FHA Non-Occupying Co-Borrower

I'm working on a deal currently where my customer needs to refinance in order to keep his home and remove his ex-wife from the existing mortgage and title. My customer has excellent credit but doesn't make enough money for his debt-ratio to qualify for a loan in today's tight mortgage market. His Dad has offered to help him out so that his son can keep his home and his grandchildren can continue to live in the home that they are accustomed.

Luckily, FHA has a program that allows a non-occupying co-borrower. FHA only offers programs for primary residences (no investment properties or vacation homes) but will allow the Dad to go on the loan and use his income and assets to qualify, along with the son's, and not be required to live in the house. The co-borrower's income and assets and credit are used as qualifiers, as well as their debts. And, it's important to note that the co-borrower is just as responsible for the debt as the borrower, even though they're not living in the home.

This is a great program for situations such as this, as well as for First Time Homebuyers when the parents are willing to help their children purchase their first home.

Another great thing about FHA mortgages is that they allow for up to 97% of the purchase price/value to be borrowed, requiring a modest down payment.

How to Buy a Foreclosed Home

Here's a link to an article I found this morning. I think that it gives a good overview of the foreclosure market and different ideas of how you can take advantage of current conditions.

http://money.cnn.com/2008/08/06/real_estate/Foreclosure_bargains/index.htm?postversion=2008080811

Have you considered a Reverse Mortgage?

If you are 62 years of age or older, I believe that you are doing yourself a disservice if you don't investigate the merits of a reverse mortgage. If you own your home and have equity, the following are some benefits:

• Eliminate your mortgage payment so you can remain in your house or live with less financial stress in your life
• Cash out equity and use the money however you wish. Some ideas are to invest the money in the stock market or buy an annuity, buy a vacation home, purchase an RV to travel the country, gift money to your heirs, pay for major expenses or pay off debt
• Use the equity in your home to eliminate your mortgage payment and receive monthly income

It's easy to qualify as well! You don't need to provide any income documentation to the bank, you don't need to have a job, and there's no minimum credit score required to qualify for a reverse mortgage. You just need to be at least 62 years old and the property that you take out the reverse mortgage on needs to be your primary residence.

The most popular reverse mortgages are either FHA or Fannie Mae backed.

Check it out. I don't think you'll be disappointed.

IS NOW THE RIGHT TIME TO BUY YOUR NEW HOME?

The simple answer to my question is YES. It makes sense that people who need to sell their existing house before purchasing a new one are stymied by current market conditions. BUT, this is a great time to be a First Time Homebuyer or renter looking to own again. From all accounts, real estate prices in our area are near bottom. Mortgage rates remain low, at least by historical standards, and it's a buyers market. What more could you ask for?

All you need to do is get yourself pre-qualified by a mortgage broker, which basically gives you the clout of a cash buyer and will let you know the price range that you can afford, get yourself a good realtor, and start looking for your new home! There's plenty of inventory to choose from.

If you aren't concerned with getting settled into a new school district by the beginning of September, you have an even greater edge. It is a very difficult time to be a seller right now and many homes are not priced for this market (they're still priced at last years values). A good realtor will be able to help you with making a fair offer.

If you're a first time homebuyer who's sick of renting or living with your parents, what are you waiting for?

You Can Still Get A Mortgage!

It's been sometime since I last "blogged". I've gone through some serious personal issues with my Dad. I am going to do my best to provide new posts at least on a weekly basis going forward.

Since my last post, the mortgage and credit markets have continued to tighten, the economy has worsened (in my opinion), gas prices have sky-rocketed, mortgage rates have risen, and banks have frozen existing lines of credit due to the declining real estate values. It's been quite a year!

There is good news, though! YOU CAN STILL QUALIFY FOR A MORTGAGE!

That's right! Customers with decent credit can still easily qualify for a new mortgage provided they can document their income, assets, and put down at least 3% of the purchase price. This really isn't too much to ask! Many, not all, of the current foreclosures are due to customers with poor credit qualifying for Stated Income or No Documentation loans that they (in hindsight) should never have qualified for in the first place. It's unfortunate but the customers should also have realized that they couldn't afford these loans.

