Ask the "Mortgage Man": FHA LOANS WITH 600 SCORES

Ask the "Mortgage Man": FHA LOANS WITH 600 SCORES: We are introducing a new program for FHA with scores as low as 600.  There is no catch! Most lenders are requiring a minimum of 640 credit s...

FHA LOANS WITH 600 SCORES

We are introducing a new program for FHA with scores as low as 600.  There is no catch! Most lenders are requiring a minimum of 640 credit scores to finance FHA, but Abacus can do much lower scores.  These programs are almost the same as the typical FHA mortgages with a few minor differences.  I am outlining the differences for both programs below.

If a borrower's credit score falls between 620-639, a maximum debt ratio of 43% is allowed.  You can't go to 45.  If a borrower's new mortgage payment (PITI) doubles what a borrower is currently paying in rent, they must show an extra 2 months mortgage payments in reserve ( IRA, 401K, etc.)
They can't spend every dollar on buying the house, as a normal FHA program allows.  You can still get the seller to pay 6% of the selling price toward the buyers closing costs, but the buyer's 3.5% down payment CANNOT be a gift.  They must show proof that it is from their own funds. 
If a borrower's credit score falls between 600-619,  maximum debt ratios may not exceed 33/45%.  In addition, the borrower must put 5% down payment, not the standard of 3.5%.  The entire down payment must be the borrower's own funds.  If there is a doubling of the mortgage payment compared to what the borrower is currently paying in rent, they must show proof of an extra 2 months mortgage payments in reserve (IRA, 401K, etc.). 

This is a great opportunity to finance people who have experienced a problem with their credit in the past but have cleaned it up and still show scores below what is the norm.  It also helps to enable borrowers with high credit card debt to be able to purchase a home before having to pay down their revolving debt. 

For more solutions to your mortgage needs please contact me on my cell, email me at andrew.williams@abacusmort.com, find me on twitter at #abacusmort or find me on facebook.

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972

Reason no. 45 why to use Abacus Regional Mortgage

Everyone has the problem where a self employed borrower hasn't shown enough income in order to qualify.  This is the time of year when they prepare their tax returns for the previous year.  Everyone is gathering their receipts and deductions to try and pay as little income tax as allowed by the federal government.  The more you pull out of Uncle Sam's pocket, the less house you can afford.  Since lenders use a two year average of income to qualify a self-employed borrower, careful consideration must be used in doing 2012's return.  If the income is high enough, a buyer can boost their buying power greatly. 

The problem lies in what is know as Form 4506.  Because of many cases of loan fraud having occurred in the past, where buyers have given fraudulent 1040s to their lender far different than the actual one they filed with the IRS, lenders won't allow buyers to close on their homes until they receive proof of income from the IRS.  This form when sent to the IRS, verifies the 1040 transcript matches the one given to the lender.  It can take as long as 8 weeks by the IRS to verify a return has been filed by a borrower.  This has delayed many closings, and in some cases causing hardships with families.  I have three lenders who don't send this form to the IRS; therefore, I can close the loan with a newly filed tax return.  No delays means happy customers, and happy realtors.

Call me with your next mortgage loan.

Andy Williams
President
Abacus Regional Mortgage
484 695 5972
NMLS # 118317      

Commercial Loan Rates Drop....Finally!

For years, interest rates on commercial loans have been much higher than standard 30 year fixed rate mortgages for a primary residence.  The rates for home loans have been coming down lower in the past few years to record lows.  Most homeowners have refinanced their mortgages to the lowest payments possible, but commercial loan rates have remained steady. There has always been a difference in interest rates between the two types of mortgages of between .5 to 1.5% in rates.  Never before has the spread been as much as 3 % higher for commercial loan rates.  Until recently, rates on commercial loans have been TWICE the rate of residential home mortgages.  The reasoning of most banks has been that they are lending to businesses based on the depositors who have money in their banks.  These institutions have been paying depositors less than 1% on their savings accounts and CDs, yet they are charging 6.25% to the commercial borrowers. Since they have a limited pool of funds they can't lend like the banks who are selling their residential loans to Fannie Mae and Freddie Mac.  These agencies have an unlimited amount of funds to lend to the banks, making them flush with funds available to lend to homeowners.  Finally, they have come to realize that these low interest rates on home mortgages appear to be staying at these record low levels for quite some time.  In sympathy with the home mortgages, many local banks have reduced their lending rates on commercial loans to as low as 3.75%.  This marks a sharp reduction for what they were charging as recently as a few months ago.  Since most commercial loans are much higher than residential loans, the monthly savings will be significant.  If you haven't taken advantage of these low rates for businesses, you may get in touch with your current lender, or if you own a business in Pennsylvania you can call me.

Andy Williams
President
Abacus Regional Mortgage
484 695 5972 

What are people waiting for?!!

 I can't understand why more people aren't buying homes right now. If you compare a $ 180,000 house of today at today's interest rates to the same house at 2007 prices and rates, the average monthly savings is $ 750 per month. If you could afford that house 5 years ago at a monthly payment that much higher, you would think people would be lining up to buy right now!

Andy Williams
President
Abacus Regional Mortgage
484 695 5972

Is there USDA money or not?

What a great question.  When USDA (Guaranteed Rural Housing) ran out of money suddenly, without much notice in September, there was speculation from many people when they would be getting more funding from the government.  Many speculated that it wouldn't be until after the November presidential election.  Others had been told that the money hasn't run out.  I can tell you that there is new money available and is funding as we speak.  We will have plenty of funds available through the beginning of 2013.  Rest easy, because when you call I will have plenty to lend. 

Andy Williams
President
Abacus Regional Mortgage
NMLS # 118317
484 695 5972

No more Harleysville Bank

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