VA Loan Certificate of Eligibility — A Simple Definition:

The VA Loan Certificate of Eligibility is a key ingredient to getting a VA loan which is very popular with people who are Military Active Duty, Reservists, Veterans, and their immediate families.  Simply put – if you can’t get a VA Certificate of Eligibility, you can’t get a VA loan.

VA Loan Certificate of Eligibility — An Expanded Definition:

There is a long list of potential people who could get a VA loan – but rather than break those out, I can offer a simple rule of thumb:

If you are in the military or have served in the military, or you are a spouse or a dependent of someone who was or is in the military you may be eligible for a VA loan and a Certificate of Eligibility.

You can visit the Dept of VA website to check military service requirements for VA loan eligibility.

From a more technical standpoint, the VA loan eligibility certificate is called Form 26-1880 and you can get it directly from any VA regional center, or you can get it online at the Veterans Information Portal.

Most VA lenders can also help you with getting your certificate if needed.

The certificate does not say that you are qualified for a VA loan, it simply means that you are eligible for a VA loan.

To qualify for a VA loan you will have to apply and qualify for it with a VA lender. It is during the application process where you will need to prove your eligibility for a VA loan with your certificate.

Lastly, the Certificate of Eligibility informs your VA lender what loan amount you are eligible to get which is based on your level of military service. In general, full eligibility without a down payment will get you up to a mortgage amount of $417,000. If you are eligible for the full amount and you don’t borrow all of the $417,000 in one mortgage, it is possible to get another mortgage on another property if you meet certain qualification requirements.

For more specific details on this, or other items relating to the VA Loan Certificate of Eligibility, you can speak to your loan officer.

Are you a diehard football fanatic?

Can you fathom the thought of not watching your favorite team on TV?

Blackout restrictions are in place between NFL teams and their local television markets. If the game sells out it is on TV. If the game is not a sell out, local fans become “blacked out” of signal and cannot watch their teams play. Or in other words, it will no longer be televised on your local network. NFL rules state a game must be sold out 72 hours prior to kickoff.

NFL ticket sales have been down for the past three years and it looks as if this year may be the worst yet. According to USA Today at least 11 NFL teams could be facing blackouts as franchises fight through a downward trend of stadium attendance. Last year the league had 22 blacked out games, a five year high.

Today’s economy has many consumers ultra focused on spending habits and an increasing number of consumers with no disposable money available. Maybe NFL franchise owners have priced themselves out of consumers comfort zones and now the economy will force ticket prices and the overall stadium experience back in place. Maybe consumers are at fault for paying the asking price for season tickets and supporting team revenue by shelling out for concessions and team jersey’s and such.

Tampa Bay Buccaneers: Blackouts likely.

Jacksonville Jaguars: Seven blackouts last year.

Oakland Raiders: Seven blackouts last year.

Detroit Lions: Four blackouts last year.

Can football tell us anything about the economy?

Let’s see… the cities above located in California, Michigan and Florida… States which just happen to lead the country in foreclosures. And the NFL expects it to get worse this year. I for one think this is a very viable measurement on the state of our economy. Just examine the statistics of the number of TV blackouts for NFL games and come to your own conclusion.

In fact, if you really want to feel the pulse of the economy, ask the following shops you patronize how’s business: your favorite restaurant, your cleaner, your car dealer, your real estate agent, your neighborhood pub, your car mechanic…. get my point?

And now for a shameless plug. Go Redskins! By the way I did not renew my five season tickets this year for the first time in a decade. The Skins priced me out of the market.

Effective for FHA loans for which the case number is assigned on or after October 4, 2010 the Upfront Mortgage Insurance will decrease from 2.25 to 1.00 (100 basis points) on most FHA insured loans except Home Equity Conversion (HECM – “reverse mortgage”). Chances are you have heard this or some version of it but until yesterday, September 1, 2010, it was not in writing in the official form from HUD.

When are FHA case numbers assigned?

