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Positive underwriting changes may make qualifying easier!

Written by Clay S. on . Posted in Fannie Mae, Freddie Mac, Loan Modification

PendulumIt is easier to get approved for a mortgage these days … really!  Both Fannie Mae and Freddie Mac made substantial changes that will help qualify more buyers – do I dare say that many of the changes introduced some common sense back in the underwriting??  Some highlights … You can Pay Off Credit Cards to Qualify One significant change involves credit card debt – accounts that are paid down at closing to help qualify no longer need to be closed.  That means a credit card that has been paid in full no longer counts against the applicants qualifying debt to income ratio.  That can make it easier to qualify. Quite often we have clients that were frustrated because there credit report indicated minimum payment on credit card balances that previously had to be considered in their debt to income calculations.  Even if the client could demonstrate that they always paid off the credit card monthly and did not carry a balance it got in the way of qualifying. A credit card paid in full no longer counts as debt. Loan to value increases for High Balance Areas More good news for conforming loans in high cost areas! Fannie Mae guidelines for loan to value are now the same for high balance areas as they have been for standard loan to value maximum. Clients wanting to finance a purchase or refinance a loan can now go up to 95% loan to value with  mortgage insurance for a $625,500 loan on a single-family property in high cost areas such as the San Francisco Bay Area. Previously the limit was more restrictive with loans exceeding $417,000. Non-occupant co-borrowers are now allowed by Fannie Mae Helping a family member by a home particularly in California can be done utilizing a non-occupant co-borrower, typically a parent. That option is now opened up for conforming loans and there is no restriction on the occupying clients’ debt to income ratios. This will open up opportunities for families wanting to help get their kids into a home. I already have two instances where these new guidelines were the difference between getting a loan and not. Contact me if there are not any deals that were “on the edge” and we will work like crazy to see if the new guidelines can put that client in the position they could get financing for their dream home! Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149

2016 Conforming loan limits up for San Diego, Monterey and Napa Counties

Written by Clay S. on . Posted in Uncategorized

The maximum conforming loan limit for single family properties remains at $417,000 with the maximum high-balance conforming loan limit for the San Francisco Bay Area and other high cost areas was unchanged at $625,500. Fannie Mae and Freddie Mac set loan limits based on changes in real estate values each year around December 1st. Napa joins the ranks of “high cost areas” that includes other Northern California counties of San Francisco, Alameda, Contra Costa, Santa Clara, Santa Cruz, Santa Clara, San Mateo , San Benito, and Marin. 2015-12-15_0959 2-4 unit properties have higher loan limits.  Search for your county here:  Loan Limit Lookup Table (see Resources to the left) Conforming loans provide a lower mortgage rate to the borrower and with higher limits for these counties increases the number of potential qualified buyers further supporting real estate values. Please give me a call if I can be of help in any way. Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149

Veteran can purchase a home with little or no down payment … and no monthly mortgage insurance

Written by Clay S. on . Posted in reverse mortgage

Veteran BootsDid you know a veteran can purchase a home in the Bay Area with 100% financing up to $625,500 and with 90% financing to over $1 million?  VA loans do not have any monthly mortgage insurance and rates are around 4% within the lender credit to cover the funding fee.

What a wonderful option to put a veteran in a home with little or no cash to close. We recently completed a transaction in Tracy where our client got into their $417,000 home for $137 … It happened that the borrower had a service related disability which reduced the funding fee, and the lender credit was sufficient to cover impounds.

Too often VA loans are lumped in with FHA loans as expensive and thinking there are restrictive property requirements. That is not the case and properly utilized can really be a benefit to our veterans.

Clay Selland

NMLS #183492 CalBRE #01398801

925-807-1500 x303  (fax 925-807-1505)

clay@104.238.124.149

“HomeSafe” brings Jumbo Reverse Mortgages to California

Written by Clay S. on . Posted in Current Events, HECM, reverse mortgage

A reverse mortgage for higher value homes will be available to borrowers soon! The new fixed rate loan will be focused on borrowers with higher value homes. The maximum loan amount will be slightly over $2 million and primarily available in high-cost states, including California. This will be an important compliment to the Federal housing administration’s (HECM) Home Equity Conversion Mortgage which has a lending limit of $625,500. Too often borrowers with substantial equity did not find a reverse mortgage a viable option because of the low loan amount available. It is expected that the new fixed rate loan called the “HomeSafe” will be much more competitive than the jumbo option offered by Generation Mortgage “Generation Plus”. Previously that was the only option with loan amounts above the HECM limit. The Cut-Off at red cedar bend development are ready for your new home – set among the beauty that nature has to offer! Buy to build or buy to invest. Level frontage to water’s edge with each lot including their own dock. As a mortgage broker Signet Mortgage Corporation has lender relationships with several reverse mortgage lenders including Urban Financial of America – who will roll out the new mortgage September 2nd. Clay Selland, president of Signet Mortgage commented “It will be exciting to see the details of this new product and I anticipate it will be a significant help to seniors that are fortunate enough to have lots of equity, where the standard HECM was not a viable option.” Signet Mortgage, headquartered in Danville California, is licensed in five states (CA, OR, WA, ID and UT) and specializes in both forward and reverse mortgages – finding solutions that fit a clients needs. Please contact Clay Selland, CPA with any questions. Clay can be reached at 925-807-1500 x303 or clay@104.238.124.149 (full article from Reverse Mortgage Daily)

