was not on the forefront of the minds of consumers purchasing homes
There was a feeding frenzy to buy homes regardless of the ability to repay the loan
The prevalent thought at the time seemed to be , buy now and worry later
Unfortunately, this school of thought has hence caused thousands to lose their homes in foreclosures and scores other also filing for bankruptcy
Since 2008, the mortgage world of finance has seen a complete change in the way it does business
Lenders as well as consumers must now consider many new guidelines before receiving a mortgage
One of the biggest considerations is can the consumer qualify and still have the ability to repay their mortgage?
Changes in mortgage underwriting to qualify for a mortgage has been a rude awakening for many consumers, as denials have increased
Many home buyers have found that the world of lending has changed
Lenders are asking for concrete documentation for income, assets, explanations regarding credit, and other obligations such as student loans and prior collection accounts
These new underwriting guidelines and regulations regarding lending are taking place to make sure consumers are being protected
In other words, it doesn’t do you much good to get into a debt repayment, unless you have the ability to repay that debt, only later to endure the heartbreak of losing what you thought was a sure thing
Making sure you have the abiliity to repay are a return to common sense and reasonable financial responsibility on both lenders and consumers
implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for
Do you currently have a VA Loan? If so, you may find it beneficial to explore getting a VA Interest Rate Reduction Refinance Loan (IRRRL), commonly referred to by lenders as VA Streamline Refinance. Many Veterans here in Delaware, Maryland and Pennsylvania are seeing the benefits from this program.
The VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your current interest rate by refinancing your existing VA home loan. By obtaining a lower interest rate, your monthly mortgage payment should decrease. You can also refinance an adjustable rate mortgage (ARM) into a fixed rate mortgage.
VA Streamline (IRRRL) Facts and Answers
If I currently have a VA Loan, do I need a property appraisal? Answer: No appraisal or credit underwriting package is required when applying for an VA Streamline, IRRRL.
Do I need to put out any out of pocket to get my VA loan refinanced and my interest rate reduced? Answer: No, in most cases you need “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.
What if I currently have a VA ARM (adjustable rate mortgage) can I still to a VA Streamline Refinance? Answer: Yes, you can go from an existing VA ARM loan to a fixed rate loan.
I am a Veteran, how do I proceed? Answer: Simply give us or lender of your choice a call to get started.
Can I receive any cash if I do a VA Streamline Refinance? Answer: No, you may NOT receive any cash from the loan proceeds.
How do I know if I qualify? Answer: If you have an existing VA loan and currently occupy your home, you most likely qualify.
How do I get the application process started?
A new Certificate of Eligibility (COE) is not required. You may take your Certificate of Eligibility to show the prior use of your entitlement or you can use our e-mail confirmation procedure in lieu of a certificate of eligibility.
Are there loan limits to get my VA mortgage rate reduced?
VA does not set a cap on how much you can borrow to finance your home. However, there are limits on the amount of liability VA can assume, which usually affects the amount of money lenders will lend you. The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These loan limits vary by county, since the value of a house depends in part on its location. See Loan Limits for more information about the limits in your county.
When is the best time to get this done?
Your timing could not be better. Rates are now at their lowest point in years and if you are a veteran and currently have a VA loan higher than 4.0%, you may benefit from an interest rate reduction loan.
You’ve considered moving, but the home you are buying is either a foreclosed or short sale property. You’re not sure just how it works when purchasing such properties. The home is priced right, but you need to know more before proceeding.
Listed below are the concerns for buyers who wish to purchase foreclosed or short sale homes:
2.Appraisal: The home must appraise for the sales price you offer and requires a review by our underwriters to measure the value. Review with your realtor the comparable sales in the vicinity of the new home to be sure the comparable values are in line with your offer.
3. Time: When you make your offer, be sure to allow enough time for the lien holder to accept your offer and then additional time to final settlement. Our experience has shown 60-90 days settlement time is not unusable.
