On January first, 2010 there will be new RESPA changes that go into effect. There will be a new GFE and HUD. These disclosures are being implemented for consumer awareness and protection.
Starting 2010 borrowers will see the complete cost of loans, all fees, including YSP. YSP will be disclosed as a dollar amount and not a range of yield. It will be listed in 2 places, one as the origination charge and then secondly as a credit back to the borrower. If you need to re-disclose, the waiting period under HERA will apply. These changes will apply to HELOCs and Reverse mortgages also.
Borrowers should take their time reviewing these, and check all fees and not the APR when comparing to other brokers or lenders. A bank's APR may seem less, but because brokers will be giving a credit as part of the new disclosure, they may actually have a better option for the borrowers. I know this is all new and may be confusing, but if you compare the bottom line numbers, you will see who is giving you the best option.
The Temporary Loan Limits have been extended to the end of 2010, under H.R. 2296.
FHA will also be making some changes. The first will be that FHA will do away with their Approved Condo list. It will be up to the lender to do its own review of the condo. The FHA Spot On Approval will most likely be gone in the first quarter of 2010. It also looks like the requirements for owner occupancy will be increased.
Alex Echeandia 301-881-8900
Monday, November 30, 2009
Friday, November 20, 2009
HELOC | terms & floors
Right now Home Equity Lines Of Credit are a great product because of the flexibility and super low rate. Some banks also offer a fixed rate option, if you see the Prime rate increasing. Right now Prime is 3.25, and a lot of banks are offering Prime minus .25.
Most banks also offer them as a No Closing Cost loan. Please be aware that you must leave the line open for 3 years. You can have a zero balance, but it must remain open. What a lot of banks are doing these days, is adding a floor to the rate. The normal floor is 4.5%. What that does is, make your payment based on 4.5%, even though the terms say 3.25-.25.
The disadvantage is you don’t truly get Prime minus .25, but the good thing is, Prime could keep rising and you will be at 4.5 until Prime hits 4.75 (Prime minus .25, per the terms of your HELOC). The HELOC is a much better option for a lot of transactions.
You will not be able to borrow money at a cheaper rate, especially since most HELOCs are interest only payments for the first 5-10 years. You should be aware that most banks will want to stay under an 80 Combined-Loan-To-Value.
Alex Echeandia, MD loan officer
301-881-8900 x208
Most banks also offer them as a No Closing Cost loan. Please be aware that you must leave the line open for 3 years. You can have a zero balance, but it must remain open. What a lot of banks are doing these days, is adding a floor to the rate. The normal floor is 4.5%. What that does is, make your payment based on 4.5%, even though the terms say 3.25-.25.
The disadvantage is you don’t truly get Prime minus .25, but the good thing is, Prime could keep rising and you will be at 4.5 until Prime hits 4.75 (Prime minus .25, per the terms of your HELOC). The HELOC is a much better option for a lot of transactions.
You will not be able to borrow money at a cheaper rate, especially since most HELOCs are interest only payments for the first 5-10 years. You should be aware that most banks will want to stay under an 80 Combined-Loan-To-Value.
Alex Echeandia, MD loan officer
301-881-8900 x208
Friday, November 6, 2009
Fellowship Income
I know this may not be a popular issue, like the HVCC or New FHA Guidelines, but it may affect some borrowers, so I wanted to discuss it.
When you are receiving income because you are on a Fellowship, it is considered, temporary income. Even though you may be on a regular salary, the banks will not treat it as a permanent job. Most Fellowship are usually for 1 year, with a option to renew the Fellowship at the end of each year. Therefore it makes the underwriting a little more complicated. What you can do to the process go smoother, is provide documentation from the employer, that provides their Fellowship history, their probability of continued employment, the probability of becoming a permanent employee, and what an asset they are to their department/agency. For the probability of continued employment, banks will like to that the Fellowship it will be guaranteed for at least 3 years. Documentation would need to be on letterhead and must be obtained by us, the lender. At Choice Finance we have become adept at closing these loans as we have funded several purchases and refinances for employees, Fellows at NIH. Please don’t deem yourself, “unable to qualify” without talking to me first.
Maryland Sr Mortgage Broker
Fairfax, VA Homes
When you are receiving income because you are on a Fellowship, it is considered, temporary income. Even though you may be on a regular salary, the banks will not treat it as a permanent job. Most Fellowship are usually for 1 year, with a option to renew the Fellowship at the end of each year. Therefore it makes the underwriting a little more complicated. What you can do to the process go smoother, is provide documentation from the employer, that provides their Fellowship history, their probability of continued employment, the probability of becoming a permanent employee, and what an asset they are to their department/agency. For the probability of continued employment, banks will like to that the Fellowship it will be guaranteed for at least 3 years. Documentation would need to be on letterhead and must be obtained by us, the lender. At Choice Finance we have become adept at closing these loans as we have funded several purchases and refinances for employees, Fellows at NIH. Please don’t deem yourself, “unable to qualify” without talking to me first.
Maryland Sr Mortgage Broker
Fairfax, VA Homes
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