Loan After a Short Sale to Get Tougher

Written by Clay on . Posted in Short Sale

Fannie_Mae Opportunity to get a loan from a merchant services will get tougher August 16th. Recently Fannie Mae announced that as of August 16, 2014 the waiting period after a short sale or deed in lieu of foreclosure will increase from 2 to 4 years ! That means anyone with a short sale in their past will have to wait an additional two years before being eligible for a loan to purchase or refinance a home or investment property. Currently there is a staggered waiting period that allows the homeowner to obtain a new Fannie Mae conventional loan as little as two years after the completion of a short sale. The down payment or equity required is 20% and have established a good credit history since the short sale. That will all change August 16th when that waiting period jumps to four years.  The silver lining is after the four-year waiting period a borrower will have available all of the standard underwriting guidelines for Fannie Mae, including the ability to finance a home with as little as 5% down. There is still an exception for extenuating circumstances but documentation of such circumstances can be tough. I have not found any indication from Freddie Mac how their requirements might change but it is something to watch. If you or a client are in the market for a new home, or would benefit from a refinance and had a short sale more than two years ago as of mid August – it would be very important to get started with the new loan right away. Signet Mortgage Corporation is uniquely positioned to assist with financing of your property and figuring out the possibilities available to you. Signet is licensed best over 55 communities. Call us today and let’s talk.

HUD Squashes Reverse Mortgage Option

Written by Clay on . Posted in reverse mortgage

PrintA variation in the HECM reverse mortgage was squashed by HUD last week. Introduced by a small number of reverse mortgage lenders in October as a combination of an initial fixed rate draw and fixed rate on a future draw on a line of credit.  While that sounds attractive – it was outside of the design of the reverse mortgage program.   A future draw at a fixed interest rate could be very nice for a borrower but if borrowing costs were to have risen dramatically and the lender not honor that commitment the responsibility would fall to the FHA insurance fund. Many HECM borrowers feel more comfortable with fixed-rate options however fixed rate HECM require the entire available distribution to be taken at closing which can result in paying interest on more funds than are needed at that time. Recent changes to the HECM program are more conservative and are designed to match the clients needs with the amount borrowed. While these loans do have a variable interest rate, interest is only charged on the outstanding balance much like a line of credit. Quite often the HECM line of credit is left unused but is always available as the need arises whether it’s to handle an emergency, supplement monthly income or one-time expenses. Signet Mortgage Corporation is a member of the National Reverse Mortgage Lenders Association and is licensed in five Western states.  We believe the HECM reverse mortgage is best used as a supplement retirement plan to help provide a more secure and flexible retirement. Call us today and let’s talk. No obligation of course but we can help you understand how a reverse mortgage can meet your needs.    

HECM Reverse Mortgage New Factors

Written by Clay on . Posted in reverse mortgage

HECMHUD issued new  principal limit factors (PLF) factors for the HECM reverse mortage. Why is this important?  What the heck is a PLF table you ask?  The principal limit factor (PLF) table determines the amount of proceeds that will be available to HECM reverse mortgage borrowers after August 4, 2014. Previous tables were based on the assumption that all homeowners would be over the qualifying age of 62.  The new tables account for recent changes allowing for the fact the youngest homeowner may be under 62 years of age.  Proceeds available will be based on the age of the youngest co-borrower. At current rates borrowers closer to 67 years of age will see a slight increase in available funds and borrowers over 72 will see a more substantial increase in available proceeds. Signet Mortgage Corporation is a member of the National Reverse Mortgage Lenders Association and is licensed in five Western states.  We believe the HECM reverse mortgage is best used to compliment retirement plans to help provide a more secure and flexible retirement. Call us today and let’s talk. No obligation of course but we can help you understand how a reverse mortgage can meet your needs.

The Basics | Renovation Loans

Written by Clay on . Posted in Renovation Loans

Print

A Renovation loan can be used to purchase a home or refinance an existing home. A HomeStyle Renovation Loan from Signet can be used to improve an investment property too!  A renovation loan based on the improved value of your home making it a valuable alternative to a construction loan. You can arrange for funds over and above the purchase price of your new home to remodel, make repairs or add a room! A refinance will pay off your existing loan, and provide additional funds for a wide range of improvements – let your imagination go! A renovation loan is a perfect way to fix up a property, or add that extra bedroom you need for your growing family.

