Archive for the ‘General’ Category

Home Ready Example Case

June 6, 2017

So let’s take a look at a scenario where the Home Ready program can really help a home buyer, let’s call him “John Doe.”  John’s mortgage credit score is 680.  John wants to buy a house priced at $200,000 and he only has about $10,000 in cash.  In addition to his down payment, he will need to use some cash for closing costs and prepaid escrow, so he can really only afford a 3% down payment.

With a standard conventional loan, John would pay a “premium” for a loan with only 3% down.  His monthly principal and interest payment would be around $985.  And his private mortgage insurance (“PMI”) would be expensive at an estimated $226 per month.  So with the standard conventional loan, John would be looking at a mortgage payment of around $1,200, before we add in the escrow payments for homeowner’s insurance and property taxes.

Now let’s assume that John qualifies for Fannie Mae’s Home Ready program.  John can therefore win approval for a 3% down conventional mortgage without having to pay the “premium price” for the low down payment.  He simply must take the $75 online class and pass the quiz at the end.  In this case, John’s monthly principal and interest payment would be around $940.  And John’s PMI would be an estimated $186 per month.  By taking the class and paying $75, John has used the Home Ready program to reduce his mortgage payment (before escrow) to about $1,126.  If John qualifies for the program, Home Ready will save him about $74 per month in this scenario.

Ultimately John will recoup his $75 online class investment in about one month.  That’s a pretty good return, in my opinion.

Now this is just one example using the assumptions provided, but it provides a realistic picture of how the Home Ready program works.  Do you want to buy a house in Georgia soon?  Do you have average to below average credit and not much money for a down payment?  If so, the Home Ready program might be a great way for you to buy that home you want.  Call me at Dunwoody Mortgage and we can review the Home Ready program and other options that could work for you.

Happy Holidays

December 17, 2016
Welcome to the Winter Wonderland. Happy Holidays!

Welcome to the Winter Wonderland. Happy Holidays!

Declining Asset Loan Option

May 16, 2016

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In the last post, I commented on a situation where a retiree with over half a million dollars in a brokerage account could not count his $4,000 monthly withdrawals from that account as “income” for a mortgage qualification.

So here’s what he can do with his current assets….I represent an investor who will do a “declining asset” loan for this retiree.  (Not all lenders will do this type of loan.)  We start with his account balance and multiply by 70%.  This is to adjust the balance for potential stock and bond market fluctuations.  That gets him to $350,000.

Then to fit this amount into a 10 year monthly income forecast – I divide by 120 months.  That yields about $2,915 per month in available income.  And that is all the “income” I can use based on his assets.

Retirement Income

This retiree told me that he had been “prequalified” by another lender for the full $4,000 “income” that he withdraws every month.  I asked, “Did that lender ask you any questions about HOW you earn your income?”  His response was, “No.”

We at Dunwoody Mortgage are trained to ask important questions up front.  By digging in just a little bit, we might discover potential underwriting road blocks early in the process.  Then we can either determine a way to work through the road blocks or stop the process early, before the buyer and the Realtor waste a lot of time and the buyer’s money (for home inspections, appraisals, etc.) on starting the home purchase process when they cannot win underwriting approval.  His Realtor was very appreciative that I helped him avoid wasting a lot of time searching for houses that this retiree could not afford.

If you know a retiree who is thinking about buying a home in Georgia, tell them to carefully consider how their assets are allocated and how they receive their income.  Not all assets and income are treated equally.  Have them call or email me at Dunwoody Mortgage Service.  We will discuss their options and we can even help them coordinate with their financial planner if necessary.  I can help them structure the deal right the first time – without wasting their time on homes that they cannot buy using their current asset accounts.

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When You Can’t Use Assets as “Income”

May 9, 2016

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I’ve been talking this week with Don (not his real name), a retiree from the Northeast who wants to move to Atlanta to be closer to family.  Don has over $500,000 in an investment account and takes out $4,000 every month for living expenses.

And I cannot count these previous monthly distributions as “income” for mortgage purposes.  Don holds his money in a standard brokerage account.  Lending guidelines will not allow use of historical withdrawals from that type of account as a basis for “income.”

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If Don held these funds in a retirement account – an IRA or 401K account – then we might be able to use his historical distributions as a basis for income.  (More about that in a future post.)

Don has found a house that he really likes, but his allowable income will not support the mortgage payments.  I may have to recommend that he buy the house with cash.

