Thursday, January 30, 2014

Top 3 Tips You Should Know When Purchasing A Home

Buying a home is a dream come true for many people. In fact, many people spend years saving up the money to purchase a place to call their own. However, people are now thinking twice before purchasing a new home.

According to experts, this is due to the recent financial problems that have been experienced worldwide. The truth is that the recent economic crisis need not prevent or stall your dream of home ownership.

There are some things that you should know before buying a home in this difficult economic time. One reason for this is that there are a lot of financial scams out there right now. If you do not know about loans and mortgages, you may fall prey to one of these scams and lose quite a bit of money.

Remember, purchasing a home is a huge decision. In addition, you will be paying off your mortgage or home loan for many decades to come. This is why it is important to know a little bit about the process before getting a mortgage.

Here are the top three tips that will be of help to you when you are looking to purchase a home.

  1. Price is very important. It is tempting to purchase a big home which can be very expensive to maintain. If you can actually afford to maintain such a home, there is nothing wrong with living large. However, most people can not afford to live in an expansive home. Although you may meet financial advisers that will claim you can spend up to 33% of your income on your mortgage, this is not exactly true. In fact, most experts recommend that homeowners purchase a home that does not cost more than 25% of your disposable income. If you are handy, you may be able to purchase a home that is in need of repair at a very modest price. This can be a good way to get the home that you want at a price that you can afford.

  2. Location is also important. The location of your home will determine its price and value. A five bedroom home located in a row home in the city, will cost much less than a 5 bedroom home in the country on a large piece of property. Homes that are located within certain school districts, may command a higher price tag than if the same home were located within a poorly rated district. Of course, even if you find a home that is affordable, you will need to calculate how long your commute to work will be. If you have to drive two hours to get to work every day from the home, it may not be wise to purchase it, even though it is affordable.

  3. Security is also important. In fact, you may want to check the police reports to see if the area is a frequent crime area. You may be surprised to find out that certain rural areas may have more crime than urban areas.

In conclusion, it is wise to do your homework before purchasing a home. If you purchase an affordable home in a great location where crime is low, you can rest assured that your home ownership dreams will come true!

Top sales representative and award winning real estate agent, Christianne Child may be the right one to talk to if you are looking to purchase residential or commerical real estate in Guelph. Click here for more information.
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Monday, January 27, 2014

How Will the FHA Lower Loan Limits Affect Your Business?

The Bad News - Well most of you may have already heard that the FHA maximum loan amounts are going in the toilet. Down in many areas by more than $100,000. The high limit of $729,750 is about to become more in line with FannieMae at $625,500.

This will take a whole bunch of clients out of the market in the higher cost area. Not to worry however.

If you have a purchase of $888,000 and the needed construction comes to $150,000 for a total acquisition cost of $1,038,000. Your options are to pay all cash... most can't but even if they can it may be to their advantage to finance the $625,500 and keep some of that cash fluid. Anyone with money knows the value of having that cash where they can make it work for them.

The Good News - There is still allot of business out there. Remember you can always piggy back an EEM Mortgage on top of a 203k loan and pick up some help on qualifying your buyer or exceed the "maximum loan amount" by 5% or, as most lenders apply it, up to $8,000. If you are having trouble qualifying a buyer this little known and little used feature.

Don't forget also that you can buy a pretty decent home for $648,000 and still use the loan to it's max. If you have investors wanting to leverage some of their aquisistions we have a loan program for them as well. It just isn't FHA but works just like it and has no PMI.

- Mike Young, 203k Team Leader

Friday, January 24, 2014

What Is It About Our 203k System That Is So Appealing To Lenders?

That is simple, we have the most completed set of forms software in the industry and we train our people to provide you with a consistent package which will go through your underwriting procedure quickly as they get a similar product from each of our business partners and software users alike. Won't you join The Mike Young Team?

Tuesday, January 21, 2014

Easy FHA Loan Qualifications With No Credit Or Bad Credit

If you fall into one of these categories you should definitely consider an FHA loan.

- Considering a home purchase with less than perfect credit

- Considering a home refinance with less than perfect credit

- Considering buying a home but have not established traditional credit.

- Currently in an ARM loan that is due to reset - and have less than perfect credit

If you have less than perfect credit or no traditional credit you may be in luck due to easy FHA loan qualifications.


FHA loan qualification guidelines are perhaps the most lenient in the mortgage world because they do not use FICO scores exclusively to assess your risk as a borrower.

Many With Low FICO Scores Qualify for FHA Loans

FHA makes it's decision on whether or not to grant you a loan based on your total credit profile. For example, your credit score may have taken a dip because of some isolated events in the past, job lay-off, illness, divorce etc...Fortunately FHA lenders look at your bill paying history over the last 2 years to determine if you qualify or not, your low FICO score will not disqualify you from receiving an FHA loan.