There are several basic types of Renovation Loans. HomeStyle loan from Fannie Mae is my favorite, as it allows loan-to-value to 95%, does not have up-front mortgage insurance and is underwritten to standard Fannie Mae guidelines.  The loan is based on the improved value of your home AFTER completion – so you will have the resources to make it your dream home! FHA 203(k) loans come in two “flavors” …
  • Streamline 203k – Renovation costs generally limited to $35,000.  The work can be done by the homeowner or contractors. Typical renovations include painting, carpet and replacement of appliances.  This loan does not require a HUD counselor, and is very close to the cost of a normal FHA loan.
  • Full 203k – Renovation costs are only limited by the FHA loan limits for the county. The renovations are generally more extensive so they require the assistance of a general contractor.  An FHA Consultant is involved to ensure the project proceeds according to plans. Remember, the loan is based on the improved value of your home AFTER completion – so you will have the budget to renovate your dream home!
Energy Improvements – Replacement of a furnace or air conditioner, or adding double pane windows or insulation are examples of renovations that can be included.  An energy audit must be completed to demonstrate the benefit of the improvements. These costs can be over and above the streamline 203k $35,000 limit.

Did You Know? A VA Loan…

Written by Clay S. on . Posted in Current Events, VA Loans

armybootsVeterans with a full entitlement can obtain 100% financing for a home purchase, well over the conforming loan limits, and there is no mortgage insurance.
Check out these limits in selected counties for VA Loans:
Alameda / Contra Costa / San Francisco               $1,050,000
Santa Clara County                                                   $827,500
Sacramento                                                               $475,950
Do you know a veteran that is looking for a home? We can help!
clay signature black

Clay Selland, President

Signet Mortgage Corporation

925-807-1500 x303

Clay@SignetMortgage.com

NMLS#183492

FHA Accommodates Younger Spouses for Reverse Mortgages

Written by Clay on . Posted in reverse mortgage

FHA will be accommodating younger spouses under the age of 62 this August. Situations where a couple would benefit from a reverse mortgage but one spouse does not happen to be 62 can now be accommodated and allow the non-borrowing spouse to stay in the home, even if the borrower passes away or moves from the home.  This is a significant change and will remove a big obstacle preventing some couples from considering a reverse mortgage. For new transactions after August 4th non-borrowing spouses will be able to remain in their homes, provided the following criteria have been met:
  • Have been the spouse of a HECM mortgagor at the time of loan closing and have remained the spouse of such HECM mortgagor for the duration of the HECM mortgagor’s lifetime
  • Have been properly disclosed to the mortgagee at origination and specifically named as a Non-Borrowing Spouse in the HECM documents
  • Have occupied, and continue to occupy, the property securing the HECM as the Principal Residence of the Non-Borrowing Spouse
  • Within ninety days from the death of the last surviving HECM mortgagor, establish legal ownership or other ongoing legal right to remain (e.g., executed lease, court order, etc.) in the property securing the HECM
  • After the death of the last surviving mortgagor, ensure all other obligations of the HECM mortgagor(s) contained in the loan documents continue to be satisfied; After the death of the last surviving mortgagor, ensure that the HECM does not become eligible to be called due and payable for any other reason.)
The principal limit tables which determine how much a borrower will receive from a reverse mortgage based on age, interest rate and type of reverse mortgage will be updated to reflect the impact of a younger spouse.  USA Today had a good article in their “Mortgage and Real Estate” insert last month profiling very happy reverse mortgage borrowers – an “up” story on the proper use of a reverse mortgage. A reverse mortgage is just one “tool” in a retirement plan.  Strategically used it can be a blessing. Improperly used it will result in unintended outcomes.  Knowing the difference is where I can help. Five highlights to get you thinking.
  1. Optimize Social Security by being able to defer benefits until age 70.
  2. Help kids buy a home close – secure a reverse mortgage for the down payment. The kids are going to get the “estate” anyhow and why not now when you can enjoy it.
  3. Replace the loss of income when one spouse passes away –  expenses do not go down.
  4. The family home is a bit like a “piggy bank” having paid into it for years and years. Maybe it is time for a withdrawal to allow you to live just a little bit more comfortably.
  5. Reserve funds are hard to come by when you need them.  
A reverse mortgage can be completed, proceeds held in reserve and only used if needed.  You will be comfortable knowing it is there just in case. I work hard to understand the proper use of a reverse mortgage and would appreciate the opportunity to talk through your situation.  Please give me a call. 925-807-1503 clay signature black