” Or “What is today’s interest rate?” We always respond by explaining there is no single rate, b/c the market moves so often and b/c there are so many things that affect an individual borrower’s rate. Here are factors that influence an individual’s […]Read More

Study Shows Mortgage Insurance Lessens Difficulty In Obtaining Down Payment

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In California’s increasingly competitive market, a study has found that mortgage insurance significantly helps California buyers with their down payment. 18 years of saving for a California 20% down payment. California’s increasingly competitive market has made property prices soar. With the high price tag associated with California real estate, many homebuyers are increasingly concerned about […]Read More

52% of Homebuyers In California & Nationwide Have Down Payments Less Than 20%

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Zillow recently published their Consumer Housing Trends Report 2018, which included in-depth reporting surveys on 20% down payments in California and across the nation. The comprehensive report found that nearly 52% of homebuyers across the nation are making down payments on home purchases with less than 20% down. This should come as a welcome surprise […]Read More

The Loan-to-Value (LTV) Ratio: A Guide for Borrowers in California

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The Loan-to-Value Ratio (LTV) is a mortgage term homebuyer and homeowners should become familiar with if they plan to apply for a home loan. Mortgage lenders will mention LTV often while explaining the mortgage qualification process and different loan products. Today we’re giving a crash course in LTV and explaining the impact LTV has on […]Read More

Six Factors That Can Impact Your Mortgage Rate in California

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Every borrower wants to get the lowest mortgage rate when applying for mortgage loan. JVM is proud to offer our buyers some of the lowest rates in the industry. But, few buyers are aware of the many different factors that could affect the mortgage rate they are given in California. Here are six factors that […]Read More

If You Owe Income Taxes, Can You Get a Mortgage? Yes!

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INCOME TAXES OWED Income tax liabilities are a frequent issue during tax season, and worthy of addressing again. Borrowers can get mortgage financing if they owe income taxes, in most cases. This is important b/c borrowers often have limited funds for a down payment and cannot afford to pay their taxes without depleting those funds. […]Read More

Consult Lender Before Moving Money; Paper-Trailing Assets

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We recently had a Realtor remind his client to talk to us before moving any money around, and it was a very pleasant surprise. Most Realtors and borrowers do not realize how stringent lenders have to be when paper-trailing all assets used for reserves, down payment funds, and closing costs. Today’s blog is a quick […]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 because […]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

Funds To Close; Every Dollar Accounted For; Don’t Move Funds!

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One of our biggest hold-ups at closing is accounting for every dollar used for down payment and closing costs (funds to close). Lenders are now required to paper-trail every dollar used. This means every large deposit has to be “sourced” and every check to escrow has to come from a verified account (both withdrawals and […]Read More

Condo Concerns? What To Look For

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Things to consider when looking at Condos: 1. Rates are usually higher for condos if the down payment is less than 25%. 2. Concentration Rule. Does one owner own more than 10% of the units? If so, most lenders won’t finance the units. 3. Litigation. If the HOA is involved in litigation, most lenders will […]Read More

Can’t Use Business Funds For Down Payment w/o CPA Letter

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CPA Letter For Use Of Business Funds This is a reminder that lenders do not allow borrowers to use business funds (from any “business account”) towards a down payment or closing costs, unless borrowers can get a letter from their CPA that states the withdrawal will not adversely impact the business. CPAs, however, rarely provide […]Read More

Converting “Cash” to Down Payment Funds – Gifts

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We frequently have borrowers with substantial sums of cash that they want to use for a down payment. They cannot simply deposit the funds in escrow or into their bank accounts b/c lenders will want to know where the money came from. Lenders prohibit the use of un-sourced and unseasoned funds in all transactions. Buyers […]Read More

One Day Out Of Foreclosure/Short Sale Loans? Options?

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We are constantly asked what options are available for borrowers who do not have the required 3 years of seasoning from their short sale or foreclosure dates. For borrowers with limited down payment funds, there are very few to no options. For borrowers with 20% down and re-established credit, Banc Home Loans is the best […]Read More

“Gift Of Equity” For a Down Payment Instead of Cash

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This is a reminder that sellers can “Gift Equity” as a portion of a down payment. With conventional financing, a “Gift of Equity” can comprise the entire down payment if it is 20% or more of the purchase price. If the Gift of Equity is less than 20% of the purchase price, buyers must still […]Read More

Put Less Down and Pay Off Car or Consumer Debts

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We had a borrower last week who was getting a gift of $40,000 to buy a home with FHA financing. FHA of course required a much smaller down payment but the borrower wanted to qualify for a higher purchase price by putting down more than what was required. The borrower, however, also had a $15,000 […]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

“80/10/10” Explained; Lower Payment; No PMI; Longer Close

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We are getting many questions about “80/10/10” financing lately. “80/10/10” stands for an 80% loan-to-value (LTV) first mortgage, a 10% LTV 2nd mortgage, and a 10% down payment. The purpose of getting two mortgages with 80/10/10 financing as opposed to one mortgage to 90% LTV is twofold: (1) borrowers avoid PMI by keeping their primary […]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

