Mobile Home or Modular

The term Mobile Home is not “politically correct” since the folks that make them ( and I guess the industry) refer to them as MANUFACTURED HOUSING… but still, I’m from NC, and I grew up callin’ ‘em Mobile Homes - so I hope I don’t offend anyone in this discussion.

We’ve had several folks come to us seeking financing for a a Mobile Home / Manufactured Home that said they had problems at other lenders… not because the borrower had credit or income problems… but because the folks they were talking to didn’t want to finance a mobile home.

In the credit crunch of the last year - mobile home financing has taken a direct hit.  Lenders who “use” to do those loans - stopped.  But there are still financing options available! Here’s the “real” trick.  Do you know what “sort” of manufactured property you own?

Sounds like a simple question - and I guess in truth it is - but what you’re looking for is a sticker.  The home should have a HUD sticker (normally near the fuse box or under the sink) OR it will have a NC “Plate” in the same area.  The “Plate” means that your home is a MODULAR home - and you can get just about any kind of financing you want!  The STICKER means you have a mobile home - and you can get financing - but in today’s market you’re probably looking at an FHA loan.

FHA guidelines require an inspection of the foundation - modular home financing does not.  Other FHA “perks” include:

•·        Low Down Payment of 3% and 100% financing options available.

•·        95% of Appraised Value Cash-Out Refinance

•·        FHA Streamline Refinance  

•·        NO  Income Maximum Limits

•·        Gift Funds:  3% down payment can come from FRIEND, FAMILY MEMBER OR NON PROFIT

•·         Seller CAN PAY UP TO 6% OF YOUR CLOSING COST!

•·        Down Payment Assistance  

•·        NO Cash Reserves Required

•·        Gap in Employment OK

•·        Permanent Alien OK

•·        NO pre-payment penalty

Qualifying for a FHA loan is somewhat easier, because FHA allows us to consider “compensating factors.”  They allow credit score down to 580, and they allow you to “build” credit if you don’t have enough for a score!

If you or your friends and family have questions about using FHA to purchase a mobile home, or a modular- and you think you meet the income and credit qualifications - call us!  Steve and Eleanor Thorne, Meridian Residential 919-459-1313

Meet Us at Open House!

We are priviledged to work with some of the areas TOP Builders.  One of our favorites, Stanton Homes is holding an Open House this Sunday, June 22 from 1-4 pm.

This is an especially great offer for Veteran’s as we’ve created a multi tier discount package for military families that includes:  Discount Home Price, Lower Origination Fees, Discounted Attorney and Appraiser Fees! “We love working with Veterans, and although the VA has a few extra hoops to jump through to obtain a loan - we find it to be a stream-lined process!,” says Steve Thorne of Meridian Residential.

Stanton Homes is one of only a very few builders to offer in-house new home plan adjustments to suit special needs or considerations. Changes to floor plans can include anything from adding more closet space or bonus areas to providing full wheelchair accessibility or other special concessions to meet ADA or Specially Adapted Housing requirements. 

Directions to the Veteran and Military Home Buyers Event 

Click here for directions to Cattail Creek, or call 919-278-8070.  Turn right at the second entrance to Cattail Creek, marked Construction Entrance.  The Veteran and Military Home Buyers Event will be held in the Stanton Homes Model Home, the first home on left. 

For questions on VA loans, call Steve Thorne of Meridian Residential at 919-459-1300. 

Purchasing FHA Foreclosures

FHA is making a temporary move which will make it easier for folks who want to purchase FHA foreclosures.  In a release last week HUD announced that it will temporarily waive a 90 day restriction it held on those selling HUD foreclosed property.  The restriction had been in place to reduce ”flips” a fraudulent practice that strips a home of its equity before being quickly resold at an inflated price.  Under most circumstances, the resale is to an unsuspecting buyer, especially if that buyer is not represented by a licensed Realtor.

In their statement, HUD said:

“In an effort to stabilize declining home values in certain neighborhoods.. announced a temporary policy that will… allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.”

Hud further stated, “that many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.”

For more information - please follow this link.

The Flexibility of FHA

FHA (and all government underwriting for that matter) is somewhat different from other, more automated systems of loan approval.  On an FHA loan you can actually have a real person look at the loan and apply the golden rule - not just a bunch of meaningless stipulations.  This is often the difference in making the dream of homeownership a reality… because not everybody has a perfect credit history, with a 20 year job, and 2.3 kids!

With FHA  - there’s the magic of  COMPENSATING FACTORS. Some of our favorites include:

Borrower has already demonstrated they can afford this house payment.  No payment shock, or at least a payment shock of less than 10% is a great offsetting factor for slightly higher debt ratios or a job history that is not as solid as we’d like to see.

