RH Funding Co. is still doing FHA loans down to 620 score! If you believe your credit score to be between 620 and 640, now is the time to apply, before these guidelines change forever.

Courtesy of RH Funding Co Orlando – www.LendingFL.com

The average 30 year fixed mortgage rate of 4.57% remains unchanged from a week earlier.  Last year this time, the average 30 year fixed rate was 5.14%.   15-year mortgages were lower of course, at 4.06%,  down from 4.63% a year ago.

These mortgages came with an average required payment of just shy of three quarters of a point (ex. .7 point on a $200k loan=$1,400).

Depending on individual’s situations, it may make sense to buy down your rate (pay points) or it may make sense not to.

Courtesy of RH Funding Co. Orlando ~ www.LendingFL.com

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It’s official!  The tax credit extension has officially been passed allowing prospective home buyers that are currently in contract until  September 30th, 2010 to close.

Originally the $8000 and $6500 tax credits were set to completely expire on June 30th, 2010 but the banks have experienced such an influx of applications both for short sale requests and mortgage applications alike that have made fast closing times a thing of the past.
It is important to not however, that the extension applies only to those buyers that are already in contract.  This does not apply to new contracts placed on homes after the initial deadline of April 30, 2010.

Amazingly enough, mortgage rates are at all time historic lows, yet 2010 has yet to see the big purchase boom that should result from market conditions such as these.

Low rates in Orlando with RH Funding Co. – www.LendingFL.com

According to RealtyTrac, THEY SURE ARE!  They recently reported that foreclosed homes made up 31% of  the residential sales in the first quarter of this year.  Combine that with the fact that the average sales price of these properties was over 26% below the average sales price of properties not in foreclosure and you have yourself a buying strategy. Now throw in the mix a 30-year fixed mortgage rate under 5% and you can realistically set yourself up on easy street for life.

The bottom line – NOW is the time to buy a foreclosed property.  Don’t wait for the market to rebound or the inventory to dry up, the people that have the prudence to buy now will reap the rewards for a lifetime.

Law Enforcement – Police, Sheriff, Parole, and Correctional Officers

Fire Rescue – Firefighters, EMS, EMT, and Paramedics (volunteer also)

Medical – Nurses, Laboratory Technicians, Pharmacists, Therapists, Social Workers, Chiropractors, Medical Administrators, Dental Hygienists, Chaplains

Teachers – Teachers, Special Education Teachers, Guidance Counselors, Librarians, Instructors, Tutors, Athletic Directors, Coaches and School Nurses

Military – Army, Navy, Marine Corp, Air Force, Homeland Security, U.S. Coast Guard, U.S. Merchant Marines, the Army and Air National Guard, and Veterans

Government – Federal Agency, State Agency, County and Municipality Workers, Departments of Agriculture, Community Affairs, Environmental Protection, Health and Senior Services, Human Services, Labor, Law and Public Safety, Military and Veterans Affairs, Parks & Forestry, Homeland Security, Lottery, the Library, the Public Defender, and Travel and Tourism

Apply Online www.LendingFL.com

On Wednesday, The Mortgage Bankers Association said that mortgage applications are up 9% from just a week ago.  Refinance transactions alone rose 13 percent, the highest level since over a year ago.

Freddie Mac states that the average rate for a 30-year fixed loan dropped to 4.69 percent last week, the lowest average rate since they began tracking rates in 1971.

Why is this happening? Investors are reacting to the debt crisis in Europe and are putting their money into treasury bonds, a lower risk investment vehicle.   Since there are more investors, the yield on those bonds is lower which forces mortgage rates lower as well.

The bottom line – Refinance or Buy a Home Now, there may be no better time in history.

Looking for more great info?  Check out www.LendingFL.com.  Questions?  Give RH Funding Co. Orlando, a mortgage lender, a call at 888-648-0005.

The RH Funding Co. Customer Experience

 A Step by Step Breakdown of The Mortgage Application and Approval Process

• Visit our secure website www.LendingFL.com and Apply Online.

