Colorado Family Opportunity Mortgage Program For Elderly Parents And Children

A great mortgage program here in Colorado that has always been around for quite some time, is the Family Opportunity Mortgage program. Not many people inquire about it, however it can literally save you tens of thousands of dollars upon the purchase of a home, and even more in interest over the life of the loan.

Why?

  • There are no distance requirements between the elderly parent and the individuals (their child).
  • Adult child may already own their own home (primary residence)
  • Adult child will need to provide a letter of explanation outlining the intent to purchase a home for elderly parents who are financially limited.

Assisting a Disabled Adult Child

  • Disabled adult child must have insufficient income to qualify for a mortgage or be unable to work.
  • The parents qualify for the loan.   The parents can be on the mortgage although it is not required.
  • There are no distance requirements between the elderly parent and the individuals (their child)
  • Disabled adult child occupies the property as their primary residence.
  • Parents may all ready own their own primary residence.

Freddie Mac and Fannie Mae products are eligible for these long overdue programs. If you are interested in this program for a home located anywhere in Washington, please contact me.

Because you get to buy another home, and not have to classify it as a Second Home or Investment Property. You can actually classify the property as Owner Occupied, so in essence you have 2 properties that can be owner occupied. So instead of 20% down, you only need to put down 5%. A program way better then FHA, because with a 640 score, you can obtain a 95% loan with no mortgage insurance. There are some caveats, and they apply ONLY in 3 situations.

Assisting your College Bound Son or Daughter

  • Son or Daughter must be enrolled in college.
  • Property must be located close to the college student is enrolled in.
  • Property must be a reasonable distance from the parent’s home
  • Property cannot be rented and the child must occupy the property for a period of one year
  • Parents cannot own another second/vacation home in the same location as the student’s home
  • Parent’s qualify for the loan, the child does not. If the child is old enough, they can be on the mortgage with the parents, however it’s not qualified.

Assisting an Elderly Parent

  • Elderly parent must have insufficient income to qualify for a mortgage or be unable to work.
  • A simple 4506-t will be ran by us to verify through the IRS that elderly parent cannot qualify on their own.
  • The individuals (children) qualify for the loan. The parents can be on the mortgage although it is not required.
    • There are no distance requirements between the elderly parent and the individuals (their child).
    • Adult child may already own their own home (primary residence)
    • Adult child will need to provide a letter of explanation outlining the intent to purchase a home for elderly parents who are financially limited.

    Assisting a Disabled Adult Child

    • Disabled adult child must have insufficient income to qualify for a mortgage or be unable to work.
    • The parents qualify for the loan.   The parents can be on the mortgage although it is not required.
    • There are no distance requirements between the elderly parent and the individuals (their child)
    • Disabled adult child occupies the property as their primary residence.
    • Parents may all ready own their own primary residence.

    Freddie Mac and Fannie Mae products are eligible for these long overdue programs. If you are interested in this program for a home located anywhere in Colorado, please contact Brian Quigley at 720-524-3215 or email me at loans@brianquigley.com

FHA GOLD Program Loosens Credit Guidelines for Subprime Borrowers

FHA has recently introduced a new program for borrowers with less then good credit. This will greatly open up the floodgates to people who could not qualify for a new home mortgage in the past. Some of the highlights of this program are the following.

  • FICO scores down to a 500. 1 score is acceptable for Purchase, Rate and Term, and Cash out Refinance.

Any score under a 580 and you will need to put at least 10% down on your new home purchase. A score of a 580 or higher, you will only need the standard 3.5% down. If you are concerned about your down payment, and do not have 10% with a score lower then 580, we can point you in the right direction in regards to getting your credit reestablished.

Other highlights of this amazing program are

  • Non-occupying co-borrowers allowed
  • No tradeline requirements
  • Non traditional credit accepted
  • Back to Work Program Okay

 

If you have further questions and would like to inquire more, you can reach Brian Quigley at 720-524-3215.  This is an amazing product, and FHA understands that your credit history is not a true reflection of your ability to repay a mortgage.