The people who are being unfairly impacted in this new market is the business owner with great credit, who legitimately makes money but can't show it the way a salary worker can. This is the person that Stated Income loans were originally created for.

The market, while being difficult, is really normalizing back to the way it used to be. When I purchased my first home in 1991, I put down 20% of the purchase price, showed the bank 2 years of W2's along with current pay stubs, bank and brokerage account statements showing my cash reserves and where my downpayment was coming from.This was expected and not considered unreasonable.

Bottom line - salaried workers with good credit can still qualify for mortgages. And, it's a great time to be buying real estate.

Visit my website at http://www.stevehawk.biz or send me an email if you're interested in learning about your mortgage options.

Have a great week!

October 25, 2007 Mortgage Market Update

The turmoil of seeing mortgage companies go out of business on a weekly basis has subsided (although Bank of America just announced that they are exiting the wholesale business at the end of the year) and interest rates are excellent. There are a glut of houses for sale, which is driving prices down and this is an excellent time to purchase if you are in the market.

Conforming interest rates have dropped significantly, partly due to the Federal Reserve’s pending meeting the end of this month where it is expected that they will once again lower short term lending rates by .50%. As per the norm, banks will lower the prime rate (currently 7.75%) also. This will help adjustable rates or home equity loans. The mortgage market has already incorporated this expectation and, if rates aren’t lowered as expected we could see a spike. As of today, 30 year fixed rates are as low as 5.875% and 15 year fixed rates as low as 5.625%.

The jumbo fixed market continues to price higher than it should, due to the lack of secondary market investors. Your best bet is to look at 5/1 or 7/1 ARMs when obtaining jumbo financing.

For those with lower credit, or other issues that may preclude obtaining a conforming loan, I offer FHA financing. The rates are good and the qualification process, while all income and job history and assets need to be documented, is not as credit score dependent as conforming and can be easier financing to obtain. There are still a few “sub-prime” mortgage companies operating but rates remain extremely high and they are offering lower loan-to-value mortgages than in the past.

I am also offering a program that is offering 100% financing with a 6% sellers concession, no reserve requirements, and no job history requirements. You do need a minimum of a 620 FICO score to qualify but I have not seen a program this aggressive in some time. While you do need to qualify, you can literally purchase a home with no money down and no money in the bank!

If you are in the market for a mortgage, please contact me. I am very accessible either via phone, email, or my website. I look forward to doing business with you in the future.

September 25 Mortgage Market Update

The mortgage market remains challenging but home prices have decreased and interest rates remain low. It seems to be a great time to purchase in most markets. Most realtors that I work with have a large inventory of homes for sale with few buyers. This creates a buyer’s market.

· Well, the Fed lowered interest rates last week, by .50%, as anticipated. The prime rate followed and is now 7.75%, which is great news for anyone who has an adjustable mortgage or line of credit tied to prime. But, mortgage interest rates did not go down. It was thought by most experts that this move by the Fed was already priced into the mortgage market weeks ago and they were right. Conforming rates (for mortgages at or below $417,000) are holding steady in the low 6% range, if you don’t want to pay any points. You can always assume paying 1 point will buy your rate down by .25%, sometimes .375%.

· Jumbo mortgage rates (those above $417,000) still remain relatively high, as compared with conforming size loans. It is highly recommended to go with a 3, 5, or 7 year adjustable – which are still pricing very well at certain lenders.

· I am continuing to have success with FHA and VA loans for my customers who have credit issues and low scores. These programs require you to fully document your income and assets but offer extremely good interest rates considering the loans are not always straight forward. I’m also working with a lender that is very forgiving and will underwrite these loans when the more conventional FHA/VA lenders will not.

· The sub-prime mortgage market continues to be challenging and lenders continue to exit the industry. The banks that are offering these programs are charging very high interest rates so that they can remain profitable. If you are in this market due to your credit, I highly recommend exploring FHA first before taking a loan at 9+%.

Please keep in mind that I do offer a variety of commercial financing. If you own a business or are thinking about doing so, please call or email me so we can discuss your options. Please visit my website, www.stevehawkmortgage.com, if you haven’t already. Thank you for your time.