2.     Borrower can afford to put 10% down.  I’m not talking about a gift (which FHA allows) I’m talking about a good old fashioned asset, and a behavior to save.

3.     Conservative use of credit.  Does the borrower have a 3 year old car that’s paid off because they don’t like having payments?  Do they pay their credit cards off every month? 

4.     The Borrower will have at least 3 months of PITI in reserves after closing on their Primary Residence.  FHA does not require reserves to insure a primary residence (unlike Conventional loans) and this additional “padding” can be a great offsetting factor.

5.     Borrower has potential salary increases that you are not counting in your Debt ratios… if the employer indicates that the borrower has a review and potential raise coming up in the next few months this is a great off-setting (or Compensating) factor.  (It’s difficult to get an employer to put that in writing for obvious reasons.) 

FHA requires that part time employment have a history of at least 12 months.  Therefore if you have a  part time job with 8 months of history (for instance) we could not use those in the debt ratios - but we could use that income as an offsetting factor for higher ratios.  Rent from potential roommates, which would be logical income even with a lease agreement, is rarely considered in our experience.  8o(

If you have questions about purchasing a home in the Triangle - please call Steve and Eleanor Thorne at Meridian Residential 919-459-1313.

Step 2 Homebuying in Cary

In a previoius post we explored the whole “First the Loan, then the Home.” Mentality of Home Shopping.  The idea is that if you begin shopping for a $175k home because you used an online calculator and figured that’s what you could afford… but some reason you DON’T qualify for that much… you’re never going to find a $150 house that looks like the $175K’s.  Does that make sense to you?  Lending is so very complicated, that you really really need to get pre-approved by a REAL PERSON! (preferrably me!)

SO we’re on to Step 2! ”Now that you and the agent know your budget, there are still questions about family, hobbies, interests, floor plan layouts, decorating tastes, schools and LOCATION which must be addressed.  Once these questions are answered, then you can see what is on the market.  In some prices rages, there are more buyers than listings and that is where your patience and the Realtor’s persistence come into play.  With today’s technology, Realtor’s have access to the constantly changing market which helps them keep an eye out for houses that meet your needs! ”

Let’s go back and re-read that highlighted section.  See that “R” word?  Realtor?  Guys!  You could cut your own hair… but why would you?  As a buyer, a real estate agent does not COST you anything!  We work with some of the TOP agents in the area.  If you don’t have one yet, look at one of these!

If you are considering buying a home in Raleigh or purchasing a home in Cary, contact Steve and Eleanor Thorne, Meridian Residential 919-459-1313

The FHA Bailout Plan

Congress, and specifically the NC delegation and Rep. Barney Frank have a new plan to stop the “bleeding” for many American Families who are upside down in their homes.  This is really not so much a problem for those of us with property in the Triangle - but for folks moving here (and by my unscientific calculations almost 65% of the mortgages are currently being written for folks MOVING HERE), it could be a great deal.

The crux of the problem, as seen by Franks, are the number of new vacant homes that competing on the market with “used” re-sale homes.  We need to get folks into those new homes, draw the inventory down - and Badda Bing - no more Housing Crisis.

How he proposes to do this is with a 300 Ba Ba BILLION dollar overhaul of FHA which creates a complicated system whereby the banks take a little loss - the seller takes a little loss and the government takes the risk. 

IMHO there’s no chance this will make it’s way through Congress prior to the election - but the provisions in the bill - which expand the FHA authority are helpful, and if passed, this could be the end to the Housing Crisis. 

The question we must all weigh is weather or not we are willing to take on this additional risk to our collective “Uncle Sam” balance sheet.  It could backfire, drive the dollar lower… and that would put gas at what - $6 bucks a gallon???

Step 1 of Homebuying in Cary

Cary has been called “The Land of $400k Houses.”  Not so… there are TONS of affordable housing in this area, and there are still ways to purchase those homes with less than perfect credit - and 100% financing.

To do this… you will need a team of dedicated “assistants” (if you will) in the form of your agent and lender - as we will need to work as a team to negotiate the best terms for you and fashion the contract so that it reflects the financing and closing cost terms.  IT CAN BE DONE, and we work with some of the top, award winning agents in this area!

So If You Want to Buy A House?   Relax!  Breahe!  You CAN DO THIS!!

