Renovation loans from HomePath facilitate buying of properties that need repair. The expense of renovations can be rolled into the loan principal, making buying the house more affordable. Below is some useful information on renovation loans from HomePath.

Listings that Qualify

HomePath loans only apply to Fannie Mae owned properties. There are normally a wide range of lenders approved to offer HomePath loans. Houses needing minor to moderate renovation may also qualify for special renovation loans from HomePath. This is typically noted within the listing details.

Who Can Use HomePath Loans

Beyond the listing being eligible for HomePath loans, buyers must also meet certain guidelines. Specific criteria can vary by lender but typically includes income and FICO score requirements. Speak with your lender for information on this.

Specifics on Renovation Loans From HomePath

Renovation loans from HomePath include some great terms. Buyers may put down as little as 5%. Additionally, the funds can be personal funds, a gift, a grant, or even loaned from designated approved organizations. Fixed and adjustable rate options are available. Another cost saving term is that no mortgage insurance is charged. Lastly, it is possible for sellers to make contributions towards closing fees.

An appraisal is perfoemd to determine what the value of the property may be once work is done. The amount of the mortgage will be based on the purchase price plus expense for repairs. Renovation expenses can be as high as $35,000 or 35% of the end value.

More On HomePath Loans

When looking into purchasing a Fannie Mae property that qualifies for HomePath, you should contact an authorized lender as soon as possible. Your lender can furnish more comprehensive information on whether you qualify for the program and what the loan costs will be. This will help you decide if the property will be financially optimal. For additional details on this and other related programs, contact Peter DaMore at Law Offices of Peter T. DaMore Jr. at 781-229-7900 or pdamore@ptdlaw.com.

Fannie Mae HomeStyle home loans allow home buyers to borrow money for the expense of rehabilitation by rolling it into the mortgage. It may be used for the acquisition of a new home or the refinance of a current property. It can encompass minor or extensive repairs and thus is a useful option for houses needing repair. This MA HomeStyle rehab home loans overview provides useful information.

Types Of Properties Eligible For Fannie Mae HomeStyle Home Loans

Fannie Mae HomeStyle home loans may apply to a wide range of properties, although there are certain restrictions. Single family homes generally qualify. Condominiums must be approved by Fannie Mae and rehab restricted to the interior. Multi-family properties are allowed but the total number of units can not increase or decrease as the result of the rehab. Property types that do not be permitted are mixed use real estate, new construction, cooperatives, and multi-families that do not intend to be utilized as a primary home.

Loan Restrictions

There are two different methods for calculating value. The first is the forecasted value when repairs are done determined by a formal appraisal. The second is the purchase price of the property plus the total rehab cost. The lower of these two is used to determine the loan-to-value (LTV) percentage. This determines the down payment and how much is being loaned.

The acceptable LTV varies by the property type. For real estate that is used as a primary residence, 95% is the maximum for single family real estate, 85% for buildings with 2 units, and 75% for 3-4 unit buildings. Second homes are limited to 90% and single family investments 85%. Cash out is not permitted for these mortgages.

Regarding Rehabs

Rehab costs must be reviewed for loan approval. All estimates must contain precise details on the work, labor and material charges. Funds for the contractor fees are placed into an escrow account at settlement and released as work is completed. Specific paperwork must be submitted by every contractor. Home buyers may not receive money for repairs that are self-completed. All rehabs must be finished 6 months from closing.

MA HomeStyle Rehab Home Loans Overview

This MA HomeStyle rehab home loans overview covers only a few of the most common questions about Fannie Mae HomeStyle home loans. Additional terms and qualifications apply to program review and approval. All information is additionally likely to change without notice. Consult with a loan advisor for further information and to determine if it matches your needs.

You normally see multiple disclosure forms when applying for a home loan. It can be a bit confusing. These documents were created by different laws and at different times. In some cases, they have similar information, which can make the information even more complicating to digest. The revised mortgage disclosure forms coming Aug. 2015 will make the information provided to home buyers simpler.

The Loan Estimate Form

Figures from the Truth-in-Lending (TIL) and Good Faith Estimate (GFE) will appear in a new loan estimate document. This disclosure will provide details on the terms of the mortgage, fees charged, estimated loan payments, and any risks involved. This will be useful for comparing different loan options from a single company or from different lenders. Lenders will generate this document within 3 business days of a home loan application.

The New Closing Disclosure

The closing disclosure form details the particular costs related to the home loan. It will combine facts normally included in the Truth-in-Lending disclosure and HUD-1. There are ordinarily a range of charges. To simplify it, they will be grouped into different categories such as service charges, government fees, and pre-paids. This form comes later in the process; it must be provided at least 3 business days before settlement.

