Buyers in Texas Don’t Need a ‘Perfect’ Credit Score

Buyers in Texas don’t need a perfect credit score to qualify for a loan. Having a high credit score can help buyers secure a loan with a lower interest rate. However, today’s loans have more forgiving guidelines when it comes to a buyer’s credit score, which is especially true with government-funded loans. Where Do Credit […]Read More

Sellers Don’t Sign Conventional Doc’s, Do Sign FHA Docs

Realtors often ask if there are any documents among our “loan documents” that sellers need to sign. FHA loan documents require seller-signatures. Conventional loan documents do not. Once a property is in escrow with conventional financing and contingencies are removed, the seller can sign all “seller documents” before loan documents are in title. There is […]Read More

FHA’s “Permanent” MI Means It Never Goes Away No Matter How Low…

We have addressed the fact that FHA MI is now “permanent” (in most cases) several times. We are, however, still getting questions about this so we thought we’d clarify (at the risk of being a bit redundant). Borrowers obtaining FHA financing, and putting down less than 10%**, are now required to keep their Annual Mortgage […]Read More

“Buy Now; Lock Now”, and “No Cost Refi’s”

We have been imploring people to buy homes “now” and to lock in interest rates “now” for several years. We have been saying this b/c rates have been at historical lows for years, and b/c housing prices have also been extraordinarily low. We said it so much, that some readers made fun of our comments. […]Read More

Short Sale Seasoning; 7 Years for High Balance; FHA – Buy “Down”

We have a few corrections/reminders in regard to yesterday’s comments in regard to Seasoning Periods after a short sale. We mentioned that Conventional Financing can be obtained as soon as 2 years after a short if a borrower has 20% of his own funds for a down payment. This seasoning period can actually be shorter […]Read More

Condo Complexes Do NOT Need to Be FANNIE MAE Approved

Condo Complexes do not need to be Fannie Mae approved. All condos are eligible for conventional Fannie Mae financing as long as they meet standard conditions, including: (1) No major litigation; (2) No concentration of ownership – one person cannot own more than 10% of units; (3) HOA Dues are paid on time by over […]Read More

FHA Appraisals Vs. Conventional Appraisals; FHA is BETTER

There is NO REASON to prefer a high LTV (over 80%) conventional purchase over an FHA purchase. FHA is far more flexible than Fannie Mae and PMI companies when it comes to credit, debt ratios, and gifts for down payments. The fear of FHA is that the appraisal is “riskier”, but that is a myth. […]Read More

FHA MI Reminder; Fix Properties Before Appraiser Visits

Quick Reminder: For most FHA transactions, FHA Monthly MI is now 1.25%, and FHA Up Front MI is now 1.75%. We recently had an appraiser call for “health and safety” repairs that easily could have been avoided. The cause was an old, outside stairway with “caution tape” over one of the stairs. The issue could […]Read More

Why HUD/FHA Require So Much Mortgage Insurance? Up Front and Monthly

Borrowers frequently ask us why FHA loans require so much mortgage insurance, with both an up front and monthly premiums. Now that FHA Mortgage Insurance has risen to 1.75% of the loan amount for the Up Front fee, and 1.25% of the loan amount (divided by 12) for the monthly fee, we get the question […]Read More

Conventional Loan w/ 3% Down Payment vs. FHA?

Many borrowers are forced to take FHA financing because they have weak credit, limited cash, and/or high debt ratios. BUT, for borrowers whose only issue is limited cash, a Conventional loan with 3% down may be the better option (if credit and income are good). A 3% down Conventional loan can be locked in at […]Read More

What Exactly Are Fannie, Freddie, FHA, Ginnie Mae, HUD, Conforming?

We often get questions from clients asking us to clarify the difference between Fannie Mae, Freddie Mac and Ginnie Mae. We also get asked about Conforming vs. FHA loans. This is JVM’s brief as possible synopsis; this is much longer than our normal blog but it is educational. This is important because over 90% of […]Read More

“Beginning of a Wave of Buyers” – 2008 and 2009 Foreclosures Now 3 Years Old

An executive with a major homebuilder comes to us for mortgage financing. This is a huge compliment, of course, b/c his firm owns a large mortgage operation of its own. (As an aside, we also fund loans for numerous employees of Wells Fargo, Schwab, and Chevron – all companies that have their own mortgage lenders/operations). […]Read More

Seasoning (Waiting) Periods After BAD Credit Events (For FHA)