 

 

FHA Back To Work Program Eliminates Seasoning on Bankruptcy, Short Sale, and Foreclosure

An FHA loan program that is flying under the radar since August 2013 can help many previous homeowners who were a victim to the recession, or experienced unemployment or other severe reductions in income, a second chance in obtaining a home loan, without having to wait the standard 2 -3 years, if they have filed a bankruptcy, or experienced a short sale or foreclosure. The program is called the “FHA Back To Work Program.”  Many retail banks do not have this program offered, so you will want to seek out a Colorado Mortgage Broker like myself.

Second chance

FHA recognizes the hardships that many of these borrowers faced, and realize that their credit history may not fully be a reflection of their true ability to pay back a mortgage. This is a huge stride in lending, and many wholesale lenders have this program in Colorado. To be considered for this program is not as difficult as you might think. What needs to have happened is an “economic event” in your life, and you will need to document the following:

  • Certain Credit Impairments were the result of a Loss of Employment or more then a 20% drop in household income beyond the borrowers control.
  • The borrower has demonstrated full recovery from the event.
  • The borrower completes a housing counseling class

This would be an FHA loan, so the max LTV would be 96.5%, or simply 3.5% down. These loans are available with credit scores down to a 580.

If you would like to apply for this program to see if you qualify for this amazing new loan program designed to give responsible homeowners a second chance, click here.

To learn more about me and the services I provide to the people of Colorado with my Mortgage Services, click here.

 

Waiting Period For Short Sale, Bankruptcy, and Foreclosure to buy a House with FHA financing

With the recent improvements in the economy and almost all economic reports coming back positive, it looks as though we have weathered the storm, and are on the upswing. We have been through a major housing crisis, a recession, and record high unemployment rates in the last 5-6 years. During this time, many people filed for bankruptcy in an effort to restart their lives again. Many others had to let their homes go, either because of predatory lenders who sold them high spiking adjustable rate mortgages after 2-3 years, or because they were so upside down on their mortgage due to neighboring short sales and foreclosures.

Thousands upon thousands of these individuals went back to a very basic way of living. They went back to renting, and for a good reason.  We all know the advantages of home ownership. If you don’t know them, you should read my blog on buying here. The waiting period for buying a home after a devasting event like a foreclosure, bankruptcy, or short sale will surprise you, and many people, maybe even you, can get mortgage financing now, with as little as 3.5% down.

For Bankruptcy – FHA

FHA CH 7 – You will need to wait 2 years from the discharge date, and then you will be able to purchase a home with as little as 3.5% down. If you qualify for the FHA back to work program, where you experienced an “economic event”, which resulted in a 20% loss in income for over 6 months, and resulted in your filing bankruptcy, or having a short sale, deed in lieu of foreclosure, or foreclosure, then you can purchase a home 12 months after any of those events. Updated August 2013.

FHA  CH 13 – You will need to have made at least 12 on time payments to your creditors, and the court will need to approve you getting  a home. This is rather easy, and you can apply after this 12 month period has been met.

For Short Sale – FHA

Short Sale seasoning to get a new FHA loan can be as little as 1 day after your short sale, if it is executed in a manner, where you had no 30 day mortgage lates to have the short sale completed. This is tricky if you have an FHA mortgage, where HUD might require you to go 30 days lates, and this has been done much easier the conventional route. With all of the recent loosening of guidelines, HUD might not now reuqire you to go 30 days late.

If you did go late, the period will be as little as 1 year, or at most 3 years, if you cannot fulfull the FHA back to work program guidelines.

For Foreclosure -FHA

If you fulfill the FHA “back to work” program, you might be able to buy after a 12 month waiting period, or at most 3 year waiting period.

 

RENT VERSUS OWN – 5 FACTS THAT WILL MAKE YOU WANT TO BUY NOW

Rent in the Denver market the last couple of years has absolutely skyrocketed. See a listing for an apartment on Craigslist, and be prepared to show up with a check if you are planning on securing an apartment to rent. A 2 bedroom apartment in Capital Hill is running about $1200 a month, up year over year the last 5 years. But what are you actually getting for your money when you rent? What are the benefits? The belows 5 facts will really be an eye opener for you, as you decide more closely, if you want to RENT or OWN.

