Pennsylvania 5 Percent Down Jumbo Loans

Pennsylvania 5 Percent Down Jumbo LoansPA home buyers now have the opportunity to financing higher costs properties up to 95% loan to value. That’s right, only 5% down payment is needed for buyers that meet the lender qualifying standards.  Jumbo financing is often necessary for buyers financing loan amount over the conventional loan limits cap of $417,000 in most locations around the U.S.  In years past jumbo mortgages generally required 20% down payment to get approved. That’s still the case with many banks, credit unions and lenders today. However, a select few are opening up more 90% and 95% financing options.

Jumbo qualifying criteria – home buyers should note the following:

  • 95% Jumbo financing only applies to owner occupied homes. The home must be the buyers primary residence. The property must be a single family, condo or town home. New construction spec homes are also permitted. No vacant land, or build on site financing permitted.
  • Buyers applying for the 5% down option must have a credit score of 700 or above. * Please note, buyers that have experienced financial hardships in recent years may face additional requirements.
  • Buyers need to fully document their income over the previous two years. Tax returns, etc.
  • Buyers will need payment “reserves” after down payment and closing costs is made. The exact amount will determined based on the loan amount, credit and down payment. 3-6 months reserves is generally customary and can be satisfied from buyers retirements accounts.
  • 95% loan amount limit is $1,000,000
  • 90% loan amount limit is $2,500,000

Read more about all the national Jumbo down payment requirements here.

Today’s jumbo mortgage options offer many benefits as follows:

  • Lower down payments – only 5 percent required
  • No monthly mortgage insurance costs
  • Combo loan options like 80/15  or 80/10 along with single loan options ( depending on property state)
  • 30 year fix, 15 year fix and adjustable rate terms available
  • Flexible jumbo refinance options for home owners that already have a Jumbo loan and want to refinance

Buyers can visit www.JumboMortgageSource.com for more information and all the latest program updates.

Serving Pennsylvania –  Philadelphia, Pittsburgh, Allentown, Erie, Reading, Scranton, Bethlehem, Lancaster, Levittown, Harrisburg, Altoona, York, State College, Wilkes-Barre, Norristown, West Chester, Dunmore, Easton, Lansdale, Phoenixville, Emmaus, Lansdowne, Norristown, Yeadon

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August 2016 USDA Loan Updates

August 2016 USDA Loan UpdatesBelow we will discuss all the important August 2016 USDA loan updates. Some great news for new home buyers regarding the USDA 502 Guarantee Program.  First, the national average 30-year fixed home mortgage interest rate in the U.S. fell to 3.36 percent Friday, matching the record low first reached at the end of 2012.  This is great not only for new home buyers, but also existing home owners that want to refinance. The USDA Pilot Streamline Assist program makes refinancing it easy. The program is available to qualified home owners that currently have a USDA mortgage.

USDA Refi Program Highlights:

  • No new appraisal or home inspection. If you are a home owner that owns more on your mortgage than current home value, it’s perfectly fine. The program is designed to help home owners that are “underwater” on their home mortgage.  Great for home owners in the hardest hit locations of Florida, California, Texas and Arizona.
  • Low secure 30 year fix rates.
  • No maximum loan amount limits.
  • Home owners debt to income ratios are not calculated.
  • All closing costs can be included into the borrowers new loan. No out of pocket costs to close or apply.

Important reminders before applying for the USDA refinance loan:

  • You must currently have a USDA loan to be eligible. Borrowers with FHA, VA, Conventional loans have seperate options, please contact us below for details.
  • Home owners mortgage payment must have been paid on time for the previous 12 months.
  • The income for the household must be below the USDA income limits.
  • The property must still be your primary residence.
  • The home owners original loan must have closed at least 1 year prior to the refi request.
  • Read more about all the refi options under the USDA Refinance page above.

USDA also has many benefits for the first time home buyers looking to purchase their first home.

USDA Home Purchase Benefits:

  • No down payment required, 100% financing.
  • Home seller can pay buyers closing costs reducing the out of pocket expense to buyer.
  • Buyers are not required to be first time home owners.
  • Many locations around the country are still eligible and considered “Rural” by Rural Development. Texas, Arizona, Florida, California have approved eligible zones , many just outside of the major cities.
  • Safe secure 30 year fix rate term.

USDA Guaranteed Fee Being Reduced Soon

This is great news for both USDA purchase buyers and home owners that are considering a USDA refinance. USDA announced the upfront Guaranteed Fee will be reduced significantly in a few months. Please read more about new 2016 USDA Guaranteed Fee here.

