Fannie Mae has announced that they will now lend you money for a mortgage in as little as two years after you have had a foreclosure.
With the record numbers of foreclosures happening, I had been wondering when their would come an announcement of guideline changes and I must admit it came a little sooner than I had expected.
Which will be a good thing for the housing market in general – because it will introduce a new class of buyer: the previously-foreclosed-upon segment.
Before this change, if you had a foreclosure, you were required to wait four years before being able to get a mortgage under Fannie Mae guidelines and two years if your home was sold in a short sale.
Now, if you have had a foreclosure or a deed-in-lieu of foreclosure you can buy a home and get a mortgage from a Fannie Mae approved lender as long as you have a 20% down payment.
When you apply for a mortgage, your loan officer typically uses Fannie Mae’s Desktop Underwriter (DU) software to determine whether your loan application meets the Fannie Mae guidelines. If you meet the guidelines, you are “approved” for a mortgage. If you do not meet the guidelines, you are not approved for a mortgage.
This software will be updated in June so that it has the latest foreclosure, short sale and deed-in-lieu policies in place — and as a result homeowners who had a foreclosure just two years ago and have a 20% down payment can now buy a home and get a mortgage that conforms to Fannie Mae guidelines starting with applications after June 30, 2010.
The message to homeowners who have been going through the foreclosure process?
Start saving your money for a down payment on your next home.
Contact The Mortgage Mark if you have any questions!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Wednesday, April 21, 2010
Monday, April 19, 2010
Philadelphia Home Prices and Home Values
According to Zillow's Real Estate Market Reports for February 2010, Philadelphia home values were down 0.4% compared to January 2010 and down 1.1% compared to February 2009.
http://www.zillow.com/local-info/PA-Philadelphia-home-value/r_13271//?scid=emm-2007288AprilLocalLender-bab
For more info contact me at mwilkins@capitalfmc.com or http://www.themortgagemark.com/
http://www.zillow.com/local-info/PA-Philadelphia-home-value/r_13271//?scid=emm-2007288AprilLocalLender-bab
For more info contact me at mwilkins@capitalfmc.com or http://www.themortgagemark.com/
Wednesday, April 14, 2010
Alimony, Child Support and Separate Maintenance--Does it Count as Income?
Alimony, Child Support and Separate Maintenance--Does it Count as Income?
When you apply for an FHA home loan, you're required to certify your income, offer proof of employment and show that you're a good credit risk with a history of on-time bill payments for at least 12 months. Many people have no trouble with this set of requirements, but some are not sure what to write down when it comes to reporting child support payments, alimony and other income as a result of a separation or divorce. How do you include income from alimony payments and other financial support in your FHA loan application? More importantly, how does the your lender regard such payments?
DOCUMENTATION
The first step in getting many lenders to recognize income from alimony, child support, or maintenance payments as a legitimate source of income is by showing proof that such payments are happening on a regular basis. Many couples who enter divorce proceedings agree to informal child support arrangements or alimony payments; unfortunately the lender is not obligated to recognize such arrangements as a legitimate source of income. In fact, some financial institutions have issued recent guidance that in order for alimony or other payments to be considered as income, there must be a court order or other legal documentation showing that one party is legally obliged to pay the other party. A divorce decree, formal separation or court order is sufficient in most cases.
AMOUNTS
When you apply for an FHA mortgage and list alimony or child support payments as legitimate income, your loan officer will examine the ratio of your other income versus the amount of child support or alimony you receive. Depending on the amount and your lender's policies, certain requirements govern how that income is to be considered.
For example, some lenders stipulate if alimony or child support is 30% of the household income or less, the following standards apply:
•The party paying alimony or child support must be obligated in writing to pay.
•The payer must have paid for at least half a year before the loan application is filled out.
•The payer must be obligated to continue paying for a minimum of three years after closing the sale.
•There must be evidence of "stable receipt" of the full amount of alimony or child support for the most current six months prior to applying for the FHA home loan.
When the amount of alimony or child support is greater than 30% of the FHA borrower's income, the rules can change. Some lenders require the following;
•The borrower must receive alimony or child support for a full year before applying for the loan.
•The payer must be obligated to continue paying for three years after the loan has closed.
•There must be evidence of complete, on-time payments for a full year before applying for the home loan.
•
It's important to remember that in all cases, if you apply for an FHA home mortgage and list maintenance, alimony, or child support, there must be legally binding paperwork acceptable to the FHA that spells out the amount of the payments and their duration. This helps document your actual income and gives the bank and the FHA a way to measure what you are able to reasonably borrow when shopping for an FHA mortgage.