1. Your RENT is not tax deductible, which means if you pay $1500 a month in rent, you through away $18,000 a year, and $90,000 over 5 years. That is dumb. Plain and simple. It is not securing your future, giving you an asset, or helping your legacy with your family.

2. You cannot RENT out your place on Airbnb, when you want to travel abroad, and make money while you travel. For example, if you rented out your condo for $90 a night for 20 nights out of 30, that would be $1800 in gross rental income. Say your condo costs about $1200 a month to own with HOA. You just got your mortgage paid, plus made $600 in the process for travelling for a month.

3. The money you invest in fixing up your place, painting, adding lighting, finishing touches, etc, is of no benefit to you, because you are leaving this to your landlord when you leave, or worse, they will make you put everything back to the way it was before you leave.

4. You are left with nothing – A memory. No investment, no asset. Nothing to add to your legacy. All the money you spent on all those years is simply wasted, thrown out the window. A 10 year history of renting a $1500 condo will cost you $180,000, and help pay down the landlord’s mortgage. Why would you want to do that.

5. It is more expensive to RENT then OWN.  Take a $300,000 house in Highlands Ranch, CO, which is a suburb in south Denver. The rent is $1900 a month. If you bough that same home with 5% down, and no mortgage insurance the loan would be $285,000. At 4.5% for a 30 year mortgage, your Principal and Interest payment is $1444.05. Add another $300 for taxes and insurance, and your full payment is $1744.05; Less then your rent payment.

All you would need is $15,000 down, and 2% of that can be a gift from a family member. As long as your credit score is a 680 or higher, this loan is available for you today in Colorado.

What is the Difference Between Modular and Manufactured Homes?

Aside from your standard Single Family Residence, Condo, and Townhome, there are 2 other types of home that will come up while you show your buyers property. It is important that you understand these types of homes, and the traditional types of financing involved, and more importantly, the lenders that can close your loan.

Manufactured Homes, aka Prefab Homes, aka Mobile Homes

Manufactured housing is a type of prefabricated house that is mostly assembled at factories and then transported to the sites of use.

Below is a picures of a manufactued home.

The construction of all manufactured homes marketed in this country are strictly regulated by the U.S Department of Housing and Urban Development’s Manufactured Home Construction and Safety Standards ( or the HUD Code). Manufacturers, in most cases, view the HUD Code as minimum performance standards.

They can also exceed these standards in their basic designs with updgrades for energy efficiency and overall performance. The HUD Code not only covers the construction of the home, but also heating, air conditioning, ventilation, plumbing, thermal and electrical systems.

Manufactured homes are also affordable. Manufacturers purchase their building materials in volume, in a controlled environment, utilizing a systems engineered production method. There are no costly weather delays in the construction process. These homes are less labor intensive to make and also require a shorter production time in relation to your standard single family home on a lot.

The incident of fire is actually lower in a HUD Code Manufactured Home, and construction requirements for wind resistance are equal to and even more stringent then the requirements for manufactured homes sold and placed in high wind areas.

Just like buying a brand new single family home, most manufacturers homes come in a variety of floor plan designs to meet almost anyones housing needs.

To get approved for your next Manufactured home purchase, click here.

Modular Homes

Modular homes are sectional prefabricated buildings, or houses, that consist of multiple sections called modules. These modules are six sided boxes constructed in a remote facility, then delivered to their intended site of use. Using a crane, the modules are set onto the buildings foundation and joined together to make a single family residence or building. These modules can be placed side by side, end to end, or stacked up to six stories in height, allowing a wide variety of configurations and styles in the building layout.

Below is a picture of a Modular home

Many lending institutions resist consideration of modular homes as equivalent in value to site built homes. To get approved for your next Modular home purchase, click here.

In the United States all modular homes are constructed according to the International Building Code (IBC), IRC, BOCA, or the code that has been adopted by the local jurisdiction.

The materials used in modular homes are the same as site constructed homes. All modulars are designed to sit on a perimeter foundation or basement.

According to manufacturers, modular homes are designed to be stronger than traditional homes by, for example, replacing nails with screws, and adding glue to joints.

 

How To Earn Up To $2000 Tax Credit Annually For Buying A Home in 2013

The Mortgage Credit Certificate, aka MCC, is a certificate issued by certain state and local governments that allows a taxpayer to claim a tax credit for part of the mortgage interest paid during a given year.

