Monday, November 30, 2015

Financing For Mixed Use Properties - 203k

Mike Young talks about how a 203k mortgage is a great way to find financing for a mixed use property. See more at

Friday, November 27, 2015

What You Should Know About a FHA Mortgage

Almost all homebuyers need to get a mortgage of some sort in order to afford their home. These loans are vital to the economy as we found out during the economic crisis of 2008. If you are trying to buy a piece of property you should look into getting a loan from the Federal Housing Administration. This branch of the Department of Housing and Urban Development has been working to insure loans to homebuyers. This means you can get lower interest rates with friendlier term limits if you take a FHA loan. Let's explore FHA loans a little more and see how they work.

How It Works

You are probably wondering how the federal government can offer low interest rates while at the same time making the qualifications for a FHA loan very easy and relaxed. The trick is simple. The borrower pays for mortgage insurance which protects the lender in the case that the borrower defaults on their loan. Pretty simple, right? Because each borrower is essentially covering themselves in the event that they cannot make their payments, the FHA can offer the consumer a loan with superb terms! If you are trying to get into a home, but have been turned down by the banks, you need to see what the FHA can do for you!

Credit Qualifications

For anyone with a credit score over 580, the FHA can offer you a mortgage with a down payment that is as low as 3.5 percent. Consumers who fall into the 500- 579 range are looking at a down payment of roughly ten percent, and those with a credit score under 500 generally do not qualify. However, the FHA can and will make exceptions for people with unorthodox or insufficient credit histories who do not have a credit score of at least 500. To see if you qualify for exceptions you need to speak with an FHA lending specialist.

Closing Costs Could be Covered

Buying property comes with a lot of other costs as well. These costs include, appraisals, title expenses, and credit reports. The FHA allows lenders, sellers, and builders to cover closing costs in order to entice a consumer to purchase their home. However, if a lender covers your closing costs, you will generally end up paying a higher interest rate on your mortgage. You will be able to compare rates between lenders with and without costs covered, so that you can make the best choice for your situation.

It is On Your Lender

The FHA is not the institution that is going to give you the money to put down on a residence. The FHA is merely an insurance fund, so if you are looking to get an FHA mortgage, you need to make sure that your lender is FHA approved. It is also important to note that not all FHA approved lenders offer the same rates even on the same loan, so it is still important to shop around for the best possible rates.

The FHA makes getting a new home a lot easier. See if your lender is FHA approved, and learn more about what they can offer you.

When looking for a Dallas mortgage, visit Benchmark Bank. Learn more about our services at
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Tuesday, November 24, 2015

Saturday, November 21, 2015

Using FHA Loans to Buy Your House? You Need an FHA Experienced Realtor!

If you're in the market for a home, FHA loans can provide you the means to get into a house much less expensively than a regular loan can, and they're especially beneficial to you if you're of modest means.

However, FHA loans can also be tricky to navigate, and you need to know what you're doing BEFORE you get one...

It's imperative that you have an FHA experienced realtor if you're looking to purchase a home with this type of mortgage, because there are some processes you'll need to go through in order to have the process go smoothly. If you don't do this, it could cost you both time and money you can ill afford.

Having an FHA experienced realtor can help you navigate the process, he or she can make things easier, and set things up so that the process itself is much easier.

Some things you should know about An FHA mortgage:

§ Lower minimum down payment

The down payment for an FHA loan is just 3.5%, as compared to at least 20% for conventional loan, and you can have a family member, charitable organization, or even your employer pay that amount. If you go for a conventional loan, you'll usually need to prove you have the down payment amount yourself.

§ Same interest rates as conventional loans (most of the time)

Usually, FHA loans have similar interest rates as conventional loans, but this will also depend on your credit score. There is an FHA 203K (rehab loan) that would usually result in a higher interest rate due to more risk if the lender is loaning money to rehab the property too. It will be much less than getting a construction loan though.

§ Sometimes okay even with weak credit

FHA loans will often be approved even for those who have had credit problems, whereas conventional loans will be much more difficult to get. What's more important with the loan is your income. Even if you have enough income, you've been at your job for a while, and your job is pretty secure, you might still face problems getting a conventional loan where FHA might be an easier loan to qualify for.

