The down low on using GIFT funds for down payment…

Many types of mortgage financing allow for GIFT FUNDS to be used towards down payment.  The basics?
* Gift funds need to come from a blood relative (“donor”)

* The “donor” needs to be willing to provide the “source” of the funds.  This can be a bit tricky as many times the relative does NOT want to provide bank statements or asset statements to show where the money came from.  There is no way around this so prepare for it from the beginning.

* The “donor’s” bank statement can not show any LARGE deposits into it in the statement period.  The reason for this is the underwriter wants to see that the “gift funds’ are not borrowed funds requiring a repayment.

* The “donor” will sign a gift letter stating they are gifting the funds from Account “X” and that the funds do not have to be repaid.

* Those funds should then be wired directly to the escrow company handling the transaction.  This helps to avoid having to “paper trail” the funds through the borrowers account and again to escrow.  If the “donor” sends the funds directly to the escrow company it eliminates this step.

Remember, on FHA loans, 100% of the down payment AND closing costs can be gifted.

Be sure to check on the specific type of CONVENTIONAL loan you are qualified for as to the allowable “gift funds” per your program.

Ready to get started?  You can apply ONLINE conveniently at www.fcfs.net

If you have any questions, feel free to contact us at 602.294.9288

or E-mail:  mortgagedr@fcfs.net

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Having a dream is good, Owning one is better!

Leslie Nilsen

Owner/Broker

First Class Financial Services, proudly Arizona mortgage lending since 1999.

602.294.9288(O)

602.294.9830(F)

www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

 

 

 

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Arizona real estate market update!

Thank you Sarah Moran of Equity Title for providing me some up to date info on the Arizona real estate market!

This is the Market Update through the end of May 2011.

Good News: Total active listings have dropped by another 3051 units over the beginning of last month. As of June 12, we sit at 31,227 Actives. Sales are at 9963 for the last 30 days (as of June 12), which is trending up. We are currently sitting at a 3.1 months of supply. If you subtract out the AWC Contracts (which are included in Actives in the Cromford Report), we are at 2.4 months of supply. Traditionally, 3-4 months of supply indicate a balanced market. We are teetering on a Seller’s Market!

Distressed Market: This represents the percentage of distressed properties that are being listed and sold. Short Sales currently represent 21% of the Closings and 39% of the active Listings for a 5.7 Months of Supply. Distressed Sales (Short Sales and REOs combined) accounted for 65% of the total sales for May.

Closings: There were 8848 closings in May 2011 vs. 8536 closings in May 2010 ~ which equates to a 4% increase over last year! 

Reality Check: The Median Sold Price for Maricopa County for May 2011 was $120,000. In May 2006, the Median Sold Price was $253,418! In May 2000, the Median Sold Price was $125,000. Use this at your listing appointments to help explain what has happened to our market and get realistic list prices!

We currently sit at a 3.1 months of supply valleywide. And we are finally seeing movement in the high-end market. In the MLS, there were 98 properties that sold for $1+ million for the month of May – and currently in the $1+ million segment, there is a 12.3 months of supply – down drastically from previous months. An astounding 93% of the closed MLS Sales for May were less than $400,000!

MONTHS OF SUPPLY

East Valley: 2.7

NorthWest: 3.0

Paradise Valley: 6.1

Luxury ($1mil+): 12.3

Southwest: 2.7

Peoria/Glendale: 2.5

Camelback Corridor: 3.8

Cave Creek: 4.4

Ahwatukee: 3.3

Scottsdale: 4.8

Apache Junction: 3.3

Fountain Hills: 4.4  

Buckeye: 3.4  

Desert Ridge & Tatum Corridor: 3.3  

Thank you again Sarah Moran from Equity Title Agency for providing this “we are teetering on a seller’s market” info! LOVE THAT!  Sarah can be reach at Equity Title at sarahm@eta-az.com or 602-769-1438.

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

How can I help make your Arizona mortgage process easier?

How can I help make your Arizona mortgage process easier?

1. First and foremost, buying a home is in the top 5 most stressful things one will do in their lifetime. I certainly do not expect you to understand what, when, why and how. ASK! Call. E-mail or to make it a bit easier there is also a wealth of information online.

2. You can apply for your mortgage online at https://secure.web-loans.com/security-logon.aspx?timeout=1 – this is a SECURE webpage allowing you to enter your e-mail address, save your data and come back to it at a later time.

3. How much is it costing you to rent and what are the financial benefits to buying? You can compare renting versus owning here: http://fcfs.net/loancenter-calculators-rentvsown.aspx

4. How much can you borrow? Use this calculator to help you find out – http://fcfs.net/loancenter-calculators-prequalify.aspx

5. How will making an extra monthly payment affect the payback of your loan? Use this calculator – http://fcfs.net/loancenter-calculators-extrapmt.aspx

6. Check out the Frequently Asked Questions section – http://fcfs.net/faq.aspx

Your question may be covered here too! No question should go without asking!

