Posts

“Private” Mortgage Insurance vs. FHA Mortgage Insurance – Huge Difference!

I recently blogged about three options to eliminate Private Mortgage Insurance (PMI), and I received several notes asking why I did not mention FHA Mortgage Insurance. By the way, I love reader-feedback, so please keep it coming – as it often makes for great blog fodder! I didn’t cover FHA Mortgage Insurance because I was […]Read More

5 Reasons Why The New FHA Loan Limits Will DESTROY Our Economy!

A first-time homebuyer can now buy a $1 million home with only 3.5% down! This is because the FHA just released its new loan limits for 2022: (1) Low Balance Limit (for most of Texas): $420,680; (2) High Balance Limit (for most of coastal California): $970,800. This is great news for many buyers with limited […]Read More

Mortgages For DACA Status Recipients (FHA & Conforming); Honey vs. Vinegar

Can DACA Recipients Get a Mortgage? FHA now allows DACA recipients to obtain FHA mortgages. DACA stands for Deferred Action for Childhood Arrivals. You can read more about DACA here, but it mostly refers to people who immigrated to the United States as children without legal immigration status. As adults, these DACA status recipients can […]Read More

5-Step Guide To Applying For An FHA Loan

FHA loans are a popular loan option for many homebuyers – especially those who are purchasing a home for the first time or those who are short on funds for a down payment.  How To Apply For An FH Loan In 5 Steps  Applying for an FHA loan is easy and can be accomplished in […]Read More

Buy A House With As Little As 3.5% Down Using FHA Loans

Federal Housing Administration (FHA) loans are a popular financing option among home buyers – especially those in the Bay Area who are contending with high property prices. One of the major appeals to this program is the minimum required down payment. FHA financing allows you to purchase with 3.5% up to the County loan limit. […]Read More

FHA Financing – Why & When Listing Agents Should Not Be Leery

INTRODUCING JVM’S BLOG PODCAST We have turned our blog posts into podcast episodes – perfect for listening on the go. You can listen to this blog as well as some of our most popular blog posts in podcast form for free HERE. We’ll be posting new blogs in audible format every week so stay tuned! […]Read More

Five Down Payment Choices for First-Time Homebuyers

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

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

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

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

Legal Sources of Funds; FHA Purchase to $800,000

I received the following questions from a very seasoned real estate agent the other week: “I have a 3.5% down offer for $795,000 on my desk – A. Does FHA even go that high; and B. What are the legal sources of funds for a down payment and closing costs?” MAX FHA LOAN AMOUNTS In […]Read More

FHA Spot Approvals for Condos; We Are Getting Them Already

I mentioned a few times now how HUD is now granting “Spot Approvals” for FHA financing for single condo units within condo complexes that are not FHA approved. We have already made several requests for spot approvals and have received answers in about a week each time. To obtain a Spot Approval we need the […]Read More

“PMI” or “Private Mortgage Insurance” Explained (Briefly)

PMI remains a great option for high-LTV financing in 2019, and all too many borrowers and agents do not fully understand how it works. First of all, PMI protects lenders (not borrowers) in the event of default. So borrowers with PMI will still be on the hook or liable for their mortgage debt even after […]Read More

Why FHA’s BETTER Than Conventional In Hot Markets

My wife Heejin was “on call” for weekend referrals yesterday, and she had two buyers who wanted to switch from FHA financing to 5% down conventional financing. The buyers were making offers over list price in very competitive markets, and they were convinced their offers would be stronger with conventional financing. And Heejin screamed,“NOOOOOO, DON’T […]Read More

2019 Conforming Loan Limit Increases – Good and Bad

PEOPLE WALKED AWAY FROM MORTGAGE OBLIGATIONS B/C THEY WERE UPSIDE DOWN In 2006, a relative of mine asked me to help her qualify for a condo purchase. Wanting to help, I loaned her enough money to clean up her credit, to pay off her consumer debt and to make a down payment. I then cosigned […]Read More

First-Time Homebuyers Should Consider FHA Loans in California

Federal Housing Administration (FHA) loans are an excellent option for California first-time homebuyers looking to buy in the competitive California market. FHA loans in California have low down-payment financing options with flexible underwriting guidelines that are great for homebuyers with liquidity or credit issues. FHA loans are growing increasingly popular among the California first-time homebuyer […]Read More

Mortgage Acronyms Every California Borrower Should Know

The California mortgage industry is infamous for throwing a lot of mortgage acronyms around. If borrowers aren’t familiar with the California mortgage industry or the lingo it can be confusing to understand what’s going on at times. Here are seven of the most common California mortgage acronyms that every borrower should know when planning to […]Read More

What’s The Difference Between an FHA and VA Appraisal?