Remember these words, “First the LOAN, then the HOME.”  In today’s faced paced market, “ball parking” your price range with an agent, or online, is good, but you MAXIMIZE your buying power by being PRE-APPROVED with a Mortgage Loan Consultant FIRST.  The pre-approval process is a simple one, and will provide you with the options which meet your payment comfort zone.  The process generally involved calling us and talking on the phone for 30 to 45 minutes.  After that conversation, we decide when we should meet in person.  We can send you Good Faith Estimate of your closing costs, and give you a pre-qualified letter at that time.  THEN you are better equipped to meet with a Realtor and find the most house for your money.  Because multiple offers come in on the same home, a PRE-APPROVED buyer has a better chance of being the new homeowner!  This is the first of six steps in the Homebuying process…

If you are considering a purchase in Raleigh or buying a home in Cary, contact Steve and Eleanor Thorne at Meridian Residential 919.459.1313

Risk Based Pricing?

You are buying a home this summer and you are LOVIN’ Life!  Yippee!

Well, if you have credit scores over 640 - there’s more good news!  Effective July 14 FHA will move to Risk Based MIP and your cost of home ownership will be less!

So, what does Risk Based MIP mean and what happens if your score is NOT a 640?

Risk Based MIP means that if you are considered a lower “risk”, because your credit score is 580 (for example) then you will have a higher UFMIP.  What is UFMIP??  It’s the UpFront Mortgage Insurance Premium charged on an FHA loan, and there’s a monthly fee too.  This is going up to 2.0%… meaning that if you borrow $100,000 on an FHA loan - you will also be charged $2000 in MIP.  This mortgage insurance is ADDED to your loan - so your Principal and Interest payments are now based on $102,000 (base loan of $100,000 plus MIP of $2,000).  If you sell the home or refinance in the first 7 to 10 years then a portion of the MIP is refunded back to you.

The most significant part of this change is NOT that the UFMIP is going up… the most significant part is that FHA is going to these steps which many see as the first in moving FHA into the “new” sub prime role.  The Risk Based Matrix actually accept scores down to 525 (and lower)… although we don’t know of “Investors” who are willing to purchase loans at these low credit scores.  FHA does not make loans - they only insure them.  So even though their matrix says you can have a lower score and get a FHA loan - it doesn’t mean that SunTrust (for instance) has to make loans at the lower score.  Our best bet is that it will be at least 12 months before loans for people with credit scores under 580 are made.

VA Loan Co-Signors

VA mortgage loan guidelines recognize legally married spouses of qualified veterans as co-signors on VA loans.  This means that we can include the spousal income to qualify for the loan, and that these loans can be fully guaranteed by the VA.  Simply being engaged means that you can get pre-qualified with the spousal income, but the closing must take place after we have evidence of the marriage.

The VA mortgage loan guidelines also allow for more than one eligible veteran(s) to purchase a home.  If a married couple with more than one eligible veteran is involved, VA divides the entitlement charge equally between them, if possible. If two unmarried eligable veterans purchase property together the same rules apply and these loans can be fully guaranteed by the VA.

While the VA guidelines may allow for a non-veteran to co-sign for a mortgage loan, they will not fully guarantee the loan, and in our 25 years of lending, we’ve never seen one of these loans close. Again, the VA mortgage loan was designed to offer long-term financing to American veterans or their surviving spouses (provided they do not remarry).

Although it seems more confusing than it is, the federal government does not generally make direct loans under the act. The government simply guarantees loans made by ordinary mortgage lenders (descriptions of which appear in subsequent sections) after veterans make their own arrangements for the loans through normal financial circles. The Veterans Administration then appraises the property in question and, if satisfied with the risk involved, guarantees the lender against loss of principal if the buyer defaults.

In the case of divorce, the Veterans Administration has several choices.  If a non-eligable spouse continues to occupy the property and if the payments are made in a timely fashion, no change to the loan will be made.  In this case, the military spouse will have their eligability for a mortgage re-instated once the loan is paid off and/or refinanced out of a VA loan.  If payments are missed, and the property is approaching foreclosure, the VA might choose to refund the loan and have the payments made directly to the Veteran’s Administration.

For more information about purchasing a home in Raleigh with VA Financing or buying a home in Cary as a Veteran, please contact Steve and Eleanor Thorne with Meridian Residential.

Firefighters Qualify for 50% Discount

And it’s not just firefighters!  Public School Teachers and Policemen also qualify for this unique FHA Program!

According to the new “Community Neighbor Program” County employees willing to purchase a HUD owned property can purchase that property for 1/2 of the sales price.  So, a $138,000 property just became affordable at $69,000!

Many of these properties also qualify for special “rehabilitation financing vehicles!”

In the Triangle there are currently over 25 properties that qualify for this program!  Call Steve and Eleanor Thorne at Meridian Residential for more FHA special loan program details!