ACHL Blog

Written by Jim Auten, Mortgage Advisor

Actually, it does if you financed your property prior to March 2009. What this allows homeowners to do is refinance those loans up to 125% of the current value of their home without incurring mortgage insurance. Typically, on a conventional loan, if your loan to value ratio is greater than 80% you will have mortgage insurance added to your payment. This is a guarantee for the lender in case of a default by the homeowner.

These new programs by Fannie Mae (DU Refi Plus) and Freddie Mac (LP Refi) allow homeowners an opportunity to refinance to market rates. Before they would have only been able to refinance up to 95% loan to value but would have the added expense of the monthly mortgage insurance.

There are many restrictions that can come into play so be sure to contact one of our mortgage advisors to find out if your mortgage qualifies. Expected in March 2012 however, the government is planning to release revisions to these programs removing a lot of the barriers including the 125% limit. It will be interesting to see how many homeowner’s can be assisted by these revised programs.

Written by Steve Chizmadia, Mortgage Advisor

With all of the talk and advertisements about "flipping" homes on the radio, late night infomercial's and in the media, it is important to know that while flipping a home can be a profitable endeavor for the seller and buyer's can like the turn key aspects of appropriately flipped homes, there can be numerous obstacles in obtaining the financing on a "flipped" home.  The properties considered flips will vary from lender to lender, some require a seller to own a home for a year, some require 6 months, but most lenders that follow Fannie Mae and Freddie Mac guidelines consider a "flip" property one being owned for less than 90 days when placed into new contract to be resold. 

While financing is available on these transactions on all major loan types (Conventional/FHA/VA), some lenders may not allow it and some lenders may allow it with additional requirements based on the loan type and how long the home has been owned since being resold.

It was not until 2010 that you could even obtain FHA financing on property flips, and to this day FHA financing may have the most additional requirements on homes being resold in less than 90 days.  Every investor will look at these transactions differently and it is important to be prepared and knowledable about what may or may not be required when looking to obtain financing on one of these homes.  Will a second appraisal be required?, Will a home inspections be required?, Will invoices for upgrades on the home being resold to justify the increase from what was previously paid be required?  Is the seller a non-profit or the foreclosing lender?  These questions and many more are what the lender should be aware of and prepared for as the answer to all of them may lead to different circumstances that you as the buyer/seller may need to be prepared for. 

As a specialist in financing on "flipped" properties and with a vast amount of knowledge and experiance on what to do with each respective loan program to avoid delays in the financing, I would be happy to help and discuss this further with all of your tenative buyers looking at one of these home's or with you as the agent representing a client selling one of these homes. 

Written by Alyssa Davis, Mortgage Advisor

Going through a foreclosure can be a disheartening and painful process. For many, it can feel like the pride of homeownership may be a dream that’s lost. But thankfully, it’s not a permanent mark on one’s credit record and homeownership can be attained again – perhaps even sooner than some might think. A foreclosure will stay on a consumer’s credit report for seven years from the date of filing. However, the length of time a buyer will have to wait after a foreclosure is recorded depends largely on the new loan program they intend to use and the circumstances surrounding the foreclosure.

Government loan programs, such as FHA or VA, are the most forgiving when it comes to how soon a previously foreclosed upon borrower can obtain financing again. FHA guidelines dictate that a borrower is generally not eligible for financing within the first three years after foreclosure or deed-in-lieu of foreclosure. However, an exception to the three year requirement may be given by the lender when there are extenuating circumstances surrounding the foreclosure beyond the borrower’s control such as serious illness or death of a wage earner. FHA does not consider divorce or inability to sell a property due to job transfer/relocation an extenuating circumstance. The other important aspect of getting an exception to the three year requirement is that the borrower must have re-established good credit after the foreclosure.

Conventional financing has stricter time requirements. Foreclosures that occurred due to financial mismanagement require a full seven years to have elapsed, or three years with extenuating circumstances. But even if an exception has been granted, there are additional restrictions with regards to loan-to-value and occupancy types that will be allowed if less than seven years has passed.

Probably the most important aspect of getting back in a position to buy a home is to diligently protect one’s credit after a major derogatory incident such as foreclosure. Any minor negative credit item such as a collection or late payment is scrutinized more than if foreclosure or bankruptcy had not occurred. Remember, a lender will be looking for good credit to be re-established after a foreclosure. That means that the prospective borrower who hopes to get loan approval after foreclosure – especially if requesting an exception for extenuating circumstances – will need to have current credit accounts (e.g. auto loan or credit cards) with a clean payment history, with no collections, judgments, or other negative credit items.

If you’ve gone through a foreclosure and unsure about when or how you might qualify to buy a new home again, the best thing to do is start talking to a lender and putting a plan in place. Give American Capital Home Loans a call and speak to any of our seasoned Mortgage Advisors to help put you back on the path to homeownership!

Written by Carl Kelley, Mortgage Advisor

There are many DAP programs throughout San Diego County specifically designed for First Time Home Buyers (FTHB). A FTHB is defined as someone that has not owned a PRINCIPLE Residence in the last three years. The FTHB programs are in place to help those people get into a home that otherwise would not be able to buy a home.

Escondido has one of the best DAP programs available. They have the Homebuyer Entry Level Program (HELP) and the Home Ownership Made Easy (HOME) Program. The HELP program is for FTHB’s that earn 80% or less of the San Diego County area median income and the HOME is for FTHB’s that earn between 81% and 120% of the San Diego County area median income. Those income levels are adjusted according to family size.

As of January 1, 2012 the HOME program has been suspended due to the State budget crisis. It is not known when or if the program will be available again. The HELP program is very much alive and well (this program is funded by Federal funds).

The HELP program allows a FTHB to purchase a home in the City limits of Escondido with very little or no money out of pocket. The HELP program will cover up to $25,000 or 5% of the purchase price, whichever is less, to cover the down payment and closing costs.

Please give us a call to find out if you or someone you know can qualify for the City Of Escondido HELP Program.