Agents and borrowers alike often find the appraisal process confusing and opaque – it’s why we consistently field questions on what appraisers look for when inspecting a property and how agents can best prepare. Not only can appraisers’ opinions on value make or break a deal, but they also play a crucial role in determining […]Read More

The Pros and Cons of Low Down Payments in California

When it comes to the down payment in California, buyers always want to know how low they can go. The industry standard is that down payments will be 20% of the property’s purchase price. This percentage is important because it determines if a buyer will need to have private mortgage insurance (PMI) with their loan. […]Read More

Watch Out For Loan Limit Changes When Crossing County Lines

We recently had an FHA approved buyer cross the bridge from Contra Costa County to Solano County to make a $600,000 FHA offer on a property. This price would have been no issue in Contra Costa County, but Solano County’s FHA Loan Limit is only $550,8500 and the buyer only qualified for FHA financing. As […]Read More

Reminders: Amendatory Clause; RPA Signatures; Seller = LLC; Deceased Seller

FHA and VA Amendatory Clause. This form is required for all VA and FHA loans. It lets buyers know they are entitled to the appraisal and not bound to buy the property if it does not appraise. This form needs to be signed by all parties and dated prior to the appraisal. Residential Purchase Contracts […]Read More

Evidence of Success! FHA MI; Extra CO/Smoke Detectors; Local Escrow

One of our former business coaches used to make us mail out “Evidence of Success” postcards every few months illuminating one of our success stories. We stopped the postcards, so here’s one for the blog: On a recent Saturday, a Realtor introduced her client to JVM. Our “Mortgage Analyst On Call” contacted the client and […]Read More

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

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

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

Cash to Close And Reserves

Borrowers often come to us with just enough funds for their down payment, without accounting for closing costs and reserves. “Reserves” have become a bigger issue lately as more borrowers shift into the jumbo arena. Reserves are the liquid funds left over after a transaction closes. Reserve requirements are usually expressed as a given number […]Read More

When Can Seller Sign? No Impounds If LTV 89.9% Or Less

Two Reminders: Sellers can sign documents at almost anytime after escrow opens for conventional and jumbo transactions (as long as escrow has all necessary terms and time to prepare documents). Sellers do not need to wait for the buyer’s loan documents to get to title before they can sign. With an FHA transaction, however, sellers […]Read More

How To Buy A Flip – Property Bought & Re-Sold Within 90 Days

We have been seeing “Flips” surface again lately. Flips are properties that are purchased and re-sold within 90 days. Lenders go by “contract date” and not close of escrow. Hence, if you buy a property on October 1st, your contract to re-sell it must be dated after January 1st, to avoid “flip” status. Anytime a […]Read More

BK’s & FHA Financing; 2 Years Seasoning Unless In Chapter 13

FHA requires only two years of seasoning from the date a bankruptcy is discharged. This is relatively well-known. What is not well known is that borrowers in a Chapter 13 bankruptcy do not need any seasoning to qualify for FHA financing, as long they have a one year history of timely payments to the bankruptcy […]Read More

Big Changes In FHA! Or Not…

FHA made a large number of changes in underwriting guidelines recently and Realtors are asking how this will affect buyers. For about 99% of our FHA buyers, the changes will have no effect. Some of the changes include: • Deferred loan student loan payments must now be counted in ratios. • For newly rented properties […]Read More

What If Spouse Has Horrible Credit?

