Stockton and Lodi is a market filled with self-employed borrowers that have been left out of the housing market due to unfair regulations. Prospective home buyers who fall outside that box – even ones with good credit and a sterling history of repayment – might have found it difficult to qualify for a loan. We at the Mortgage House Inc. have been looking for ways to service those that didn’t quite fit into the conforming loan box. I’m happy to announce we now offer several niche programs to fill that gap including bank statements for income and interest only options for loan amounts up to $3,000,000.
These new programs are some of the most innovative ways to put a self-employed borrower in a home. However the new products aren’t for everyone. These programs will tailor to those with strong credit (700 min) with a history of financial responsibility while using the monthly deposits to help determine income for the loan. These programs are critical of past credit events and restricts lending to those with negative credit events in the past five years (No charge offs, collections, or tax liens) and the bank statements shouldn’t reflect NSF charges or occurrences.
These programs are geared toward the purchase or refinance of an owner-occupied home. It’s Maximum allowable LTV (loan-to-value) for the program is 70% for purchase loans and 65% for refinances.
On the surface these programs may raise eyebrows, but they’ve been carefully tailored to focus on credit behavior, healthy equity positions and realistic income calculations. You may ask “why offer these loans”? Because as the ability to repay is proven by the credit history, sizable equity positions and income is based on a non-biased asset statement that’s not watered down through a self–employed borrower’s accountant.
With 65-70% Loan to Value the borrower has a vested interest in keeping the loan current and provides enough skin in the game to make these loan programs viable for the lender.
Feel free to contact me directly if you’re interested.
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.
5 Simple ways to set your offers apart to get the deal
Are you tired of submitting offers and being overlooked? Areas like Stockton, Lodi , Tracy and Lathrop have been inundated with new buyers from the Bay Area and the local real estate is getting more competitive. Many of these suggestions have been used in high priced areas for years which is why many of Bay Area buyers are already doing them. Educate yourself and the one or more of the suggestions below to turn that no into a yes.
- Get Pre-Approved
There’s a difference between a pre-qualification and a pre-approval although most people don’t understand the difference. A pre-qualification is something lenders can provide to potential borrowers after running credit, analyzing your financials, and an automated underwrite. A pre-approval goes beyond a pre-qualification by nearly completing the loan process minus the property. This process takes longer but it will expedite your potential close time and it will give you an edge over the competition.
- Let the seller get to know you
Enclosing a thoughtful letter has been known to persuade sellers to accept one offer over another. Although someone may be selling the home they may still have some sentimental attachment to the home or neighborhood. Before making the offer consult with your agent to see if makes sense to write a letter to provide the owner comfort that the home and neighborhood will be good fit for you and your family.
- Make a non-contingent offer
This something I will never tell a borrower to do, but many times it will send a loud and clear message to the owner that you are determined and ready to buy their home. Inspection and Loan Contingencies exist to protect the buyers’ earnest money deposit in a transaction. When removing contingencies you essentially say that if I pull out of the transaction my deposit is surrendered.
- Offer to guarantee the value
After an offer is accepted there isn’t a guarantee that the appraiser can reach the value you’re seeking. Real estate prices have been on the rise and sometimes there aren’t suitable comps for an appraiser when they’re attempting to determine value. A way to reduce the fear over the appraised value would be to offer a maximum amount of money over the appraised value if it came in low.
For example: Offer 300k – If the appraised value comes in lower than offered price buyer will pay up to 5k over the appraised value for a total not to exceed 300k.
- Increase your earnest money deposit
Show the seller you’re serious by doubling or tripling the EMD. Having more invested in the transaction will give the seller a positive feeling about your offer.
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)