Revised Mortgage Disclosure Forms Coming Aug. 2015

These documents will be launched August of 2015. If you apply for a home loan on or after that date, you will receive the new format. This change does not apply to specialized programs such as reverse mortgages. Regardless of which documents apply to you, you should always touch base with your loan officer if you do not understand something. The information on the revised mortgage disclosure forms coming Aug. 2015 in this article is shared only as an overview and does not provide every aspect of the upcoming changes.

Fannie Mae owned properties may include a notation regarding HomePath financing. This financing is exclusively applicable to Fannie Mae properties and come with a few helpful options. The introduction to HomePath mortgages in this blog includes the most important facets of this program.

HomePath Program Options

HomePath mortgages are offered by approved local lenders. There are two types of options. The first is HomePath Mortgage, which applies to livable properties. The other is HomePath Renovation Mortgage for homes needing renovation; it allows home buyers to roll-in the cost of repairs.

Key Features of the Program

Both HomePath Mortgage and HomePath Renovation Mortgage may be used on owner-occupied homes, second properties, or investment units. Down payments may be a minimum of five percent and the money may be a gift, a grant, or even a loan under certain conditions. MI is not required, but there might be a cost associated with this option. Sellers may make contributions to settlement fees. Financing terms may range from fixed rate to interest-only and variable rates.

Use of Appraisals

HomePath Mortgages do not need appraisals. For HomePath Renovation Mortgages, an appraisal is ordered to estimate what the home might be worth once work is completed. The renovation cost rolled into the loan relies on this appraisal. The rolled in amount must be no greater than $35,000 or 35% of the estimated post-renovation value, whichever is less.

Obtaining HomePath Financing

Many local lenders offer HomePath financing. Buyers should compare this program to other ones available. When considering fixed rate, variable rate, and interest-only programs, review the advantages and disadvantages of each. Certain loan options may work better than others depending on your circumstances and plans. It is not required that you use HomePath financing to buy a Fannie Mae home. It is basically an option extended to buyers intended to make purchasing more affordable. As with all types of mortgages, closing costs and other things may differ with each lender. The introduction to HomePath mortgages in this article is strictly a summary of the program, may not include all of the exact requirements, and is subject to change. Always contact with a local mortgage consultant for the most up-to-date facts.

The Fair Credit Reporting Act grants you the opportunity to obtain a copy of your credit reports every year. This law was established by the FTC to enable people to audit their credit report for errors and misuse. The tips on requesting your free yearly credit reports below will help you get started.

What Is Included in Credit Reports

Every credit report details personal facts and finances. It tracks your previous addresses, credit cards and mortgages, and monetary judgments such as a law suit or bankruptcy. This report is analyzed by lenders, employers, insurance companies, and the like to determine your financial worthiness. It is thus essential to ensure that the report is up to date.

Requesting Report Copies

There are three separate credit agencies: Equifax, Experian, and Transunion. Each may maintain slightly distinct sets of facts on you. They also tally scores differently. You may obtain a copy of your reports online at annualcreditreport.com. This website was set up for this specific reason. You can also contact them at 1-877-322-8228 or mail a special request form to them. You will be asked to provide your name, birth date, social security, and current and past addresses to establish your identity.

Other Credit Reporting Websites

Many other websites use data from individual credit agencies and keep track of changes. They alert you of certain activity in your file (such as the credit score being requested or new accounts being set up). This can enable you to follow your score in between the 12 months and detecting any acts of fraud.

CreditKarma.com is one service that offers no-cost service and will not even ask you for a credit card. Many alternate services are marketed as free but ultimately assess a fee after an initial trial period, so be aware of the terms before signing up. Also be aware of phony sites that target typical mis-typing of web addresses. These sites are established to grab your private information.

Summary of Tips On Requesting Your Free Yearly Credit Reports

The above tips on requesting your free yearly credit reports will help you monitor your credit report. Get a copy of your credit report and look through it closely. Contact the credit bureaus to initiate corrections on any errors. For more complex matters, you may want to hire a credit repair specialist for suggestions. This blog is provided merely as an introduction and must not be interpreted as legal advice.

If you are intending to build a new property versus buying a resale, it is helpful to understand the financing solutions available. Financing new homes is very different from financing an older one. The terms, rates, and process may differ. Below are some common new construction financing solutions in MA.

Construction Loans

Construction loans are short-term mortgages that dispense necessary funds during the construction process. There is usually a schedule for when funds are released and in particular amounts. Particular goals must be met for release of funds to the builder. The costs, interest charges, and other terms will differ by mortgage company. Construction loans are treated as risky, thus conditions are typically more strict than other mortgage programs. Upon completion of the construction period, a new loan must be obtained.