FHA Looks at Overall Credit Profile

FHA's philosophy is that the majority of borrowers overcome these financial setbacks. You are truly NOT the high risk your FICO score indicates; even though your credit score may indicate sub-prime status.

FHA will assess your income, recent payback status with current lenders as well your current debt-to-income ratio giving borrowers a chance to purchase or refinance a home.

Non Traditional Credit Qualifies

What if you have no established credit? You may have never used credit cards, had a car loan, student loan, or mortgage. These are considered traditional means of credit which are recorded with the 3 major credit bureaus.

FHA qualifications consider non traditional credit references as proof of responsible money management. Payments like rent, utility bills, cell phone, personal loans, and even regular deposits into a savings account as proof of "credit worthiness"

So if you thought that your bad credit or non credit disqualified you from purchasing a home - think again - an FHA loan may be the answer.

Hard working families that may have damaged credit and very little down payment can still experience the joy of home ownership with an FHA loan. Qualifying is much easier than you may think - visit: FHA Loan qualification
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Saturday, January 18, 2014

Renovation Loans - Some Get It and Some Never Will

I've been doing renovation loan and construction consulting since 1994 and found it to be a very rewarding experience and we move a whole lot of homes that wouldn't have been moved in any other way.

Daily I hear Realtors say they have never done one after thirty years in the business, others have been told by someone years ago that you should stay away from renovation projects. I love this one because in some cases they told you that so you wouldn't poach in their territory. Beware of those who might tell you to stay away from the FHA 203k and be sure it isn't because the want it all to themselves.

1) You have a home that your buyer wants that is dated, very dated. There appears to be no updating but gee, it is a nice home otherwise. In my opinion you would be doing a disservice to them not to make them aware of the potential for a renovation loan and put them into that home fully restored or updated, but that is my opinion.

2) The work all happens after it closes escrow so it doesn't affect the Realtor or slow up the process of closing.

3) The buyer gets a 10% push on the appraised value and it is based on the work being completed.

4) You can actually sell them the home, close the loan and then suggest they get a 203k refinance. The kicker here is that if they close the 203k loan within six months of buying the home they get to count all of that money they put down as money they have into the project for the purposes of the new loan making it possible to get the construction money with NO MORE MONEY OUT OF THEIR POCKET.

5) The 203k is just another tool in your tool box that you can very effectively use now and again, it doesn't have or need to be used on every home but it can sell a home for you that otherwise might be skipped over.

If your office needs some training on the programs that are available please don't hesitate to call our team, we are happy to provide you with all the info you need to know to make you proficient and confident that you can get these closed.

Donna in SC closed her first full 203k in 21 days many years ago and continues to do so. Why can Donna do this and others tell you it will take sixty days? Simply because she did her first one with a seasoned team and realized early in the game that it is the Team that makes the difference. Choose your Team wisely and we hope it will be our Team.

Wednesday, January 15, 2014

Borrower's Guide to the 203k

203k Borrower's Guide

Now you can get the money to purchase or refinance your home AND "fix it up" all in one low interest loan.

This handy guide provides you with all the information you need to be knowledgeable when you go to purchase or refinance your next home or small income property using this unique rehab loan product. HUD has increased the loan limits so this loan can be used in most neighborhoods in the USA.

It is my opinion that every home sale or refinance made within the FHA loan limits should be a 203k. Your home isn't really yours till you replace the carpeting and repaint. Why would a real estate professional allow a client to purchase a home with a leaking faucet or a bad roof... this loan substantially reduces their potential liability on every sale. All around this is a good deal for everyone involved.

If you have bought or sold a home recently that needs work you should consider the 203k. You can now refinance it and get the money to repair it with a good likelihood of no more money out of your pocket.

For more information, please visit: 203konline

Sunday, January 12, 2014

How Do I Make the Payments on My FHA 203k Loan While Paying Rent?

It would be very difficult for most people to make two mortgage payments or a mortgage payment and a rent payment. Typically one of these payments is enough for most buyers.  

Many times the construction though the cost is included in the loan amount with the 203k loan program will be handled it doesn't openly contain the rent or mortgage on the other home you need to live in during the course of construction. 
What do we do about  it? Simple... if your consultant says the home cannot be occupied for ninety days you can include three payments in your mortgage to help with that situation. If your project will last six months you can include up to six mortgage payments as part of your construction costs to ease the situation. 
You might ask who can put this all together for us? If you need a 203k lender who can actually close these loans you should give David Levy with WFHM . It is so important to use a "team" and having David on your team will be a distinct advantage. You are a part of the team as our client, and in PA it is going to be Rob Lunny of The Mike Young Team.

Mike Young, 203k Team Leader    
With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. We have ten offices in CA covering both CA states, NorCAL and SoCAL
To learn more about the FHA 203k loan program go to To contact us for a consultation please go to and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

Thursday, January 9, 2014

Why You Should You Use a Consultant on Streamlined "k"s ?