Please read the most common USDA FAQ’s here and contact us with any questions. Applicants can submitting the Information Request form found on this page, or call ph: 904-302-6060

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Jumbo Mortgage Approval Orange County CA

Orange County California JumboJumbo Mortgage Approval Orange County CA:  Orange County covers a lot of Southern California Territory covering some 948 square miles. From Fullerton to Newport Beach to San Clemente to Anaheim, Orange County is home to some 3 million residents making it the third most populous county in California and the sixth-most in the U.S. And after a slump in home prices toward the end of the last decade, property values again are on the rise and have gradually surpassed home values prior to the decline. The median home value for Orange County today is right around $650,000 which is slightly higher than the current conforming loan limit of $625,500. This means jumbo financing is an option for more home buyers in Orange County compared to other spots in the United States.

While most jumbo lenders approve loans using the same basic guidelines they may also add additional requirements in order to obtain a jumbo mortgage approval. For example, jumbo loans may require a minimum down payment of 10 percent and a minimum credit score of 700, while another jumbo loan might ask for a 25 percent down payment and a 720 score. These individual adjustments to jumbo loan programs in Orange County can vary slightly depending upon the appetite of the individual jumbo lender. Read below for 95 percent jumbo options.

Lenders determine affordability by using debt-to-income ratios. This is a percentage of housing and total monthly debt compared to gross monthly income. For example, let’s say you’re buying a home in Huntington Beach and the sales price is $975,000 and you’re making a 20 percent down payment borrowing $780,000. Using a 4.00% 30 year fixed rate, the principal and interest payment is $3723. If monthly property taxes are $500 and insurance $250 per month, the total mortgage payment is $4,473. If gross monthly income is $13,000, the housing debt ratio is $4,473 divided by $13,000 = .34, or 34. Jumbo lenders like to see this number between 33 and 38.

In addition to the mortgage payment, lenders also add up any remainder credit obligations such as an automobile loan or installment loan. Let’s say there is a car payment of $700 and an installment loan of $200. Now the total monthly debt is $5,370 and the total debt ratio is .41, or 41. This is the target debt ratio used by many jumbo lenders however some programs allow this number to exceed that providing evidence of compensating factors such as a credit score above 750 or a significant amount of cash reserves available.

Some borrowers however might choose to take advantage of low rates currently available and decide to leverage as much as possible by financing up to 95% loan to value. That’s right, jumbo financing is available to eligible home buyers up to $1,000,000 with only 5% down payment required.  Buyers can read about all the latest nationwide 95% Jumbo requirements here.  Buyers can often choose between two options:
1. Single loan 95% Jumbo with NO PMI.
2. Combo first mortgage at 80% of the sales price and the second mortgage at 15%.
A Jumbo loan specialist can run the math comparing different scenarios to discover the ideal jumbo financing option for your situation.

Please see all of the latest 2016 Jumbo loan guidelines here

If you’re employed and receive a regular pay check you’ll be asked to provide your two most recent pay check stubs and two years of W2 forms. If you’re self-employed you can expect to be asked for your two most recent federal income tax returns, a year-to-date P&L and business bank statements in addition to your personal financial information.

Most sellers today, especially so in Orange County, require that all offers include a preapproval letter from a lender. When you select your jumbo lender, ask your loan officer to provide you with a preapproval letter which tells the seller that not only have you applied for your financing but the lender has reviewed your financials as well as your credit history. Providing such a letter will give you a hands-up compared to other potential buyers without one. Once you get an accepted offer for a home in Orange County, having previously provided your personal information means your loan approval will be a smooth process.

Questions about any of the Jumbo mortgage options listed above? Contact Five Stars at www.FiveStarsMortgage.com

 

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USDA Interest Rates, Closing Times July 2016

USDA Interest Rates July 2016Mortgage interest rates for USDA loans and other home loan programs have remained low this summer.  Low as in…near historic low levels. Interest rates across the board are plummeting following Britain’s vote to leave the European Union last week. Mortgage companies began slashing their rates last week. According to the lenders surveyed, the 30-year mortgages have been the beneficiary of the most discounting.

Brexit shook the stock markets as investors ran to bonds. As the 10-year Treasury gains favor, its price rises, but the yield falls – and mortgage rates are quickly approaching record lows.

Will these low rates go down even more in July & August?  According to Fannie Mae’s most recent National Housing Survey, half of borrowers think mortgage rates will be higher one year from today, and another 47% believe rates will hold near their current range.

The survey, which covers 1,000 households, and is to monitor changing buyers attitudes toward mortgages and housing nationwide. Only 4% of those surveyed expect mortgage rates to drop.

USDA Interest Rates, Closing Times July 2016:

As of July 1st 2016 – the government loan rates are currently in the low 3% range.  This includes USDA Rural Housing, FHA and VA loans – purchase and refinance transactions.  Some important things to note:

  • These interest rates assume good credit FICO – over 720. Borrowers with FICO scores, especially those lower than 680 should expect higher rates.
  • Interest rates assume no added “points” or added fees outside normal closing costs. However, borrowers always have the options of paying added point(s) in exchange for lower rates.
  • Rates assume normal 30 year fix rate loans, 30 day lock terms.