We frequently get husband/wife borrowers where one spouse has stellar credit and the other has awful credit. Most people know that the solution is simply to do the loan in the name of the “good-credit-spouse” only, as long as the good-credit-spouse has sufficient income to qualify on his or her own. The bad-credit-spouse can do […]Read More

Rules For Gift Funds

We have a few borrowers right now navigating the best way to receive gift funds, so we wanted to provide a few reminders. Gift Funds – a Few Rules of Thumb For FHA Loans – An entire down payment can be a gift. FHA Gifts must be “sourced;” this means that the donor or “gifter” […]Read More

Using Rental Income From Departing Residence: Lease, Check, Deposit

We are seeing a lot of borrowers lately who want to buy a new home before they sell their current home. These borrowers, however, often cannot qualify for a new home b/c of the debt against their current home, and they need to use the potential rental income from their current home to qualify. Borrowers […]Read More

Short Sale Seasoning Revisited; Extenuating Circumstances Exceptions

We get so many questions about short sale seasoning that we thought we’d revisit the issue. FHA financing requires 3 years of seasoning. Conventional financing always requires 4 years now (used to be 2 in some cases). Jumbo lenders require 4 or 5 years, depending on the lender. Our 2nd Mortgage/HELOC lender requires 5 years. […]Read More

Put Less Down and Pay Off Car or Consumer Debts

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

Seasoning From Bankruptcy Discharge: 2 Yrs for FHA

We have been seeing a lot of bankruptcies (BKs) lately, so we thought it was time to again mention required seasoning periods from date of discharge. For Chapter 7 (liquidation) BKs, the seasoning period from discharge is: 2 Years for FHA Financing. 4 Years for Conventional Financing. Borrowers in a Chapter 13 (reorganization/debt pay off) […]Read More

FHA Better than 80/10/10 Conventional in Tight Market

We can close almost any purchase transaction in 14 days, using our uber-systematic, assembly-line process. One major exception is 80/10/10 loans with 10% down and a 1st and 2nd mortgage. 80/10/10 loans take us 21 days to close b/c we have to get two loans approved. Hence, if a borrower is making offers in very […]Read More

Jan. 26: Big Day – FHA MI Drops; CU Appraisal Rule In Effect

January 26th, 2015 is a big day in the mortgage industry. 1. FHA “monthly” MI is lower (down to 0.85% for most loans) for all case numbers ordered from today on. Per HUD, expect delays in getting case numbers. 2. Fannie’s much feared new Collateral Underwriting (CU) Rule is now in effect. This is a […]Read More

Homes Do Not Need Appliances Unless “Built In”

Properties do not need to have appliances installed at close if they are not “built in” in most cases. Hence, many properties do not need stoves or refrigerators to be eligible for FHA or conventional financing. There are exceptions if the missing appliance creates a gaping hole in the counter area with wires exposed, as […]Read More

FHA to Reduce Annual MI by 0.50% – 0.85% in Most Cases

President Obama is announcing a proposed reduction in FHA Mortgage Insurance today. Currently, most FHA Loans (with 3.5% down) have Annual Mortgage Insurance Premiums of 1.35%. The Obama Administration wants to reduce annual MI premiums by 50 basis points down to 0.85%. FHA (Federal Housing Administration) and Congress still have to buy off on the […]Read More

FHA No Longer Finances FLIPS

FHA will no longer finance “Flips.” A “Flip” is any property that was purchased and re-sold within 90 days of the purchase date. This means the contract for 2nd purchase cannot have any dates on it that are within 90 days of the previous purchase. If a buyer goes into contract within the 90 day […]Read More

Commercial Use In Condo Complex Is OK

JVM Lending is open today. This is a reminder that Commercial Use within a condo complex is OK (for Fannie, Freddie, and FHA) as long as the commercial use does not constitute more than 25% of the total complex. Jay Voorhees Founder/Broker | JVM Lending (855) 855-4491 | DRE# 01524255, NMLS# 335646Read More

When VA /FHA Clearly Stronger Than Conventional? Large Down

We often have buyers willing to take VA or FHA financing even though they have substantial funds for down payments. The reason is that they are often bidding on properties that will be difficult to appraise because of the lack of closed comparable sales (necessary to “bracket” the purchase price). In many markets it is […]Read More

Minimum Credit Score for FHA: 580; Minimum Score Conventional: 620

Our FHA investors and lenders allow credit scores as low as 580 for low balance loans (under $417,000). Scores under 620 require a “manual underwrite.” Manual underwrites require perfect credit over the last 12 months and much lower than typical debt ratios. High Balance FHA ($417,000 to $625,500) requires a minimum credit score of 620. […]Read More

All Questions to Ask When Evaluating Condo Financing/Purchases

We frequently discuss Owner Occupancy ratio requirements for condos, but there are many other important considerations that need to be addressed up front. The below are questions we ask all buyers and Realtors who are considering a condo purchase. These are all questions that significantly affect condo financing and they need to be known up […]Read More

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

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