Up until now, BB&T's CHIP loan has been one of the few options that still provides the ability to borrow 100% loan-to-value for certain geographic areas that included Cainhoy, Hanahan and parts of Ladson, Summerville and Goose Creek. Therefore, buyers who were able to negotiate for seller-paid closing costs can purchase a home with no money down, provided (they and the property) are eligible. 

On December 5th, BB&T changed the eligibility parameters for their CHIP loans. Here are the new guidelines:

New guidelines (Highlights) starting Dec 5th

Income limits will apply for all properties Over 97% loan to value 80% applicant must be below median HUD income = $49,760 (for total househo...

The USDA Rural Mortgage Loan was one of the only remaining 100% loan-to-value opportunities for lower income buyers who do not have a lot of savings for downpayment. Bobby Wallace from Anchor Mortgage sent me a very timely reminder email that I thought would be good to share with the followers of this blog:

The changes being implemented as of October 1st are:

"USDA will now start requiring a Mortgage Insurance Premium on these loans. USDA will now require a 0.3% annual mortgage insurance fee. While this fee is an annual fee, it is collected monthly in escrow like most Mortgage insurance payments. Another major difference between USDA’s annual MI premium and most other premiums. USDA’...

Robert Weaver from Ikon Mortgage put together this information - which I found really informative - about the maximum allowed contribution from Seller to Buyer depending on the LTV (loan-to-value ratio) and the use of the home:

For more information contact Robert Weaver.

 

 

Using Renovation Loans

USING RENOVATION LOANS

Given the proliferation of short sales, foreclosures and lender-owned properties (REOs), it is not uncommon for buyers to come across homes that may be very well price (a "steal") but need substantial renovation work to bring them up to the desired quality and functionality level. 

Many of these homes have been neglected for a long time: Initially their owners (who experienced a financial hardship of some nature) did not have the money or the inclination to do normal maintenance and upkeep. Then the home is normally vacant for a period of time, while the lender takes it to foreclosure and resolves all the legal title issues to be abl...

Why Pay Private Mortgage Insurance (PMI)?

Reese Ward from Benchmark Home Loans, one of the mortgage providers we work with sent me this article which I thought was interesting to share:

"Private Mortgage Insurance (PMI) is required by most lenders when a borrower puts less than 20% down on a purchase loan. Paid for by the borrower, PMI not only protects the lender from foreclosure, it also enables many buyers to qualify for loans and purchase real estate when they couldn't have otherwise. On January 1st, 2007, legislation went into effect making PMI tax deductible for new borrowers whose personal adjusted gross income is $100,000 or less. This has created additional opportunities for ma...

New Photo Requirements For Appraisals

JoAnn Terrell from Bank of America sent us this information today, which we thought was interesting to share with everyone, especially with our friends the appraisers:

New Subject Property Photo Requirements - On the all interior inspection assignments, including FHA and Conventional, the appraiser must include, at a minimum, the following photographs:

The kitchen All bathrooms Main living area Examples of physical deterioration, if present Examples of recent updates, such as restoration, remodeling and renovation, if present All modifications/additions to the exterior of the subject Exterior pictures of front, street, rear and sides of the...

SHOULD YOU PAY CASH FOR A HOME?

If you have the cash and plan to buy a home, there are different issues to consider to determine your best strategy.

First, you may consider peace of mind. Does having no debt make you sleep like a baby? 

Next, consider financial effectiveness, tax and retirement planning. If you pay cash for a home and in the future need to refinance with cash out to use some of the equity, the interest you pay on the mortgage will NOT be tax deductible.

The tax code says that deductible mortgage interest must be from either:

First lien ACQUISITION indebtedness; or Second lien (i.e. equity line, 2nd mortgage) of up to $100,000 - funds can be used for any purpose. ...

WELLS FARGO RELAXES CREDIT SCORE REQUIREMENTS

Wells Fargo announced last week that they will consider issuing mortgage loans to buyers with lower credit scores.

FHA loans are usually requiring a 620 middle score and will lend up to 96.5% (3.5% downpayment) Conventional loans usually require a minimum 10% downpayment. 

As of last week, Wells Fargo was the only lender to have relaxed their requirements to:

Credit scores from 550 (with a 5% downpayment) Credit scores from 500 (with a 10% downpayment)

This will allow some buyers that may have had some problem with their credit but are still "good risk" to borrow money for a home purchase. These loans will be manually underwritten, s...

Bank of America announced it is launching a new loan program for medical professionals

The Doctor Loan from Bank of America is for licensed, practicing physicians or residents, dentists or other eligible medical professionals. It features a range of fixed and adjustable rate loans and offers significant advantages including:

As little as 5% down on mortgages up to $850,000 Employment start date up to 60 days after closing Student loan debt excluded from total debt calculation

Bank of America joins SunTrust in targeting this segment (see below).

The Doctor Loan Program is a residential mortgage loan developed specifically for Licensed Residents/Interns/Fellows and Licensed doctor...

Bank of America announced this week that they were freezing all their foreclosure processes until all the foreclosure documentation had been reviewed. 

In its most recent report to shareholders, BofA disclosed that it solf $453 million in foreclosed properties during the second quarter of 2010. It still has an inventory (REO's) of $1,740 million worth of foreclosed homes it needs to dispose of.

Bank of America is the fourth lender that has temporarily halted foreclosures pending review of their documentation. The government is increasingly concerned that lienholders may not be carrying due process and correct documentation for their foreclosures, and lenders like BofA want to make sure ...

Condo Loans Now Require HO6 Insurance

All CONDO LOANS, including those backed by the government, Fannie Mae & Freddie Mac, now require the buyers to purchase HO6 (contents/wall-in) insurance, and require the premiums to be included with the escrow reserves.

Although these guidelines were published back in 2008 by these agencies, it had never been enforced by them until now. Fannie, Freddie and other investors are now requiring this coverage.

SHORT SALE PROGRAM PROPOSED

Yesterday I heard on the radio that the Obama administration is thinking about increasing their support to lenders so that they consider more short sales instead of foreclosures.

However, the program said that what the government has in mind is to provide an "incentive" payment of $1,000 to the primary lienholder, $1,000 to the second lienholder and $1,500 to the homeowner to encourage short sales.

Well, let me tell you: This is NOT going to help much! We are talking about tens (or hundreds) of thousands of shortfall in most cases. In a $300,000 home that was originally sold at $400,000 and financed with an 80/20 mortgage loan combo ("normal" practice to avo...

Blog Author's Note: This article does not necessarily reflect Keller Williams' or my own point of view. But Robert brings up some key points that I thought would be interesting for would-be buyers and homeowners looking to re-finance their mortgages.

How We See It

By Robert Weaver 

Interest rates provide the key ingredient to the mortgage recipe. They determine the cost of your borrowing, how much you can borrow, and how much of your time will be consumed repaying what you borrow.  Their importance cannot be overestimated and an explanation of such would fill volumes. The vital nature of interest rates in our economy begs the question: where are they heading? 

We believe that interest...

Buyers and sellers have agreed to terms and conditions, the buyers have done their inspections, repairs have been agreed and done by the seller, the attorney has done the title work, the appraisal has been done, everything seems going perfect to close on time...

Enter, the lender's UNDERWRITER.

During the housing boom that ended three years ago, underwriters were just an extra check, and they were not really very concerned about confirming every little detail on the loan application, the contract and the origin of the deposit money. Maybe that's one of the reasons why we are in this mess altogether!

This has changed! Today underwriters have (it seems) unlimited power to minutiously dis...