Convertible Loans

Construction to permanent loans involve a single closing. While the home is being built, interest-only charges are usually due. Once construction is completed, the loan transforms into a typical mortgage with regular mortgage payments. Interest rates are typically set when construction starts, although the rate lock for the permanent part of the loan may have a deadline. If your home is delayed, then the interest rate for the permanent loan may adjust.

Builder Financed for New Construction

This is the easiest option for a home buyer because no additional loan is required by the home buyer. Home buyers are normally asked to submit a significant deposit and to pay for upgrades during construction. Buyers must obtain a loan at closing.

New Construction Financing Solutions In MA

Financing solutions on the market may be based on if you own the lot or the builder does. Lots that you own ordinarily need a construction loan of some type. Builder financing is commonly available within new subdivisions. Options will also vary by mortgage company as some have unique options. Connect with a loan officer to learn all of the different new construction financing solutions in MA and related costs prior to making a decision.

Most borrowers who use FHA mortgages were persuaded by the low down payment option. Given that mortgage insurance is typically assessed on loans for more than 80% of the value, most FHA buyers have mortgage insurance payments each month. The process for having that fee cancelled depends on when the loan was issued by FHA. This article contains an overview of cancelling mortgage insurance from FHA mortgages issued prior to June 3, 2013.

Cancelling Mortgage Insurance Gradually

With every monthly payment that you send in, you pay down a fraction of your loan balance. In the early few years, the amount towards interest is greater than the amount for the principal, but this steadily changes. Mortgage insurance is eventually cancelled when the loan is paid down to 78% of the original value. You may also submit extra contributions towards principal to get to this point quicker.

With most mortgages, you may demand that mortgage insurance be cancelled when the balance drops to 80%. It is certainly a great idea to do this and save more money. Check your mortgage paperwork to verify that this is indeed an option.

Shift in Home Prices

Loan-to-value percentages are calculated using your loan amount and the initial price or current appraised value. If prices improve enough, your loan balance could be lower than 80%, thereby cancelling the mortgage insurance. In order to cancel mortgage insurance via this option, you must call your Lender to request an appraisal. You are responsible for the cost, but it pays for itself if your mortgage insurance is gone as a result. Also, you must have had your mortgage for at least 5 years before cancelling mortgage insurance.

Guidance on Cancelling Mortgage Insurance From FHA Mortgages

Loan terms always get modified over time. The above is purely a summary of typical FHA loan conditions. It is important to check your specific documents regarding cancelling mortgage insurance from FHA mortgages. You may also call a lending professional for further assistance.

PMI is typically required on loans for more than 80% of thee purchase price. Most homeowners who select FHA have little down payment funds and will therefore be responsible for PMI on a monthly basis. The premium is calculated using the beginning balance of the loan and may represent a significant part of the monthly payment. Homeowners thus will save money when eliminating PMI from FHA home loans, but updated policies have changed how this occurs.

PMI Rules

In 2013, FHA made important changes to PMI rules. These apply to home loans with case numbers granted after June 3, 2013. In the past, all FHA home loans had a standard clause for elimination of PMI when the principal was paid down to a specific amount. This no longer applies. There are now separate policies depending on a few factors. This article details two common scenarios.

Mortgages With Greater than 10% Down

For 30 year FHA home loans where borrowers submit a down payment of 10% or more, removing PMI is an option. There are two specific criteria. First, the loan must have been activate for at least 11 years (during which PMI fees were paid). Additionally, the remaining balance must be 78% or less than the original price or current appraised value.

Mortgages for Greater than 90% Loan-to-value

For 30 year FHA home loans with down payments lower than 10% (such as the 3.5% minimum), terminating PMI is not an option. PMI continues for the entire term of the loan despite how much is paid down. A borrower's only solution for eliminating PMI from FHA home loans in this category is to refinance it into a new mortgage.

Eliminating PMI From FHA Home Loans

Eliminating PMI from FHA home loans is not as straight forward as it used to be. Most people choose FHA for the low 3.5% down payment option. It is helpful to know that PMI cannot no longer be automatically eliminated from these mortgages. Home buyers with FHA case file numbers generated prior to June 3, 2013 need not be concerned about this change. There are also other exemptions such as streamline refinances of home loans endorsed before May 31, 2009 and Home Equity Conversion Mortgages. Speak with loan officer for further information.

