My Name is IRRRL (A VA Mortgage Story) is a post from: Ten Day Close

When I first started doing VA Mortgages about 20 years ago, I wanted to learn all of the benefits and features that would be available to our military personnel; both past and present.  Not long after I did my first few VA loans I had a veteran ask me to refinance his VA mortgage.   Not knowing a great deal at that time I asked my processor about a VA refinance and she mentioned that she was not qualified for such a loan as these loans have many “technical” aspects.  Next, I asked my manager.  He mentioned that he had not done a VA loan in quite awhile but he was “somewhat familiar” with the VA Interest Rate Reduction Refinance Loan (also know as the VA IRRRL; pronounced “Earl”). 

If you follow my teachings and writings you will find that I crave knowledge.   I want to learn everything I can about the technical aspects of any loan program (or anything else I study).  I learned quickly that the IRRRL loan was one of the greatest benefits of a VA loan; a quick refinance with no mortgage insurance.   Let me give you one success story…

Just a few years ago a veteran came to me and (as of yet) had not been able to get his VA Certificate of Eligibility.   I was able to help him to handle the paperwork and soon we closed his VA Purchase loan.   About 18 months later he called me and was about to fall behind on his payments as his hours had been cut by his civilian employer.  I suggested a VA IRRRL.  He was thrilled to know that the Veterans Administration would be able to change him from a 30-fixed to another 30-year fixed (or adjustable if he preferred) and lower his interest rate without a lot of “red tape”. 

This meant that our borrower was able to lower his interest rate, roll in the closing costs, not have to make a payment the month after the refinance closed, and lower his payments.  All he had to do was to call me.   He then went back to his U S Army Reserve Unit and let the other military personnel know of the transaction.   If you know of a veteran who wants to lower the interest rate on their VA loan…. NOW IS THE TIME.  The interest rates are the lowest they have been in years.   Have them call me; say they are a veteran and they want to know more about my friend “IRRRL” (pronounced “EARL”). 

If you are a veteran; contact me directly at weswaddle.com.  As always; thank you so much for your service.

Another VA Mortgage Success Story is a post from: Ten Day Close

Before I moved at Arizona in 2005, I had a Department Of Defense (DOD) pass on my Jeep which allowed me to have access to certain military installations on the east coast. I typically would visit the base at least one day each week. One day I received a call from the base asking for an appointment. This was not unusual. I was to speak to a married couple who wanted to purchase a home near the base.

These two individuals were both active duly U S Air Force enlisted personnel. He was going to TDY (temporary duty) in just a few days to go to school for a few weeks. She, however, was six months pregnant. They really wanted to buy a house for the new baby. They planned to stay in the area for a few years and did not want to live on base. They had managed to save up $5000 for furniture for the new house. They were going to be “proud” parents. The excitement just beamed as they smiled and spoke of the future.

As soon as I could get them pre-qualified they were out looking at houses. In just a week or two they found the perfect house. They called me and were both happy and sad at the same time. They were happy about the house. It seemed perfect, but they were sad as the Realtor informed them that this house was in high demand and the seller required an earnest money deposit of (you guessed it) $5,000. My reply was “Don’t worry. Give them the $5,000. You’ll get it back at closing.”

As a loan officer, I have been told many times that a borrower is not permitted to “get money and get keys” at the closing table. But I learned many years ago this rule, “You have an advantage within the rules; if you know all of the rules”. It is true that they were not permitted to receive borrowed or undisclosed money at the closing table; however, they were permitted to receive “excess earnest money”. These (soon to be) new parents were so happy when they received a check for over $4600 at the closing table so they could buy the new baby furniture.

We became friends after that time. They were really pleased a year later when I told them the interest rates were falling and they qualified for an IRRRL (Interest Rate Reduction Refinance Loan) with no appraisal and no money out of their pockets. This allowed them to go one month without having to make a payment and have lower monthly payments.

Our veterans deserve the best treatment possible. If you’re a veteran; Thank you for your service!

