Friday, October 22, 2010
On a $250,000 home, the savings is two-fold: First, borrowers saves $8,750 in respect to the required FHA down payment (3.5%) and two, borrowers save $183/month in PMI (private mortgage insurance). These two savings make this program a “big win” for first time homebuyers helping them qualify for more home for less money.
There are however three main pre-requisites for qualifying for this program: (1) Borrowers must qualify under the maximum household income cap; (2) The home must be located in a USDA eligible region; and (3) The borrower(s) must have over a 620 credit score (please see Dan Keller, Bellingham USDA Mortgage Banker for information on credit qualifying guidelines and credit repair).
(1) The borrower must not exceed the annual household income requirements (ex. a family of 1-4 must not exceed a household income greater than $74,050 annually.) You may want to refer to the USDA household income worksheet, but I recommend a 3-4 minute phone call to discuss your ‘total household income’ under USDA guidelines.
(2) Second, the borrower must purchase a home in a USDA-RD approved region. In the map below, in the dark orange, you will find the ONLY areas in Whatcom County that are NOT USDA eligible. I have provided a link where you can by-pass the map and type in the physical address to get instant verification – CLICK HERE to verify a USDA eligible address. I always recommend that my clients work with a Realtor that understands the USDA Rural Development Program. From helping you find and locate a USDA eligible home, to understanding the funding and closing process, it is crucial that your Realtor understands this program. There is a Bellingham USDA Real Estate Agent that personally know does a brilliant job serving their USDA customers. His name is Briddick Webb with EXP Realty and he can be reached directly at (360) 920-1218 or firstname.lastname@example.org
(Please Note: First you need to click “accept” on the USDA page to proceed.)
(3) USDA Credit Score Guidelines. The USDA program is about as “flexible” as any loan program available today. In some cases, borrowers may even qualify with collections, a recent bankruptcy, or no credit history at all. However, in any of those cases, I highly recommend a strong approach to repair and/or build a more stable credit history.
If you are interested, I offer all of my clients a FREE, no obligation pre-mortgage credit analysis to address a clear game-plan for establishing A+ credit and detailing the home buying process.
As always, if you have any questions, please feel free to contact me directly at email@example.com or directly at (425) 350-7136.
Some Related Blog Posts You May Enjoy:
Is Now A Good Time To Buy Or Should I Rent?
FHA 203k Rehab Loan - Get Up to $35,000 From The Bank To Buy A "Fixer"
Four Ways To Buy With Zero Down
House Key State Bond - Homebuyer Education: How To Get $10,000 Toward Down Payment
Friday, October 8, 2010
All of these questions are very good questions and will be answered below. Cutting to the chase, if you have a consistent 2-year employment history, meaning, if you've worked in the same line of work and can document your income via tax returns, W-2's and college transcripts (if you spent time in college, that counts as viable work experience) then you most likely qualify for a home mortgage. The reason why I am not too concerned with your minimum credit score to qualify for a FHA, VA, or USDA mortgage is because I can build or fix credit in a short time... So, here are the answers to those BIG questions:
(1) Is my credit good enough to purchase a home with zero down?
You need a minimum credit score of 620 (possibly 580 on certain programs). Regardless of how low your score is, I have a special credit repair program for Seattle area home buyers, so don't let a past mistake detour you from making a great financial investment today...
(2) Can I buy a home in Stanwood, WA with Zero Down?
Yes, you can use the Stanwood USDA Rural Development Home Loan Program if you are buying a home east of highway 9 or north of 140th in Marysville. You can also use the Stanwood VA home loan. You must have served or are currently serving in the military and provide a VA Certificate of Eligibility and DD214. Lastly, you can use the Washington State House Key State Bond Loan Program that offers the only true zero down option for first time homebuyers. This program requires you to attend a 5-hour homebuyer education course in Everett, WA with Dan Keller, House Key Approved Mortgage Lender. In return, you get a state bond down payment assistance certificate for up to $10,000 to use toward your down payment, closing costs or buy down points.
(3) How much do I qualify for?
