In the case of Sharon Johnson-Smith, Academy Mortgage and Steve Alonso were able to get them into a new home with financing only one year after a short sale.

Have you had a short sale in the past and now want to get a mortgage? Contact Steve today to find out how.

Get a Mortgage One Year After a Short Sale

Here is a letter from a client who recently closed on a new home only one year after having a short sale.

From: Sharon Johnson-Smith
To: Steve Alonso
Sent: Friday, January 13, 2012 11:12 AM
Subject: Endorsement

Hi Steve,

Here is our endorsement – and we mean it sincerely. -Sharon and Pinkie.

—–
And they said it couldnt be done My husband and I began to have our doubts, but Steve Alonso pulled it through.

We are elated about being able to get financing on a home after only ONE year since our short sale closing.

I was particularly doubtful after talking with several other realtors who were sure that it takes 2-3 years after a short sale before any lending institution will finance a mortgage.

I had serious second thoughts about going through with purchasing our new home, after talking with a couple of mortgage brokers who saw it highly improbably we would get financing this year.

However, Steve with his This will be done, attitude, actually did it. Thank you Steve for performing what was considered an impossible feat!

Sharon Johnson-Smith, REALTOR
480-893-0600
Fax:888-400-1956
West USA Realty
sjsmith100@hotmail.com
sjsrealestate.listingbook.com

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One of the first things to get comfortable about when it comes to a short sale is that you will not likely be able to buy a new home for at least 2 years (all mortgage programs including VA loans, FHA loans and Conventional mortgages). The 2 year guideline stands as long you keep your credit record spotless from the time your short sale is complete until you try to get a new mortgage.

With this in mind you’ll need to think about renting a home for a at least 2 years to give yourself time to meet the minimum time requirements that you’ll need to get any type of mortgage. Mortgage programs differ and there are different time requirements following a short sale that you’ll need to know about if you plan to purchase a home after your short sale. Below you’ll see a summary of some of the time requirements.

Time Requirements To Getting a New Mortgage After A Short Sale

Fannie Mae (Conventional and Freddie Mac):

• 2 years with 20% down
• 4 years with 10% down
• 7 years with 3% down

FHA:

• 3 years from short sale completion date * Per FHA – you may be able to get a FHA mortgage under 3 years under special circumstances

VA:

• The VA hasn’t specified wait time guidelines after a short sale but plan on nothing less than 2 years.

USDA Rural:

• 3 years from the completion date

Jumbo:

• 7 years from completion date

Now that you have this list you may want to think it is set in stone. What you need to remember is that if you have a good reason for what caused the short sale you may be able to get an exception to any of the time frames listed above. Best thing you can do is talk to a few loan officers to get different opinions.

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In my experience, properties that are currently owned by the bank are in need of a few repairs before anyone can live in them.

Which is why I get quite a few questions about two of the most popular loan programs designed to help homeowners finance needed repairs on a new home: the Arizona FHA 203k loan program and Fannie Maes HomePath mortgage program.

One of the more common quick questions I hear when people are learning about these loan programs is:

Which is better, the HomePath momortgager the FHA 203k loan?

The simple answer to this question is it depends and before I give you a simple formula that might help you choose between the two programs, here is a quick review of each loan program.

The FHA 203k and FHA Streamline 203k Loans

The FHA 203k loan program can be grouped into two different types of loans: the FHA Streamline 203k loan program and the FHA 203k loan. The FHA 203k streamline is designed to be a limited repair program and has simpler processes and no HUD consultant required like on the full FHA 203k loan. In my experience, the FHA 203k streamline is a more popular option since many of the needed repairs for bank-owned homes can be considered cosmetic.

Highlights of the FHA 203k streamline loan include:

• It works very similar to a construction loan it allows you to purchase a home that wouldnt qualify for FHA financing due to repair work being needed
• The loan amount is equal to the purchase price of the home plus the amount needed for repairs
• FHA 203k streamline program allows for repairs ranging from $5,000 and $35,000
• Qualifying for FHA 203k loans are the same as regular FHA loans
• Repair work cannot begin until loan closes and the money to pay contractors comes from an escrow account set up when the loan closed
• FHA 203k loans require UFMIP and MIP just like regular FHA loans
• Appraisal required
• Currently available for owner-occupied properties only although I have heard rumors of an Investor 203k loan coming soon.

Fannie Mae HomePath Renovation Loan

When the housing downturn began and Fannie Mae started owning more homes than ever before, one of the things Fannie Mae did to help move the homes to new owners was to design the HomePath mortgage program.

The HomePath mortgage program has two different programs within it the HomePath loan and the HomePath Renovation loan.

