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

FHA Appraisals Are Public Record; New Compensation Rules

FHA APPRAISALS REVIEW HEALTH AND SAFETY In California and Texas, FHA property appraisers generally focus on potential problems for the occupant’s health and safety. The appraiser will do a simple examination of the home’s electrical system to make sure it’s working properly, and there won’t be any hazards for the homeowner. They will also inspect […]Read More

FHA MI – Does Little Good to Put More Down; FLIPs OK

Today one of our clients made an offer on a FLIP property (bought less than 90 days ago) and the seller was refusing ALL FHA offers until July 1st. BUT, FHA allows for FLIPs now. Fortunately, the seller called me after getting our very strong and emphatic “Pre-approval letter”, and it looks like our offer […]Read More

FHA Not Only for First Time Buyers; FHA MI to Increase Again

We still get many home-buyers who think FHA financing with 3.5% is only for “First Time Buyers”. That is NOT the case, however. ANY qualified buyer can take advantage of FHA Financing, as long as the property will be “owner occupied”. FHA is increasing their monthly Mortgage Insurance from 0.90% to 1.15% for ALL case […]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

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

FHA for UNITS; FHA Instead of TIC Financing

Once again, positive economic news signals the market that the Fed may start pushing up interest rates for two reasons: (1) a stronger economy may bring on inflation (higher rates hold off inflation); and (2) a stronger economy does not need the extra support of the Fed’s low interest rates. Don’t forget that FHA financing […]Read More

90 Day Flip Rule for FHA Explained

Several of our FHA sources no longer enforce the 90 day flip rule; irrespective of who the seller is (the seller can be an investor who just bought at auction, for example). However, the requirements get onerous if the current buyer is paying more than 20% more for the property than did the previous buyer. […]Read More

Reasons to Buy Now; FHA Assumable!

Yesterday, our client’s CPA told her that she was “stretching herself too thin” with a $500,000 FHA purchase, even though her debt ratio was less than 38%. We were surprised to say the least, and we of course pointed out the reasons why we think now is a great time to buy: (1) buyers can […]Read More

FHA Changes; Fed Speaks Today

The Fed is also expected to announce continued efforts to keep rates low now that economic news from December (unemployment and manufacturing) has come out worse than expected. If the economic news had continued to show improvement, it is likely the Fed would have allowed rates to go up a bit. SO, it looks like […]Read More

95% “Dream Loans” with No MI – FHA May Be Better

We had clients ask about the 95% Loan-to-Value loans with no mortgage insurance that are being touted by some lenders. But despite the lack of mortgage insurance, these loans are often less competitive than they might appear at first blush. When there is “no mortgage insurance” on a high LTV loan, that simply means the […]Read More

FHA Appraisals NOT subject to HVCC Nonsense Until Feb. 15th!

Despite the rate increases, we had some great news yesterday. The imposition of HVCC guidelines on FHA Appraisals has been delayed for another 45 days (to Feb. 15th). This is extremely good news, as we have literally “saved” at least 25 deals in the last 12 months solely and only because we were able to […]Read More

New FHA Guidelines

Below are the NEW FHA guidelines for condominium financing. Note that only a very few lenders still do Spot Approvals, but we have wholesale access to those lenders, and we have become experts at garnering Spot Approvals. Extends the “spot approval” process until Feb. 1, 2010, allowing individual units to qualify rather than requiring an […]Read More

Assumable FHA Loans Could Add Value to Home

Rates still remain “historically low”, as we keep saying. And these rates will seem extremely low in the next few years if inflation sets in as expected. This is why the ASSUMABILITY feature of FHA loans should never be disregarded. Only FHA loans are assumable. And those borrowers locking in FHA loans at 5.0% for […]Read More

FHA Spot Approvals Are Still Here

A Realtor today told us that HOA “Spot Approvals” are no longer allowed? This was a shock to us, as we have at least ten fully approved “Spot Approvals” in our pipeline right now. A “Spot Approval” is an FHA approval for a single unit in a condominium complex that is not a formally FHA […]Read More

Rates Improve as Fed Promises Continued Mortgage Buying; FHA Loans Are Assumable

Great Story: We had an elderly couple come by yesterday for a Reverse Mortgage. They bought their house in the late 1970s in Danville, CA. Their home cost more than similar nearby homes because it came with an assumable 9.25% mortgage, at a time when mortgage rates were close to 20%. In other words, the […]Read More

Rates Improve Marginally on Inflation Numbers; Rent vs Buy Comparison AGAIN.