Here are the seasoning or waiting periods required to get FHA financing after major adverse credit events. We publish this from time to time because the periods change and we get asked constantly. We focus only on FHA because conventional waiting periods are so much longer in most cases. Note again that NO seasoning is […]Read More

5% Down on NON-FHA Approved Condos; Getting Condos HUD Approved

We get calls weekly from Realtors and buyers asking if certain condo complexes are FHA Approved. And more often than not, the complexes are not FHA approved. If the HOA is strong and very cooperative, you can get the entire complexes approved by HUD/FHA in about 30 days**. That is the only option for FHA […]Read More

“Kiddie Single Family Residence” Loans – Not Just Condos

We had some feedback and questions in regard to our “Kiddie Condo” comments yesterday. Here is some clarification. First of all, “Kiddie Condo” is just an expression. Most of these loans involve Single Family Residences, often near colleges where the “kids” can garner one or two room-mates to offset the housing payment. Tax Deduction. It […]Read More

Internet Mortgage Shopping for Low Rates?

We often have borrowers come to us to compare rate quotes they have obtained from an internet-based mortgage company via Zillow or other sources. These internet rate quotes are always very low but they come with huge caveats such as this: “This quote is for a 30-day lock and it can only be obtained once […]Read More

“Big Banks” Not Better, Safer or Lower Than Brokers

In the last few months we have closed four loans that B of A simply could not do (the borrowers were denied by B of A before coming to JVM). We have also closed three loans for Wells Fargo employees because our rates were LOWER than Wells Fargo’s “preferred employee rates”. We bring this up […]Read More

Loan Officers Must Be Much Smarter Nowadays for Tough Deals

Here are some of our tougher deals that fell out at other lenders: 1. A purchase involving comingled gift funds that cannot be sourced. The entire down payment of “gift funds” is sprinkled among a myriad of accounts. 2. A purchase involving a huge employment gap that cannot be explained. 3. A purchase involving a […]Read More

FHA – Strap in Place and Turn On Water Heaters

We frequently get “As Is” FHA purchases involving houses in near perfect condition. But, the appraisers often have to return for re-inspections for two reasons: (1) to make sure the faucets work with hot water; and (2) to certify that the water heater has been strapped in place. Hence, if you are involved with an […]Read More

High Balance Loan Limits of $729,750 May Yet Be Re-Extended Again

There was an article in the WSJ yesterday regarding the real estate lobby’s intense push to keep the High Cost Loan Limit at $729,750 (for FHA and Conventional Loans). This is coming especially from high cost states like California and New York. Many think these higher loan limits are necessary to restore a healthy housing […]Read More

Tax Deduction for Mortgage Interest Going Away? We Think No Way

Our first-time buyers have been expressing concerns lately about the possible elimination of the Tax Deduction for Home Mortgage Interest. This is because there is much talk about simplifying the tax code and eliminating ALL deductions. We think the Mortgage Interest deduction is here to stay for three reasons: (1) The Real Estate Lobby is […]Read More

FHA Loans – Only One Per Borrower; Exceptions to Rule

We have numerous borrowers refusing to lock now because they are convinced rates will go to 3.75% “this time.” But, like last year, those super-low-rates may never come and we may have seen the bottom. The tragedy is that many of these borrowers would have benefited tremendously from a refinance, but they end up getting […]Read More

What if an Appraisal Comes in High? Comes in Low???

We have had several FHA Purchases lately involving appraisals that came in way above purchase price. We have a $420,000 purchase, for example, with a $460,000 appraisal. When this happens, our borrowers often think they qualify for better financing, but they don’t. For value purposes, lenders always correlate to the Contract Purchase Price. Appraisals are […]Read More

3% Down Conventional Instead of FHA at 3.5% Down

Many of our lenders offer a 3% Down Conventional Loan, which is to be used in lieu of FHA. The PMI is the same as FHA’s MI rate of 1.15%, but the Conventional Loan’s Interest Rate is about 1/2 percent higher. It is also harder to qualify for the conventional loan, and Gift Funds are […]Read More

Without HOA Dues, How Much More Can You Buy? From Townhouse to SFR?

