JUMBO Financing with No PMI – You better believe it!
The market is definitely shifting and prices are increasing which is why new programs are coming around to fill in the gaps. Jumbo mortgage guidelines had been overly invasive and difficult in the past but recently new investors have come into town to offer a better option.
At the moment we can provide financing on JUMBO mortgages without PMI (Private mortgage Insurance) with as little as 10% down with a 680 credit score. A few weeks ago I would have told you that were impossible, but things are changing rapidly. These new programs are reducing the reserves, credit score, loan to value, cash-out loan to value etc. If you were told no before you may want to give us a call to see if your situation now fits.
Loan limits rise in San Joaquin County and Sacramento county for the third year in row. Over the past 8 years our housing prices have shifted drastically and many of our home prices saw 40-60% drops from their 2007 highs. The economy has been improving and our housing market has rebounded faster than most thought was possible; which is why were seeing loan limit increases. This is welcomed news as many homes in San Joaquin and Sacramento counties have been priced above FHA loan limits for years.
When Loan limits rise potential buyers can purchase a home that may have been out of reach by offering a wider variety of favorable guidelines that FHA and conventional loans provide. Buyers purchasing above set loan limits can still use Jumbo financing, but that also comes with many the negatives borrowers are looking to avoid like larger down payments, higher interest rates, and strict UW guidelines. Using traditional conforming financing is typically the cheapest and easiest financing to obtain which is why it’s so great when they widen the limits.
2017 FHA Loan Limits San Joaquin
| 2017 FHA Loan Limits - San Joaquin County (Stockton, Lodi, Manteca)
2017 Fannie Mae Loan Limits San Joaquin
|2017 Fannie Mae Loan Limits for San Joaquin County (Stockton, Lodi, Manteca)
2017 FHA Loan Limits Sacramento
|2017 FHA Loan Limits Sacramento (Elk Grove, Natomas, Galt, Folsom, Sacramento)
2017 Fannie Mae Loan Limits Sacramento
|2017 Fannie Mae Loan Limits Sacramento (Elk Grove, Natomas, Sacramento, Folsom,Galt)
Don’t let appraisal repair conditions ruin your transaction
It’s imperative that you protect yourself by insuring the property you’re purchasing or selling is ready to be inspected by an appraiser. Allowing an appraiser to inspect a property with health and safety issues can easily derail a transaction and inflate the costs of repairs due to inaction.
“Per FHA Single Family Housing Policy Handbook, “HUD requires every property to be safe, sound, and secure to be eligible for FHA insurance”. The property must also comply with HUD’s Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). FHA appraisers must report all readily observable property deficiencies, as well as any adverse conditions discovered performing the research involved in completion of the appraisal. In addition to identifying and disclosing these items, appraisers must provide photographic documentation of them in the appraisal report. “ -AAA Appraisal Management Company
A homes deficiencies and adverse conditions can lead an appraiser to request additional inspections that buyers and sellers don’t require. Knowing common FHA repair conditions can help avoid the need for additional repairs and re-inspections.
The following repairs are suggested prior to scheduling an FHA appraisal inspection:
- Repair (i.e. scrape, sand, fill, prime, paint) all defective paint surfaces.
- Repair all leaks (i.e. plumbing, HVAC, roof, foundation, etc.).
- Repair all foundation/structural settlement.
- Repair/replace defective roofing.
- Repair/replace all loose/missing handrails.
- Repair/replace defective and exposed electrical wiring.
- Properly install required safety items such as GFCI outlets, smoke detectors, carbon monoxide detectors, water heater pressure relief valves/extension pipe/straps, etc.
- Repair/replace broken inoperable windows/doors and their locks.
- Repair/replace broken/inoperable overhead garage door openers.
- Repair/replace broken/uneven/loose stairs, walks, driveways, flooring, etc. (Trip hazards)
Why do I care if an Appraiser requires repairs or other inspections? Isn’t that a good thing?
By the time you have an appraisal done, you should already know the issues a home has and hopefully negotiated with the seller to repair items that will impact the financing of the home. If an appraiser requires a repair they will charge for an additional inspection to ensure that said repair was completed. Avoiding charges and issues should be your focus.
Why is chipping and peeling paint a big issue?