Your financial institution has specific guidelines on these issues--don't assume terms are identical from one bank to another. It's best to ask up front about any sources of income from alimony and child support so you know how to properly budget for your FHA home loan.
Contact me at mwilkins@capitalfmc.com or visit http://www.themortgagemark.com/
When you apply for an FHA home loan, you're required to certify your income, offer proof of employment and show that you're a good credit risk with a history of on-time bill payments for at least 12 months. Many people have no trouble with this set of requirements, but some are not sure what to write down when it comes to reporting child support payments, alimony and other income as a result of a separation or divorce. How do you include income from alimony payments and other financial support in your FHA loan application? More importantly, how does the your lender regard such payments?
DOCUMENTATION
The first step in getting many lenders to recognize income from alimony, child support, or maintenance payments as a legitimate source of income is by showing proof that such payments are happening on a regular basis. Many couples who enter divorce proceedings agree to informal child support arrangements or alimony payments; unfortunately the lender is not obligated to recognize such arrangements as a legitimate source of income. In fact, some financial institutions have issued recent guidance that in order for alimony or other payments to be considered as income, there must be a court order or other legal documentation showing that one party is legally obliged to pay the other party. A divorce decree, formal separation or court order is sufficient in most cases.
AMOUNTS
When you apply for an FHA mortgage and list alimony or child support payments as legitimate income, your loan officer will examine the ratio of your other income versus the amount of child support or alimony you receive. Depending on the amount and your lender's policies, certain requirements govern how that income is to be considered.
For example, some lenders stipulate if alimony or child support is 30% of the household income or less, the following standards apply:
•The party paying alimony or child support must be obligated in writing to pay.
•The payer must have paid for at least half a year before the loan application is filled out.
•The payer must be obligated to continue paying for a minimum of three years after closing the sale.
•There must be evidence of "stable receipt" of the full amount of alimony or child support for the most current six months prior to applying for the FHA home loan.
When the amount of alimony or child support is greater than 30% of the FHA borrower's income, the rules can change. Some lenders require the following;
•The borrower must receive alimony or child support for a full year before applying for the loan.
•The payer must be obligated to continue paying for three years after the loan has closed.
•There must be evidence of complete, on-time payments for a full year before applying for the home loan.
•
It's important to remember that in all cases, if you apply for an FHA home mortgage and list maintenance, alimony, or child support, there must be legally binding paperwork acceptable to the FHA that spells out the amount of the payments and their duration. This helps document your actual income and gives the bank and the FHA a way to measure what you are able to reasonably borrow when shopping for an FHA mortgage.
Your financial institution has specific guidelines on these issues--don't assume terms are identical from one bank to another. It's best to ask up front about any sources of income from alimony and child support so you know how to properly budget for your FHA home loan.
Contact me at mwilkins@capitalfmc.com or visit http://www.themortgagemark.com/
Monday, April 12, 2010
Buying short sales with FHA home loans
With thousands of new home entering the foreclosure process every month in each market area the question arises ever more frequently, “Can I use an FHA loan to purchase a short sale property?”
For the readers not familiar with short sales let us first define the term as it applies to real estate. As “short sale” on real estate is when the existing lien holder(s) agree to accept a lower amount than is currently owed on the existing loan(s).
If you need an example suppose the home owner has only one mortgage for $350,000 (existing payoff) on a home. Perhaps that home is currently valued only at $275,000. The home owner cannot refinance, the lender has failed to modify and foreclosure is looming so the lender agrees to accept a sales price equal to the current appraised value even though it is a full $75,000 lower than (short of) the payoff.
Answering the question, “can an FHA loan be used to purchase a short sale”, really is too simple. The answer is “yes” provided the property and transaction fall within FHA insurance guidelines. Remember FHA has maximum loan amounts, guidelines for property type and guidelines for property use.
For more information visit http://www.themortgagemark.com/ or email me at mwilkins@capitalfmc.com
For the readers not familiar with short sales let us first define the term as it applies to real estate. As “short sale” on real estate is when the existing lien holder(s) agree to accept a lower amount than is currently owed on the existing loan(s).
If you need an example suppose the home owner has only one mortgage for $350,000 (existing payoff) on a home. Perhaps that home is currently valued only at $275,000. The home owner cannot refinance, the lender has failed to modify and foreclosure is looming so the lender agrees to accept a sales price equal to the current appraised value even though it is a full $75,000 lower than (short of) the payoff.
