Posts Tagged ‘money’

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

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

or E-mail:

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Having a dream is good, Owning one is better!

Leslie Nilsen


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




NMLS #162494

AZDFI Loan Officer # LO-0911453





Arizona Mortgage Question of the Day: Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?

Arizona Mortgage Question of the Day:  Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?

Well, kind of. 

There is a NEW Arizona mortgage underwriting rule for this.  IF you are qualifying for an Arizona mortgage and you have co-signed (for example for your son to buy a car) BOTH you and your son need to be on the NOTE to repay.   Your son makes the payments on time each month (out of his OWN individual account) then he can provide cancelled checks to show HE makes the car payment.  By doing so, you can qualify for your Arizona mortgage without having that payment included in your debt.

IF, instead, you initiate the loan FOR HIM, you are on the ONLY borrower on the NOTE, then you have to qualify for your new Arizona mortgage WITH the car payment regardless of who makes the payment. 

It always angered me that my father would never co-sign on my behalf, to establish credit.  After what I have seen on individuals mortgage credit reports, I now understand his concern.  Although we all know, I would have made all of my payments diligently 🙂 …… the alternative possibilities are scary.

I would always discourage anyone from co-signing on behalf of another person, however, in certain circumstances it can not be avoided.  IF this is the case- just ensure you are BOTH on the NOTE.

Having a dream is good, owning one is better!

Leslie Nilsen

Owner/ Broker

First Class Financial Services

602.294.9288 (p)         


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 – 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  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 –  – 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)

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

5 tips for First Time Home Buyers!

First, Congratulations on wanting to buy your first new home! NOW, is definately the time! This is not only an exciting time but a stressful one as well. Here are some tips to help you through the process:

1. Ask questions. Ask questions of everyone you can find. I mean EVERYONE! Chances are, they asked or experienced the same question at some point in their own lives. No question is a stupid question.

2. The first question to ask is: “Can you give me a referral to a good mortgage loan officer?” Your GOOD loan officer is going to be as valuable to you as your physician. Once you choose one, apply for your new home mortgage:

* How much do you WANT to spend?

* How much do you QUALIFY for? (these could be two radically different numbers)

* How much money will you need for your down payment?

* What, if any, issues will you need to deal with in order to qualify?

* What is the current interest rate and how much tolerance do you have for interest rate movement?

3. Once you have your qualified magic purchase price number, you need a GOOD realtor. Again, ask your sphere for a realtor referral. Interview them like they are applying for a job with you. They are! The will be “working” for you until you find your new home. You need to like them! They need to be clear about your needs/wants, available to take you out looking on your schedule and be someone you want to spend time with.

4. Start shopping! Hit the streets. What do you find? Does your price point accomodate your needs? Stay in contact with your loan officer. Do you need to tweak your pre-qualification in order to make the homes you are seeing work with your budget? What are mortgage interest rates doing?

5. Make an reasonable/realistic offer! It is a buyer’s market! You are in the driver’s seat here but be realistic. Listen to your realtor. Use their advice and make a reasonable offer!

Watch for future blogs to elaborate on each of these items. Again, buying a home can be in the top 5 most stressful things you will do in your lifetime. If you fill your sphere with knowledgeable and helpful professionals you can take a tremendous amount of stress out of the equation.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner/Broker

Proudly mortgage lending in Arizona since 1999!

First Class Financial Services


NMLS#162476 / MB#0902810

“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!




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.


MB#0902810/ NMLS#162494

Kids and Money… The 3 C’s

Critical. Control. Credit.  Critical is #1. Control is 1.1. Credit is #1.2.  (All close in line is what I am trying to say)  

I have talked to my son about all of these since he was a toddler.  Little did he know when we were talking about how inappropriate it was for him to be throwing a fit while begging for candy at the grocery store, that we were really talking about his credit report.   “You cannot get future great stuff without doing the right thing right now” 

Critically think first, practice some control and know that credit is like breathing.   Re-read that last sentence.  If we all jumped out of bed, said “Goodmorning Day” and adopted that as our new mantra… where would we be? 

So many clients come to me with the dream of home ownership only for me to tell them that their credit score it too low to qualify.  They have worked their butts off, they have spent years saving the down payment money, they have changed their lifestyle to handle the new dream mortgage payment but skid…… no dream home for you.  Their credit score is too low because last December, when they bought a new big screen TV instead of making the credit card payment,  they forgot… “You cannot get future great stuff without doing the right thing right now”  I have to also remind them that their credit score plummets and is like climbing Mount Everest to get the score back up again.   THAT conversation is why I write this blog.  Although titled “Kids and Money”, sometimes my 44 year old clients need to be reminded of the lessons they should have learned with they were 4.

Critical. Control. Credit.  Start with YOUR kids when they are 4. 

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services
602.294.9288 (p)

MB#0902810 / NMLS#162476