Refi Options Now Better Than Ever; Values Up; Rates Down

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With values higher than they were a year ago (especially in certain areas) and with rates shockingly low once again, every buyer who puts down less than 20% should evaluate refinance options. We are of course more than happy to conduct free analyses for everyone. We analyze current estimated property values, current available interest rates […]Read More

Realtor Commissions Credited for Closing Costs & Down Payment (Gift)

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Realtors can credit their commissions toward recurring and non-recurring closing costs. This is well-known. What many Realtors do not know is that they can “gift” all or a portion of their commission towards a down payment as long as the buyer is a relative. Almost anybody can be a relative, however. Jay Voorhees Founder/Broker | […]Read More

Using Lender Credits For Closing Costs; Just Need Down Payment

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We had a borrower come to us over the weekend who wanted to buy a $400,000 home with FHA financing, and she had exactly $14,000 for a down payment (just enough). She had no money for closing costs which will be about $10,000 for non-recurring and recurring costs (including impounds). The solution in this competitive […]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

Almost Anybody Can Be a Relative for “Gifting” Purposes

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We repeat this often b/c such a large proportion of our borrowers purchase properties with “gift funds” for down payments and closing costs. A “donor” or a person gifting funds can be almost anybody, including an aunt, an uncle, a sibling, a parent, or a grandparent. Lenders do not verify the authenticity of the relationship. […]Read More

CHDAP Program; ONLY 1/2% Down Gets Buyers Into Home

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The CHDAP Program is a down payment assistance loan involving an FHA first mortgage and CHDAP 2nd Mortgage. Borrowers using CHDAP can purchase a home with as little as 1/2 percent of the purchase price (as a down payment). This is an excellent program for borrowers with very limited cash who cannot access gift funds. […]Read More

“Gift of Equity” for a Down Payment; No Cash Required

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We often have buyers purchasing properties from close family members. These buyers often have minimal cash for a down payment, and the sellers (often parents) are willing to help the buyers out. In these situations, the best option for a down payment is a “gift of equity.” As long as the down payment is 20% […]Read More

Down Payment Help In Exchange for Appreciation; FirstRex

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FirstRex offers Down Payment Assistance for high end home-buyers. The article in the link below discusses a buyer who purchased a $780,000 home; half of the 20% down payment came from his own funds, and half ($78,000) came from FirstRex. In exchange, FirstRex will get 40% of of the buyer’s appreciation when he sells. This […]Read More

“80/10/10” vs. Conventional Loan With PMI; Pros and Cons

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A buyer looking into a $675,000 purchase contacted us over the weekend. He had enough funds for a 10% down payment, and he wanted to compare programs. Our “80/10/10” program, an 80% loan-to-value (LTV) first mortgage, with 10% down, and a 10% LTV 2nd mortgage (HELOC) seemed like the obvious “winner.” Our estimated PITI for […]Read More

Gift Money Revisited: Parents, Siblings, Cousins, Fiancé

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We remind borrowers in need of more down payment funds that they can access “Gift Funds” from almost any relative, including cousins and even a fiancé (we recently learned). Lenders do not actually verify that a donor is a relative, so there is much leeway with respect to making a person an “eligible” donor. Remember […]Read More

“Gift of Equity” Purchases – No Cash Out Of Pocket For Down Payment

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When a relative buys a property from a relative, a “Gift of Equity” is a great down payment option if the buyer is cash-strapped. As long as the “Gift” is 20% of the purchase price or more, the buyer does not need to bring in any money for a down payment. If the “Gift” is […]Read More

97% LTV or 3% Down Conventional Loans – SFRs and CONDO

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3% Down, or 97% loan-to-value loans are available now at many lenders. The option is only for loans below $417,000, but it is a great alternative to FHA financing now that FHA MI is becoming permanent in June. For loans above $417,000, borrowers still need to put down 10%. A major advantage of 3% down […]Read More

Concurrent 2nd Mortgages or HELOCS That Fund W/ First Mortgages Return

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2nd mortgages that funded concurrently (at the same time) with first mortgages were common prior to the 2008 meltdown. Most of these 2nd mortgages were in the form of Home Equity Lines of Credit or “HELOCs”. They disappeared b/c they had very high foreclosure rates. A few lenders re-introduced them but they were typically associated […]Read More

FHA Loans Often Stronger than Conventional; Speed and Flexibility

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We beat this dead horse often, but it bears repeating. FHA offers are not weaker than conventional offers with down payments of 20% or less. FHA financed purchases are often more likely to close. Flexibility: FHA financing has far more flexibility with respect to debt ratios, down payments, gift funds, credit issues, etc. Many issues […]Read More

Buying Condos With Little Money Down; PMI More Flexible Now

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We frequently tout low down payment Condo purchases as an alternative to FHA. For loan amounts under $417,000 – buyers need as little as 3% down. For loan amounts above $417,000 (up to $625,500), buyers need 10% down. The big concern, however, for low-money-down Condo financing has always been Private Mortgage Insurance (or PMI). We […]Read More