We have clients looking at Townhouses and because of payment concerns they have capped their purchase price at $450,000. The problem is that all of the townhouses they are looking at have HOA dues of at least $300 to $350. An FHA Purchase of $450,000 for a Townhouse with HOA Dues and supplemental insurance of […]Read More

“Rolling Down” Your Rate When Rates Improve

All too many of our clients want the best of both worlds. They want to lock in rates when they are low, and then zealously hold us and our lenders to our rate-lock promise no matter what if rates go up – and we comply. Borrowers rightfully want their “rate lock contract” honored. But, when […]Read More

FHA Appraisals and “As Is” Purchases

We constantly get “As Is” FHA purchases that seem like “smooth-sailing” until the appraisal comes back with all kinds of repair-needs called out. Appraisers have an obligation to call out a whole litany of defects and repairs. If they miss items, they can lose their licenses. These repair items include non-working plumbing and appliances, apparent […]Read More

“Leverage” Yourself While Rates Are Low

We have a well-educated Asian immigrant buyer with over $150,000 in the bank. He qualifies for almost anything, but he wants FHA financing. The reason is that FHA financing (high balance), can be had at 4.25% at “no points” and “no fees”, and with a substantial lender credit for closing costs to boot. Our buyer […]Read More

3% Down Plus 2% Gift = 5% Down; Loan Limits Staying

Recently we touted a 3% down Conventional loan as an alternative to a 3.5% down FHA loan. Drawbacks to the 3% down loan include a very high PMI rate (1.15%), restrictive underwriting guidelines, and significant upward adjustments to the rate for the high “loan-to-value” ratio. Remember that sometimes FHA won’t work because one spouse has […]Read More

FHA Loans Are Truly for Anyone; No Income Limits

We had a well-off borrower yesterday tell us that she is “ineligible for FHA financing” because she “makes too much money.” We let her know that you cannot make too much money for FHA. The only thing that makes a borrower ineligible for FHA financing is having an FHA home loan on the books already. […]Read More

Open House Flyers; FHA Mortgage Insurance for 5 Years No Matter What

We do “Open House Flyers” every week for numerous Realtors. A few samples are attached. We can get them done quickly and easily, and they look great. Please let us know if you would like flyers for any of your open houses. We love to provide them, and there is no cost. FHA buyers must […]Read More

Getting Out of FHA MI?? FHA Assumable??

There is still much confusion about FHA loans, so we are addressing two issues today: (1) getting out of MI; and (2) if FHA loans are ‘assumable’. You can get out of FHA MI, but ONLY after a minimum of five years, and ONLY if your LTV drops to 78% or below. Many loan officers […]Read More

HOMEPATH Financing Summary – May Be Better Options

Many of our lenders are again touting “Homepath Financing“, and we are getting borrower questions as well, so we thought we’d do another summary. Homepath Financing is available ONLY for REOs owned by Fannie Mae. Homepath Highlights Include: 97% financing for Primary Residences with NO PMI 90% financing for Second Homes and Investment Properties with […]Read More

FHA Energy Efficient Mortgages – Easy to Do – Very Beneficial

We often tout “EEM Loans” for FHA buyers, but we think we get far too few takers in light of how easy they are, and how beneficial they are. EEM or Energy Efficient Mortgages are simply FHA loans with an extra $8,000* tacked on to the loan to cover the cost of Energy Efficient Improvements […]Read More

FHA Buyers Can Have Other Mortgage; FHA NOT 1st Time Buyers Only

We had borrowers with a large existing home and mortgage in Clayton, CA use FHA financing to buy “down” (buy a smaller house) in Walnut Creek, CA. The lender allowed this b/c the borrowers had a compelling motivation to move – a job change that made the commute from Clayton far too long. In addition, […]Read More

Co-Signer/Co-Borrower NOT Just for FHA; Freddie Allows Them

When discussing conventional or FHA loans, non-occupant co-borrowers, or co-signers, and blended ratios all refer to the same thing: Using a friend or relative to co-sign for a competitive owner-occupied loan even though that friend or relative will not live in the house. (Note: co-signer does not have to be a relative) Many people mistakenly […]Read More

What Makes a House “OK” for FHA? Condition Issues?