Homeowners that currently have a USDA Rural Development loan with a higher interest rate can learn more about the cost saving USDA Streamline Assist refinance. The new program makes refinancing easy and allows for unlimited loan to value, no appraisal, home inspection or minimum credit score requirement.  *This only applies to this special refinance program, NOT the standard USDA 502 Guarantee purchase loan.

USDA Closing Turn Times July 2016:

USDA turn times can vary depending on the home purchase state. As of July 2016, most states are between 3-7 business days.  Note: this is the time is takes USDA Rural Housing to issue a loan commitments AFTER the lender has competed the initial underwriting, appraisal, etc. Buyers should expect the complete closing process to take about 30 days depending on purchase location state. If you have questions about a USDA already in process with a lender or bank, please contact them directly for latest status.

Home buyers that have questions about a new USDA loan approval, please contact us at 904-302-6060 (7 days a week) or visit www.UsdaMortgageSource.com for more information.

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Considering Jumbo Loan Washington State?

Jumbo Loan Washington StateConsidering Jumbo Loan Washington State? High end real estate in Seattle requires a bit more time when searching for the proper financing. Sure, most mortgage companies offers both conforming and jumbo loans, but there are companies that tend to specialize in jumbo financing. By doing this they have special relationships with jumbo investors and can offer more of a boutique-style options in addition to standard, jumbo fixed rate fare.

Jumbo mortgages are those that are above the local conforming loan limit. In most of Washington the conforming loan limit is $417,000 yet in certain areas deemed “high cost” due to the higher median price of homes, the conforming limit can be as high as $625,500 (parts of California, Florida, etc) That vast bulk of conforming loans are those underwritten to Fannie Mae and Freddie Mac guidelines. When lenders approve a loan using these standards the loan is eligible for sale in the secondary markets, freeing up additional cash to make still more mortgages. Jumbo loans also have a secondary market though not as robust as the conforming marketplace. In some cases, jumbo lenders keep their loans in-house with no intention to sell. In all, jumbo loans account for around 20% of the overall number of mortgages approved each year.

All this means is there are choices for jumbo products but not nearly as many conforming loan options. Mortgage companies that tend to specialize in the jumbo category built special relationships with jumbo investors and build their market and mortgage products around this strategy. Getting jumbo financing isn’t all that different from a conforming loan and all one might discover is the minimum down payments for a jumbo loan are greater and mortgage rates may be slightly higher although that has started to change in recent years.

Up until around 2007 and 2008, jumbo financing was across the board. Stated income, even 100% financing programs were introduced. No document loans could be found where nothing regarding the financial details of a borrower was verified. Yet after the mortgage collapse, jumbo lenders pulled way back and it wasn’t really until around 2012 when jumbo lenders got back in the mortgage game and rates began to more resemble conforming rates than those for a jumbo loan.

Today, borrowers can expect to put at least 10% down payment for a jumbo loan with a full suite of mortgage rate product offerings. However, select lenders are now again offering up to 95% Jumbo mortgages in Seattle with fixed rates ranging from 15 to 30 years or adjustable rate hybrid offerings of 3/1, 5/1, 7/1 and 10/1 programs. Hybrids offer a slightly lower rate than a fixed rate product for an initial fixed period of time before turning into an adjustable rate that can change annually. Buyers can learn more about the 95 percent Jumbo financing options in the video below.

Programs that require only a 5% down payment and utilizing a second lien for the remaining 15% percent, keeping the first mortgage at the 80% loan-to-value level and avoiding mortgage insurance. Your loan officer will be able to do the math for you to see if putting , 5%, 10% or 20% or more is better for your personal situation.

Mortgage companies that specialize in the jumbo product know which type of jumbo program best suits your needs. While most jumbo lenders approve an application in much the same fashion, sharing basic qualifying guidelines, there can be other “tweaks” to an approval process that one jumbo lender has that another does not. For example, one program might only require one year’s worth of federal income tax returns instead of two for the self-employed applicant. This can be advantageous to someone whose business had a down turn one year but recovered nicely in the next. Because most programs average year over year business income, one bad year could keep someone from getting approved. Other differences may be different credit scores and down payment requirements. Some programs allow for higher debt ratios than others.

The point is this- while jumbo loans are all categorized by the size of the loan, there can be differences from one program to the next. Experienced jumbo lenders know just where to look when a special circumstance comes into play.

Five Stars assists buyers in across the country including those in Washington: Seattle, Spokane, Tacoma, Vancouver, Bellevue, Kent, Everett, Renton, Yakima, Spokane Valley, Federal Way, Bellingham, Kennewick, Auburn, King County WA.  They can be reached at ph: 800-871-2636  or by visiting www.FiveStarsMortgage.com 

 

 

 

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