VA Mortgage Loan Success Story is a post from: Ten Day Close

Many veterans of our United States Military (as well as active duty military personnel) should take advantage of VA Loan Programs.  I am amazed at the number of people who think that there is a time limit or age limit to use their such benefits.   One of the first questions that I ask when I am attempting to prequalify a borrower for a purchase (or a refinance) is, “Are you a veteran of the U S military?”  If the answer is “no”; that is fine.  However, if the answer is “yes”, I immediately offer to assist the borrower in locating their DD-214 and their “VA Certificate of Eligibility”.

I recall one couple that came to my office a number of years ago.  He was in his 60′s, received a small pension and worked a part-time job.  She was also employed on a part-time basis.  They had very little debt and only “acceptable” credit.   They had always wanted to purchase a nice, brand new house.   She complained to me that he was never able to buy her a nice house.

They went for a Sunday drive and saw some properties being built.  They called my office and asked for an appointment.

During the initial consultation I asked them to bring the standard, “30 days worth of paystubs, 2 months bank statements, and 2 years of W-2 forms”.  They showed little money for a down payment, so I asked, “Are you a veteran?”  His answer was almost as if he was unsure.  He said, “Well, I was in the National Guard Reserve during the war.”  I asked, “Do you get VA benefits?” He said, “I don’t know; I never thought about it.  I have never used them before”.   I asked if I could have his permission to call the Veterans Administration regarding his eligibility.  He agreed.  The Veterans Administration was very helpful in locating his old miltary records and granting this veteran a “VA Certificate of Eligibility”.

Two months later they closed on the first “brand new” house that they had ever owned.  A few days after the closing, they came back into my office and personally thanked me for working so diligently with them so that they could buy this property with “no money down”.  The wife actually cried as she thanked me.  I reminded her that it wasn’t me that made this possible.  This was all made possible by the years of military service that her husband gave to these United States.

As they walked out of my office that day; I could see a new gleam in her eye as she looked at him.  He seemed to walk a little prouder and with a little more dignity.  I just smiled and as always said, “Thank you for your service”.

FHA Streamline Without Appraisal in AZ and California is a post from: Ten Day Close

Many people have used an FHA loan to buy a house in the last few years and chances are that the interest rate they are currently at is much higher than the current FHA interest rate.  If you find that your current interest rate is higher than the current interest rate, chances are that the best way to get a lower rate is to refinance using the FHA streamline refinance program.

If you live in Arizona or California and have bought your home in the last few years, there is a chance that you also owe more on your mortgage than your house is currently worth.

But if you participate in the FHA streamline refinance program, the good news is that you can still refinance if you participate in the  FHA streamline without appraisal refinance program.

Last fall, HUD changed the guidelines on the FHA streamline no appraisal program and now if you are going to do an FHA streamline without appraisal, you can’t finance your closing costs into the loan. I thought this meant that FHA streamlines were pretty much dead — until interest rates went lower than I thought possible.

The changes to the FHA streamline program mean that anyone who is interested in an FHA streamline will need to bring their closing costs to close unless interest rates have dropped to the point where a lender will give a slightly higher rate in exchange for covering some of the closing costs.

And interest rates have dropped to historic low levels.

Which means that you can now do a FHA streamline refinance without an appraisal and have it still make sense financially.

So if you are currently in an FHA loan and have an interest rate that is higher than what the current interest rate is, the good news is that the FHA streamline can help you even if you currently owe more on your mortgage than your house is worth.

Be sure to ask your loan officer about the FHA streamline without appraisal program.

• More information about the Arizona FHA streamline refinance program
• More information about the California FHA streamline refinance program

Qualifying For A Mortgage, An IRA and Being Self Employed is a post from: Ten Day Close

Being self employed is a catch 22 in the world of mortgages and Roth IRAs. So many of my self employed mortgage clients have great credit but seem to write down their income to the point to where they sometimes shoot themselves in the foot when it comes to buying a home. In reducing their income with all their write offs (like so many self employed people seem to do) they can reduce their income far enough to prevent them from being able to qualify for the home that they really want and can technically afford.