Rent vs Buy in today’s market? With FHA rates so low, and FHA guidelines so flexible, we wonder why anybody with adequate credit would continue to rent in today’s market. A $225,000 house in Eastern Contra Costa County would rent for about $1,650 to $1,700 per month. That same house can be purchased with FHA […]Read More

FHA Appraisal Story – Happy Ending

FHA Appraisal Story: We have an FHA purchase in Crockett and about half the house is under construction. Our FHA Appraiser disclosed everything, but he only gave value to the finished portion of the home, and disclosed the unfinished portions in a way that would not alarm the lender. The result: The appraisal slid right […]Read More

HVCC Appraisal Horror Story; FHA Not Slower

Consumer Confidence is up; New Home Sales are up; and Durable Goods Orders are up. Normally all this “good news” would send the stock market up too, and the bond market down – resulting in higher rates. The stock market, however, was unimpressed because New Home Sales and Durable Goods Orders are only up month […]Read More

A Scenario Where FHA Offers are Superior to Conventional Offers

When to accept the FHA Offer? A Realtor/Client called yesterday to discuss multiple offers she received in the $650,000 range for a $625,000 listing. Several offers involved conventional financing, and several involved FHA financing. Her concern was the appraisal; there were only one or two comparable sales that bracketed the $650,000 price while the majority […]Read More

FHA is NOT Only for First Time Homebuyers; Age is Never an Issue Either

FHA Loans are NOT just for First Time Homebuyers. Almost any qualified borrower can take advantage of FHA financing. The only exception is that in most cases borrowers are not allowed to have two FHA loans at the same time. But even that rule can be circumvented if a move to a new home is […]Read More

Expect Surge in Housing Inventory; FHA Appraisal Issues at Banks

We frequently point out how “positive” economic news, like improving industrial production or improving employment statistics, usually pushes interest rates higher. Positive reports send signals to the market that the economy is improving and that the Fed may back off from its support of the bond market. Our point is to remind everyone that when […]Read More

All FHA Lenders NOT Created Equal; Different Lenders Have Different Guidelines

We received a Condo Purchase this week that had fallen out with another lender. That lender told the real estate agent that there was “no way the property could ever get FHA financing because the complex could never get an FHA Spot Approval”. This was news to us because we had just closed an FHA […]Read More

Take Advantage of FHA; Spot Approvals for Condo Projects Not FHA

We have been beating this dead horse over and over, but we continue to be surprised by the number of Realtors who do NOT recognize the advantage of FHA financing. The major advantages include: (1) Very small down payments of only 3.5%; (2) The entire down payment can be a gift; (3) FHA transactions can […]Read More

“Spot” Approvals for Non-FHA Approved Condo Complex’s

We are getting a surprisingly large number of purchases for Condo Complexes that are NOT FHA approved. The reason we are getting them now is because the Complexes used to be far out of the FHA allowable price range so the developers never sought FHA approval. But now that prices have plummeted and FHA Loan […]Read More

FHA’s Share of the Market Climbs Dramatically; FHA Advantages (again)

According to the MBAA, the government-insured (FHA and VA loans) share of mortgage applications was nearly 36% last month, the highest level since November of 1990; FHA and VA accounted for almost 40% of purchase applications. There are numerous reasons for this: (1) FHA and VA offer the only low-down payment options; (2) FHA loan […]Read More

No More New Construction Tax Credits; Septic Tank OK for FHA w/o a Septic Cert

The State of California is no longer accepting requests for the $10,000 Tax Credit for New Construction, as they have used up the allotted funds. The $8,000 Federal Tax Credit for all First Time Homebuyers remains in place through November 30th. FHA now allows properties with septic tanks, without a “septic certification”, if the appraiser […]Read More

Market Very Volatile; FHA Closing Costs

There appears to be some confusion about FHA Closing Costs. Remember first of all that the “Up Front MIP” (1.75% of the loan amount) can just be added to the loan, so it is not usually a closing cost the buyer pays out of pocket. Other closing costs, for a $300,000 FHA purchase, for example, […]Read More

FHA Can Be Better!

FHA Financing can be better than Conventional Financing for many reasons. Listing Agents and Sellers have no reason to be leery of offers that involve FHA financing. 1. FHA loans are assumable in most cases. Conventional loans are not. This is a huge advantage for buyers locking rates at historical lows now. FHA assumable loans […]Read More