Answering the question, “can an FHA loan be used to purchase a short sale”, really is too simple. The answer is “yes” provided the property and transaction fall within FHA insurance guidelines. Remember FHA has maximum loan amounts, guidelines for property type and guidelines for property use.
For more information visit http://www.themortgagemark.com/ or email me at mwilkins@capitalfmc.com
Friday, April 9, 2010
Thursday, April 8, 2010
Can I Still Get a First Time Homebuyer's Tax Credit?
If you seek an FHA loan, time is very short to take advantage of the First Time Home Buyer's Tax Credit. Current guidelines have the plan expiring at the end of April, 2010. According to current guidelines, as long as a binding sales contract has been signed no later than April 30, 2010, the buyer is able to claim the $8,000 tax credit.
WHEN TO CLAIM
If you purchased your home after November 6 2009, but before January 1, 2010, you can claim your tax credit when filing your tax paperwork for 2009. The current rules forbid you to amend your 2008 return to make the claim when the home was purchased between those dates. If you took out an FHA home loan and closed on the house in 2010 you can claim the tax credit on either your 2009 or 2010 income tax. To claim your tax break on your 2009 taxes, you may be required to file a paper tax return instead of an e-filed version. Check with your tax preparer or visit IRS.gov for more information.
INCOME REQUIREMENTS
The First Time Homebuyer's Tax Credit program has income requirements for single and married buyers. If you are taking out an FHA mortgage as a single person, your income must be no more than $125,000 per year to qualify for the full tax credit. Married borrowers must make no more than $225,000 per year. If you make $145,000 per year as a single person, you are eligible for a partial tax credit under the program. Married taxpayers who make no more than $245,000 a year are also qualified for partial credit.
There's one important exception to the April 30, 2010 deadline for the First Time Homebuyer's Tax Credit program; some military members get up to a full year of extra time to take out an FHA loan, VA home loan or conventional mortgage and claim the tax credit. If you are in the military and on "extended duty" outside the continental United States, you have until April 30, 2011 to buy and claim. Some federal employees are also eligible.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
WHEN TO CLAIM
If you purchased your home after November 6 2009, but before January 1, 2010, you can claim your tax credit when filing your tax paperwork for 2009. The current rules forbid you to amend your 2008 return to make the claim when the home was purchased between those dates. If you took out an FHA home loan and closed on the house in 2010 you can claim the tax credit on either your 2009 or 2010 income tax. To claim your tax break on your 2009 taxes, you may be required to file a paper tax return instead of an e-filed version. Check with your tax preparer or visit IRS.gov for more information.
INCOME REQUIREMENTS
The First Time Homebuyer's Tax Credit program has income requirements for single and married buyers. If you are taking out an FHA mortgage as a single person, your income must be no more than $125,000 per year to qualify for the full tax credit. Married borrowers must make no more than $225,000 per year. If you make $145,000 per year as a single person, you are eligible for a partial tax credit under the program. Married taxpayers who make no more than $245,000 a year are also qualified for partial credit.
There's one important exception to the April 30, 2010 deadline for the First Time Homebuyer's Tax Credit program; some military members get up to a full year of extra time to take out an FHA loan, VA home loan or conventional mortgage and claim the tax credit. If you are in the military and on "extended duty" outside the continental United States, you have until April 30, 2011 to buy and claim. Some federal employees are also eligible.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Wednesday, April 7, 2010
Prepare to be a good Mortgage Candidate
In today’s challenging lending environment, loan applicants often try to be the best candidate possible by painting the most optimistic picture about their debt, credit and affordability goals.
While it’s important to put your best foot forward, it’s even more important to be honest, open and forthright so your mortgage adviser can customize a mortgage and financial plan that fits.
With that in mind, here are a few things that will help move your loan application forward and give you the best chances for success:
Be open about your entire debt portfolio.
Student loans, car loans, small business loans, personal loans and credit cards are some of the most common and high profile elements of a “debt portfolio.” Associated payoff amounts, loan terms and payment histories directly affect your credit worthiness.
It’s important to divulge the entirety of your debt portfolio so your mortgage adviser can guide you through the loan application process. Surprise debts can slow down the process and could jeopardize a potentially great loan!
Know your credit score.