If you know a retiree who is thinking about buying a home in Georgia, tell them to carefully consider how their assets are allocated and how they receive their income.  Not all assets and income are treated equally.  Have them call or email me at Dunwoody Mortgage Service.  We will discuss their options and we can even help them coordinate with their financial planner.  I can help them structure the deal right the first time – without wasting their time on homes that they cannot buy with using current asset accounts.

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VA Jumbo Loans

April 25, 2016

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The VA program for jumbo loans is excellent.  A quick definition here – a jumbo loan in Georgia is defined as a loan with a principal amount of more than $417,000.

The first benefit is that you can get a VA jumbo loan with a lower down payment than a conventional jumbo loan.  The minimum down payment for a conventional jumbo is 10% of the total loan amount.  The minimum down payment for a VA jumbo is 5% of only the amount above the jumbo threshold of $417,000.

So if your veteran friend David wants to buy a house priced at $517,000, his minimum down payment options are (1) $51,700 for a conventional loan or (2) only $5,000 for a VA loan.

(Anybody else remember this catchy recruiting jingle from the early 1980’s?)

And veterans like David can get a VA jumbo loan with a credit score as low as 680.  Our minimum credit score for a conventional jumbo is 720.

Lastly, David can get a much lower interest rate on a VA jumbo – perhaps even ¾% lower than with a conventional loan.  Interest rates on VA jumbo loans are comparable to conventional non-jumbo mortgage rates.  So David will save a lot of money every month by obtaining a VA jumbo loan.

Note that VA jumbo loans still require paying the VA funding fee.  But even with the fee, VA jumbo mortgages are a great product – they make buying a house more affordable than most other jumbo loan alternatives.  If you are a veteran or if you know a veteran friend or family-member who wants to buy a high-priced home in Georgia, call or email me at Dunwoody Mortgage Services.  We can discuss loan options and help you obtain all the great VA loan benefits you have earned with your service.  We love serving military veterans.  Delivering great loans with excellent service is a small way that we can say “thank you” to those who have served.

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VA Loans Offer Low Interest Rates

April 18, 2016

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If you have friends or family who are military veterans, it’s a great time to buy a house – from a mortgage perspective.  We have already reviewed how veterans can obtain loans with a low, or even no, down payment.

To make things better, interest rates are near their historic lows and VA rates are some of the best around.  Let’s do a quick comparison of a VA loan vs. a conventional loan.

A hypothetical situation here – Phil Soldier is an Army veteran.  He has an average credit score of 690 and plans to make a 10% down payment.  He can apply for a VA loan and obtain an interest rate of about ½% to ¾% lower than his rate for a similar conventional loan.  In addition to his lower interest rate, Phil does not have to pay a monthly mortgage insurance premium.  On a loan of around $250,000, Phil could easily save $150 more on his monthly payments.

Military Salute

Making a low down payment and having lower monthly payments sounds great to me!  What do you think?

We will take a look at VA jumbo loans in the next blog post.

VA mortgages are a great product – they make buying a house more affordable than any other program out there.  If you are a veteran or if you know a veteran friend or family member who wants to buy a home in Georgia, call or email me at Dunwoody Mortgage Service.  We will discuss loan options and help you obtain all the great VA loan benefits you have earned with your service.  We love serving military veterans.  Delivering great loans with excellent service is a small way that we can say “thank you” to those who have served.

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VA Loans – Low or No Down Payment

April 11, 2016

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Military veterans who want to buy a home don’t have to spend years scraping together a down payment. That helps make home ownership possible for scores of veterans and military families who might otherwise not buy a home.

Veterans can actually get loans with no down payment.  All the veteran must do is pay a Funding Fee – and that fee can be rolled into the loan balance.  So a veteran with very little cash can still get a mortgage.

The Funding Fee is based on the type of service and whether the veteran has obtained a VA loan before.  For first time use, a regular military veteran will pay 2.15% for a zero down loan.  For the same loan, a reserves or national guard veteran would pay a 2.4% funding fee.

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For veterans who have previously had a VA loan, the funding fee is 3.3% for both service levels.  Veterans can opt to pay a larger down payment to lower their funding fee amounts.

That is a great deal for veterans with a good job but not a lot of cash.  They don’t have to wait months or even years to scrape together a down payment.

