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.

 

 

Loan Limits Rise for FHA and Conventional Loans

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)
SingleDuplexTriplexFourplex
$362,250$463,750$560,550$696,650

2017 Fannie Mae Loan Limits San Joaquin

2017 Fannie Mae Loan Limits for San Joaquin County (Stockton, Lodi, Manteca)
SingleDuplexTriplexFourplex
$424,100$543,000$656,350$815,650

2017 FHA Loan Limits Sacramento

2017 FHA Loan Limits Sacramento (Elk Grove, Natomas, Galt, Folsom, Sacramento)
SingleDuplexTriplexFourplex
$488,750$625,700$756,300$939,900

2017 Fannie Mae Loan Limits Sacramento

2017 Fannie Mae Loan Limits Sacramento (Elk Grove, Natomas, Sacramento, Folsom,Galt)
SingleDuplexTriplexFourplex
$488,750$625,700$756,300$939,900

 

 

USDA Drastically Reduces Guarantee Fees for 100% Financing

USDA Rural San JoaquinBeginning 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 FeeAnnual Guaranty Fee (Paid Monthly/12)
October 2016-20171.00%.35%
2015-2016 September2.75%.50%

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 jwomack@themortgagehouse.com

Home Energy Ratings and Energy Efficient Mortgages

Feeling powerless against high energy costs isn’t acceptable anymore.

If you’re in the market for a home it would be wise to order a HERS report and possibly obtain an EEM.

Acronyms and programs may be a bit boring, but I assure you knowing the energy flaws of a home before you buy could save you thousands in energy costs.

  • HERS (Home Energy Rating System) is a powerful tool you can use to evaluate your homes energy consumption with an in depth diagnostic report.
  • EEM (Energy Efficient Mortgage) is added into your current mortgage to pay for energy upgrades on a home purchase.

Home Energy Rating System (HERS)
HERS inspection results are based on diagnostic testing using specialized equipment, such as: a blower door test, duct leakage tester, and infrared cameras to determine:

  • The amount and location of air loss/leakage throughout the home
  • Percentage of air loss/leakage through HVAC
  • The quality and effectiveness of current insulationgreener Solutions Energy Efficient Mortgage
  • Window and Door energy loss
  • Appliance energy assessment (Water heater, HVAC, Kitchen Appliances)
  • Solar benefit analysis

The report will produce a computerized simulation analysis with accredited rating software to calculate a rating score on the HERS index. The report will provide recommended improvements based on a cost benefit analysis and expected return on investment through energy savings. These energy upgrades can be financed through what’s called an EEM (Energy Efficient Mortgage).

Energy Efficient Mortgage
Energy Efficient Mortgage program (EEM) helps home buyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a home as part of their home purchase or refinancing mortgage. Items that can be included in an EEM

  • Appliances (Water Heater, Kitchen Appliances)
  • Insulation
  • HVAC and Duct repair
  • Windows and Doors
  • Solar

Loan amounts vary by county and price of the home, as well as lender limits. So we like to stress that the best way to approach the topic of EEM is during the Pre-Approval/Approval stage of the lending process, not when they are looking at homes or after they found one. It’s better to go into the search with open eyes knowing your options opposed to finding out later.

The EEM shouldn’t be an added stress, the process is simple, and when you think about it, you want the savings your upgrades will bring to be greater than the cost of the upgrades, we often use the analogy you give us $50 we will give you $51 and new windows! The program is set up to provide buyers the opportunity to upgrade the home without incurring additional costs; the additional loan payment should equal the energy savings. An EEM on an older home will provide the funds necessary to upgrade while also adding which should be a no brainer.

Who should obtain a HERS report and EEM?
All homeowners can benefit from the homes energy data; however homes built before 2000 would likely benefit more. Energy focused building has improved drastically in the recent years and older homes stand to save the more.

Is the EEM used in Stockton?
The amount of Energy Efficient Mortgages in Stockton is increasing, because of companies like ours that draw attention to the cost and energy saving potential. Stockton was built in phases and the majority of homes were built prior to 1980, which leaves thousands of potential homes without energy improvements. Think about single pain windows, ineffective insulation, Missing weather stripping, Old HVAC, and aging appliances.

New Home Owners Checklist

You didn’t think your work was over did you?

After waiting weeks to close, providing piles of documents, and signing countless forms the home you dreamed of is finally yours. Yes the buying process is over, but the hard work isn’t and I’ve compiled a list to help. The new home owners checklist should help guide you into a smooth transition.

Change the locks
You never know who might have a key to your home and it’s important to re-key the home ASAP to prevent unlawful access.

Hook up utilities
Contact your local utility providers to set up service. Some providers will require the deed before activating service. The most common items are electricity, gas, water, trash/sewage, cable, and internet)

Change your address
Visit your local post office and grab a change of address package. The package comes with coupons for home related services and items like hardware stores, window coverings, and moving supplies.

Replace batteries in smoke and CO2 alarms
The batteries may be working currently, but you have no idea when they were replaced.

Map the circuit breaker
Before moving everything in the home; locate the circuit breaker and label it. This can help you with troubleshooting problems later.

Find the water and gas shutoff valves
Finding this will shorten the time it takes stop a gas leak or plumbing disaster.

Create a House Binder
Organizing documents associated with your home will help with future problems. The items listed below are important, but they are rarely looked at and often get lost.

Items to include in the binder

  • Notes, Deeds, and Contracts from the purchase
  • Contact information of all parties involved (Lender, Realtor, Insurance, Escrow, Title, etc)
  • Appliance Information (Manuals, Receipts, Service/ Warranty info)
  • Utility account and contact numbers (Water, Cable, Trash, Electricity)
  • Neighbor’s name and phone numbers
  • HOA bylaws and contact info
  • Irrigation pipe layout
  • Insurance Policies

First Aid and home safety
Make sure the home has safety items like flashlights, fire extinguishers, and a first aid kit.

Congratulations on your new home purchase!