Now, what I have come across in my mortgage career is that when it comes to IRAs some of my clients who know the Roth IRA basics often don’t think they’ll qualify for a Roth IRA because they make too much money and they overlook the Roth IRA in favor of other traditional plans like the SEP – Simplified Employee Pension.

I’m not going to preach to you about how you should manage your taxes or money, but if you are in the market to buy a home and you are self employed then you need to ensure that you have sufficient income to qualify for the home that you really want and can afford. When it comes to starting a Roth IRA and buying a home, one strategy you may want to employ if you are self employed is to buy your home first by holding your income a little higher. And then when you have your home under your belt, start using your write offs to get your income down to lower your income tax exposure.

When it comes to Roth IRA basics, there are income limits where an individual or married couple are capped in being able to contribute. Here is where the catch 22 comes in, if you are trying to get your income down to the level where you can contribute to a Roth IRA you may find yourself pricing yourself out of the house you want to purchase with showing less income on your tax returns.

My advice, if you are self employed, don’t have a Roth IRA started and thinking about buying a home, talk to a financial planner and tax preparer to cover your options. Most likely there is a path to follow so you can efficiently accomplish everything on your financial goals list – but it is wise to get some professional guidance first.

Jumbo Loans in Arizona: Time To Refinance? is a post from: Ten Day Close

With interest rates for almost all mortgages at their lowest points in decades – interest rates on  jumbo loans have been somewhat slower to come down. Many of the banks that used to loan money for jumbo loan mortgages have went bankrupt and many of the bigger banks have pulled back significantly on their jumbo lending.

But as reported in the WSJ recently, jumbo loan rates are coming down and are currently at their lowest levels since 2003.

Courtesy WSJ

According to the WSJ:

Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza.

“In just the past couple of months, jumbo loans have really started to be competitively priced,” says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.

The recent low rates on jumbo loans has caused an uptick in refinancing activity – with some jumbo lenders reporting that jumbo refinancing up as much as 50% vs. what it was last year.

Arizona Jumbo Loan Refinance: Big Savings

The larger the balance of a jumbo loan, the more savings are possible by lowering the interest rate.  With a million dollar jumbo loan, you can easily save tens of thousands of dollars each year by lowering your rate by only one percent.

A simple example pointed out by the WSJ was where a homeowner with a 30-year fixed-rate $800,000 mortgage at 6.86% pays $5,247 a month. If he were to refinance at 5%, his monthly payments would be reduced by $952.

AZ Jumbo Lender: Academy Mortgage

Academy Mortgage is one of the top lenders in Arizona and has become the choice of many Realtors who refer their clients to us.  We work with people for many different types of mortgage financing, and have expertise with people who are searching for the right jumbo loan financing for their new home.

Contact us today to see if it is in your best financial interest to refinance your jumbo home loan here in Arizona — or anywhere else!

FHA Jumbo Loans: Low Rates and Popular is a post from: Ten Day Close

Most people know that interest rates are at all-time lows… and that means when you finance your home, you can buy more house because your monthly payment is lower due to the lower interest rate.

And the FHA jumbo loan program is no different — the rates are low and depending on where you live in the country, currently FHA will allow you to finance up to $729,000 with just 3.5% down.

The FHA jumbo loan program is that it was part of the legislation passed which was created by HUD and it won’t be around forever. It is actually at risk of going away at any time.

So if you are considering a home that will need a jumbo loan, be sure to ask your loan officer if the FHA jumbo loan is right for you. You might find that with the recent property declines and with interest rates at all time lows, an FHA jumbo loan might make the most sense for your situation.

Remember how that house down the street in 2006 was selling fro more than $1,000,000? Now it is selling for about half of that — and it is probably eligible for FHA jumbo loan financing.

FHA jumbo loan guidelines:

• Up to $729,000 financed. (based on the county loan limits published by HUD)
• 660 FICO score required.
• 3.5% down payment.
• 30 year fixed rates around 5%

FHA jumbo loans take just as much time to close as “regular” FHA loans do – 10 days.  So if you are in a hurry, we are able to accommodate your schedule as well.