With this question, I typically refer you to call me, and within 5 minutes, I can Pre-Qualify you for a mortgage and give you an exact estimate that you qualify for with corresponding total monthly payment figures. You can request information directly from me by visiting www.mymortgageguydan.com
Below are two additional questions that surface daily...
(4) What are closing costs, and can we get the seller to pay our closing costs for us?
Closing costs are the sum of all cost associated with the mortgage process - bank and loan fees, title and escrow fees, and pre-paid and reserve fees required by the bank if you putting down less than 20% to cover property taxes and home owner's insurance so that in the event the borrowers ever default, the mortgage lender's security interest in the home is protected. Closing cost are typically estimated at 3% of the loan amount, and YES, nearly 100% of the time with my first time homebuyers we get the seller (or in the event the home we are buying is a foreclosure or short sale) bank to pay the borrower's closing costs.
(5) Can I get a great deal and buy a foreclosure short sale?
Yes. About 80% of the mortgage loans I write today are on foreclosures homes and short sales. You don't need to go to the court house and pay all cash for the home, nor do you need a special lawyer to buy these homes. Your full-time local Realtor that specializes in working with homebuyers should be able to advise you accordingly.
Recently I have been involved in 3 transactions that required repairs that exceeded my borrower's budget for the downpayment. The main purpose for writing this blog is two-fold:
(1) All 3 clients met with other realtors and loan officers that either tried to steer them in another direction, away from using the 203k loan, and even buying the one home they wanted to purchase. They were referred to me bacause of my knowledge, confidence and ability to fund these tough, but valuable mortgage loans.
(2) The other reason for writing this blog to to assist in building back some of our local communities by educating consumers, asset managers, realtors and banks of the power of this loan program.
The qualifying guidelines for this program fall under standard FHA Mortgage Guidelines:
- 620 min. Credit Score (Contact Dan Keller for 30-day Credit Repair)
- 3.5% Down Payment
- no debt-to-income restrictions, subject to AUS Findings
- down payment can be gifted from family, employer or non-profit organization
- non-occupying co-borrowers are allowed (a non-occupying co-signer)
- closing FHA 203k Rehab loans in 45 days or less!
The Seattle FHA 203k Rehabilitation Loan has two special program designed to help buyers:
1. The FHA 203k Rehab Streamline Program - this program allows for up to $35,000 in repairs to be done on the property and only 3.5% down, with min 620 fico score.
2. The FHA 203k Full Program - this program allows for total renovations and fall under regional FHA loan limits (King County $567,500). Please refer to the Powerpoint presentation on my Seattle FHA 203k Mortgage Website for more detailed information.
The FHA 203k loan program is basically a glorified home imprvement loan that is tied into one loan and a low, 30-yr fixed rate.
Some examples of repairs that are allowed are:
- Gutters, roof and down spouts
- Paint, and lead-based paint removal
- Flooring repairs
- Weatherizing, window, heating, plumbing, electrical...
- Additions and tear down of non-permitted work
... and so much more, please see the powerpoint presentation I have attached on my FHA 203k Website.
If you are a Realtor and are interested in better understanding the FHA 203k Rehab Program, please contact me directly at firstname.lastname@example.org and I will be happy to share with you everything you need to know to be prepared to market and offer this product to your clients.
If you are a homebuyer interested in using the FHA 203k Rehab program to buy your home and working with a local mortgage bank that specializes in FHA 203k mortgages, please contact me at www.mymortgageguydan.com directly at 425 350-7136.
Tuesday, October 5, 2010
Most banks (including mine) have what's referred to as "risk overlays" or in simple terms, their own separate qualifying guidelines. HUD governs FHA, VA, and Snohomish County USDA-Rural mortgage loan programs, and their minimum credit score requirements are 580. However, most banks (including mine) require a 620 credit score in order to obtain a mortgage. With that said, I want to make this clear - You Can Purchase A Home With Poor Credit. I have a team of credit repair specialists that work directly with me and my clients to help repair credit in usually 60 days or less. Click on the live link above for an example of how our system works, and if you have any questions, email me at http://email@example.com
With all of the negative press surrounding the banking industry and housing markets, many of the clients and real estate agents that I speak to are unaware of the great loan programs that are still available to help first time homebuyers purchase a home. There are four loan programs available for consumers that require as little as $100 down.
