Archive for the 'Financing' Category
Why Isn’t My Loan Closing On Time?
Wondering why your loan isn’t closing on time? Well, it’s because legislation from last summer is now kicking in. The Mortgage Disclosure Improvement Act requires that all people who purchase a home and get a loan must receive a Good Faith Estimate and a Truth in Lending Disclosure seven working days before closing. If those figures change and impact the annual percentage rate more than .125% of 1%, then the figures need re-disclosed and the closing must be delayed 3 business days.
Most lenders have always been good about giving their customers this information at application and most lenders don’t change their fees significantly between application and closing so this should not be a problem. This law really will protect the consumer by forcing all lenders to disclose their fees accurately and in a timely manner so customers aren’t sitting at the closing table thinking…”This isn’t the loan I signed up for!”
So what documentation should a borrower receive when they apply for a loan? The two documents in question are a Good Faith Estimate and a Truth in Lending Disclosure. The Good Faith Estimate breaks down the payment for the loan, discloses the down payment required, type of loan, the closing costs that the lender expects to charge and the items to set up the borrower’s escrow accounts if the borrower will be putting real estate taxes and homeowner’s insurance in an escrow account.
The Truth in Lending tells a customer the annual percentage rate, how much they will pay in finance charges, whether the loan is fixed or variable and whether a loan has a pre-payment penalty, among other items. All the things you’d like to know in writing before you agree to the loan, huh?
One of the first numbers on a Truth in Lending Disclosure is the Annual Percentage Rate. APR is a required item to be disclosed when you make a major purchase like a car or a home. It blends the note rate with the cost of the financing.
The official definition reads: “APR is the cost of the loan in percentage terms taking into account various loan charges of which interest is only one such charge. Other charges which are used in calculation of the Annual Percentage Rate are Private Mortgage Insurance or FHA Mortgage Insurance Premium (when applicable) and prepaid finance charges (loan discount, origination fees, prepaid interest and other credit costs). The APR is calculated by spreading these charges over the life of the loan which results in a rate higher than the interest rate shown on your mortgage/deed of trust note. If interest was the only finance charge, then the interest rate and the annual percentage rate would be the same.”
Charges on the Good Faith Estimate which are for actual services, like a survey and an appraisal, don’t impact annual percentage rate. However, charges on the form that go to pay lender’s and title company’s overhead do impact the annual percentage rate.
The important way this protects the consumer is that the figures disclosed at loan application can’t vary much between application and closing without letting the customer know in advance. This law won’t hurt a consumer dealing with a reputable lender, but it will protect a consumer who has fallen in with a lender who planned to bait and switch.
Discussion: 1 Comment »
Using The VA Loan For Your Greenwood IN Home
One of the best 100% loans still around is the Veterans Administration loan. Also known as the VA Loan, this loan program is specifically for persons that have served in the military. Over the years, we have helped many homeowners use the VA Loan to purchase their Greenwood IN homes.
When using the VA Loan to purchase your Greenwood IN home, Veterans (or active duty service people who have served enough years to earn their eligibility) can borrow more than 100% of the sales price of the home.
Here’s how it works: When you use the VA Loan to purchase your Greenwood IN home, you’re going to pay a VA Funding Fee. This VA Funding Fee is normally about 1.25% – 3.3% of the loan amount (this amount is going to vary somewhat depending on whether you have been full-time military or reservist and whether you have used your VA eligibility before).
This funding fee then gets added onto your loan amount and if you are entering the home with no money down your loan amount is 100% of the sale price of the home. Add the VA Funding Fee to this amount and that is how VA is able to finance more than 100% of the sale price of the home. It’s quite possible that Disabled American Veterans may be exempt from paying this Funding Fee, so be sure to check on that if you are a DAV.
Another huge advantage of using the VA Loan to purchase your Greenwood IN home, besides not needing a down payment, is the fact that these loans have no monthly mortgage insurance! That’s always good news and another way to keep your monthly house payment down.
If you’re thinking about using the VA Loan to purchase your new Greenwood IN home, be sure you have your VA Eligibility Certificate handy. Not sure where yours is? Click Here to obtain it. You definitely don’t want this to be a last minute hang up when you’ve found your Greenwood IN dream home.
Rates for using a VA Loan to purchase your Greenwood IN home are very competitive and qualification is not difficult. But it will be important for you to talk with a local Greenwood IN Mortgage Lender so you know what the VA Loan Limits are for your particular area.
The bottom line is, if you’ve served in the military, be sure to ask about using the VA Loan to purchase your Greenwood IN home. And most importantly, thanks for serving our country. We appreciate all you do.
By the way, this information was provided for us by Jody Bleier at Stonegate Mortgage. If you’re wanting a quick response and excellent service, contact Jody NOW at: 317.213.1387 Also . . . be sure to ask Jody about using the VA Loan to refinance your current mortgage, as well!