§ Higher ratio of mortgage payment income

With conventional mortgages, you can only have Housing Expense ratios of 28% of your monthly income, and 36% ratios of monthly debt to income to qualify. FHA loans allow a ratio of 29% and 41% respectively.

§ No prepayment penalty

Fortunately, there are no prepayment penalties if you pay your loan off early with an FHA loan.

§ Closing costs can be included in FHA loans (up to 6% of the purchase price)

Closing costs can also be included in these loans, as long as you qualify for the higher amount of closing costs.

Other things in regard to your realtor and FHA loans

Of course, you'll also need to know these things yourself, but it's imperative that your Realtor also knows the differences between conventional mortgages and an FHA mortgage. It's important because if your realtor doesn't know the ins and outs of these loans, he or she may proceed based upon the assumptions used for conventional loans, only to have FHA loan requirements not met and the process itself thwarted.

In addition, most FHA loans require that the home in question be appraised first, and that the property in question is in "habitable" condition. If your realtor knows what FHA requires for a particular property, he or she will be able to account for any possible issues with the appraisal so the process goes as smoothly as possible.

The bottom line?...

In short, if you don't work with an FHA experienced realtor, and you're planning to get your home financed through this loan program, you could find yourself not only failing to get the home you want, but spending money you don't have only to be disappointed in the end. Save yourself a lot of heartache, and find an experienced realtor to work with.

Dustin Miller is a Realtor who specializes in helping FHA buyers and works with homeowners to avoid foreclosure by doing short sales. He works in the Coral Springs / Coconut Creek, FL area as a Short Sale Realtor and resident. If you have any questions regarding your specific situation visit his site for his contact info and feel free to contact him anytime. For more FHA loan answers check out more info on FHA Loan Requirements [] by clicking the link You can also read more related articles or search for properties including FL Condos at this site
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Wednesday, November 18, 2015

I Was Told I Couldn't Refi Till After 6-months - Simply Not True.

When does it make sense to refinance before 6 months is up?

You just purchased a home, it isn't quite the way you wanted it but you needed to close the loan quickly, or so everyone told you. Now you can't really enjoy it till you get it fixed up and everyone is now telling you that you need to let this loan mature at least six months before you can refinance. Well, it just isn't true. In fact, it would be to YOUR benefit to refinance immediately with regards to getting the money to fix it up.

Simply not true!

FHA 203k loans have a little known feature for those who need to fix up a property they just purchased and likely should have purchased under the 203k program in the first place. It is simply that you can refi immediately and as long as you close the new loan within six months of the original loan closing YOU get to count all that money you put down as money you have in the new transaction. This is huge because you can

This is huge because otherwise you would have to show equity on a home you just purchased and may have to come up with more money to close the new loan. The drawback is that the original lender may loose their commission on the first loan. Not typically an issue if you let them do the new 203k loan. If they don't do the FHA 203k then they just loose their commission. Sometimes $%^* just happens. In many cases they can do the 203k for you

Sunday, November 15, 2015

FHA Loans Help First Time Home Buyers

Being a first time home buyer is both an exciting and frightening time. You cannot wait to find the house of your dreams, yet you worry about finding a lender, the interest rates and the final monthly payment. These concerns double if you have ever filed bankruptcy or have blemishes on your credit. This is why so many first time home buyers turn to FHA (Federal Housing Authority) loans. Since 1934 the FHA has been helping first time buyers like you make their housing dreams become a reality.

Why FHA?

FHA loans offers many benefits that conventional lenders do not. They are much more lenient in a variety of ways; ways that would normally get you a big fat "NO" on other home loan applications. Let's take a few moments to explore these benefits and why you should apply for an FHA loan when purchasing your first home.

Your Credit Score

Traditional lenders require a credit score of at least 720 before they will even consider approving you for a home loan. FHA, however, will approve you with a credit score of 620. Have you filed bankruptcy? No problem. Yes, you have to wait a bit, but with FHA the time is much shorter--two years after filing they will approve your application. If you haven't filed bankruptcy, but have collections or late payments, they tend to overlook these provided you are now making payments on time. Liens, however, are not forgiven.

