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Effective today, the popular FHA Streamline program has undergone a guideline change.  There are 3 main changes.  First is what your new loan amount should be.  Previously, FHA would allow a borrower would be allowed to borrow up to the amount they originally borrowed, plus their new upfront premium.  Now, they can borrow the principal balance on the loan, plus the new up front premium.  This will lead to one of two things.  Either the borrower will be paying more closing costs out of pocket, or the borrower will have to take a higher rate, and the loan officer will have to give a bigger broker credit to keep costs down.

Another major change is seasoning.  Now a borrower must have made at least 6 mortgage payments on their current FHA…

Not too long ago congress extended the first time homebuyers tax credit.  This was the 8,000 tax credit that was originally set to expire on November 30th, 2009.  Now, any first time homebuyer who wanted to take advantage of the credit but wasn't able to find and close on a home before the Nov. 30th deadline is in luck.  Keep in mind this credit is not applied at closing, it is a credit that is applied when you file your annual tax returns.

Also, as a part of the first time home buyer tax credit extension, current homebuyers are also eligible.  If you have lived in your current home for 5 of the last 8 years you would qualify for up to a 6,500 tax credit.  The only other requirements are the house you're buying must be your primary…

In today's real estate market you hear more and more everyday that you need to work with a direct lender, not a mortgage broker.  People say that brokers don't close on time, brokers take advantage of customers, and brokers are too expensive.  The truth is, none of those are true.  In today's market brokers have a huge advantage...we work with multiple lenders and have multiple options.  What if you're working with Bank of America direct lending, and they can't do your loan because your loan to value ratio is too high?  Do they just turn your loan down?  Working with a broker he can take your loan to someone else.  Maybe Bank of America can't do it, but someone else can.  Another example would be your debt ratio being too high for…

For those of you who put down less than 20% when you bought your house, you probably have mortgage insurance on your home, and you're probably wondering how you can get rid of it.  It depends on the loan type of loan you have.  If you have a conventional loan, you have to pay down your principal balance to 80% of the value of the house.  For example, if you bought your home for 200,000 and borrowed 190,000 you would need to buy down your principal balance on your mortgage to 180,000 to begin getting rid of your mortgage insurance.  Another option would be for the value in your home to increase (not likely in this market) and make your loan to value ratio less than 80%.  Once one of these milestones are reached you can get in touch with your…

It used to be that a borrower needed a 620 credit score and a clean mortgage history for 12 months in order to qualify, but that has recently changed.  Now there are some lenders who will do the streamline as long as you just have on time mortgage payments for 12 months.  This is a great new change for some borrowers who are having a tough time keeping up with all their bills, but have made their mortgage payments on time.  With FHA 30 year fixed rates hovering around 5% and ARM rates hovering around 4% this is a great time to take advantage of the more lenient underwriting on a the FHA Streamline loans.  The best part is, it goes for both conforming and jumbo loans.  If you can lower rate down to today's low levels, and ordinarily…

A few years ago, everyone was offering "no cost refinances."  The loan officer would pay all of the borrowers closing costs for them (lender and title company fee's).  This was great for the borrower who wouldnt have to come out of pocket for closing costs, and wouldnt have to increase their loan amount to roll in the closing costs.  The way the loan worked is the borrower would agree to take a slightly higher interest rate (loan officers get paid more yield spread on a higher interest rate), and then would give a "lender credit" for the amount of closing costs.  These loans still are out there today, but since most borrowers don't understand how they work, its hard to explain why they have to take a higher interest rate.  The good thing is, with rates as…

Condo financing is getting tougher and tougher these days.  There are many different aspects to condo financing that come into play.  First is how much of the building is owner occupied vs. investment properties.  Ideally, you want at least 75% owner occupied if not more.  If its less than that, you run the risk the condo may not be warrantable, and therefore tough to get financing on.  This issue often comes up with new constrution condos because a lot of investors tend to look at condos for opportunities.  Also, if a lot of the units haven't been sold, it could cause issues.

Another issue that comes up with condo financing is interest rates.  Condo's often time have rate bumps depending on your loan to value ratio.  Most condo owners should be prepared…

Over the past few years, we've all heard that ARM's are bad, and you should only go into fixed rate mortgages.  For a while that made sense, especially when the difference in a 5 year ARM and a 30 year fix was less than .5%.  Over the past few weeks ARM rates have become considerably better, and that makes the ARM  product that much more attractive.  We've even seen 5 year ARM's get down in to the high 3% range. 

So who can bennifit from an ARM?  Anyone who will be staying in their home on a short term basis would be the perfect candatate.  For instance, a couple buying their first home, or someone who has moved to an area for work, but knows they won't be here for more than a few years.  Why not have a lower monthly payment if you know you won't be in…