In future blog posts, we will review other great aspects of the VA loan program.  For now, if you are a veteran or if you know a veteran friend or family member who wants to buy a home in Georgia, call or email me at Dunwoody Mortgage Service.  We will discuss loan options and help you obtain all the great VA loan benefits you have earned with your service.  We love serving military veterans.  Delivering great loans with excellent service is a small way that we can say “thank you” to those who have served.

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VA Loans are Quite Popular Now

April 4, 2016

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Realtor.com recently reported that the VA loan program closed more mortgages in 2015 than any year in the program’s history.  The VA guaranteed about 631,000 loans for veterans last year, breaking the record set two years before.  Recently released figures show that VA loan volume surged 19% year over year.  For perspective, the VA guaranteed more home purchase loans in 2015 than total loans (purchases plus refinances) in fiscal year 2010.

And the outlook for the VA loan program is bright too.  A recent Deutsche Bank analysis reported that the population of younger veterans will rise about 36% over the next 5 years.  These young veterans will be in prime household-formation and home-buying years.

Experts have called VA loans “the most powerful residential loan product on the market.”  And in this time of slow wage growth and a tight housing market, more and more veterans are using these loans as their go-to financing source.

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So what makes VA loans so popular?  Here’s a quick summary of VA loan benefits:

  • Low Interest Rates – Even on jumbo loans
  • Low Down Payments – Veterans can even obtain loans with 0% down payments
  • No Monthly Mortgage Insurance

In future blog posts, we will review each of these great benefits in detail.  For now, if you are a veteran or if you know a veteran friend or family member who wants to buy a home soon, call or email me at Dunwoody Mortgage Services.  We will discuss your loan options with you and help you obtain all the great VA loan benefits you have earned with your service.  We love serving American veterans.  And we sincerely appreciate your service and sacrifice.

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Must have apps when looking for a home

March 1, 2016

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Thanks to technology, it is way easier to look for a home today. Not only do most buyers look at homes online prior to getting into a car with a real estate agent, there are now apps that help with the entire home buying process. Here are five of my favorite listed out in no particular order.

Genius Scan – OK, so this one is first because it is my favorite. I use this app all of the time. Let’s say I meet with a client, and they bring original tax returns and W2s to our meeting. Naturally, they do not want to part with the originals. What do we do about a scanner? That is where Genius Scan comes into play. This app will allow the user to turn a document into a PDF file (amount other formats) using the camera on their smart phone. It is like having a scanner with you at all times. This app is free, and there is a paid version too.

Homesnap – Ever been driving around and see the sign for “Free Information” on a home that is listed… only to open the sign and no flyers are in it?!? Frustrating! Not anymore. Using Homesnap, the user can take a photo of the home and get estimated home values, interior photos (if available online), public record information (beds/baths/square footage), etc. You never have to leave empty handed again!

MagicPlan – Let’s say you are inside one of the homes you found using Homesnap, and are wondering about a room’s size? Perhaps a home needs some work, and you want to get an idea of the layout and scope of the project? MagicPlan allows the user to create floor plans and work estimates for projects by using, again, the camera on their smart phone. This app is also free to start with, but also has in-app purchases.

MileIQ – this app is a life saver for real estate professionals (or any professional that needs to keep track of their mileage). When keeping a mileage log for tax deduction purposes, the IRS wants specific details. When working with a tax professional to file income taxes, a simple total of miles driven won’t work… you need individual trips, date of trip, starting mileage and ending mileage. This is hard to keep up with, which is why MileIQ is so handy. MileIQ automatically logs trips and calculates the value of the trip. Classifying a trip (personal, business, etc.) is as easy as a swipe. This app costs $5.99 per month on a subscription OR $59.99 annually. Considering a 12-mile business trip will net $6.48 in deduction, this is an app that pays for itself for sure.

Postagram – you’ve found your new home, and you want to let all of your friends know you’ve moved. Again, you can get this done using your smartphone. Postagram allows the user to turn any of their photos into a postcard that can be mailed for $0.99. So take that selfie of you in front of your new home, and send it out to with your new address and a personalized message.

It’s amazing what you can do on your phone.

You know what else you can do with your phone? You can call me today to get started with the prequalification process. If the home you are looking to buy is in Georgia, we can get you going in just a few minutes over the phone. Just takes one call to get started!

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Happy Holidays

December 17, 2015
Happy Holidays to you and yours!

Happy Holidays to you and yours!