As many of you know, I have been doing business with a small local bank in Bucks County named Harleysville Savings Bank for many years. They have always accommodated my customers by doing loans that didn't quite fit the mold of a saleable loan. This means that what Fannie Mae and Freddie Mac deemed unworthy, Harleysville gladly accepted. They didn't sell their loans and , in many cases, couldn't sell these loans. They financed homes on many acres, log homes, non fannie mae approved condos, land loans, loans with mobile homes attached, 80% 1-4 unit investor financing, cash out refinances requiring no seasoning, and residential mortgages for LLCs. Although their rates are extremely high and unattractive compared to the rest of the market, they still found a niche to finance the unique buyer. Because of their desire to begin selling their loans on the secondary market, they have informed me that they no longer wish to do business with Brokers. Effective September 30, 2012, I can no longer originate loans for them. If you have had anyone pre approved by me prior to this date and I told you that I would be using Harleysville for the financing, I will no longer be able to honor this request. I will have to take the mortgage application by the end of the coming week September 29, 2012 in order to finance it with them. I'm sorry for this inconvenience, but I'm currently seeking new lenders to fulfill this void.
Andrew Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972
Friday, September 21, 2012
Sunday, September 16, 2012
Ask the "Mortgage Man": Rehab Loan Made Easy
Ask the "Mortgage Man": Rehab Loan Made Easy: Is there an easy way to finance the repairs into a home purchase? I can't find a home for a good price that doesn't need tons of renovation...
Rehab Loan Made Easy
Is there an easy way to finance the repairs into a home purchase? I can't find a home for a good price that doesn't need tons of renovations! Due to the high volume of foreclosed homes being sold on the market, anything in my price range is usually a foreclosure. These are common responses I hear from potential home buyers in their search for a home. I have a program that makes it easy and financially attractive for the buyer to finance the repairs with their home purchase. It is called a Rehab Loan.
The Rehab Loan is where a buyer adds the cost of needed repairs to the selling price of the home they wish to purchase. For as little as 5% down, they can finance all the repairs into their loan. Here is how it works.
The buyer makes an offer on a house, they get estimates from a contractor, builder, Lowe's, Home Depot, etc. and adds it to the sale price of the home. This combined total is what we call the Acquisition Cost. We can finance up to 95% of the acquisition cost. The buyer settles and takes possession of the house and that is when the work begins. We will hold the money for repairs in escrow after closing and during the construction/ rehab period. This means that we will release the monies to the person doing the work in stages or Draws, which are no more than 3 during the construction period. As each stage of the work is completed, the bank will release the money to the builder/ contractor paying them as they go. It is that simple!
These types of loans are now available with FHA under the 203K program. Some banks offer the Fannie Mae Homepath renovation mortgages, too. But for many, these two programs have distinct disadvantages that this loan doesn't have. For instance, both the Homepath and the FHA 203K programs offer higher than market rates (as much as 1% ) on these loans costing the buyer many tens of thousands over the life of the loan. The FHA 203K charges a much higher Mortgage Insurance Premium ( both up front and throughout the life of the loan )- this is 50% higher than our program. You have to choose an approved builder/ contractor, which takes away the ability to shop around for the lowest bid. Our program offers the most competitive rates, most often at below national averages for current conventional fixed rates.
To qualify for this loan, you must have a credit score of at least 680, and be purchasing a property located in the following counties: Lehigh, Northampton, Carbon, Pike, Wayne and Luzerne, PA. The next time you are looking for yourself or to refer clients for renovation mortgages, please give them my name and number.
Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972
The Rehab Loan is where a buyer adds the cost of needed repairs to the selling price of the home they wish to purchase. For as little as 5% down, they can finance all the repairs into their loan. Here is how it works.
The buyer makes an offer on a house, they get estimates from a contractor, builder, Lowe's, Home Depot, etc. and adds it to the sale price of the home. This combined total is what we call the Acquisition Cost. We can finance up to 95% of the acquisition cost. The buyer settles and takes possession of the house and that is when the work begins. We will hold the money for repairs in escrow after closing and during the construction/ rehab period. This means that we will release the monies to the person doing the work in stages or Draws, which are no more than 3 during the construction period. As each stage of the work is completed, the bank will release the money to the builder/ contractor paying them as they go. It is that simple!
These types of loans are now available with FHA under the 203K program. Some banks offer the Fannie Mae Homepath renovation mortgages, too. But for many, these two programs have distinct disadvantages that this loan doesn't have. For instance, both the Homepath and the FHA 203K programs offer higher than market rates (as much as 1% ) on these loans costing the buyer many tens of thousands over the life of the loan. The FHA 203K charges a much higher Mortgage Insurance Premium ( both up front and throughout the life of the loan )- this is 50% higher than our program. You have to choose an approved builder/ contractor, which takes away the ability to shop around for the lowest bid. Our program offers the most competitive rates, most often at below national averages for current conventional fixed rates.
To qualify for this loan, you must have a credit score of at least 680, and be purchasing a property located in the following counties: Lehigh, Northampton, Carbon, Pike, Wayne and Luzerne, PA. The next time you are looking for yourself or to refer clients for renovation mortgages, please give them my name and number.
Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972
Monday, September 3, 2012
Is USDA Going the way of FHA?
USDA announces changes a 33% increase to their monthly Mortgage Insurance Premium
With the recent change in the monthly Mortgage Insurance Premium, USDA is creeping up closer to the FHA threshold. Don't get me wrong USDA is still the way to go, but it just seems odd that the government first imposed a monthly amount, and now for the second year in a row has increased it. The latest changes doesn't effect the up front Funding Fee, which remains at 2% of the sale price. This fee can still be financed into the loan. FHA has a 1.75% fee. The annual premium has increased from .3% to .4% of the loan amount. Broken down into monthly installments it doesn't seem to imposing compared to FHA's 1.25%, but it still is creeping up. All in all, USDA remains the better option of the two given their 100% financing as opposed to the 3.5% required down payment by FHA. Hopefully, this is the last increase for both types of loans for a while.
Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972
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