• Once your application is completed, you will receive an email confirming the receipt of your application.

• If the application is complete, you will receive an email with a pre-qualification letter.

• You will receive a phone call from your personal Mortgage Consultant explaining your loan options and answering any questions that you may have.

• Your Realtor will then submit the Contract for Purchase along with our pre-approval letter.

•  Once the offer is accepted and the Contract for Purchase is executed, you will receive an email with instructions regarding “E-disclosures”

• Complete the “E-disclosures” package and upload any necessary, outstanding documents.

• You will receive a phone call from your personal Loan Processor to notify you that an appraisal company will be calling soon to collect payment for the appraisal.

• You will then receive a call from the appraisal company anywhere between 24 and 48 hours later to collect the payment information.

• You will then receive a call from your personal Mortgage Consultant to go over your loan options and “lock” in your interest rate.

• You and your Realtor will receive an e-mail stating that your loan has been sent to the Underwriting Department.

• You will then be able to track the progress of your loan online 24/7!

• The file is underwritten anywhere from 24-48 hours after submission and you will receive a “Conditional Loan Approval.”

• You may need to provide your personal loan processor with some additional documentation.

• Once the Conditional Loan Approval is received, you must secure a Homeowner’s Insurance policy for the new property and pay one year’s premium in full.

• When your personal Loan Processor collects all the remaining documentation along with the Homeowner’s Insurance policy binder and “paid in full” receipt, the file will be sent back to the Underwriting Department.

• You will receive a phone call from your personal Mortgage Consultant 24-48 hours later letting you know that your loan is “clear to close” and the closing date/time may be scheduled.

• Anywhere from 24-48 hours later you will receive an approved HUD-1 Settlement Statement from your personal Mortgage Consultant; this document will have all of the final closing figures for your mortgage.

• CLOSING DAY! Make sure to bring a cashier’s check (unless the funds are to be wired) as well as your photo ID and enjoy your new home!

FHA plans to cut maximum “seller concessions” from 6% of the sales price to 3%. Seller concessions typically can generally be applied to reoccuring and non-reoccuring closing costs, i.e loan origination, transfer taxes, appraisals, inspections, closing and escrow costs among others — though not the down payment.

When FHA officials comment on the current 6% maximum “exposes the FHA to excess risk by creating incentives to inflate appraised value.”  This is an undeniable fact.  Basically, they are insuring loans with “inflated values”.  A home is worth as much as someone is willing to pay for it.

Jose Fleming of Five Star Realty Group in Orlando, FL – “The reduction of the maximum seller contribution would be detrimental to this already sensitive real estate market.  I can understand that FHA needs to hedge their bets so to speak, but the overall effect this will have on the housing market is inevitable.”

They are looking into the possibility of a sliding scale approach.  This, to me, seems more realistic because the people that will suffer most with these changes would be those buying lower priced homes.  The reasoning behind this is that the smaller the loan amount, typically the higher the percentage the closing costs will be.  While it is realistic to expect a 3% seller concession to cover the costs of a $300,000 home purchase, it would barely cover junk fees at the local bank on a $60,000 property.

Our solution here at RH Funding Co. Orlando is to waive the fees altogether, thereby decreasing the amount of money paid out of pocket by a homebuyer.  We have special no bank closing cost loan programs geared towards the changing market.  Visit us online today at www.LendingFL.com and find out more!

Each mortgage type has different requirements for how long you have to re-establish credit before you’re able to qualify for financing. Generally speaking, FHA is the most lenient.  Buyers can purchase a new home as soon as 24 months after a bankruptcy and 36 months after a full-blown foreclosure. If you sold your home in a short-sale, you could potentially turn around and buy a new home right away if you were current on your mortgage at the time you sold and the rest of your credit was reasonably solid. If you were in default on your mortgage going into the short-sale, you’re back to the 36 month waiting period.