Simple answer is that you don't always know when it is a Streamlined "k" or a Full. We had a glazier buying a home... he felt that he could repair the broken windows so they had the contractor bid on the roof, carpeting, & new kitchen leaving off the broken windows. The appraiser called the broken windows tripping this into a Full 203k requiring a consultant. Had they merely mentioned this ahead of time this would have been a Streamlined "k".

Another one we just saw appeared to have structural issues in and about the garage but turned out that we were removing the garage which then removed the structural issue & left it a Streamlined "k". Had they wanted to repair the garage it was a Full 203k.

Having your consultant do the inspection on the property can let you know sooner that is one or the other, & in some cases save it as a Streamlined "k"

Monday, January 6, 2014

What is a Consultant?

I get approved consultants that call interested in our Award Winning software... One that called the other day thought our software provided way too much paperwork, much more than they needed or wanted. YIKES! Are they really consulting? NOT.

Our trained consultants obviously do a lot more for our clients than our competitors. We provide 100% of the paperwork that, when added to your 203b paperwork, is ready to submit to underwriting. Since the MMW is required to be filled out by the lender you merely take our numbers and input them on your MMW. Lenders should insist that your consultant has had training from us or gets their CE from us. Continuing Education is essential in any industry.

For more information please visit

Friday, January 3, 2014

FHA Vs Conventional Loans - Which is Better For You?

There are many different types of financing available to those looking to purchase a home or refinance their mortgage. The key to finding the right loan for a homeowner's individual situation is knowing what he or she needs from their mortgage and can afford. Homeowners should research the differences between what FHA loans and conventional loans have to offer to determine which financing option is best for them.

FHA Loan Information

The Federal Housing Administration (FHA) insures FHA loans, which protects the lender in the event that the borrower defaults on the loan. This insurance makes these loans less risky for lenders, and they are more likely to offer low interest rates on them. The FHA is fully committed to its borrowers and has assistance in place for borrowers who need assistance making their mortgage payments.

If an applicant has a credit score of at least 580, the down payment on an FHA loan will be 3.5%. If the applicant has a lower credit score, the down payment will increase to 10%. Although, while the FHA does allow for loans to be granted to people with credit scores below 620, most lenders today do not. The FHA also requires that applicants have at least one year free of any delinquent mortgage or rent payments. Overall, FHA loans have less strict credit and income requirements compared to other home loans.

With an FHA loan, the borrower must be financing his or her primary residence. There is also an upfront mortgage insurance premium (which just increased to 2.25% from 1.75%), as well as monthly mortgage insurance. These loans also allow homeowners to refinance a greater value of their home (up to 97%!) and feature a streamline refinance option, which requires less documentation and quicker processing.

Conventional Loan Information

Conventional loans are not insured by the government, so lenders mitigate their risk by imposing tighter qualification standards. These loans tend to have higher interest rates than FHA loans because the rates are more likely to be driven by a borrower's credit scores and other risk factors. With a conventional loan, an applicant needs to have a good credit score and income to receive competitive loan terms. These loans do not have to be used only on primary residences, but can also be used on investment properties.

The down payment on conventional loans tends to be higher, with the requirement currently set around 10% for most loans. Applicants will need to have a credit score of 660 or higher to be eligible and, in most cases, will need a 700 to receive competitive interest rates. There is no upfront mortgage premium requirement, but there will be monthly mortgage insurance if the borrower's loan-to-value ratio is greater than or equal to 80%. There are refinancing options with conventional loans, but the amount a homeowner can refinance is only 80% for a cash out and 95% for a non-cash out, compared to 85% and 97% respectively for FHA loans. There is also no streamline refinance option available.

Which Type of Financing is Right For You?

After assessing his or her financial situation and weighing the pros and cons of FHA and conventional loans, an applicant can determine the best loan for his or her situation. Different loans are beneficial for different types of situations and it is important to be well informed so the best choice is made. An FHA loan would likely be more beneficial for those wanting to borrow more than 80% of the purchase price or home value, those with lower credit scores, or those who do not have a lot of money for a down payment because they can have access to lower interest rates. This loan might also be better for borrowers who want a cash-out loan because they will likely receive a lower rate than with a conventional loan.

On the other hand, a conventional loan may be better for those who have excellent credit, those borrowing less than 80% of the purchase price/home value and those not wanting to get a cash-out loan because they can receive low interest rates and, unlike FHA loans, they will not have mortgage insurance if the loan amount is less than 80% of the purchase price or home value. For those who need further assistance choosing a type of loan, there are a variety of resources available. Speaking with a knowledgeable loan specialist is a good way to make the decision process less complicated.

Victoria Belle-Miller is the newest member of the writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the FHA loans team and a valuable source of sound mortgage advice.
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Wednesday, January 1, 2014

Happy New Year!

"May every day of the new year glow with good cheer and happiness for you and your family"