When Renovation (203k) Loans Are Not Practicable

Renovation loans, also known as “203k” or “Homestyle” loans, are an awesome resource for properties that are badly in need of major repairs or updating. These loans allow buyers to finance major home improvements with their initial purchase money mortgage by increasing the mortgage to cover the cost of improvements. For major repairs required by flood, […]Read More

Five Misleading Closing Cost Tricks the Big Banks Play

We have been stealing a lot of loans lately from the big banks b/c our service is better and our rates are lower. As a result, the big banks are using some very aggressive and often misleading tactics to win borrowers back. These tactics include massively understating closing costs and then implying that their closing […]Read More

Cracking the Perfect Credit Score? Don’t Bother…

200 MILLION AMERICANS NOW HAVE FICO SCORES About 200 million Americans now have FICO Scores, and about 3 million have perfect scores of 850, according to this Bloomberg article – “How More Americans Are Getting a Perfect Credit Score.” America may be approaching “peak credit score” with average scores now above where they were at […]Read More

Seller 2nds/Carrybacks Are Kosher; See Our Winter Seller’s Guide

SELLER CARRYBACKS In yesterday’s blog about how sellers can help buyers, I failed to mention an important avenue – Seller Carrybacks or Seller 2nds. Almost all conforming loans allow for seller carrybacks as long as: (1) buyers still meet the minimum down payment requirements – usually 5% of purchase price or more; (2) the note’s […]Read More

How Sellers Can Help Cash-Strapped Buyers (They Can’t Gift Funds)

SELLER CAN’T GIFT FUNDS An agent recently asked us if a seller could gift funds to a cash-strapped buyer to help the buyer get into the home. The answer unfortunately is no. This is what sellers can do to help cash-strapped buyers. 1. Closing Cost Credits. Sellers can give credits up to 6% of the […]Read More

5 Reasons Why This Winter Is The Best Time To Buy

Most of our agent-readers well know why winter can be a great time to buy from a real estate perspective. I am nonetheless repeating a few of the obvious reasons while also illuminating a few less-obvious mortgage-related reasons. 1. Rates Hit Six Week Low! While rates have been climbing for most of the year, they […]Read More

Calling Listing Agents With Every Offer

This is another reminder that we love to call listing agents when offers are made simply b/c it is so effective. Listing agents have in fact told us on numerous occasions that it was our phone calls that pushed our buyers to the top. When we call, we follow the same script every time and […]Read More

The Dispute Over Disputing Disputes (On Credit Reports)

One of our most frequent credit issues involves reported “disputes.” Borrowers report an account in “dispute” whenever they believe some credit data (usually late payments) is reported in error. We usually need to remove the “disputes” from the credit report altogether with an expensive “rapid rescore” and borrowers often do not like this. We must […]Read More

Funding Process Explained; Why Wet/Table Funding Isn’t Favorable

We have had a string of buyers relocating to California from the East Coast lately, and they are confused about the closing process out here. For most purchases in California, the loan is not immediately ready to fund after a borrower signs their loan documents. The “funding package” (signed loan documents and escrow conditions) needs […]Read More

Buying New Home Before Selling Old Home; Considerations

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

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

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

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

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

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

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

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

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

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

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

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?

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

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

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

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

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

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?

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

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

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

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

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

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?

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

Rent Vs. Buy Calculators; A MUST For Renters Nervous About Payments

We have a borrower paying $1,800 in rent, who is very nervous about her potential payment increase after she purchases a home. Her “effective payment” will go down, however, when tax savings and appreciation are accounted for. Both Trulia and Freddie Mac offer excellent “Rent vs. Buy” calculators. Even with very modest appreciation (3%) and […]Read More

Lender Credits For Closing Costs Again – Effect on Payment?

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

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

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

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

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

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

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

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?

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?

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

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”

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

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

Cash Purchases with “Delayed Financing;” No Gift Funds For Cash

This is a reminder that buyers who purchase properties with 100% cash can obtain cash out loans against those properties immediately after close of escrow. This is called “Delayed Financing.” Delayed financing requires that buyers use ONLY their own funds. If buyers use gift funds for a cash purchase, they must wait 6 months from […]Read More

Condo in Litigation? Not a Deal Killer

We closed a transaction last week on a condominium with a Homeowners Association (HOA) that was involved in litigation. The litigation had to do with some mold in a building that was not attached to our subject property’s building in the same complex. In any case, if litigation does not involve the structural integrity of […]Read More