Here is a Summary Chart along with the general guidelines for the 3 main types of finacing: Conventional, FHA and VA…

Conventional Home Loans: (Fannie Mae and Freddie Mac)    

Bankruptcy:

(Waiting period begins on the final discharge or dismissal date.)

Chapter 7 and 11 bankruptcies: 4 years from discharge date.

Ch. 13 dismissed bankruptcy: 4 years from dismissal date.

Ch. 13 discharged bankruptcy: 2 years from discharge date.

Previous bankruptcy policy applies to persons who have a prior bankruptcy in the last 7 years.  A person with multiple bankruptcies requires a 5 year period to reestablish credit.

For Chapter 7 and 11 bankruptcies, the waiting period may be reduced to 2 years with documented extenuating circumstances.

Pre-foreclosure Sale (Short-Sale):

This transaction involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage. The transaction must be approved by the lender, investor, mortgage insurer, if applicable, and all lien holders.

Short sales require a 2 year period to re-establish credit after the sale is completed.

Foreclosure:

The time for reestablished credit is 5 years. There are restrictions with additional requirements for the period between 5 and 7 years. During this period a 10% down payment will be required and the minimum score requirement is 680. No investment property allowed. No second home allowed. No cash-out refinances allowed. After 7 years normal guidelines will apply.

With documented extenuating circumstances, the waiting period may be reduced to 3 years. Deed-in-lieu of foreclosure is similar to foreclosure, except the waiting period is 4 years. The same restrictions apply between 4 and 7 years as above for a foreclosure between 5 and 7 years.

FHA Home Loans: (includes Utah Housing)

Bankruptcy:

Chapter 7: minimum waiting period is 2 years from discharge date

Chapter 13: Minimum 12 months from the bankruptcy filing date with AA payment history and transaction approval from the bankruptcy trustee. Buyers can potentially close on their new home while they are still in a Chapter 13 repayment plan.

Foreclosure:

3 years from completion of the foreclosure.  Approval for closing sooner is sometimes possible with verifiable extenuating circumstances and underwriting approval.

Pre-foreclosure Sale (Short-Sale):

Guidance on Borrowers current on their mortgage(s) at the time of Short Sale:

Borrowers are considered eligible (with no waiting period) for a new FHA-insured mortgage if:

• They were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and

• The proceeds from the short sale serve as payment in full.

Guidance on Borrowers in default at the time of Short Sale:

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.

 Veterans Administration (VA) Home Loans:

 (Directly from the VA’s lending guide.)

Bankruptcy:

The fact that a bankruptcy exists in an applicant’s (or spouse’s) credit history does not in itself disqualify the loan.  Develop complete information on the facts and circumstances of the bankruptcy.  Consider the reasons for the bankruptcy and the type of bankruptcy filing.

Bankruptcy Filed Under the Straight Liquidation and Discharge Provisions of the BK Law 

You may disregard a bankruptcy discharged more than 2 years ago.

If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that the applicant or spouse is a satisfactory credit risk unless both of the following requirements are met:

• the applicant or spouse has obtained consumer items on credit subsequent to the bankruptcy and has satisfactorily made the payments over a continued period, and

the bankruptcy was caused by circumstances beyond the control of the applicant or spouse such as unemployment, prolonged strikes, medical bills not covered by insurance, and so on, and the circumstances are verified.  Divorce is not generally viewed as beyond the control of the borrower and/or spouse.

Foreclosure:

The fact that a home loan foreclosure (or deed-in-lieu of foreclosure) exists in an applicant’s (or spouse’s) credit history does not in itself disqualify the loan.

• Develop complete information on the facts and circumstances of the foreclosure. 
• Apply the guidelines provided for bankruptcies filed under the straight liquidation and discharge provisions of the bankruptcy law.  See the preceding heading entitled “Bankruptcy.”

If the foreclosure was on a VA loan, the applicant may not have full entitlement available for the new loan.

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