Down Payments and Interest Rates

With an FHA loan, your down payment is only 3 percent, versus the typical 20 percent required by most other lenders. They also permit the seller to pay up to 6 percent of the closing costs to make the process even easier on you. Although your FHA interest rate is variable (there may be some fixed rate FHA Loans), their rates are so low you actually pay less over the life of your loan than a person with a 30-year fixed mortgage rate.

Application Process

It is actually fairly easy to get approved for an FHA loan, as they are lenient about who they lend to. You must have steady employment and meet the credit requirements, which we talked about earlier. They do expect a reasonable explanation for late payments, such as the loss of a job or a serious illness.

Importance of Debt to Income Ratio

Your debt to income ratio plays a vital role in any lender's decision. They take into consideration all your current debt (i.e. car and credit card payments, school loans, etc.), and will add in your potential mortgage payment. FHA loans are much more lenient about this as well. They allow a 50 percent debt to income ratio, which is extremely high in the lending world.

Now that you have read this article, it is my hope that your hope is rejuvenated and your mind at ease, at least a little. Although your credit life may not be perfect, you still have a fighting chance at buying the home of your dreams, thanks to the Federal Housing Authority. During a time and economy that is making it difficult for first time home buyers to obtain a mortgage, FHA loans are giving you back your dream. Run with it.

Charles F. Butler is a Real Estate Professional in Carson, Ca, specializing in First Time Home Buyer Programs, Distressed Sales, REO Residential and Commercial properties. Charles helps homeowners develop a second income stream so they can save their homes from foreclosure. Follow My Blog: Http://  Develop A Second Income Stream  3 Weird Tricks To  Earning 100% Commissions  Commission Loop Holes
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Thursday, November 12, 2015

FHA 203k has Arrived in Graeagle CA

Opened another office in Graeagle CA to service Sierra and more of Plumas Counties, as well as parts of Nevada County that are closer to Graeagle than formerly possible. 

Why do you need to know about this? Easy, places like Loyalton, Almanor, Beckworth, Verdi, Portola, and even Truckee (Nevada County) can be accessed much easier from this office. 

What is a 203k loan? 

Simply a tool for Realtors to sell more houses. This program allows you to sell more home as it opens up all the "fixer" type properties to the everyday client. Many people might purchase a home if they knew what the repairs would cost to fix it up but they don't. Well now they can easily find that by using a 'feasibility report' or 'feasibility analysis' which we provide for a modest fee. We have two feasibility clients. One is the seller, the point of this report is so you can help bring your seller to reality when they are asking too much for the property and you know it won't sell at that price. But moreover it also pin points the repairs so your seller gets the most they can and be fair to all concerned.

Feasibility Analysis

This is a quick look at the property for the buyer or the seller of a property. 

Seller Feasibility Report

- If a seller wants the highest possible amount for their property and they understand it needs work this product is a must. We provide a limited report that identifies the items that are health and safety or of necessity under the HUD/FHA Minimum Property Standards (MPS). This is all the seller is interested. What repairs are needed to bring my property to the MPS to get it sold. 

- If the seller is a bank or lending institution we also provide an estimate of the cost for repairs that most potential buyers might do such as update the kitchen or bathroom(s) where they were adequate for MPS.

This gives the potential buyer info they need to make a decision now. 

Buyer Feasibility Report

- If a buyer is about to place an offer on a property that requires repairs they must have a clear idea of the cost to make the repairs. If the property is being sold for $250,000 and needs $150,000 in repair it must appraise at $400,000 or it doesn’t make any sense to buy it. If the value after improvements to MPS is only $350,000 then the home is only worth $200,000 “as is”. Knowing that number for the repairs is part of your due diligence prior to purchase of a fixer.

- On the other hand, the buyer may also want to know the cost of the additional repairs they may want to add to the mix. In that case a Feasibility Analysis from The Mike Young Team will also provide a quick estimate of those repairs as well. So you actually get two estimates, one for MPS which is used to help you with your offer and, the second one with your additional improvements that make this YOUR HOME.

