Deanna Valeo
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Home deals are “falling apart” according to survey – what can you do? August 1, 2011

 

"Grace isn't a little prayer you chant before receiving a meal. It's a way to live." ~ Jacqueline Winspear


In this Saturday's Charlotte Observe columnist Kenneth Harney states"One of every six realty agents polled in June reported having signed contracts canceled before closing up from one in 25 the month before."  While the article does state that economic conditions may be contributing to the fallout; it also points out that increasing issues surrounding lenders associated with tougher underwriting standards have significantly contributed to fallout as well.

So what is one to do?  According to Gary Keller in his book "Shift, How Top Real Estate Agents Tackle Touch Times" in the slow markets of the past many buyers were less able to buy or qualify. Accordingly Mr. Keller states, "Knowledge and a great loan officer are the key" to putting false thoughts to rest for potential home buyers concerned about qualifying for the purchase of their new home.

A recent example of lender knowledge solving a buyer's problem was the following:  Our buyer was moving to Charlotte for a new job from California and wanted to buy a $600K+ home.  Unfortunately our client's pay structure, while lucrative, did not allow him to qualify for the Jumbo loan he wanted due to bonus pay we could not use for qualifying.  Because we knew how to get an 89.9% CLTV (80/10/10) type loan we were able to get the client qualified to buy at the price point they needed and meet the underwriting standards required.  The end result was the client getting the house they wanted now in the neighborhood they wanted at a lower overall payment; all instead of renting.

Our team has the knowledge you need to get your clients' qualified even when they do not think they can get a loan.  We often come up with unique solutions to make the deal work when it benefits our buyers.  We are okay with client's that think they can qualify as well :)

So the next time you get that pre-qualification letter from some lender at a big bank you do not know.  Find out how your client found the lender and remind them of why they want to control the financing portion of their home purchase and offer an alternative you can trust.  Remember product knowledge and a great loan officer may make all the difference between an on-time closing or potential fallout.

In closing, please remember to control your buyers' transaction by teaming with a professional loan officer (yes, such as us!)

Have a fantastic week and remember we are here for you.

By the way even if you are not with Keller Williams, Gary Keller's book is a great read for any of us going through this current real estate market.  Deanna and I highly recommend the read.

The Valeo-Croy Team - Call today:  (704) 488-1421

Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421

Accessible | Program Expertise | On-Time Closings   

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
  
                         

Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date: 8/1/2011


Shift Page 175 August 1, 2011

You can buyShift: How Top Real Estate Agents Tackle Tough Times at Google Books:


Fannie Mae Foreclosures and Home Path Loans August 15, 2011

"What lies behind us and what lies before us are tiny matters compared to what lies within us." ~ Ralph Waldo Emerson 


Home Path Loans - 

New American Mortgage participates in the Home Path Mortgage program as a broker.  The Home Path mortgage program allows a buyer to purchase a Fannie Mae foreclosure property with fewer dollars down and with lower qualifying credit scores.  Some of the benefits of Home Path Mortgages are as follows:

  • Min FICO is 620 (for less than 20% down payment min FICO is 660)
     
  • Searchable properties on Home Path Web site for Charlotte and other areas (use zip search)
     
  • Properties must be designated at Home Path Eligible (certificate needed to process loan)
     
  • No monthly MI can mean better monthly cash flow
     
  • No appraisal requirements
     
  • Fannie Mae "First Look" properties limited to owner occupied in first 15-days of listing
     
  • Allows for purchase of investment properties up to 90% LTV with no MI
     
  • Maximum 45% monthly debt to income ratio (min. monthly debt payments/gross monthly income)
     
  • Investment properties if owed more than 4 total properties must have 25% down payment

Please keep in mind the property must be on the web site as Home Path eligible, must have a solid roof; be fully functional (ie bath rooms, kitchens, windows, functioning doors and waste systems) and must have a solvent HOA.

This may be a good loan for your client however only an analysis with tell.  The rates are somewhat higher than standard conforming loans. 

The Valeo-Croy Team - Call today

 

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704)488-7763

Accessible | Program Expertise | On-Time Closings   

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
  
                         

Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date: 8/15/2011


Only have 10% down payment - why pay PMI? August 22, 2011

"If you don't go after what you want, you'll never have it. If you don't ask, the answer is always no. If you don't step forward, you're always in the same place." -Nora Roberts 

 

We can still do 80/10/10 loans

For a while these combination loans disappeared; however, we have found ways to keep 80/10/10 loans an option for our buyers (and those who refinance).

What is an 80/10/10?

