Archive for Financing Related
February 22, 2010 at 6:00 pm · Filed under Financing Related and tagged: austin, creative financing, financial advisor, limited income, low credit score, mortages for foreign nationals, mortgage, other mortgage options, quick closing, real estate, securities-based loans, Texas, undocumented income
For clients with signficant stock investments who looking for something other than a traditional mortgage, a securities-based loan may be an option to consider. Since the collateral for such loans is the stocks (not the house), borrowers can avoid many underwriting and credit score issues while enjoying a competitive interest rate. We’ve recently seen fixed rates from various sources at 2% to 4.5%. These non-recourse loans may be particularly attractive to foreign nationals as well as those with low credit scores or limited or undocumented income and can usually close much quicker than a mortgage.
There are, of course, some down sides too. If the stock value falls below the loan amount, the borrower must make up the difference. Plus these loans, with typical terms from 3 to 10 years, cannot be prepaid. Whether a securities-based loan is the best option for you, is best discussed with your financial advisor. We have an exceptional advisor at Morgan Stanley Smith Barney that can answer further questions:
Christopher B. Cason, CRPC®
Global Wealth Management
Morgan Stanley Smith Barney
401 Congress Ave 19th Fl
Austin TX, 78701
direct 512.469.3431
fax 512.469.3408
toll free 800.359.8250
chris.cason@morganstanley.com
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February 17, 2010 at 8:43 pm · Filed under Agents Resources, Financing Related and tagged: 30 days, approved, austin, complex, condo, database, handbook, lender, requirement, VA
After posting about the FHA approved condo list, there was talk of the VA list so we’re posting that as well. VA Approved Condo Database: vba.va.gov.
*Go to Condo PUD Reports
*Select
1)Summary
2)Both
3)First few letters of the condo name followed by “*”
4)All Offices
5)Just select the State, leave city and county blank
If the condo complex is not on the VA Approved List, but does meet the requirements (see VA Pamphlet, Lender’s Handbook) then your lender can submit for approval. This process is said to take approximately 30 to 60 days, however we’re currently working with a lender who has received approval in as little as 2 weeks.
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February 10, 2010 at 6:30 pm · Filed under Agents Resources, Financing Related and tagged: FHA, HUD, FHA Approved condo, concentration, owner occupied, database, requirements, insurance, mortgagee letter, HOA, management
Consumers may search the database for FHA approved condos at entp.hud.gov. However, this should only be considered a starting place since approval guidelines have been tightening, and the database may not fully reflect these changes. Current requirements include:
*Complex must be at least 51% owner occupied.
*No one entity can own more that 10% of the units.
*Only 50% or less of the units can have FHA insured loans (concentration).
*Less than 15% of the units can be in behind more than 30 days on association fees.
*HOA must carry specific insurance on the complex (see Letter B below)
For detailed information read the Mortgagee Letter 2009-46-A and Mortgagee Letter 2009-46B .
When we represent clients buying condos with FHA loans, we’ve found the best way to make sure the condo complex is approved is not only to check the database but also to contact the HOA prior making an offer. The HOA management company should be able to provide answers to these questions along with details regarding their insurance coverage.
**Some of these same requirements may apply when seeking conventional financing as well.
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January 28, 2010 at 2:30 pm · Filed under Agents Resources, Financing Related and tagged: 2010, allowable, extended tax credit, filing, first-time homebuyer, income limits, maximum, tax credit
People have been asking, so here are the details of the extended tax credit:
When is the new deadline?
-April 30, 2010
-If a written, binding contract to purchase a home is in effect on April 30, 2010, the qualified buyer will have until June 30, 2010, to close
What is the maximum allowable credit available to a qualified buyer?
-Up to $8,000 for a first-time homebuyer ($4,000 married, filing separately)
-Up to $6,500 for a current homeowner ($3,250 married, filing separately)
Who qualifies for the extended credit?
-First-time homebuyers who purchase homes between November 7, 2009, and April 30, 2010, to use as their principal residences; homebuyer and spouse cannot have owned a principal residence for three years prior to home purchase
-Current homeowners who purchase homes between November 7, 2009, and April 30, 2010, to use as their principal residences and have used their previous home as a principal residence for five consecutive years of the past eight years
-In addition to previously-required documentation, homebuyers must also include documentation of purchase with tax returns to secure the credit
*It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse in order to claim the tax credit.
What are the income limits for the newly-extended credit?
-$125,000 for single buyers and $225,000 for married couples (additional $20,000 phase-out allows for partial tax credit)
-Homebuyers who earn more than the maximum qualifying income ($145,000 for singles, $245,000 for married couples filing jointly) are not eligible for the credit
What is the maximum home purchase price?-The maximum home purchase price is $800,000
Will the extended credit need to be repaid?