In a challenging lending market, your credit score is the single most important factor in determining your credit worthiness. For the potential lender, it’s the most accurate demonstration of your debt-to-income ratio and your ability to pay down debt effectively and on time. Your mortgage advisor will check your score with a “merged” report from all three credit rating agencies – Equifax, TransUnion and Experian. This gives you the most accurate overlay of credit information – and will eliminate any potential hiccups!
Express your lifestyle intentions and financial goals.
People buy homes for many different reasons. Some may purchase a single-family home in order to raise a family while others might buy a condominium with the intention of buying a house a few years later. Still, others might buy a townhome purely for long-term investment purposes. No matter the reason, it’s important to express your intentions to your mortgage adviser to help them guide you to the appropriate loan package.
For instance, if you’re a newly married couple planning to raise a family, you may be looking to establish good credit knowing that you’ll quickly outgrow your first condominium. Hence, a more aggressive, variable rate loan program might best serve your short-term needs. A 5/1 ARM, for example, keeps your interest payments low for the first few years of wedded bliss – making it easier to buy a home when the tots arrive!
Gather the appropriate documentation prior to application.
The loan process takes a little longer than it did a few years ago. And since most loan locks last for 30 days, it’s a good idea to have all of your documentation at the ready. That way your mortgage adviser can strike when fluctuating mortgage rates are most favorable to you and your needs.
Prepare the following documents:
• Recent paystubs
• Two years of year-end W-2’s
• Recent bank and asset statements (Note: be sure to include all pages. Believe it or not, this includes the one that says “this page intentionally left blank.”)
• A copy of your driver’s license
• Copy of purchase agreement (if applicable)
Try to get the cleanest copies of all your documentation. A smudged, blurry or faded copy or fax will slow things down!
These items will help you prepare for the loan application process. If you have any questions or wish to get started in earnest, call your mortgage adviser for a free, in-depth consultation.
Contact Mark Wilkins if you have any questions.
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
While it’s important to put your best foot forward, it’s even more important to be honest, open and forthright so your mortgage adviser can customize a mortgage and financial plan that fits.
With that in mind, here are a few things that will help move your loan application forward and give you the best chances for success:
Be open about your entire debt portfolio.
Student loans, car loans, small business loans, personal loans and credit cards are some of the most common and high profile elements of a “debt portfolio.” Associated payoff amounts, loan terms and payment histories directly affect your credit worthiness.
It’s important to divulge the entirety of your debt portfolio so your mortgage adviser can guide you through the loan application process. Surprise debts can slow down the process and could jeopardize a potentially great loan!
Know your credit score.
In a challenging lending market, your credit score is the single most important factor in determining your credit worthiness. For the potential lender, it’s the most accurate demonstration of your debt-to-income ratio and your ability to pay down debt effectively and on time. Your mortgage advisor will check your score with a “merged” report from all three credit rating agencies – Equifax, TransUnion and Experian. This gives you the most accurate overlay of credit information – and will eliminate any potential hiccups!
Express your lifestyle intentions and financial goals.
People buy homes for many different reasons. Some may purchase a single-family home in order to raise a family while others might buy a condominium with the intention of buying a house a few years later. Still, others might buy a townhome purely for long-term investment purposes. No matter the reason, it’s important to express your intentions to your mortgage adviser to help them guide you to the appropriate loan package.
For instance, if you’re a newly married couple planning to raise a family, you may be looking to establish good credit knowing that you’ll quickly outgrow your first condominium. Hence, a more aggressive, variable rate loan program might best serve your short-term needs. A 5/1 ARM, for example, keeps your interest payments low for the first few years of wedded bliss – making it easier to buy a home when the tots arrive!
Gather the appropriate documentation prior to application.
The loan process takes a little longer than it did a few years ago. And since most loan locks last for 30 days, it’s a good idea to have all of your documentation at the ready. That way your mortgage adviser can strike when fluctuating mortgage rates are most favorable to you and your needs.
Prepare the following documents:
• Recent paystubs
• Two years of year-end W-2’s
• Recent bank and asset statements (Note: be sure to include all pages. Believe it or not, this includes the one that says “this page intentionally left blank.”)
• A copy of your driver’s license
• Copy of purchase agreement (if applicable)
Try to get the cleanest copies of all your documentation. A smudged, blurry or faded copy or fax will slow things down!
These items will help you prepare for the loan application process. If you have any questions or wish to get started in earnest, call your mortgage adviser for a free, in-depth consultation.
Contact Mark Wilkins if you have any questions.
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
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