Archive

Archive for June, 2011

AZ Mortgage Question of the Day: Can I use money from my Home Equity Line for a down payment on an investment property purchase?


AZ Mortgage Question of the Day: Can I use money from my Home Equity Line of Cfredit for a down payment on an investment property purchase?

Yes. Yes you can! Couple of things:

1. Along with meeting the other investment property qualifying requirements, you need to be able to qualify WITH the new monthly payment from the home equity line.

2. You will need to show that is where your down payment money came from. This is important. IF you draw, for example, $20500 from your Home Equity Line of Credit, you cannot withhold $500 for yourself when you go to the bank to make the deposit. We will not be able to tie the two numbers together. Deposit exactly what you drew from the line. Then you will need to provide the statement from the line that shows the withdrawl and a statement from your account that shows the deposit. Voila! The numbers tie together and we can now “papertrail” the source of the funds.

3. You will need to provide the NOTE (your re-payment agreement) from when you acquired the Home Equity Line of Credit. This will show the terms of the line.

4. You will want to consider the Home Equity Line of Credit payment amount in your total exposure on the new investment property to ensure that it is still an income producing property.

NOW! Today! Immediately. PRONTO….is the time to consider purchasing investment property real estate. The opportunity is amazing. Property values are low and demand for rentals is extremely high!

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

Investment properties are HOT but how many can you mortgage?


Investment properties are HOT right now but how many can you mortgage?

It is important to cover this at application time as many investors assume with good credit and the minimum down payment requirement they can mortgage as many as they would like. This can vary DRAMATICALLY between lenders and needs to be prior approved before the investor starts shopping!

Each lender makes a distinction as to what underwriting guidelines they are going to follow. Most lenders have “overlays” over the top of the traditional Fannie Mae/ Freddie Mac guidelines.
Fannie Mae’s standard guideline is that one borrower cannot have more than 10 financed properties including any financed primary residence.

Many lenders have an “overlay” restricting that to 4 financed properties including any financed primary residence.

Many lenders restrict the number the borrower can already have financed with them as well.

Freddie Mac has a maximum financed properties of 4 including any financed primary residence.

As an agent, be sure you ASK your loan officer what the restriction is for the number of mortgage properties. Many loan officers are not even aware of this restriction and again will only approve the borrower on credit/down payment merit.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

 

More AZ First Time Home Buyer Tips (really tips for ANY buyer!)


In Arizona, as in most places, if you are a first time home buyer, you can be overwhelmed with the process of purchasing a home.

Here is a bit more guidance:

First, when your realtor says “Location.Location.Location.” Just trust them. It is critically important. The bottom line is, you can change virtually anything about a house, you cannot change where it is located. Again, just trust us on this one. Clients like to convince themselves into things. This one cannot be compromised.

Second, USE your realtor. Remember, your BUYER agent is paid by the seller so there is NO reason not to use a realtor and use them to your advantage. They have done this “home buying” thing before. They know what, when, who, where and how to look for real estate…. and how much! The “how much” is the biggest thing on everyone’s minds these days…”how much” is not everything though… You realtor can walk you through all sides of it.

Third, get pre-approved. I know. I’m beating a dead horse here but full disclosure, it will not be the last time I bring it up. Use the mortgage calcuator at http://fcfs.net/loancenter-calculators-monpmt.aspx – this will help you get an idea of your potential monthly payment. Get your head around what you are comfortable with AND what is realistic. Fourth, after you have your monthly payment from using the calculator- don’t forget to add in your property taxes (go estimate is .78% of your purchase price is ANNUAL taxes – divide that by 12 to get your MONTHLY taxes) and go to http://www.iii.org/media/facts/statsbyissue/homeowners/  to get stats on average home owners insurance rates. You can use a factor of .35% (same way as above) to get an estimated amount as well. These will be added into your monthly payment so you want to be prepared for your FULL payment not just principal and interest.

NOTE: Don’t forget about potential home owner association fees!

Fifth, not sure? You may want to see the comparison of what is costing you to rent versus the benefit of home ownership- try out this handy tool to see the true impact – http://fcfs.net/loancenter-calculators-rentvsown.aspx  – I can save you some time and just tell you that the value of home ownership will substantially outway renting (in this current Arizona market) but sometimes seeing it is believing it. Remember, these are just items to give you some direction. Your loan officer and your realtor will walk you through all of these steps. The more you know before you start the better educated you will be during the process!

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O) 602.294.9830(F)          www.fcfs.net

MB#0902810 NMLS #162494 AZDFI Loan Officer # LO-0911453

FREE credit report!


Remember, the law states you can get a FREE copy of your credit report annually!

Through the Fair and Accurate Credit Transactions Act (FACT Act) consumers are entitled to receive a copy of all three credit reports, annually, for free.

You need only go online to:

www.annualcreditreport.com

Enter your state of residence and follow the instructions to request a copy. IF the copy is requested online, you will have access to print it immediately from the site.

You can request a copy by phone at 1-877-322-8228 or in writing. If you request a credit report by mail, download the “request form” by going to www.annualcreditreport.com, print and complete the form and mail to:

Annual Credit Report Request Services

P O BOX 105281
Atlanta, GA 30348-5281

If you order by phone or mail it will take up to 15 days to process.

IF you find any errors or corrections, you can dispute any item found on your report by going to:
Equifax – www.investigate.equifax.com
Experian – www.experian.com
TransUnion – www.transunion.com

It is important to monitor your credit report annually and this is an easy way to do it for FREE! (as always, if it’s FREE, it’s for me!)

Having a dream is good, owning one is better!

 

 

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

AZ Mortgage Question of the Day: How long do I need to be out of an Arizona bankruptcy, short sale or foreclosure to be eligible to mortgage a new home?


AZ mortgage Question of the Day:

How long do I need to be out of an Arizona bankruptcy, short sale or foreclosure to be eligible to mortgage a new home?

Here is a generic guideline – keep in mind that many lenders have additional requirements depending on their own guidelines:

Bankruptcy:

Chapter 7:

FHA – 2 years with re-established credit / 1 year if bankruptcy was from extenuating circumstances and have shown substantial ability to manage new affairs since. A minimum 640 score.

CONVENTIONAL – 4 years and a minimum 680 credit score.

Chapter 13:

FHA – 1 year has elapsed since filing, all payments have been made to the trustee on time and ONLY with trustee prior approval.

CONVENTIONAL – 4 years and a minimum of a 680 score. All payments have been made to the trustee on time and ONLY with trustee prior approval.

Foreclosure:

FHA – * 3 years has elapsed from the finalized date of the foreclosure.

CONVENTIONAL –

* 3 years if borrower can prove extenuating circumstances. Additional occupancy, credit score and down payment requirements.

* 7 years if financial mis-management. Additional occupancy, credit score and down payment requirements.

Short Sale:

FHA * 3 years has elapsed from the finalized date of the short sale.

CONVENTIONAL – * 4 years – Additional occupany, credit score and down payment requirements.

One additional note to consider: Many lenders will NOT follow these guidelines if they had their own prior loan included in the bankruptcy, foreclosure or short sale so keep this in mind when applying. All of this information is in a generic sense and can only be guaranteed with an approval directly from your lender. This is another reason that applying and getting loan approved BEFORE you start home shopping is so important.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453