Let us know if you need us to come by one of your weekly or monthly meetings for an educational session.

Out of area owners

You may service out of area owners and that is okay too, If their homes or second homes need repairs we have a couple of programs they can use to get their homes fixed up for the spring as well. Many of these out of area owners who use this area for their summer homes will be leaving the area for their winter homes by the end of this month. These non-owner occupied programs have purchase and renovation limits or refinance and renovation limits up to $3 Million. These are good for investors as well as second home buyers.

Monday, November 9, 2015

Finding The Right Mortgage For You

Shopping for the right mortgage can quickly become overwhelming. With so many loan options available today it's important to understand how to find the right mortgage that fits your needs.

Purchasing a home is a huge financial commitment. Not only do you have to find the perfect place to call home, but also the right mortgage product that fits your situation. If you are unsure where to start, you can always ask a real estate professional. We deal with lenders daily and know a variety of reputable ones that we can recommend.

Step 1: Finding a Mortgage Lender

When shopping for a lender you will want a reputable company, the best deal available and stellar customer service. It's important to note that many times you may have one institution as the lender and another as the loan servicer. Ask questions as this will need to be understood before you close. While this doesn't change the terms of the loan, it will mean that you may be writing the monthly mortgage check to another company. Unfortunately, when it comes to whom services the loan, borrowers have no real say in the matter. It is worth it to shop around for a mortgage lender with which you feel comfortable and will also look out for your best interests. Ideally you will find a lender that offers competitive loan terms that can also handle your loan efficiently and competently. Things to ask when shopping around for a loan are the interest rate, points, APR and closing costs. You should also make sure that there is no pre-payment penalty should you pay off the loan early. The vast majority of buyers will opt for a 30-year loan with either a fixed or adjustable interest rate. However, with interest rates being as low, many buyers are choosing a fixed interest rate.

Step 2: Getting Qualified

Before the house hunt begins, a borrower should meet with a lender to get pre-qualified and figure out what they can comfortably afford. To get qualified for a loan, a lender will typically ask for the following items:

  • Two years of federal tax returns
  • Two years of W2's
  • Thirty days of paystubs
  • Statements for all asset accounts for the past 60 days (checking, savings, and any other investment accounts)

Once you submit a loan application and submit all of the required documentation, a lender will be able to tell you how much you qualify for and also can issue a pre-qualification letter that can be submitted with an offer. A pre-qualification letter can go a long way in showing that you are qualified to purchase the property.

Step 3: Understanding the Different Types of Loans

You will find a variety of loan types from which to choose. For instance, you may hear the term 'ARM'. Let's use the example of a 5/1 ARM. This means that the interest rate is fixed for five years and then adjusts annually after that. The appeal for an Adjustable Rate Mortgage (ARM) is that the initial rate is lower the a fixed rate. But when the loan resets the interest rate could go much higher. Often borrowers will choose an ARM if they don't plan on having the property for long.

For borrowers that don't have the ability to put 20 percent down on a property, the Federal Housing Administration (FHA) offers a loan that can be done with as little as 3.5% down. The FHA loans also offer an opportunity for homeownership to buyers that have less than perfect credit. The main problem with this type of loan is that mortgage insurance will be tacked on (mortgage insurance is required for any loan that has less than 20% down). The Veteran's Administration offers loans with lower to no down payments to service members and their surviving spouses. There are also first-time homebuyer loans that are available as well as rural financing through the USDA.

The other type of loan worth mentioning is the Jumbo loan. The standard loan maximum is $417,000, anything over that is considered Jumbo. Typically a Jumbo loan will require a higher down payment and potentially a higher interest rate than "conforming" loans.

There are many other options available to borrowers today. The best advice is to shop around to find the best product that fits your individual needs.

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Friday, November 6, 2015

What Should I Spend on a Remodeled Kitchen?

Who knows. I do know that was the guest speaker at a round table discussion on remodeling some time ago in San Jose. I got there a few minutes behind schedule and a San Jose Contractor was on stage talking at the time I arrived. He had videos and photos of some beautiful kitchens without a doubt.