This is where a first mortgage of 80% of the purchase price is combined with a 10% second mortgage.  In most cases the new second mortgage is a Home Equity Line of Credit (HELOC).  The HELOC is a line of credit based upon the prime rate plus a margin (1-2%) as of the date of this posting prime rate was 3.25% so the rate at prime + 1% = 4.25%.  The minimum payment due is interest only so the required payment can be small.  Since the rate is based upon prime rate is can move up and down with the prime rate.  It is truly variable .vs. fixed.

Who should consider these types of loans?

Borrowers with 10% down payment that want to avoid the monthly PMI payments.  This can be for tax purposes or for cash flow purposes.  Typically 80/10/10 loans will have lower overall monthly payment requirements. 

Typically the best candidates for 80/10/10 are borrowers with the resources to pay down the 10% HELOC quickly if needed.  They must also have superior credit scores to get a second mortgage and excellent financial reserves after closing.

Another great application is using an 80/10/10 instead of a Jumbo loan.  Home purchases up to $645,000 are the perfect candidates to consider a $417,000 first mortgage with a new 2nd MTG adding up 90% of the purchase price.  The blended interest rates of the two mortgages will outperform any traditional Jumbo rate.

Who should not consider this type of loan structure? 

If you have less than 10% down payment these are not for you.  If you have excellent credit and 5% down you may want to consider a Lender Paid Mortgage Insurance strategy as this can have better tax consequences. 

 The variable interest rate of the HELOC may not be the best for borrowers on a tight budget.  Prime rate was 8.5% in 2007.  While rates should continue to be low for the next couple of years; there are predictions rates will rise again.

As always please know we are here to help you with your mortgage solutions.   

The Valeo-Croy Team - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704)488-7763

Accessible | Program Expertise | On-Time Closings   

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
  
                         

Please "Like" our page... Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date: 8/22/2011


Seller Paid Closing Costs - what does it mean to the seller and buyer? August 29, 2011

"Ask yourself this question:  Will this matter a year from now?" - Richard Carlson

 

As Loan professionals we are always encouraging seller paid closing costs for our buyers.  It is amazing how many sellers seem to balk at this.  I thought we could clear up what the seller paid closings cost mean for the seller and buyer.  While the example is an FHA loan the same could apply for a jumbo purchase.  Seller paid closing costs allow more people to buy a seller's home.

 

Seller Paid Closing Costs:  What it means to the seller

Sellers paid closing costs are a way for a buyer to bring fewer dollars to the closing table.  When considering seller paid closing costs consider the net to you as the seller:

Always keep in mind often for the buyer it is better to pay a higher price and get seller paid closing costs.  Make sure to let you agent determine If the buyer's agent understands.  Not all clients do.

Sales Price

$ 200,000

$ 206,000

 

Seller Pd Closing Costs

$ 0 

$ 6,000.00

2.91%

Commissions @ 6%

$ 12,000

$ 12,360

 

Misc. Selling costs

$ 1200            

$ 1200

 

Net to seller

$ 186,800

$ 186,440

 

 

Seller Paid Closing Costs:  What it means to the buyer

Seller paid closings costs are useful to multiple buyers:

  • - First time home buyers can get more house for the same amount of liquid dollars saved
     
  • - Affluent buyers understand the value of keeping cash and diminished value of future dollars
     
  • - For corporate relocations the payback makes sense as they may be transferred again
     
  • - It would take over 16 years to make up the payment difference of $29.63/mo if the buyer had to bring the $6000 to closing instead of getting seller paid closing costs.
     

Sales Price

 $ 200,000

 $ 206,000

   

FHA Loan Amount

 $ 194,930

 $ 200,777

   

Down Payment

 $ 7,000

 $ 7,210

   

Closing Costs + Escrow

 $ 7,465

 $ 1,666

 $ 6000 seller Credit

Dollars to close

 $ 14,465

 $ 8,876

   

Payment P&I at 4.5%

($ 987.68)

($ 1,017.31)

  ($29.63)

Difference

Years to gain back $6000

 16.87

 

   

When you are considering buying your new home please consider us for your purchase as well. 

The Valeo-Croy Team at New American Mortgage - Accessible | Product Knowledge | On-Time Closings 
www.valeocroyteam.com  Todd Croy 704-488-7763 and Deanna Valeo 704-488-1421. 

As always please know we are here to help you with your mortgage solutions.   

The Valeo-Croy Team - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704)488-7763

Accessible | Program Expertise | On-Time Closings   

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

http://www.mortgagenewsdaily.com/mortgage_rates/

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
  
                         

Facebook link: http://www.facebook.com/valeocroyteam?v=app_4949752878

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date: 8/29/2011