Case numbers must be assigned prior to ordering third party services such as the appraisal. Appraisals are not ordered until there is a fully executed sales agreement in the lender’s possession. The lender orders the FHA case number and assigns it to the loan application where it becomes permanent record.

Monthly Mortgage Insurance also changing.

With UFMIP going down MMIP is heading up. Much more dangerous to the industry because it impacts monthly payment and thus debt-to-income ration (DTI). Currently on loans of over 95% the MIP is .55% annually and from 95% and lower it is .50% annually. Effective October 4, 2010 those numbers will be .85% and .90% which results in an increased monthly payment.

Contrary to some reports there has been no notification of change in the amount of closing contributions by the seller which can be contributed to cover closing costs which is 6% and has not (yet) changed. The buyer must contribute 3.5% of their own money but it can be a gift.

This information applies to 203b and 203k loans.

Examples – top row is now, second row is after 10/4 and the $43.39 is the monthly payment increase:

Image Wikipedia Commons

FHA Streamline Refinance – A Simple Definition:
The FHA streamline refinance is a refinance program designed for people who currently have an FHA loan to be able to take advantage of lowering their interest rate when rates drop with less documentation than a “normal” refinance requires.  The term streamline refers to the reduced documentation requirements that are designed to streamline the process.

FHA Streamline Refinance – An Expanded Definition:
As interest rates have fallen to the lowest point in decades, many people who can are thinking about refinancing. With the FHA streamline program, there are 2 main options: an FHA streamline refinance with appraisal and an FHA streamline without an appraisal.

For many people who are in an FHA loan and owe more on their mortgage than their house is worth, the FHA streamline without appraisal makes it possible where they can possibly refinance. When you refinance in the FHA streamline program and choose the “no appraisal” option, according to a recent rule change by HUD you can no longer roll the closing costs into the loan. This means that you will need to be prepared to bring in your closing costs – or – possibly have the lender cover a portion of your closing costs in exchange for a slightly-higher-than-market interest rate.

If you refinance with the FHA streamline with appraisal, you can still roll in your closing costs if need be and it is sometimes referred to as a “no out of pocket closing costs refinance”.

Regardless if you participate in the FHA streamline refinance program and go with the “no appraisal” or “with appraisal” option – the key is that you need to lower your interest rate enough for it to make sense. When considering whether or not it makes sense to refinance, be sure to consider how long you will be in the property, what your total closing costs will be and how much monthly savings you will realize by refinancing.

The easiest way to calculate these numbers as to whether or not it makes sense?

Talk to your loan officer. Great loan officers can easily help you know whether it makes sense in your situation.

Fannie Mae HomePath Financing

HomePath is a special designation given by Fannie Mae to properties in their portfolio that have been foreclosed on. Fannie claims their goal is to sell these properties in a timely manner in order to minimize the impact on the community. Houses labeled with a HomePath tag become eligible for special financing.

HomePath properties for sale – click here

+ Important Facts

- Fannie Mae will not accept contingent contracts on the sale of your home.

- You must use a Realtor® to purchase a HomePath property.

- You can choose your own title company

- Fannie Mae sells properties “as is”.

- Properties listed for sale include single family homes, townhouses and condos.

+ Financing

- 3% down payment on owner occupied properties

- NO mortgage insurance.

- Available for owner occupied and investment properties

- NO Appraisal – Fannie uses the sales price as it’s valuation.

- Eligible for HomePath Renovation Financing

Loan limits up to $729,750 depending on property location for single family homes. Four unit loans available up to $1,403,400 in high cost areas. Minimum credit score is 600 although many investors will not approve loans at this score. Borrower must have 5% of their funds towards the purchase. Seller may offer up to 9% help on CLTV’s less than 75%.

***I have closed these loans in less than 10 days. Understanding the guidelines is key.

Whether you are a first time home buyer or an seasoned investor, I recommend to work with experienced HomePath lending specialist and Realtors® who understand the guidelines and can fully explain your options.

“This may be the best time in the history of the world to purchase a home” – LP

Find out more about Fannie Mae HomePath financing – click here

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If you’ve ever shopped around for a mortgage, you’ve undoubtedly heard the phrase “mortgage points” tossed around when looking at closing costs and fees.