Then he dropped the bomb on everyone when he started showing us photos of this kitchen and that and telling us the cost to do that remodel, was $70,000, and this other one at $65,000, and yet another at $80,000.

This is not to say he isn't or wasn't right but do we need these kitchens in a $300,000 or a $500,000 house... I don't think so.

This is a kitchen we put in for about $8,400.00 at retail price. The price the home owner would pay for this kitchen.

This isn't a $70,000 kitchen but it is a great kitchen for the house we put it into.

All Solid Wood Maple Cabinets with granite counter tops.

Does every home need a $70,000 kitchen, I don't think so. This kitchen made the cook in this home extremely happy.

When someone calls me to hire us and asks "What is your fee?" I cringe. How many consultants would just take the contractor bid and input it into the paperwork. We actually consult with our client. See what it is they are trying to accomplish with their renovation loan and then work to get that into their budget. It isn't about what our fee is, it is about getting you want you want at a price you might not otherwise be able to afford. We earn our fee by saving YOU money. We typically save our clients 4-5 X our FEE so you want us to give you the highest fee possible. I would think. Actually we are very competitive.

A client called the other day and asked my fee. I told her $800.00 based on her construction budget. She said another consultant told her only $350.00, I told her that I'm sure she won't be charged that. I was right. She called me back in a month and apologized. Her other consultant charged $350.00 for showing up at the inspection and then charged her $800.00 for the consultation. She actually paid $350 more thinking she was going to save money. Had we done that job she would have received better service, no bait "n" switch tactic, and we would have found a contractor that fit her needs better, providing more bang for her buck. What you pay isn't always what it costs you. You would be better to ask, "What do I get for your fee?"

Tuesday, November 3, 2015

Use the FHA Mortgage Specifically Created for Home Improvement

Almost everyone knows about FHA mortgages. They are tailor-made for first time homebuyers and others with less than perfect credit or other financial issues. You don't have to be low income or have bad credit to use FHA, but generally the loan limits prohibit high priced homes.

What you may not know about FHA is that there is a special loan program designed to provide the funds to buy or refinance your home PLUS additional funds to make repairs or improvements.

This FHA mortgage is called the 203K and the K is the operative part of the name. Not every lender participates in the rehab loan program, but the major national lenders do. If the loan officer you contact is unaware, then call the corporate office and ask them to direct you.

The FHA 203K loan program calls for an FHA inspector to go over the house, using the plans you gave him. Before you get to this inspection phase, you should be working with a general contractor who understands how to provide plans and specs for a project. Plans and specifications are standard in the contracting industry for anyone managing a project >$5000, which is the minimum rehab amount for this loan program.

The FHA inspector will decide if the project is feasible, depending on whether there is additional work required to bring the property up to code, and whether or not the property will appraise for enough to make the project "worth it". FHA is willing to lend based on the after-rehab value and will even stretch that value a little in order to get houses brought up to code.

Once the lender is happy with the valuations, the plans and specs, and the inspector's report, your loan file will be reviewed by an underwriter specially trained and certified in rehab loans. Your credit and finances do not have to be perfect to be approved, but the creditworthiness and qualifications are similar to a regular FHA loan.

One of the benefits of a 203K is that all costs can be added into the project. The fees, permits, closing costs, etc. are all added up and your downpayment on the purchase is calculated on the total. If you are refinancing instead of purchasing, the amounts are totaled the same way, but you might already have enough equity in the home to avoid coming up with any cash.

What's next? Once approved, the loan closes and the rehab portion of the money is escrowed by the lender. The contractor submits requests for payment and each phase is inspected. As soon as the work passes the inspection for completion, the contractor is paid. You can not go back to the well for more money, so your initial plan must be a good one. A contingency fund is usually added in during the total project calculation.

This contingency fund can only be used to fund hidden repairs that were not evident during the initial workup. Any remaining funds in the contingency are used to pay down the mortgage at the end of the project.

The FHA 203K mortgage is not a "piece of cake", but if you do not qualify for low cost money at the local home improvement equity loan bank, then it is very definitely worth looking into.

Judi Moore authors Ask The Underwriter at and personally answers questions from readers about FHA mortgages and mortgage advice in general.
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