And if the FHA jumbo program goes away before you can get qualified and close your FHA jumbo loan?

Don’t say we didn’t warn you.

Energy Efficient VA Loans – Real or No Deal? is a post from: Ten Day Close

Let’s start out here by stating the play on words: there is no such thing as an energy efficient veteran loan. Loans are paper and money etc. not some thing that can be more energy efficient.

OK, now that we have that play out of the way, there is such a thing called the EEI or Energy Efficient Improvement Loan. EEI’s are loans that completely cover or partially cover the expenses of making energy efficient improvements to your home.

For most veteran loan types (purchase, refinance or streamline refinance) you add the energy efficiency improvement costs to the top of the mortgage balance as long as a few criteria are met.

EEI Veteran Loan Criteria:

1. If the cost of the energy improvements do not exceed $3,000 the costs must be documented and can just be added to the mortgage amount.

2. If the cost of the energy improvement exceeds $3,000 up to $6,000, then the amount can be added to the mortgage amount as long as the energy reduction in monthly utility cost savings exceeds the increased mortgage payment increase due to the increased mortgage amount. In other words – up to $6000 can be added to the mortgage amount as long as the costs are documented and the reduction in monthly utility costs due to the energy improvements exceeds the mortgage payment increase due to the increased mortgage balance as a result of the energy improvements.

3. If the energy improvements cost more than $6,000 then the VA will have to perform a value determination in order to justify the increased mortgage amount.

Examples of Energy Efficient Improvements:

• Solar Hot Water Heater Installation
• Upgrade heater to modern heating unit
• New or more ceiling, wall, floor and attic insulation
• Installation of energy efficient storm windows, doors and or vapor barriers
• Installation of a heat pump
• Installation of a clock thermostat

If you are considering making energy efficient improvements to your home either when you purchase it, or while your refinance, talk to your veteran loan loan officer to find out exactly how you can take advantage of this great opportunity.

FHA Jumbo Loans Popular in AZ, CA, UT is a post from: Ten Day Close

If you live in California, Arizona or Utah – and are shopping for a higher-end home, chances are that you are at least considering financing it with an FHA jumbo loan.

Did you know in many areas of the country FHA will finance up to $729,000 with just 3.5% down? This is a great product and may not be around forever. This is a special product created by HUD when the housing crisis hit and it could been taken away anytime. If you are thinking of buying a new home but don’t have a lot of money for a down payment this is the program for you. Rates are at the lows of 2010. Not to mention, the price drop on homes over $500,000 is tremendous. There are fantastic deals for homes out there for this market.

Here are some basic guidelines:

• Up to $729,000 financed. (based on the county loan limits published by HUD)
• 660 FICO score required.
• 3.5% down payment.
• 30 year fixed rates around 5%

This is a great loan for move up buyers who may be upside down your existing home. You can rent out your existing house and take advantage of the new lower home prices.

We can close your FHA jumbo in just 10 days!

HomePath Mortgages In Arizona: Now Lending is a post from: Ten Day Close

If you are in the process of buying a new home here in Arizona, chances are that you are looking at least a few homes that are “banked owned”.

And if one of those banks that owns a house that you are looking at, there is a good chance that the house is approved for the Fannie Mae HomePath mortgage financing program. So whether it is ready to move in, or whether it needs a little work before you move into it — there is a HomePath mortgage program that will work for financing the home.

Fannie Mae HomePath Mortgage

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance
• No appraisal required — the sales price is the value
• No declining markets policy
• No loans under $20,000
• No more than 10 financed properties
• No prepayment penalties

Fannie Mae Homepath Renovation Mortgage Highlights

• Financing to fund both your purchase and light renovation
• Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate)
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer
• No mortgage insurance

So if you find yourself falling in love with a home that is currently owned by Fannie Mae, be sure to ask about the HomePath Mortgage or HomePath Renovation mortgage program – you might be surprised at how much money they can save you!