4.Be Ready: When you receive the go ahead from the lien holder, be ready to move quickly. The time it takes to get approved is slow, but once the lien holder agrees to the terms of sale, things move quickly. Don’t allow the seller to push you beyond the expected time to complete the sale.
5. Sales Contract: Have your sales contract reviewed by your real estate attorney. Make sure the contract includes all disclosures and any known conditions that exist with the property.
6. Earnest Money: Be sure your sales contract addresses any earnest money deposited. Copy your earnest money check and keep it in your file for future reference. Your mortgage lender may also ask for a copy.
7. Documentation: You want to make sure you can afford to purchase the home. If the home needs some “TLC” you may want to see if you have enough additional assets to make the purchase or are you expecting to get a mortgage that addresses those concerns? Knowing the mortgage programs and getting pre-approved is essential.
8 Attorney: You want to make sure the home you are buying has a clear, unencumbered title. Hiring a qualified real estate attorney or title agent is very important. Don’t be afraid to ask for credentials and client testimonials.
There are some great buying opportunities on the market at this time. Usually there is a reason behind why a property is being offered at a below market price. As buyers, you’re key question to ask is whether or not you can tolerate the possibilities of dealing with uncertain issues that may arise during the purchase transition.
If you have further questions, just click on the button below or give us a call at 302-266-9500 or toll free 877-266-9500.
You found a house you would really like to buy. The house is in a great Delaware neighborhood, it’s perfect for your size family, but it needs some work. You don’t have tons of cash to make the repairs and upgrade the kitchen or other rooms and still make the down payment. You need a mortgage that works for you. Good news!
There is a way to make your purchase a reality. Check out our FHA 203K.
Sometimes when you mention FHA 203K loan program many clients and realtors alike have the idea it is a difficult process. For some lenders, it might, but those who understand, an FHA 203K is the perfect mortgage product to purchase a not so perfect house in Delaware.
So here are the 7 things you need to do to get your FHA 203K Loan:
1. Contact a qualified FHA 203K Lender and get pre-approved.
2. Hire a professional realtor to find you a suitable property.
3. Get an appointment with a 203K Consultant. If the project is less than $35K, you may not need a consultant, but our experience has shown they are well worth retaining. The consultant creates a ‘job specification and bid request’. The consultant lists out the repairs and items needed to complete the work needed to repair and get the house ready.
4. Get contractor bids. Use the job specification and bid request as your basis for estimates. We suggest using a general contractor who will co-ordinate all facets of the work. Each contractor must be licensed and approved by lender.
5. Choose the contractor. Most often your loan consultant can provide you a list or you can get your own. Keep in mind the contractor must be licensed and insured. As the buyer, you are not allowed to do your own work, unless you are a licensed contractor and approved by lender.
6. Order the appraisal. We the lender, will order a FHA approved appraiser. Once value is completed, we can proceed to close the loan in order for the renovations to begin.
7. Contractor will begin the renovations. Once the work begins, there will be several inspections called, draw requests, which will be used as the basis for getting the work completed in a timely manner.
We are ready to assist you in adding the best value to your new home. We are lending experts who specialize in the FHA 203 (k) loan process. Together we have an extremely knowledgeable team of experts who know all of the governmental requirements of the 203 (k) process and we will assist you every step of the way to make sure that you will receive all of the monies you need to complete the job correctly and on time.
Let us know if you would like to see if you qualify: CLICK HERE
To learn more about the program, just click on the button below or give us a call at 302-266-9500 or toll free 877-266-9500.
You live in Delaware and currently own your home, but your family has grown or perhaps you’re retiring and want to down size. Everyone has a different reason for buying their next home.
You have purchased a home before and have a good idea of what to expect when making your home purchase. However, over the last 4 years there have been a lot of changes when it comes to buying your home. For the most part, changes in mortgage financing have been a good thing for consumers. The best part is that we are getting folks, just like you, into their Delaware homes every day.
Below are 9 things to consider before you begin searching for your new home:
1. How much do feel your current is worth if you put it on the market to sell today?
Compare your house to others nearby to get comparable values. The purchase market call these comparisons, “comparables.”