It’s a simple way of saying you’ll be charged “X” amount for obtaining the loan with this mortgage broker or that bank.

A point is just a fancy (or not fancy, depending on how you look at it) way of saying a percentage point of the loan amount.

So if a bank says it’s charging you one point and your loan amount is $100,000, the cost of the mortgage point is $1,000. If your loan amount is $200,000, that fee is $2,000. And so on…

While this is easy enough to understand, how much you’re charged (and why) may not be.

For example, a lender may not charge you anything out-of-pocket (no points), but offer you a higher interest rate to compensate.

So instead of snagging that hot 4.5% rate on the 30-year fixed you qualify for, you may wind up with a 5% rate and no points.

That might make sense if you don’t plan on staying with the loan (or the home) for a long period of time, but it could also mean you’re getting a bad deal.

There are situations where you might be charged one mortgage point upfront while also getting pushed into the higher rate, effectively paying twice what you should in fees (thanks to the yield-spread premium and/or service release premiums).

Sometimes Paying Points Lowers Your Interest Rate

Keep in mind that you can also pay mortgage discount points to lower your interest rate.

So if you qualify for a rate of 4.5%, but desire a rate of 4%, you can pay “X” number of mortgage points to lower the rate to that level.

These are considered a form of pre-paid interest and are therefore tax deductible – you’re essentially paying the interest upfront at loan closing as opposed to monthly.

Remember to inquire about all costs and fees and do plenty of price comparisons to ensure you get the best deal, especially when using Zillow’s Mortgage Marketplace to shop for home loan offers.

(photo: a2gemma)

Although there are many posts on the internet about FHA MIP rising to 1.55% that is factually inaccurate. The act signed into law on August 14, 2010 (HR 5981) does not state FHA monthly mortgage insurance premium (MIP) is increasing to 1.55% – it simply states MIP “may” be increased to a maximum of 1.55% (of the loan amount per year) by the commissioner without further need for congressional approval.

Currently no official FHA announcement has been published as to exactly how much MIP will increase. There has, however, been printed and spoken information circulated stating the increase on FHA monthly insurance will be to .90% on loans with less than 5% down payment and 85% on loans with 5% or more down payment.

On August 10th Deputy Assistant Secretary  Vicki Bott sent a letter which ended with an italicized paragraph including the statement that on October 4th 2010 FHA MIP would increase. “FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years.”

Statements that indicate the Federal Housing Authority will be adjusting the monthly MIP to 1.55% are unfounded and not factual. A final announcement from FHA will be made prior to the October 4th date of implementation.

HR 5981 - Amends the National Housing Act with respect to requirements for the insurance of mortgages secured by a one- to four-family dwelling which are obligations of the Mutual Mortgage Insurance Fund. Authorizes the Secretary of Housing and Urban Development (HUD) to establish and collect annual premium payments of up to 1.5% of the remaining insured principal balance on such a dwelling.

It also authorizes an annual premium of up to 1.55% of the remaining insured principal balance of any 30-year mortgage on such a dwelling involving an original principal obligation greater than 95% percent of such value. (Currently, an annual premium of up to 0.55% of the remaining insured principal balance on such a mortgage is required.) Authorizes the Secretary to adjust the amount of any initial or annual premium through notice published in the Federal Register or mortgagee letter, which shall establish the effective date of any such adjustment.

No Cost Mortgage – A Simple Definition:
The no cost mortgage (also sometimes called the zero cost mortgage) is an option when interest rates are falling and is when the lender agrees to pay all of the closing costs associated with the loan. All closing costs as in nothing is added to your original loan balance.

No Cost Mortgage – An Expanded Definition:
Just because the mortgage is a no-cost mortgage doesn’t mean there aren’t costs — it just means that the lender agrees to pay for the costs in exchange for a slightly higher interest rate. So just because you aren’t paying for an appraisal, an underwriting fee, a credit report fee or any other type of fee doesn’t mean that someone isn’t paying them… it just means that the person paying these fees isn’t you.