For homes that are in need of repairs, the HomePath Renovation loan is the loan program that is often compared to the FHA 203k loan when weighing options.

HomePath Renovation loan highlights include:

• The property must be currently owned by Fannie Mae
• The loan amount is for both the home and the repairs required for the home
• Repairs can be up to 35% of the as-completed value, but not to exceed $35,000.
• Down payment requirements can be as low as 3%
• Fixed or adjustable rates are available
• No mortgage insurance required
• Investment properties or 2nd homes and investment properties are allowed
• No appraisal required
• Lenders can be difficult to find, not every lender is HomePath approved and many HomePath approved lenders do not offer the HomePath Renovation loans
• HomePath Renovation Loan or FHA 203k Loan?

When deciding on financing for a home that is in need of repairs, the Fannie Mae HomePath Renovation loan program and the FHA 203k loan program are what most people are going to select.

Is there an easy way to select the right loan between the two?

Yes.

Which Loan Program Is Better?

Here is a simple way to choose the right loan program between the two if you are buying the home as your primary residence:

• Is the home owned by Fannie Mae? If yes, it probably makes the most sense to get a HomePath Renovation loan.
• Is the home owned by someone other than Fannie Mae? If so, then your best option is the FHA 203k loan.
• While both the FHA 203k loan and the Fannie Mae HomePath Renovation loan programs are similar, I have found that for houses owned by Fannie Mae it usually makes more sense to go with the HomePath Renovation loan.

Which means the first question you may want to ask is:

Is this house owned by Fannie Mae?

And then you will have your answer.

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Yes, I realize that it is not every loan that needs to close in ten days, but it is always nice to have available if needed.  Here are just a few of the reasons that we at Academy Mortgage can close a mortgage in ten days:

We have on-site processing. What this means is that once I have taken a loan application, I don’t have to upload it into an electronic file to be zoomed off to someone who works in another city (or country) to start doing the various tasks required in order to get your loan approved and funded.

We have on-site underwriting. This is nice for a number of reasons, but one of the reasons I like it is that when there is an issue with a file and the underwriter doesn’t understand something or needs something more, they are right down the hall from my office. And believe me, it is much easier to solve problems through face-to-face communication than it is to try to solve them through email and voicemail.  It saves quite a bit of time.

We have on-site doc drawing. Once your file is underwritten and approved, it is sent to our closing department to work on getting your final documents to the title company.

Our branch manager is empowered. Every once in a while there is an issue where a judgement call needs to be made as to whether or not a decision on a loan is the right one. Or if everyone is comfortable with funding a loan. Or if everything that is needed on the file is in the file before the loan funds.

In some companies, these decisions are made by people who are not on the ground floor — they are made by people who have titles like “Chief Risk Officer” or something like that. Not here. Here, our branch manager has been empowered to make the hard decisions when needed — so you don’t have to worry about waiting for someone to make a decision on your file.

There really isn’t a magic bullet to the mortgage process — but we have found that by putting all of the different departments under one roof and letting our branch manager control the process… we are very confident that we can get your loan done in ten days or less… when we need to.

And there just aren’t that many companies out there who can say that in today’s environment.

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According to a story in the Wall Street Journal, at least one couple is having this problem:

Getting financing for unusual homes has never been easy. Near Granby, Colo., Richard Messer opted not to look for a conventional mortgage because there was nothing conventional about what’s inside his walls: 50 tons of paper Coors beer packaging used as insulation. Mr. Messer got a $60,000 loan from friends to help pay for it. “The problem for anyone trying to do a unique house is financing,” he says.

Wayne Bryant, a 56-year-old steamfitter, spent much of last year looking for a way to refinance a $417,000 construction loan on his underground house high in the San Juan Mountains in southwest Colorado. The first appraiser to examine his property didn’t even come down from Denver to look at it, saying he had made a few phone calls and determined that there were no comparable transactions in the area, Mr. Bryant says.

No matter what state you live in, one thing to consider when using “green” or recycled products to build your home is “how will this impact my ability to finance this house”?

As the credit crisis drags on and banks are picky about who they are lending money to, one thing is certain:  Owners of odd homes can be out of luck.

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As you can see in the chart below, after peaking at about 5.60% in the first week of June this year, the 30 year fixed rate has been hovering very close to 5.00%. The 15 year mortgage is also on a similar trend but at a slightly lower rate.

The good news is rates remain at historically low levels. The graph above is based on an average weekly mortgage rates provided by Freddie Mac. Of course the exact rate you receive is dependent on many factors.

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Now that subprime loans are a faint memory of the past, we often look to the FHA loans to fill in the void. Not that we miss those ugly sub primes all that much. But alas, FHA does provide a hearty loan for those who may have had a shaky credit past.  So, here are a few fun facts and figures on the famous FHA loan.

