VA Mortgage Debt to Income limits

Core Mortgage Financial does not have a limit on debt to income ratios. A majority of VA mortgage lenders have overlays that limit  the debt to income ratio. Here is an example as to how the DTI ( debt to income) traditionally works.

Borrower A gross income is $5,000 monthly. The next step will be to take the monthly minimum payments that show up on his credit report. IE: car loan payment, credit card minimums etc. Next we look at his current housing expense. We take the minimum payments + the current housing expense and the new proposed expense and add these numbers up.

Example: Borrower A has the following bills:

Car loan $300
Credit cards payment $175
Student loan $100
Living Rent Free
Proposed new payment with taxes and insurance $1,800
TOTAL $2,375

We take the VA debt obligation of $2,375 divided by the income of $5,000 = .475%. We move the decimal point to the right and our debt to income is 47.5%.  The borrower qualifies for a VA mortgage with this DTI ratio.
Most lenders are have a max DTI between 41%-50% .
Core Mortgage Financial does not have a VA DTI limit or credit score requirement. As long as the automated system shows the loan is approved/eligible we can close the loan.
The highest VA debt to income ratio I have completed is 67%. The borrower had excellent credit score and large cash reserves in the bank. In order to have a high VA debt to income you must have compensating factors like high credit score and reserves. The automated system looks at credit score/history, debt to income and cash reserves when making a decision.

I hope this clarifies the VA debt to income ratios ! Last week i received two calls with regards to VA debt to income ratios.

Thanks !

855-554-2673 (Toll Free)
VA Home Loan Experts

Mortgage:


Collectively, the security instrument, the note, the title evidence, and all other documents and papers that evidence the debt. A Mortgage is a loan secured by a lien on real estate held in fee simple or on an acceptable leasehold estate. A loan made for the purpose of purchasing, building or rehabilitating real property, and secured by that property. A pledge of real property as collateral for payment of debt. The term is also used to describe both the mortgage (security instrument) and the promissory note evidencing the debt, which includes the terms of the debt’s repayment.

FHA to increase Annual Mortgage Insurance

FHA is set to increase the annual mortgage insurance premium on all mortgages.
Effective 4/18/11 the premium chart will appear as below:

If a borrower is applying for a $163,000 loan, the increase would add $33 a month to the payment. The FHA letter came out on 2/14/2011with a detailed  description of the plan. This is bad news for borrowers seeking FHA financing. With rates on the rise and borrowers costs going up will only hurt the fragile real estate market. It will only be harder for borrowers seeking financing to qualify if costs go up this will effect debt to income ratios. I am suggesting to my clients to get your real estate contracts in and submit FHA loan applications ASAP. The real estate financing is getting tougher and tougher each day. I am still poised to inform my clients that we are still lending strong!

Call usl today to discuss your lending needs !

855-554-2673 TOLL FREE

Weekly Mortgage Update

I have seen rates consistently increase over the past three weeks. The 30 year fixed conforming rate has past 5% for the national average. This does not include loan origination fees that include 70bps for the 30 year fixed option. I expect rates to continue on the upward trend for now but will go up and down depending market factors. The government notice about the limiting of mortgage back securities and the desire to get rid of Fannie Mae and Freddie Mac is a big part of the increase. The new proposal that came out from the Treasury last week reveal a bias towards less government and more privatization of the mortgage industry.
This week has a ton of interesting mortgage related news. This week is retail sales that are expected to show positive signs of recovery, in turn will push mortgage rates on the upward trend.

In good news for rates that might keep things steady is inflation worries have been relatively low. If we have any more inflation worries, expect rates to increase 50 basis points overnight.

Good luck with your mortgage locks !

Call us today
855-554-2673 ( Toll Free)

Naples Mortgage Blog

Core Mortgage Financial is the leader in Naples Mortgage Blogger. We are proud to provide valid content for all users seeking up to date Naples Mortgage Blog informational content. We give daily, relivent mortgage advice and information. Core Mortgage Financial is thesuper highway for mortgage information in Florida mortgage loan origination. Take a step back and read our many Florida Blogs !
Its been a pleasure and guaranteed always a great experience !

Core Mortgage Financial

Top 10 reason why to consider an FHA Mortgage

Core Mortgage Financial list of top ten items to consider when choosing a loan product. Below are top 10 reasons why an FHA mortgage might be right for you!

1) First time home buyer: FHA loans are designed to first-time buyers. FHA/HUD specifically designed the program to provide financing alternatives to low to middle income families. The program was also designed to spur home
ownership.

 


2) Low Down payment: FHA requires just 3.5 percent down payment for 2011. The down payment funds can be gift funds from a relative, making it easier for someone with low cash reserves to purchase a home now rather than waiting to build up a savings account.

3) Credit Score Minimum: FHA Credit scores requirements not as high as other loan programs. Any credit derogatories must be cleared up or have a good explanation as to the reasons for the lates. Core Mortgage Financial lender portfolio allows credit down to a 560 middle score.

4) Employment: The borrower must have accumulated two years of continuous income in the same field of work. Full-time students now working in their field of study may be able to count school as part of the two-year requirement. All income must be reported on tax returns.  Some lenders recently have changed their guidelines to show that only 6 months of employment are needed to get Florida FHA mortgages.