One of the common questions people ask is “how much higher of a rate will I get if I want a no-cost mortgage rather than pay my own closing costs?” and the answer is — it depends. As a general rule of thumb, expect to have a .25% to .50% higher rate if you decide to opt for a no-cost mortgage.

As counter-intuitive as it may sound, no-cost mortgages are not always the best financial choice – it depends on your situation. Typically, the longer that you plan to keep the home (or, more specifically, the loan on the home) the more sense it makes to pay the closing cost and get the lowest possible rate.

Is a no-cost mortgage right for your situation? Maybe. But be sure to double check with your loan officer to see what the numbers stack up to be in your situation.

Several companies have already pledged to waive late charges and suspend negative reporting to credit bureaus for Gulf state veterans, according to Secretary of Veteran Affairs Eric K. Shinseki. The secretary issued a plea Monday asking all mortgage companies to make similar concessions for affected veterans.

“Through no fault of their own, many of our veterans are out of work and are struggling to earn an income,” Shinseki said in a news release. “We must assist these veterans in this difficult time, just as they have supported us in their sacrifice to the nation.”

The VA already has an array of avenues to help veterans battle foreclosure. Perhaps lesser known is its guidance for veterans affected by major disasters. Veterans with and without VA-guaranteed loans can contact their closest VA Regional Loan Center at 1-877-827-3702 to obtain free mortgage counseling.

Image: jim.greenhill

First the feds would pour billions of taxpayer dollars into a “toxic asset” recovery plan which would be distributed to the biggest banks. Only those banks who are most friendly with the ruling party, though. Then when that didn’t do the trick the feds, having now nationalized these big banks, would “suggest” they modify the home mortgages on a few million homes. After all when you have the president (Obama), Nancy Pelosi, Harry Reid, Barney Frank and Chris Dodd all on a rocket tour through the destruction of the American economy who could say no?

The banks did not. At least the ones who were walking around with their lips around the teat of the mother of all bailouts. It appears Robin Hood was, after all, a modern American socialist. Only he stole from the rich and gave to the poor people. This version is different wherein the Robin hoodlums steal from the commoner and their children and give to the rich … or at least the mega rich. In fact evidence shows if you are not large enough to affect an entire national election you aren’t due for any of the people’s gold.

In the end nearly one-half of the home owners who applied and who were/are underwater in their homes, not able to keep up with their “toxic mortgage” payments for any number of reasons or simply looking for some of that very personalized socialism have fallen out of the all but forced Home Affordable Modification Program (HAMP). All but forced upon the banks that is. After all, the banks owe the president and the four horsemen of the recession their sworn allegiance. Instead of letting the banks fail, as open market capitalism requires, the executives of the behemoths still have their positions and have pockets lined with tax payer sacrifice ripped from the altar of belief in an increasingly communistic way of life.

More a sign of the times than actual necessity for the preservation of America we now are burdened with poorly written regulation mixed with a recipe of lack of foresight, failed introspect, atrocious levels of community involvement (nil), and “how can we make this work for re-election” publicity. The Summer of Recovery hasn’t even so much as sparked before it fizzled. It’s a dud bomb that only poisoned the waters of the free market with yet another failure in the HAMP program. I can’t wait to see how they spend our children’s money next. Surely there must be yet more ways to fail the American people.

Who’s fault is it? Why Chris Dodd and Barney Frank of course. The same people entrusted to make America safe from the horrible bankers for years and years. The same horrible bankers who followed their regulatory changes to open the mortgage market to the “underserved” citizens of America under the Clinton administration. These are the same underserved people who continually get the very short end of the stick and still find themselves uninformed enough to vote for the same kings and queens election after election. I suppose the sheep doesn’t really know he’s a sheep. He just wonders why every time the lord of the barn invites him in he leaves cold and naked having his shearing blamed on the shearer, not the lord of the barn. But there’s plenty of grass to eat and it’s so green …

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