Remember, my goal- 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

“I can’t buy a new house, I understand it is much more difficult to qualify”

That statement is just simply not true!

I can’t tell you the last loan application that I took that a borrower did NOT qualify.  I’m sure there was one but it is definately not the norm. 

I dare you to ask 5 people today, “Could you qualify for a mortgage if you applied today?” If they say “No.” Ask “Why?” I guarantee they will say “I understand it is much more difficult to qualify” but they will not have specifics as to what they consider “more difficult”.  It appears that most are repeating what they hear in the media “Its more difficult to qualify”.  It’s just not true.

Here is what people think… AND the reality in BOLD.

* I need 20% down payment, that could be 10’s of thousands of dollars! ……….. FHA requires only 3.5% and that can be gifted from a blood relative.

* I don’t want an FHA loan but cannot get a conventional loan without 20% down payment……. Mortgage insurance companies are back in the game and allowing borrower and lender paid mortgage insurance up to 95% loan to value.

* My credit score is too low… FHA allows for a minimum of 580 credit score. Conventional loans allow for a minimum of 640 credit score.  The average American citizen has a 660 score. 

* I can’t qualify to afford the payment… Most borrowers are shocked that their monthly mortgage payment is LESS than they are paying in rent. 

* I don’t have enough credit… borrowers need only 4 open active tradelines on their credit report and enough history to meet the minimum credit score requirement.

* I’m on fixed income and cannot qualify for the monthly payment ….. FHA allows for up to a 50% debt to income ratio (this means if you make $2000 a month you can have $1000 go towards total debt)

* I do not have any down payment money… the USDA Rural Housing product allows for a 100% financing on eligible properties on borrowers who meet the income eligibility as well. 

I could go on and on.  You get the point.  Spread the word to your borrowers.  Most people don’t realize how easy it is to qualify and are waiting when they could be shopping! 

Please join my “Squash the Qualifying Rumor” campaign…….Pass it on!

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

To Condo or not to Condo?

Ugh. Condo’s.  I don’t want to be a big downer on condo’s but… here it comes.  Specifically to Arizona, condo’s are increasingly more and more difficult to lend on.  There are several reasons for this but primarily the lenders make a distinction between whether the condominium project is warrantable or non-warrantable.  Simply put, lendable or not?  

Conventionally the project needs to meet a miriad of restrictions:  (this is the short list.. there are more)

* 70% of the units need to be owned and occupied as primary residences.

* The HOA cannot be in any litigation with the homeowners.

* One owner cannot own more than 10% of the units.

* The HOA cannot have more than 15% delinquency.

* The HOA has to be turned over to the owners.

* In a new construction project, 90% of the units have to be delivered.

* The HOA has to carry a minimum of a $1million dollar liability home owners insurance policy and carry an employee dishonesty rider (Many other insurance requirements but this tends to be a big one)

For FHA, the project needs to have received its NEW FHA approval (all FHA approved condo projects needed to get reapproved in 2010)

Given the above restrictions, you can see why I would be a big downer on condos.  With the amount of default we have seen in the state of Arizona, most projects have a higher than 30% investor occupancy.  Many investors have gone in and bought several units and made the projects ineligible OR the current owner is in default/ delinquent on HOA dues. 

I understand the draw to the condo projects as there are many that are priced too low to pass up.  Ask the right questions initially in order to determine if it is eligible for lending.  On a conventional loan, the HOA MUST complete a “Condo Questionaire”.  Most HOA’s do not hand complete them any longer.  They are typically done through HOA Questionaire Services for a fee.

My last question? How difficult will it be to re-sell given the difficulty today?

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

YAY! Lender LOWERS FHA credit score requirement to 580!

I ask you… IF you can get a mortgage with:

1. A 580 credit score

2. Your grandmother can gift you the 3.5% down payment

3. The seller can pay ALL your closing costs

4. (You can have ZERO contribution of your own money)

5. You do not need reserves to qualify.

6. You can get an interest rate below 5%

7. You have more inventory to choose from than eggs at an easter egg hunt.

8. You can have a new mortgage payment less than you are paying in rent.

9. You LOVE your realtor.

10. You LOVE your loan officer.

11. You HATE your roommate.

What is everyone waiting for?

Spread the word. Life is good. We need to take advantage of it!

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner/Broker

First Class Financial Services, proudly mortgage lending since 1999.

602.294.9288(p)               mortgagedr@fcfs.net                www.fcfs.net

MB#0902810/ NMLS#162494