 

4) NO income Limits: FHA mortgages do not have income restrictions. This is particular important for borrowers that have good income but just not 20% down payment to complete a traditional mortgage. FHA mortgage loan caters towards the low down-payment programs for those with low or median income.

5)Primary Residence Only: FHA loans are limited to owner-occupied properties and are available for one to four units. Three-to-four unit properties must be self sufficient.

6) Debt VS Income: FHA qualifying ratios for FHA loans are more relaxed than the typical conventional financing, allowing the borrower to purchase a little more house. Some lenders will allow someone to reach a 55% Debt to Income ratio. Compensating factors might be needed, like strong cash assets and excellent credit is an example.

7) Rehabilitation Loan: FHA also offers a Rehabilitation of Property Program. That dream home you’ve discovered may need some repairs and rehabilitation. This program allows the repair costs to be rolled into the loan.

8) FHA Refinance program: FHA borrowers can refinance without an appraisal. This program can assist borrowers who want to enjoy the current low mortgages rates but do not have the equity.  You can roll all of the closing costs into the loan and have ZERO out of pocket expenses. I expect the no appraisal program to be completely gone this year.

9) FHA Seller paid closing costs: The seller  can pay up to six percent of the purchase price towards to the buyers closing costs.  This allows the borrower not to come up with some much out of pockets expenses and just deal with the down payment funds only.

10) FHA vs conventional. FHA mortgage parameters are not as strict like a conventional loan.( Fannie/ Freddie) Conventional loans request large down payment and 740+ credit scores. If you do not fit "in the box" of a conventional loan, your rate will be higher. FHA mortgages  do not hold the same criteria measures as the conventional loan.

Hopefully the TOP 10 reasons why to consider an FHA mortgage has been beneficial for you ! Please do not hesitate to contact Core Mortgage Financial with any FHA mortgage questions. We have many different FHA products and portfolio options for you.

855-554-2673 ( Toll Free)
Core Mortgage Management Team
The Florida FHA Mortgage Experts !

Florida Reverse Mortgage

Core Mortgage Financial has Florida Reverse Mortgage available our portfolio. A reverse mortgage is designed for seniors over the age of 62yrs. The main purpose is to release the home equity without doing a standard cash out refinance.

A Florida reverse mortgage is different because you do not have the standard monthly mortgage payment. A Florida reverse mortgage is payable as one lump sum or you can receive multiple payments.  The obligation to make the payments is deferred until the homeowner dies.
Most Florida reverse mortgage lenders  put a lien 300% above the current value of the amount funded in the transaction to protect against any other secondary liens that the homeowner might request at a later time.
Age is a big factor in the lender underwriting decision making process. The older the homeowner the more favorable the underwriting stance will be in obtaining the loan.

The requirements/proceeds to complete a Florida reverse mortgage have a few factors that a lender will take into account:
1. An appraisal is required to ensure the value of the home before any loan amount can be established.
2. The age of the applicant
3. The interest rate is tied to two indexes. ( US treasury 1YR T-Bill / 1YR Libor or CMT Index. You can read on indexes here.
4. Loan product selected. The terms and fees are different depending on if you want to take a lump sum or establish a credit line.

A certificate of counseling for the Florida reverse mortgage is a standard requirement by FHA/HUD. Each homeowner is required to complete counsel to ensure then borrower has a clear understanding of the loan product. The counselors will discuss the legal and financial terms of a reverse mortgage.

A Florida reverse mortgage is very costly. The normal fees associated with this type of financing do exceed the standard threshold of a conventional mortgage.
Mortgage insurance is required which is usually 2% of the appraised value. the origination fee is capped at 2% of the first 200k loan and 1% thereafter. Standard Florida closing costs are required via title insurance, taxes, lender fees, survey etc. The reason its typically a higher fee loan is the closing costs are based upon the value of the home and not the loan amount. The lender basis this calculation to protect their interest in case the loan exceeds the full value during the lifetime of the loan.

Core Mortgage Financial has a reverse mortgage expert standing by today!
We will take the time to slowly walk you through the process. A Florida reverse mortgage is not for everyone. Each borrower has a different need and financial situation. We will go through a analysis and decide if a Florida reverse mortgage is best for you. Let us answer any questions you might have by picking up the phone today !
Hopefully  this Florida reverse mortgage blog has been beneficial to you !

Call us today and speak with a reverse specialits NOW at
855-554-CORE (2673)

Florida VA Certificate Of Eligibility

Core Mortgage Financial has the ability to electronically request the certificate of eligibility from the veterans administration. The old process was to mail in or fax the VA as form online and expect a response in 30-45 days. The online portal has streamlined the COE (cert of eligibility) tremendously in the past few years. Core Mortgage Financial has all the capable Florida VA mortgage  technology at our disposal. We get calls from Florida Vets all the time telling me;
My answer is really? Ok, Core Mortgage Financial, can pull your COE right now. LOL !!! It's amazing how often I laugh, that other lenders have VA and current armed forces active duty folks "jump through hoops" to get VA mortgages and loans. Rest assured, give me or one of my loan officers a call today, you will not be disappointed !!!!!

Core Mortgage Financial Management Team
855-554-2673 toll Free

Definition:
Certificate of Eligibility: The document issued by the Veteran’s Administration evidencing the amount of entitlement a veteran has for use in purchasing a home.