2. How much money will you realize after the sale of your current home?
This is the amount of money you will net from the sale of your house, after you payoff your current mortgage, transfer taxes, realtor fees and other closing expenses.
3. How long do you think it will take to sell your house?
Ask yourself, are homes in your area selling fast or slow? This is a good yardstick to determine your estimated transition to a new home.
4. Are you comfortable shopping for another house, without knowing you have a buyer for your current house?
Some folks are comfortable shopping for a new home without knowing whether or not their current house will sell in time and not knowing how much they will receive from their current house sale. Yet, others are not comfortable to move forward until their current house is definitely under a sales contract.
5. Does your income justify the new mortgage payment?
More importantly, does your current income support a new higher mortgage payment?
Have you made all your past mortgage payments to date on time? Are you paying your other revolving debt on time?
7. Do you have additional assets available to put down toward the purchase of your new home?
Do you have money saved? You have other liquid assets to put down on the new house and still have funds for closing?
8. Is your current job stable?
No one knows for sure how stable their job is in today’s economy, but you better than anyone, will have to answer this question.
9. How will the move to a new home impact your life?
Purchasing a new home should be considered one that will hopefully improve your quality of life. Be careful not to stretch your budget to the maximum when considering your new home purchase. Doing a household budget will help give you good direction in determining your overall ideal number for a new mortgage payment.
Moving is considered one of the top 3 changes that will occur in your life. The nice part is that mortgage process can go very smoothly and very quickly.
Congratulations, if you have decided to purchase another home. Our experiences have shown that no two persons are exactly the same in their needs and wants.
Take advantage of our free 30 minute consultation to determine what you can afford, what terms are best, and which program works for your needs. More importantly, you want to make sure you have the proper timeline and steps in between to make your home purchase as smooth as possible.
12-171″>FHAplays a very important role in helping more Americans and Delawareans qualify to become home owners
FHA maintains the viability of this important financial resource
FHA home financing is important for continued home purchases and sustained growth to the economy
As stated, FHA is essential in that FHA accounted for 50 percent of home purchase mortgages for African American borrowers and 49 percent for Hispanic/Latino borrowers, along with thousands of other eligible borrowers use FHA financing
In reporting on findings of the independent actuarial study,
, “FHA has weathered the storm of the recent economic and housing crisis by taking the most aggressive and sweeping actions in its history to reform risk management, credit policy, lender enforcement, and consumer protections,” said HUD Secretary Shaun Donovan
“During this critical period in our nation’s economic history, FHA has provided access to homeownership for millions of American families while helping bring the housing market back from the brink of collapse to a point where the outlook is positive and recovery is underway
FHA Acting Commissioner Carol Galante added, “While the loans made during this Administration remain the strongest in the agency’s history, we take the findings of the independent actuary very seriously
We will continue to take aggressive steps to protect FHA’s financial health while ensuring that FHA continues to perform its historic role of providing access to homeownership for underserved communities and supporting the housing market during tough economic times
Three factors are driving the change in FHA’s position compared to last year:
First, the house-price appreciation forecasts used for this actuarial review are significantly lower than those used in last year’s report, as the actual turnaround in the housing market occurred later than was projected last year
These house-price appreciation estimates do not include improvements to home prices that occurred since June and were depressed by a high level of refinance activity
Second, the continued decline in interest rates, while good for the overall economy, costs the FHA revenue as its borrowers pay off their mortgages to refinance into lower rates
Again, this is clearly a positive, but it impacts the actuary’s estimate of the value of the Fund
In addition, the actuary predicts that borrowers with higher interest rates who are unable to refinance will default at higher than normal rates, increasing losses from foreclosures for FHA
Third, based on recommendations made by the Government Accountability Office (GAO), HUD’s Inspector General and others, FHA directed the actuary to employ a refined methodology this year to more precisely predict the way losses from defaulted loans and reverse mortgages are reflected in the economic value of the MMI Fund
The two more important new initiatives that will affect future borrowers purchasing homes into 2013 are listed below:
Reverse a policy made in a prior Administration to cancel required premium payments after a certain period that effectively meant that while FHA’s 100% insurance guarantee remained in effect for the 30-year life of a loan, borrowers were only required to pay premiums for less than ten years
FHA has been left without premiums to cover losses on loans held beyond the period for which it collects premiums
This change will apply to new loans
In 2013, enact an increase of 10 basis points or 0
1 percent to the annual insurance premium paid by borrowers on new FHA loans
This premium increase is expect to add $13 per month for the average borrower and will strengthen FHA’s capital position without limiting access to credit for qualified borrowers
If you are live in Delaware and are currently considering making a home purchase using FHA financing, you may want to consider moving forward before the end of 2012
Entering into a sales contract and being assigned an FHA case number prior to years end (2012) may allow new borrowers from being part of the new planned initiatives, however, if allowed, this may still be lender specific
Wondering if refinancing your mortgage is something you should look into? That answer depends on what you want to get out of it.