We get asked time and again about what properties “qualify” for FHA financing – the concern is usually in regard to condition. But now that FHA allows “As Is” purchases and, as long as NO reports are referenced in the purchase contract, FHA is largely the same as Fannie Mae or conventional, with respect to […]Read More

PMI Rates – a Few Examples; FICO under 720? – FHA Often Better

We are getting lots of questions about PMI rates all of a sudden, so here are a few examples. For borrowers with FICOs over 720, and 30 Year Loans under $417,000, here are a few rates for purchases: 85% LTV: 0.32% per year. 90% LTV: 0.49% per year. 95% LTV: 0.67% per year. IF the […]Read More

Inflation Is Here – Why Care? Assumabili​ty of FHA

The Wall Street Journal had a brief column about inflation this morning. The writer made it abundantly clear that it is now here, as indicated by the Producer Price Index, Commodity Prices and Food Prices, and there is no disputing it. The press is not sounding the alarms yet b/c the Consumer Price Index has […]Read More

FHA Loans “Assumable”; No Other Loans Are

FHA Loans are the ONLY loans that are assumable. No “Conventional Loans” are assumable. Once again, the “Assumability” feature is a big selling point of FHA Loans. We mention this often, but if inflation sets in and rates spike to double digits (what we expect to happen), selling a house with an “assumable FHA loan […]Read More

FHA vs. Conventional? FHA Often Has Lower Rates

FHA Interest Rates are often lower than Conventional Interest Rates, and we often have borrowers ask us which type of financing is better. FHA’s benefits over Conventional Financing: (1) Lower Rates Sometimes; (2) More Flexible Credit Standards; (3) FAR Lower Down Payment Requirements – saves liquidity; (4) FHA Loans are Assumable – a great feature […]Read More

FHA to Raise Annual Mortgage Insurance Premium

FHA will likely increase the Annual Mortgage Insurance Premium in October. It is currently at 0.55% of the loan amount, but it will increase anywhere from 0.90% all the way up to the recently authorized 1.55% of the loan amount. The good news is that the Up Front Mortgage Insurance Premium will likely decrease. We […]Read More

FHA Buyers MUST Include Spouse’s Credit; Why Our Broker Channel Remains Better than Our Direct Lending Channel

Married FHA buyers MUST provide their spouse’s credit too, no matter what the circumstances are. We often get married buyers who want to get FHA financing on their own, but are precluded from doing so b/c their spouse’s credit is so bad or b/c their spouse has so much debt that debt ratios are pushed […]Read More

HVCC May Not Go Away; FHA Assumability is Valuable

Note that we have a few lenders at 4.125% today, but those lenders require Impound Accounts (taxes and insurance get paid every month with mortgage payment). Many lenders offer lower rates with Impounds, but we do not quote those rates b/c so many of our borrowers do not like this requirement. We are certainly not […]Read More

FHA Financing

FHA loans represent equally good opportunities for the same reasons Conventional Loans are so appealing – the loan limit goes all the way to $729,750, and the rates are low. Advantages of FHA Loans include: Small down payment of only 3.5% of purchase price Debt ratios up to 57% Entire down payment can be a […]Read More

Private Mortgage Insurance vs. FHA (again)

The ridiculously tight underwriting standards that so grate on all of us have the upside benefit of making mortgages more appealing to investors, and thus keeping rates down. We were asked again about the upside of Private Mortgage Insurance (PMI) financing vs. FHA financing. PMI has NO “Up Front” fee at all, while FHA has […]Read More

Irrational Fear of FHA Financing? We Can Help

Last week we touted FHA loans again b/c they are “assumable”. BUT, many sellers and asset managers continue to fear FHA financed offers, and we think that fear is utterly irrational. There is almost no difference between an “AS IS” FHA Offer and an “AS IS” Conventional Offer. The only difference is that the FHA […]Read More

Rent vs FHA Buy vs Investor Buy Numbers: MESSAGE: BUY

We have a $315,000 purchase in Antioch for a 3,000 square foot house. An investor is buying it with 20% down. The “Rent Survey” came back with a range of $2,150 to $2,400 per month. With 20% down, the investor’s PITI with a rate of 5.375%* will be about $1,825 per month. This house could […]Read More

Loan-to-Value Limits for FHA and Conventional Financing

Loan-to-Value Limits: For FHA Purchases for SFRs, Town-homes/PUDS, and FHA Approved Condos: The LTV limit remains 96.5%. For Conventional Purchases with Mortgage Insurance: Condos can go to 90% LTV, and SFRs can go to 95%. Remember that Town-home or PUD complexes (where the buyer owns the land under the structure) do not have to be […]Read More

Flips “OK” for FHA and Conventional, but “Coach” the Appraiser!

We are getting numerous “FLIPS” in our office, as we have several lenders who accept them for both FHA and conventional purchases (even NON-owner occupied). A Flip is a property that changed title (to an owner other than a foreclosing bank) in the previous 90 days. Remember, however, that lenders scrutinize Flip appraisals much more […]Read More