2018 San Joaquin County Conventional and, FHA Loan Limits have been released and INCREASED

San Joaquin County 2018 loan limits have been released and increased for FHA and Conventional Conforming loans.

San Joaquin loan limits encompass Stockton, Lodi, Manteca, Lathrop and surrounding areas.  At the end of every year the area median income and median home values are reviewed to determine a loan limit for the area.  Over the past few years San Joaquin County has seen a steady increase in values and income which has translated into higher loan limits.

Loan limits are calculated and determined by the GSE’s (Government Sponsored Enterprise- FHA, Fannie Mae, and Freddie Mac).  A loan limit is the maximum loan amount permitted under a specific program.  If a borrower was looking to purchase a home priced beyond the limits they could put additional money down or acquire a non-conforming loan (jumbo loan).

FHA 2018 Loan Limit in San Joaquin County / FHA 2018 Loan Limit Stockton and Lodi

The largest limit increase year over year in San Joaquin County was FHA.  The loan limits increased sharply up to $391,000.  This would allow an FHA borrower to purchase a home for $405,000 with as little as 3.5% down.  These loan limits are also used by first time home buyer programs like the GSFA platinum program and CALHFA.

Conventional 2018 Loan Limit for San Joaquin County

Conforming/ Conventional loan limits refer to a traditional mortgage that conforms to the guidelines set in place by Fannie Mae and Freddie Mac.  At the increased 2018 loan limit of $453,100 a borrower could purchase a home of $467,000 with a mere 3% down.

With loan limits up and inventory increasing 2018 is looking like a great year for real estate and financing.  When lending guidelines and options expand it provides borrowers who have been left on the sidelines an opportunity to jump in.  I would love to help you make that jump

Work with an Inventive Lender

Working with a lender who will provide the proper options and explanations is crucial to your success. Call me at 209-474-7111 or contact me here to discuss a loan scenario, get an estimate, or simply ask a question. I’m here to help and I always return a call personally.

 

The Self Employed Have a New Program – Income from Bank Statements

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

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.

Set Your Offer Apart From The Rest

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.

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

 

Co-signing a loan can prevent home ownership

If you have stable income and credit you’ve probably been approached by friends, family, and/or Girlfriends and Boyfriends to co-sign for a loan.  Lenders look for good credit and income to evaluate the potential risk of applicants and those that pose and elevated risk need others to help reduce that risk.  It’s important to know what can happen if you decide to co-sign before you sign on the dotted line.

Co-signing

A co-signer accepts joint responsibility for another individual’s debt.  Both parties are responsible for the making sure the debts are paid. Credit of both parties involved may be positively or adversely affected depending on the payment history.

Understanding the risk

Credit scores are based on risk and those who can’t qualify for a loan may have limited/no credit, bad credit, too much credit, or not enough income.  All of the reasons listed should raise red flags for any lender and potential co-signer.

Mortgages consider co-signed loans in the DTI (Debt to income Ratio)

Mortgages treat co-signed loans like any other loan, even when it’s someone else’s.  The only way to remove the liability from consideration is if you can prove someone else has been making the payments for 12 months.  This can prove difficult if the account is paid in cash or unverifiable.

Questions to ask yourself before co-signing:

  • Are you willing to assume the debt if the co-borrower wasn’t able/willing to pay?
  • Have you looked at the co-signer’s credit to evaluate their risk?
  • Are you willing to trust this person to make the payments?
  • Are you willing to jeopardize home ownership?
  • Are they making a rash decision they aren’t financially prepared for?

Things you can do to safely co-sign (If you must)

  • Explain expectations to co-signer
  • Require all payments be auto paid through bank – so that all payments are made on time and can be verified.
  • Make sure your number and email are attached to the account so you may be notified in case of account issues.
  • Require the co-signer to allow you to evaluate and inspect their credit history.
  • Avoid co-signing for anyone that’s not part of your immediate family. Avoid boyfriends, girlfriends, friends, etc.

Fannie Mae’s Foreclosure and Short Sale Waiting Periods Updated

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 EventWaiting Period RequirementsWaiting Period with Extenuating Circumstances
Bankruptcy Chapter 74 Years2 Years
Bankruptcy Chapter 132 Years from discharge date
4 Years from dismissal date
2 Years from discharge date
2 Years from dismissal date
Foreclosure Included in Bankruptcy4 Years2 Years
Short Sale or Deed in Lieu4 Years2 Years
Foreclosure7 Years3 Years

Requirements

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.

Questions

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.