Mortgage insurance (MI) protects mortgage companies in case a borrower fails to pay a home loan. It is typically required by a lender on mortgages with a down payment of less than 20% of the purchase price and is usually charged in monthly premiums. For buyers with tight budgets, monthly charges for MI can be an extra hardship. Financed MI is a potential solution. In this blog you will find the definition of financed mortgage insurance.

Definition Of Financed Mortgage Insurance

Financed MI enables a borrower to cover the insurance cost at closing and essentially include the cost into the principal of the home loan. It is available on both fixed rate and adjustable rate programs. It is helpful to understand the pros and cons of this arrangement.

Benefits of Financed MI

Financed MI reduces the total monthly mortgage payments. The overall amount of the insurance is somewhat low when applied to the life of the mortgage. It can also offer the most tax benefits as not all homeowners can use a tax deduction for monthly mortgage insurance costs.

Downside of Financed MI

There are a few cons to financing MI. Since the cost of MI is rolled into the principal of the loan, the mortgage starts at a higher figure. Additionally, the total premium is paid up-front so there is a greater up-front expense to obtaining the mortgage. If the mortgage is paid off early, the cost of MI can be effectively higher than using the monthly premium alternative.

Assessing MI Alternatives

Financing MI can be helpful if you want to hold on to a mortgage for more than a few years and/or if you require a lower monthly payment. If you intend to pay off your loan in a couple of years, it might be less costly to pay the insurance monthly. This definition of financed mortgage insurance is offered for reference only. To determine the best option for your particular situation, consult with a mortgage professional.

Refinancing a home mortgage may lead to big savings if completed under the correct circumstances. Every loan and homeowner varies, so an opportune time for one person may not be for another. Before starting a refinance, take a look at these 5 factors for refinancing a home loan.

5 Factors For Refinancing A Home Loan

1. Your Unique Needs

Your personal situation needs should play an important role in your decision to refinance and the loan program you should select. When do you intend to sell the home? Will you possibly refinance again in the future? Do you intend to convert the home into a rental property? Does your existing home loan have a pre-payment penalty? How much do you have available to cover closing costs? These are all important questions to ask yourself and to discuss with your loan advisor.

2. Interest Rates

Interest rates are based on market conditions, credit rating, loan amount, and loan term. First, consider whether rates are expected to rise or fall based on what is going on in the economy and with the federal government. You cannot predict the future, but there may be particular circumstances that may directly impact rates. Second, find out what rate you qualify for with your credit history and loan amount. The one you can get may not necessarily be the advertised rate. You will receive better interest rates if your credit score is high. Lastly, compare the current interest rate to your old one. The savings (per month and over the length of the loan) should be compared against the expenses associated with refinancing. Typically, it is worthwhile if the new rate is one percent or more less than the existing rate.

3. Expenses for Refinancing

It is useful to understand both the overall cost of refinancing and the cash due at closing. Every mortgage has fees associated with it. Loans marketed as having no closing costs simply mean that the costs are either lumped into the loan amount or are covered by a higher interest rate. Some costs, such as pre-paid expenses, are not classified as closing costs but will result in out-of-pocket expenses.

Usually, a refinance will require some money brought to closing. Funds that you receive back from your old escrow account can offset some of this cost. Additionally, you may have one month without a loan payment. For example, if you refinance during the month of June, you will have already submitted your June mortgage payment and the first installment due on the new mortgage will not be due until August 1st. An exception to requiring money at closing is a cash out refinance. In that case, closing fees would be deducted from the equity funds.

4. Real Estate Market Value

You may have heard the term loan-to-value. This percentage reflects the amount of your loan against its current market value. Because the real estate market continually changes, so will the value of your home. Although a real estate agent can prepare a good estimate of market value, an appraisal is required at the time you refinance to pinpoint the exact figure. Maximum loan-to-value percentages may apply (the exact ratio depends on the mortgage program). If the value of your home is less than the mortgage balance, you will have trouble refinancing without funds to reduce the loan amount. Some financing programs, such as an FHA streamline refinance, may waive the appraisal requirement and therefore make this less of an issue.

5. Qualification Conditions

Every loan program has specific qualifications and limitations. Below are common factors:

• Loan-to-value Percentage
• Credit Rating
• Property Type
• Dollar Amount of Loan
• Reduction in Monthly Payment
• Whether You Have Any Non-occupant Owners
• Mortgage Insurance Amount and Duration

MA Refinance Considerations – The Next Step

As you see from the 5 factors for refinancing a home loan above, deciding to refinance includes more than comparing interest rates. It requires consideration of personal factors and weighing of all options. An experienced loan officer will help you analyze these different pieces of information and assist you with making an educated decision. For additional MA refinance considerations, contact Peter DaMore at Law Offices of Peter T. DaMore Jr..