-The credit does not have to be repaid as long as the buyer occupies the purchased home as his or her principal residence for more than three years
-If the home is sold within three years of purchase, the full credit amount must be repaid
*Information provided by the National Association of Realtors. Visit NAR or a certified tax attorney for additional details
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January 22, 2010 at 11:32 pm · Filed under Agents Resources, Financing Related and tagged: changes, FHA, guidelines, Federal Housing Administration, MIP, FICO, seller concessions, David Stevens, risk
HUD.gov
January 20, 2010 the Federal Housing Administration (FHA) announced the following changes coming this spring to FHA loans:
*Upfront mortgage insurance premium (MIP) raised from 1.75% to 2.25%
*Borrowers with FICO scores below 580 will have a required downpayment of at least 10%
*Allowable seller concessions lowered from 6% to 3% (seller concessions meaning the amount of closing costs the seller can pay on behalf of the buyer)
Commissioner David Stevens explained “Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important. When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Read More
January 21, 2010 at 5:20 pm · Filed under Agents Resources, Financing Related, Real Estate General and tagged: end of owner financing, end of seller financing, HB 10, licensing, originator, prohibit, regulation, SAFE, seller financing
TREC Legal Update Course & Text
On January 19th, 2010, we attended a TREC legal update course which informed us HB 10 – New Registration for Mortgage Originators – Texas Secure and Fair Enforcement for Mortgage Licensing Act (SAFE) has effectively ended seller financing. The room of agents and brokers was in uproar. When the clamor subsided, the TREC licensed instructor explained that House Bill 10 was passed to comply with SAFE under which all residential mortgage loan orginators who are not employees or subsidiaries of a depository institution who are “registered with the federal banking agency having jurisdiction over that institution” are subject to state licensing and regulation. The definition of residential loan originator does not include:
*a person who performs solely administrative or clerical tasks on behalf of the residential loan originator,
*a person who performs only real estate brokerage activities unless that person is compensated by a lender or agent of the lender
*a person who is involved solely in providing extensions of credit related timeshare plans
The definition DOES include private investors who provide their own financing. The only exception to seller financing, the instructor explained, was loans between family members. If this is the case, many of us asked, why do we still see owner financing advertised all over town? To which there was no good answer. It’s possible that this information is too new and not yet widely enforced.
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January 21, 2010 at 4:33 pm · Filed under Agents Resources, Financing Related, Foreclosures & Short Sales, Real Estate General and tagged: affordable, austin, fast, FHA, foreclosure, HUD, loan, policy, quicker, real estate, restrictions, Texas, waiver
Ann McKinley NMLS#200305, Network Funding
HUD has temporarily waived the rule on FHA loans that prohibits insuring mortgages on homes which the seller has owned less than 90 days. Previously this requirement has both prevented the quick turn around of foreclosed property and limited buyer’s loan options when seeking affordable homes. The current plan is for the waiver to be in effect for one year, however FHA may withdraw or extend at any time. It does come with the following restrictions:
*Transactions must be arms-length. No identity of interest between the buyer and seller.
*If the sales price is 20% or more above the seller’s acquistion cost, the lender must meet specific conditions for the waiver to apply.
*Waiver is limited to forward mortgages and cannot be used under the Home Equity Conversion Mortgage purchase program.
Read More: full text of waiver on HUD.gov
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March 28, 2009 at 8:50 am · Filed under Agents Resources, Financing Related, Real Estate General and tagged: Appraisal, appraiser, austin, comparables, FHA, guidelines, price, real estate, rules, size, solis
Revised federal guidelines require that all FHA appraisals done after April 1, 2009 provide:
1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71).
2. At least 2 comparable sales within 90 days of appraisal date.
3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables.
4. Bracketed listings using both dwelling size and sales price when possible.
5. Adjust active listings to reflect the List To Sales Price Ratio.
6. Adjust pending sales to reflect contract sales price when possible.
7. Include original list price and any revised list prices.
8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales.
9. Absorption Rate Analysis.
10. Known or reported sales concessions on active and pending sales
FHA also is restating its warning that “Direct Endorsement Lenders are reminded that if the appraiser they selected provides a poor or fraudulent appraisal that leads FHA to insure a mortgage at an inflated amount, the lender is held responsible equally with the appraiser for the integrity, accuracy and thoroughness of an appraisal submitted to FHA.”
Since this will require additional work by appraisers, it is likely to lead to higher fees.
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February 21, 2009 at 12:45 am · Filed under Financing Related and tagged: austin, creative financing, credit, double wrap, investor, real estate, revocable trust, seller, Texas, wrap loan
Obstacles, such as our current real estate market and the tightening of credit, often lead to creative solutions. We came across this interesting 25-minute video about the “double wrap” which is likely a form of revocable trust. Though the concept isn’t terribly intricate, it doesn’t lend itself well to a quick summary. Best to watch the whole video. As always, we recommend investors seek the guidance of their attorney.
Double Wrap Video
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