This program is offered in Colorado, and our company, The Mortgage Network, is proud to have this affiliation to offer this money saving program to homebuyers throughout Colorado.

Here are the minimum requirements to qualify for this money saving program.

1. Be a first time homebuyer, or not have owned a home in the previous 3 years

2. Owner Occupied only

3. Must meet income and purchase price restrictions.

 

Regarding #3, in targeted areas of Colorado where this program is underserved, here is the breakdown.

Maximum Family Income – Families 2 or fewer – $95,160

Maximum Home Cost – $452,531

 

For Non -Targeted areas

Maximum Family Income – Families 2 or fewer – $79,300

Families 3 or more – $91,195

Maximum Home Cost – $370,252

 save-money-201x300

You will also have to take a HUD Approved Home Class, which you can look into here, and I would advise doing so before you go under contract to give yourself plenty of time to get all the paperwork properly processed. If in Denver County, you do not have to pay anything upfront for the program. In all counties outside of Denver, you will need to pay $250 upfront to CHFA.

Here is how the program works in Detail.

You are able to receive an annual Federal Income Tax Credit Equal to 30% of the Annual Interest You Pay on your Mortgage Loan.

This is a credit, and this will allow you to subtract the amout of credit from your annual federal income taxes.

 

Here is an example

$417,000 Purchase Price – Which is conforming limit in Denver County for Conventional Loans

4% Interest –(Thinking ahead here people. RATES ARE GOING UP)

Mortgage Interest Paid first year – $16,680

x MCC Credit – 30%

=TOTAL CREDIT – $5004

 

NOTE – The IRS limit is $2000 a year, so on the above example you would report a $2000 credit on your tax return

You can continue to receive a tax credit for as long as you live IN the home and keep the mortgage

 

Can you Buy a Home with Collections on your Credit Report? Depends

Depends on who you talk to.

If you talk to a retail banker with only a couple of loan products, they will tell you NO.

If you talk to a correspondent lender with more loan products available then a retail banker, they will tell you NO

If you talk with a mortgage broker, with knowledge from 2007, they will tell you NO.

If you speak with the above 3 people, and they tell you NO, and then bash another broker who says they can do it, RUN.

You need ANSWERS!

FHA was going to put a bill out last year, where if you had any disputes on your credit report, and collections over $1000, you would have to have the disputes cleared, and the collections paid. GUESS WHAT

IT NEVER PASSED!

Guess WHAT, note EVERYONE got the MEMO!

Be careful WHO you get your information from when applying for a LOAN with variables like this. It can discourage you, and cause you to quit looking for a home.

You need to speak with a broker with experience in this area, who lives and breathes this business, and HARD TO DO loan scenarios.

If someone tells YOU NO!, continue your search until you get the ANSWERS YOU DESERVE!

Foy anyone misleading a borrower with DATED information, simply read this article from the LA TIMES about this rule that NEVER passed.

I am ALL about fair competition in this marketplace, but when the competing broker bashes you, and tells the borrower you cannot do that loan, or that loan will fall apart at the closing table, it is because HE CANNOT DO IT. And that is not his/her fault. It is simply the fact that his/her company has a certain basket of goods and services to offer. If all they have is apples and oranges, and you need a pineapple, thank them for their time, and continue your search.

NOTE – This is a REAL EXAMPLE of a LOAN IN PROCESS now

Collection ACCOUNTs do not have to be paid off with an FHA Purchase, but disputed accounts need to be cleared, and that is simply having the borrower write a letter to the creditor NOT DISPUTING the account in question.

FHA has very loose guidelines, and is the easiset loan to get. Period end of story. What the issue is, is that lenders and banks have over lays on top of these guidelines to mitigate their risk. There is nothing wrong with that.

But just because YOU cant do the loan, does not mean someone else CANT.

 

What to do when the SELLER does not pay closing costs – Homebuyer TIP

Buying a home will be one of the biggest financial commitments you will make in your life, and pre-buying jitters can scare off even the most seasoned of buyers. They want the house, that is no question, however they should be able to get it at the lowest cost, at the best interest rate, and the best of both worlds, with having their closing costs paid for. That would be a perfect world right there.