The House Key State Bond Zero Down Program - The Washington State Finance Commission offers a Washington Down Payment Assistance program for first time homebuyers. It is important to note that this program is simply an FHA 3.5% down loan in which House Key finances the down payment. The 2 main qualifying factors are: (1) you must be a first time homebuyer (and that means not owning a home in the past 3 years); and (2) there are income restrictions per county. Typically, it is real close to the USDA income eligibility guidelines with a cap around $97,000 household income. I would refer to the blog I wrote on the Snohomish County House Key State Bond Program.
The VA Home Loan - this loan program requires that the borrower has served in the US military and has VA Eligibility. I recommend visiting a page that I created that breaks down the Seattle area VA home loan guidelines. This program too is a ZERO Down loan program that does not require monthly PMI. Furthermore, I am able to loan up to $481,000 with the Seattle VA Jumbo loan program.
HUD Owned $100 Down Program - this program is another great loan program where the borrower can purchase a home using FHA financing without having to put 3.5% down. The only caveat with this loan program is that the home must be a HUD or owned foreclosure. Search Marysville HUD Homes and make sure that your Real Estate Agent is an approved HUD agent. If you have questions on HUD financing, I'd be happy to answer those questions for you.
***BONUS*** Ok, so this isn't a ZERO DOWN loan program, but it's close, and it's HOT. The Marysville FANNIE MAE Homepath Program is a program similar to the HUD $100 down program. This program allows the borrower to purchase a FANNIE MAE bank owned home (or REO) for 3% down, no appraisal and no PMI. The borrower is allowed to get gift funds for the down payment then making it a Zero Down Loan Program.
I have attached links to each one of these programs to provide you with a bit more information that supported in this blog. As always, please feel free to contact me directly if you have any questions and I will be happy to explain or meet with you to discuss qualifying for one of these programs. Typically, each of these programs take anywhere from 2 weeks to 4 weeks to fund, so contrary to what you may read or hear, they are pretty simple turn-key loan programs for today's first time homebuyer.
Dan Keller - Marysville FHA Mortgage Banker
Friday, October 1, 2010
Seattle FHA JUMBO Mortgage Guidelines
• FHA Home Loans require a 3.5% down payment
• The Washington FHA Loan Limit of $567,500 does not have to include the UFMIP
(FHA's Upfront Mortgage Insurance Premium, which is usually financed into your loan amount)
• FHA Loans allow non-occupying co-borrowers such as parents and siblings.
• The Seller can pay up to 3% of your closing and settlement costs
• The minimum score for most FHA Home Loans is 620 (even on FHA High balance or FHA Jumbo).
• You may receive a gift of funds for your down payment and closing costs
• FHA Condominium requirements include at least a 51% owner-occupancy ratio, no outstanding lawsuits against the Homeowners Association (condo guidelines have changed, so you may want to call me for details)
• I also offer FHA 203K Rehab and FHA 203K Streamline Rehab loans to purchase a distressed home that needs repairs
Below I've Outlined the Difference Between FHA and Fannie Mae Conventional Financing:
Loan Amount: $500,000
Down Payment: $17,500
Min. Credit Score: 620
Credit Score Used For Example: 700
Interest Rate: 4.625%
Monthly PMI: $362
Total Mortgage Payment: $3,335
FANNIE – Conventional
Loan Amount: $500,000
Down Payment: $50,000
Min. Credit Score: 700
Credit Score Used For Example: 700
Interest Rate: 4.875%
Monthly PMI: $431
Total Mortgage Payment: $3,280
As you can see with the breakdown above, the FHA scenario is much more “flexible” in regards to a lower down payment, lower credit score requirement, and lower interest rate. Please note that with a higher credit score, the Fannie Mae Conventional option may be a better fit as there are split-PMI options that make the conventional option less expensive. I recommend talking to me about scheduling a Mortgage Analysis to compare all options available per you specific credit application.
I can be reached at
Dan Keller, FHA Mortgage Banker