1)  You do not have to have perfect credit to qualify for an FHA loan! Yes, this is great news. In fact, even with a bankruptcy or a mortgage late, it is easier for you to qualify for an FHA loan than a conventional loan.

2)  FHA loans have a low 3.5% down payment. This money can come from a family member, an employer or even from a charitable organization as a gift. Most other loan programs do not allow this unless you have a much larger down payment or 5% of your own money invested.

3)  FHA rates are competitive! Believe it or not, because the Federal government insures these loans, they offer comparable rates. Your rate won’t be sky high if you opt for FHA instead of a conventional mortgage. The government makes sure of this!

4)  FHA helps you stay in your home. This may have sounded funny a few years ago. But today this is extremely relevant! The FHA has been in place since 1934. They want to protect the folks who have bought. FHA has various options to help keep you in your home should you run into difficulties and to help you avoid foreclosure in the long-run.

5)  You can buy or refinance various types of new or existing homes on an FHA loan: A one-unit, single family home; a duplex, triplex or four-plex; a condominium unit or even a manufactured home (provided the manufactured unit is on a permanent foundation). Sorry, no houseboats as of yet!

6)  Finally, for qualified buyers FHA mortgages are assumable!  This means a buyer of your home may take over your existing mortgage if they qualify.  This may help you sell a home with an FHA mortgage down the road if interest rates have gone up.

So, there you go. A few little details on the famous FHA loan.  Most likely tidbits you have heard before, but worth remembering for the day you may choose to use an FHA loan.

HUD’s internet site provides plenty of additional information. I also suggest talking to your realtor about their experience with FHA clients.  And, if you want to see if you qualify for the FHA loan, just give Mike or me a call. We can let you know in no time!

photo credit: Kamal H.

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Time is a runnin’ out! Here is one last call to all you FIRST-TIME HOME BUYERS! Don’t delay. Get those offers in ASAP.  As I am sure you have heard you are eligible for up to an $8000 tax credit on your 2009 tax return.  And when they say tax credit that is what it is. It is a dollar for dollar reduction of what you owe the government. Very often this will mean cash back to you!! $8000 could be a new car.  $8000 is one heck of a vacation! Or for those prudent among us…$8000 is a mighty fine cushion in one’s bank account, come that rainy day.

Now here’s the rub. If you want to be able to take advantage of this fantastic opportunity, you need get qualified now, have your realtor write the offer, get it accepted and get that home into escrow immediately! No pressure here!  In order for you to close on this by the November 30th, 2009 deadline you will want to get an offer accepted in the next few weeks!

Now, to take off the pressure just a bit there may be a chance this tax credit will be extended into 2010. But, we don’t know this for sure. If you wait, it is a gamble. So, I suggest you do your absolute best to find that home now!

Now, let’s talk detail. What exactly does it mean to be a first-time homebuyer? Well, technically you can have owned previously. However, you may not have owned in the full three years prior to the purchase of this home. So, if you sold a home 2.9 years ago…sorry! But, if you sold a home four years ago, and rented in the meantime, you are eligible!

You are probably wondering how much you will really receive. Yes, that is an excellent question. If you were to purchase an $80,000 home you could receive the maximum tax credit of $8000. Essentially, your tax credit is 10% of the purchase price of the home. If you happen to be buying a home that is less than that price your tax credit will be less than the max allowed.  Simply calculate 10% of the home value and you have your amount.

Now let’s talk a bit about what types of homes qualify for this tax credit. Thankfully, any home that would be considered a principal residence works! This includes single-family homes that are detached, attached homes like townhouses and condominiums, manufactured homes and even houseboats! Do keep in mind that this program does not allow you to purchase a home from your parents, grandparents, children, grandchildren or spouse.

So…get out there, one and all! Let’s take advantage of this fantastic program and pray that the government finds it in their heart to extend this ever-so-useful credit into 2010! Please contact us for further questions and go to the tax credit site for more detailed information!

photo credit: wilhei55

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WASHINGTON (Reuters) – The U.S. Senate should act later this week to extend a $8,000 tax credit for first-time home buyers that is scheduled to expire soon, Democratic Sen. Bill Nelson said on Monday.

“We should be able to extend that later this week,” Nelson, a member of the Senate Finance Committee, told reporters before joining President Barack Obama on an Air Force One flight to Florida.

“The existing law ceases to exist on November 1. This would be an extension for a limited period of time,” Nelson said.

We’ll keep you posted.

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It’s set to expire by the end of the year.

Made me think of this video:

Now read this overview on why you need to get moving to take advantage of this money.

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