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8 Ways To Lower Debt Ratios & Qualify for More

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!

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

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

10 Factors That Impact Your Mortgage Rate

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

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

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

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 how they will afford a down payment on a home. Zillow recently released a study that showed that it takes […]Read More

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

Zillow recently published their Consumer Housing Trends Report 2018, which includes in-depth reporting surveys on trending household decisions 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 for homebuyers who […]Read More

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

The Loan-to-Value Ratio (LTV) is a key mortgage term for homebuyers and homeowners to know and understand. We mention LTV a lot when breaking down other mortgage topics and products. Today we’re giving a crash course in LTV and explaining the impact LTV has on purchasing and owning a home. Loan-to-Value Ratio Defined The loan-to-value […]Read More

Six Factors That Can Impact Your Mortgage Rate

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 interest rate they are given. Here are six factors that could impact […]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 because […]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

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

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

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

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 such letters now days b/c of the […]Read More

Converting “Cash” to Down Payment Funds – Gifts

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?

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

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

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

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

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

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

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)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3% Down Condo Financing; Alternative to FHA for Strong Buyers

One of our Private Mortgage Insurance providers now insures condo financing with as little as 3% down (for loan amounts under $417,000). This is a huge boon for first-time buyers with limited cash who are looking to buy in complexes that are not FHA approved. We have been touting 5% down condo purchases as an […]Read More

Loan Over $417,000? 2 Options: 10% Down or 3.5% Down FHA

If loan amounts are under $417,000, buyers can get conventional financing with as little as 3% down, as well as FHA financing with 3.5% down. If loan amounts are over $417,000, however, buyers still have only two options: conventional financing with 10% down or more, or FHA financing with 3.5% down. This is an important […]Read More

Main Criteria To Evaluate To “Know” a Buyer Is Viable

We often have Realtors with eager buyers who want to view homes before the buyers have been previewed 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

2nd/Vacation Home Financing to 90% LTV

This is a reminder that 2nd Home or Vacation Home Financing is alive and well. For loan amounts below $417,000, borrowers can buy 2nd homes with only 10% down. The rates are only marginally higher than those associated with primary residence financing. No points loans can easily be locked in the mid to high “3’s.” […]Read More

Lender Paid M.I. – Why We Don’t Recommend It

We have many conventional borrowers with less than 20% equity (or down payment) and an aversion to Private Mortgage Insurance (PMI). These borrowers often opt for Lender Paid Mortgage Insurance or LPMI. With LPMI a lender simply waives PMI requirements in exchange for a higher interest rate. For example, a $400,000, 90% LTV loan might […]Read More

Gifts/Other People’s Money for Down Payment – Don’t Deposit It

A client came to us this week looking to buy a $500,000 house with a $100,000 down payment from her boyfriend (who won’t be on the loan). She was going to deposit the money so it would be “seasoned” by the time she went into contract. We said “stop”. First, it will take way too […]Read More

Down Payment “Gifts” and Gift Tax Issues? Banks Don’t Report Gifts

We often have concerns from donors about the “Gift Tax” ramifications from giving a gift of funds to relative for a down payment. This is b/c banks require donors to sign a “gift letter” that states that the donors are “gifting” the funds, and that the funds are not to be repaid. We are not […]Read More

JVM has Down Payment Assistance – But Is It Overrated??

Down Payment assistance has returned to the market, as many readers know. The assistance offered by various towns and cities is not the only program available now. “Access” allows buyers to come to the table with as little as 0.5% of the purchase price. “Access” offers a 3% second mortgage (8.25%, 15 year) on top […]Read More

Max Debt Ratio: 50% for High Balance; Pay Debt to Qualify

Wells Fargo told one of our clients today that Fannie Mae will never approve a high balance loan (over $417,000) with debt ratios over 45%. This is NOT the case. Fannie will accept High Balance loans with debt ratios of up to 50% if the borrower has “reserves” equal to six months of PITI (principal, […]Read More

Fed “Stimulus”; Gift Funds for Down Payment

The Fed announced their $600 billion stimulus yesterday. They plan to buy up $600 billion in bonds to further reduce rates and to flood the economy with more dollars. Reactions were mixed yesterday (rates bumped up a bit) b/c this action could prove inflationary, and inflation fears push rates upward. GIFT FUNDS can be used […]Read More

Loan Limits Remain $729,750; Seller Paid Up Front MIP

Congress extended the “Temporary Loan Limit” of $729,750 through 2011. This is good news for those of us in the Bay Area where housing prices are so high. This news, however, was probably met with a yawn from brokers in Topeka, Kansas. FHA Up Front Mortgage Insurance Premiums (Up Front MIP) go down on Monday […]Read More