If you found this information helpful, you might also enjoy
http://ishopgreenwood.com/2008/12/19/more-specifics-on-the-fha-203k-loan/
http://ishopgreenwood.com/2008/12/13/is-it-really-possible-to-roll-rehab-money-into-my-mortgage/
http://ishopgreenwood.com/2008/12/03/i-have-no-down-paymentcan-i-still-buy-a-home/
Discussion: 1 Comment »
More Specifics On The FHA 203k Loan
As a quick follow up to an article we posted last week, here are some more specifics regarding the FHA 203k Loan Program.
Again, this is a great loan for financing HUD Homes, Bank Owned Properties and “As Is” or “Handyman Specials”.
From our friends at Indy Mortgage, “Here are some allowable improvements:
- Roofs
- Gutters
- Downspouts
- Windows
- Siding
- Doors
- Kitchens
- Bathrooms
- Room Additions
- Appliances
- A/C
- Hot Water Tank
- Well
- Septic
- Floors
- Basement Waterproofing
- Basement Finishing
- Porches
- Patios and more!”
If you are anywhere near the Greenwood or Indianapolis area, you know our real estate market is full of HUD Homes and Bank Foreclosures to choose from.
Want to try your hand at bringing some love back in to these once loved homes? Give us a call at 317.893.1636 or send me an email at Shawna@iShopGreenwood.com
We’d be more than happy to hook you up with the best deals and the best loan programs for these types of projects. Contact us today!
Discussion: 2 Comments »
Can I Really Roll Rehab Money Into My Mortgage?
The answer, believe it or not, is actually “Yes!” But in order to do it, you’re going to need to use the FHA 203k Loan Program. Now this is not giving you an open checkbook to go out and fix up a property in need of help but, it is a way to help you make some necessary repairs without paying for them out of pocket. Here’s how it works:
Prior to closing, you will need to have contractors come in and give you bids for how much it will cost to make the needed repairs to your new home. Now your new loan amount will be based upon the sale price of the home plus the amount of money it will take to make the repairs.
After closing, you will have a limited amount of time to get all of the repairs made. Then the property will be re-inspected by the lender and if everything meets their approval, the money to pay for the repairs is then released to the contractors.
There are many HUD owned and bank owned properties that could qualify for the FHA 203k loan program. Right now, the loan limits for FHA loans in the Indianapolis area is $271,050. And best of all, the down payment needed for an FHA loan is only 3% of the purchase price. But if you’re thinking about going this direction, you may not want to put it off because this down payment amount will be increased to 3.5% as of January 1, 2009.
Want more info or want to see if you could qualify for this type of loan program? Please contact Jody Bleier at Stonegate Mortgage (317.213.1387) and be sure you tell her you found out about her at iShopGreenwood.com ! Good luck! Thanks for the info Jody!
Discussion: 3 Comments »
I Have No Down Payment…Can I Still Buy A Home?
Believe it or not, inspite of all that you’ve heard on the news lately, there are still 100% loan opportunities for 
homes that fall under the category of Rural Housing. The USDA program (also known as Rural Housing) has not changed their guidelines.
These loans are Zero Down and require no Monthly Mortgage Insurance (commonly referred to as “PMI”). They do, however, collect a Guarantee Fee which ends up getting financed into the loan (so yes, the customer ends up financing more than 100% into the loan when you figure there was no down payment, plus an additional fee rolled in).
Borrowers must meet income limits and the property must fall into a Rural Housing designated area. Right now, the income limits are based on household size and go up incrementally per person.
After January 1st, they will have only two categories of income: 1. Family of 4 or under or 2. Family of greater than 4. This will benefit singles and couples with no children as they will be able to take advantage of higher income limits.
To find out if a property you are interested in is in a USDA area, simply go to www.rurdev.usda.gov
From there you will need to go to:
- Housing and Community Facilities, then
- Income and Property Eligibility, then
- Property Eligibility – SF Housing, then
- Accept their terms and plug in the address you’re curious about
This information came to us courtesy of Jody Bleier with Stonegate Mortgage here in Greenwood. If you have more specific questions, please feel free to contact her directly at: 317.213.1387 And be sure you tell her that you found her at iShopGreenwood.com !
Discussion: 4 Comments »
Down Payment Assistance…Going…Going…
Wow, it is September 7th and I can’t believe that the end of Down Payment Assistance programs is right around the corner!
Yes, if you have been pre-approved for a loan program that allows the seller to pay your down payment for you, you absolutely have to close on the house BY THE END OF THIS MONTH – SEPTEMBER 30, 2008 or there’s a very good chance you’re not going to get the help you need! Read the rest of this entry »
Discussion: No Comments »
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