Homes built prior to 1978 with chipping and peeling paint shouldn’t be inspected until the paint is repaired. If the home was built prior to 1978 FHA requires and EPA certified painter to repair even the smallest repairs and that can cost nearly double the normal rate depending on the painter. The seller can easily fix these things before the appraiser visits the property and avoid a potential nightmare.
Does an Appraiser really need to come out to the home to confirm a smoke alarm was installed?
YES! Make sure there are smoke alarms in all bedrooms and a Co2 detector installed on each floor. Otherwise this will incur a re-inspection fee ($50-$150)
Beginning October 1st, 2016 USDA loans will drastically reduce their upfront and annual guarantee fees. It will allow home buyers and homeowners in rural communities to reduce the costs associated with closing and holding a USDA 100% financed loan.
USDA guarantee fees are very similar to FHA’s MIP/ UFMIP(Mortgage Insurance Premium and Upfront MIP) or VA’s Funding fee. Both FHA and USDA charge and upfront (financed) fee and an annual fee (paid monthly), while VA only charges an upfront funding fee.
| ||Upfront Guarantee Fee||Annual Guaranty Fee (Paid Monthly/12)
Over the past several years delinquency rates and foreclosures have reduced to normal levels and USDA has reduced its risk which led to a reduction in the amount of insurance they need to collect. This is a win for borrowers who plan to move into an USDA eligible community.
What areas can I buy a home and use a USDA home loan?
USDA will allow financing on homes in areas they have deemed rural. Below is a list of some towns, cities and communities within 75 miles that will currently work:
Galt, Lathrop, Jackson, Sutter Creek, Wilton, Linden, Lockeford, Rancho Murieta, Plymouth, Thornton, Farmington, Escalon, Oakdale, San Andreas, Del Rio, Ripon, Patterson, Discovery bay, Newman, Waterloo, Valley Springs, Wallace, Walnut Grove, Rio Vista, Camino, Placerville, and many more in between
How much will the lower Guarantee fees save me?
On a $300,000 home, the new lower USDA upfront Guarantee fee of 1.0% will save you $5,250! This will help keep your loan balance lower because the USDA upfront Guarantee fee is normally added to the loan balance.The new .35% annual fee (paid monthly) will reduce your monthly payment by approximately $37.50/month or $450/yea.
Why hasn’t my lender offered this program to me?
The truth is, Most lenders either don’t offer the program or don’t understand it. It’s a Niche type of loan that isn’t available for use in big cities, so many large banks and lender don’t bother with it. We live in an area that rightfully suits USDA financing due to the surrounding rural landscape ithat is far reaching and affordable.
Banks that don’t offer USDA or the other ‘niche’ loan programs that we offer, will often purposely withhold educating and informing their customers in hopes they don’t go elsewhere for their mortgage.
And don’t think USDA is the only low down payment option you have.
If you would like to find out of you can qualify for a USDA loan and interested in comparing that option with several other home buyer assistance programs that offer down payment and closing cost assistance, call me at 209-474-7111 or email email@example.com
Fannie Mae recently changed their policies regarding the purchase of a home after a major credit event like a foreclosure, short sale and bankruptcy. The changes are both positive and negative, but seem to focus on reducing the wait times for those that encountered an “extenuating circumstance” or in layman’s terms a one-time or temporary event that led to the negative credit event. These changes show Fannie Mae’s focus on helping those that were hit hard by the recession.
|Derogatory Event||Waiting Period Requirements||Waiting Period with Extenuating Circumstances
|Bankruptcy Chapter 7||4 Years||2 Years
|Bankruptcy Chapter 13||2 Years from discharge date|
4 Years from dismissal date
|2 Years from discharge date
2 Years from dismissal date
|Foreclosure Included in Bankruptcy||4 Years||2 Years
|Short Sale or Deed in Lieu||4 Years||2 Years
|Foreclosure||7 Years||3 Years
After bankruptcy, foreclosure, or short sale a borrow must re-establish credit in order to meet minimum Fannie Mae guidelines. For specific down payment and documentation needed please contact me directly.
What’s considered an extenuating circumstance?
Extenuating Circumstances must be verifiable hardships that are considered out of the borrower’s control that significantly reduce income or expense. This can be anywhere from job loss to health issues.
I foreclosed when my property lost substantial value, is that an extenuating circumstance?
Unfortunately no, that falls under a strategic default and is exactly why Fannie Mae is drawing a line in the sand. If you fall into this category waiting 3 years and using FHA may be the best option for you.