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

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

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

Who is the King of 15 Year Mortgages?

If you have been living under a rock or on a deserted island you may not know about the historic low mortgage interest rates.  Since statistics have been kept in 1933, never before have mortgage rates been this low in our nations history.  The lowest fixed rates of all are the 15 year variety.  They are below 3 and quite possibly dropping further.  A little know fact about 15 year mortgages is that only 1% of the population actually obtains a 15 year mortgage.  Most people want the comfort of the lowest payment available to them, thus they choose the 30 year option.  I am drawn to the fact that the interest rates are as much as .75% lower for a 15 year than a 30 year mortgage.  You would think that the payments would be comparable to each other, but they are not.  The payment is roughly
$ 200 higher for a 15 year mortgage for each $ 100,000 borrowed.  It scares most borrowers to death. But if you compare the current rates of people who have purchased their homes in 2007 and are still making payments based on interest rates in the 6% range, the 15 year payment at today's rates are comparable to what they are currently paying. If you can afford the payment now you should be able to afford the new payment at 15 years in the future.  Most borrowers can shave off 10 years on their mortgage and still be at a comparable payment to what they are currently paying.  Since I show this analysis to most customers, I have seen a dramatic increase in the number of borrowers obtaining 15 year mortgages.  My percentage of customers getting 15 year mortgages is 600% higher than the national average.  Did you know that there is no credit score requirement for a 15 year mortgage other than the minimum 620.  There is no effect on the interest rate charged.  Maybe you should consider a 15 year mortgage.  Come to the King of 15 Year mortgages for your next loan.

Andrew Williams
NMLS # 118317
Abacus Regional Mortgage
484 695 5972

FHA Streamline Refi NO DOC ?

FHA Streamline refinances are available to anyone who has a current FHA mortgage, though not everyone is eligible to partake in them.  First of all,  the interest rates currently offered must be signicantly low enough to save the customer at least 7.5% on their monthly payment.  Second, with the ever increasing Monthly Mortgage Insurance Premiums added to the loan, the monthly savings from the lower interest rates must more than make up for the higher insurance premiums, as well.
Third, borrowers must be current with their present mortgage payments for at least the past 12 months.  In addition, most lenders are requiring a minimum score of at least 660-680.  Some require as much as 720.  If you are one of the fortunate ones who fit all of these criteria, you may still not be eligible based on some other factors.

What if you have recently changed employment? I have had borrowers turned down by many lenders because they have become newly self employed?  They don't have a 2 year track record of earnings for their new business endeavor, thus they don't qualify to get any kind of a mortgage, let alone a streamline refinance through FHA.  What do these people do for a loan? In the past, we had mortgages for the self-employed borrower who couldn't produce the needed income necessary to qualify.  These loans were known as NO DOCS ( No documentation required ).  They came in many forms of loans.  They were called NIV ( No income verification), Stated, No Ratio, SISA ( Stated Income, Stated Assets) and NINA ( No income , No assets ).  All of them were a form of a NO DOC in some way or another.  Many economists felt that these types of loans were the main reason our economy took such a tumble.  These loans allowed un qualified people to buy homes that couldn't afford them.  Many are the foreclosures you see today.  In March of 2009, the governor of Pennsylvania Ed Rendell signed a bill outlawing these types of mortgages in any form.  All loans require some form of verification of assets and employment.   

I do have a lender that doesn't require any documentation regarding employment other than stating it on the mortgage application.  Even if someone is newly self-employed, they can qualify for the FHA streamline refinance as long as all of the above criteria are met.  The income section of the application is left blank.  All current and previous employers must be listed on the application going back two years.  A bank statement showing the money needed for closing is required from the borrower. 

In some cases, we as the lender can pay most of the closing costs for the borrower.  If you are one of the individuals who purchased your home in the height of the market prior to May 29, 2007, you are eligible to receive the discounted monthly mortgage insurance and no up front premium.  In addition, the streamline refinances don't require an appraisal of the property, so even if you have little or no equity in your current property, you will still be eligible for this loan. 

For more information please go to www.abacusmort.com and use the link "Full Application".

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