Refinancing, or paying off your existing mortgage with a new one, could be worth it when it saves you money. And with interest rates near historic lows according to the Mortgage Bankers Association – it very well could help you save.
However, just because rates are low, doesn’t mean that refinancing is the right option for everyone.
In fact, refinancing costs and rates vary on a case-by-case basis.
Below is a list of questions you can ask yourself to help you make a decision if refinancing is right for you.
Question #1 – Will I get a lower interest rate if I refinance?
It only makes sense to refinance if the new mortgage is going to be better for you financially, right? Then, the first place to look is the interest rate, which is a good indicator of how much you could be saving.
Talk to one of our loan specialists here at Delaware Financial Capital Corp to find out if – and by how much – you might be able to lower your interest rate by refinancing. But keep in mind, the interest rate is just one piece of the puzzle. Sometimes a low interest rate might come with high fees.
Question #2 – How good is my credit score?
Why should you care about your credit score when it comes to refinancing your mortgage?
Here’s one reason: Lenders may use it to decide whether or not you are a good risk for a home mortgage.
So what’s a good score? Well, FICO credit scores – can range from 300 to 850.
And the higher the score, the better.
If your credit score isn’t where is should be, don’t worry. There are a few things you can do to help improve your score, like paying your bills on time and paying down your credit card balances.
Question #3 – Can I afford the refinancing costs?
If you’re currently paying 6% interest on your mortgage right now, it might feel like a no-brainer to try and refinance to a 3.5 % interest loan. But before you sign off on that new loan, you need to know how much refinancing will cost you.
Question #4 – How long do I plan on staying in this home?
This is one of the more important questions to ask yourself, because if you are planning to move within one or two years, refinancing might not be worthwhile for you.
Question #5- How stable is my employment?
One of the things lenders look at when determining whether or not they’ll approve you for a loan is the stability of your employment.
Does that mean you won’t qualify for a loan if you’ve had more than 1 job? Not necessarily, but you do need continuous employment. Lenders want to make sure you’ll have a job two months from now.
Question #6 – Can you put those big purchases on hold for a while?
If you’re considering refinancing, ask yourself if you can put other big purchases on hold for a while. If you can’t refinancing may not be in your best interest.
Don’t take out new debt at the same time you’re trying to get a refinance. Some borrowers think that the lender will see I just got a new car, so of course they’ll give me money – but in truth the lender worries if you have a new car (and new car payments) how will you pay the mortgage?
And while it’s okay to have some debt – like student loans or car payments – it’s important to make sure that you can manage all of your payments comfortably, including refinancing costs and monthly payments.
Finally, if you’ve already applied for a refinance, don’t take on new debt until the deal has closed.
How do you know whether or not you qualify? Simply, you won’t know unless you ask. If this whole topic seems a little confusing, please do not hesitate to give us a call at 302-266-6500 to see if you may qualify for a lower rate and a refinance.
NMLS #128606, Licensed by the PA Dept of Banking, State of Delaware, and State of Maryland