Does that happen every time? No way. Even the most experienced real estate agent will tell you that, especially if they negotiated for you to drop the price, countering back and forth the seller, who finally agrees at the lower price, but getting closing costs on top of that, might be difficult.

Especially if the seller is underwater, and just cannot, even if they wanted to help you. Some might be breaking even, or taking a loss with the purchase, so getting the closing costs paid for is not 100% guaranteed. The following is an example of a home buyer going under contract on a $417,000 house, which is the conforming loan amount limit for Denver County.

The closing costs come to around – $5114 in this example, and include the following as an example only

$1219- All title fees, closing fees, recording fees, lenders title insurance policy.

$1200 – Homeowners Insurance Policy – to be paid upfront for 12 months

$1800 – Taxes escrowed for 6 months

$895  -  Underwriting Fee and all Lender Fees

 

Now, the buyer has put aside his 3.5% for FHA financing, since his credit score is only around a 600 from a past credit issue. He has his $14,595 put aside which is the 3.5%, and has budgeted for this to buy the home. He does not have reserves to handle another $5000 in closing costs, and the realtor cannot get it, because he/she already negotiated an incredible offer, that just got accepted way below the asking price. In my opinion, he/she did the best they could do in that situation.

What is the alternative here?

As mortgage brokers, we are compensated from the lenders who we will take our buyers home loan to. It is a very simplified process. We are all guaranteed a specific compensation with our lenders, and anything above our compensation, can be used as premium pricing, with a slightly higher interest rate, to help pay third pary closing costs.

So in this example, our compensation is 1%. We simply price out the loan higher then that to cover all of the closing costs.

So if 3%, paid us as a broker, 1% of the base loan amount or 96.5%, that would be $402,405 x 1% which is $4024.05

What we can do, as brokers is raise that slightly to 3.25%, which is paying 2.25%

1% which is $4025.05 gets paid to us, and the remaining 1.25%, is $5030.06, which covers all of the closing costs, to help the buyer obtain the home, in a situation where he would have to wait, or not go under contract, if that cost was not taken care of.

For any questions regarding closing costs, or the scenario above, click here.

 

How to Get A Mortgage 1 Day After A Short Sale

Speak to 99% of Real Estate Professionals and they will all tell you the simliar response when asked how long it takes after short sale to get a mortgage. “3 years”. While that has truth to it, it does depend on your unique situation and what kind of loan that you have.

If you currently have an FHA Mortgage, it is difficult to avoid going late on your mortgage to execute a short sale. HUD does want you to go 30 days late at least one time, in an effort for them to approve the short sale. This results in no lender being able to give you a loan, until that short sale seasons for at least 3 years.

 Can-I-Get-a-Mortgage-after-a-Short-Sale

On the flip side, if you currently have conventional loan, you are not required to go late 30 days for a short sale to be executed, and this will allow you to get an FHA mortgage as soon as the next day after your short sale.

Sound too good to be true? I have a client who short saled his home in California, and purchased a $500,000 in Denver, CO. He closed two weeks ago.

Now, there are rules that have to play out, with regards to your short sale, for FHA to insure the loan. For example, one of them is you cannot short sale to take advantage of market conditions. For the full mortgagee, which explains this, click here. This rule was actually introduced in 2009, however many lenders have overlays, which means they will not allow you to purchase a home, until a certain amount of time has passed.

Luckily we at The Mortgage Network, do have access to lenders, that will do these loans 1 day after a short sale. This is vital information to have with regards to your buyers and their credit profile.

Just because someone has a short sale on their record, does not mean an immediete denial. They need to align themselves with a mortgage broker, who is flexible, resourceful, and who is on top of breaking news and information.

If you have a conventional loan, and you are being instructed to go late on your mortgage, I would think twice about doing that, and think about the impact this is going to have on your future.

If the idea of homeownership is daunting to you, and you simply can not make the payments, and you are completely upside down, then going late might be inevitable, and that is okay. A short sale might be your only option with having to go late, however usually this is only a HUD rule with regards to FHA loans.

If you or anyone you know has any further questions about this unique loan program, click here.

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