Condominium Litigation When Getting A Mortgage

October 7th, 2021
law books judge gavel

If a condominium has litigation against it, to get a loan approved there are certain things a mortgage lender has to document or the loan may be denied.

A mortgage lender has to prove that the litigation has no impact on the safety and structural soundness of the condo.

And the insurance carrier that insures the condominium building has to have agreed to provide the defense, and the amount of the litigation must be covered by the HOA’s insurance.

There are other reasons why litigation against a condominium may not be an issue, such as:

  • It is non-monetary litigation including, but not limited to neighbor disputes or rights of quiet enjoyment;
  •  the HOA is the plaintiff in the litigation and not the defendant;
  •  the reasonably anticipated or known damages and legal expenses are not expected to exceed 10% of the project’s funded reserves.Financing a condominium can be tricky for other reasons. Mortgage guidelines have the ability to change at any time, so always talk to a well-reviewed mortgage loan officer to make sure you understand the current guidelines and how they might apply to you.
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2021 Mortgage Loan Limits

March 23rd, 2021
loan limit

Every year, the Federal Housing Finance Agency (FHFA) sets a dollar cap on conventional mortgages that Freddie Mac or Fannie Mae are allowed, commonly referred to as a conforming loan limit. In 2020, the conforming loan limit for a single-family home was $510,400. This year, the conforming loan limit for a single-family home increased to $548,250, nearly 7.6% higher!

This means Freddie Mac or Fannie Mae can purchase conventional loans valued at or under the conforming loan limit from mortgage lenders. In most areas, the maximum conforming loan limits are as follows: Read the rest of this entry »

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Can paying off a debt help qualify you for a mortgage?

February 25th, 2021
debt paydown

When you qualify for a mortgage loan, it may not be for the amount you want. Outstanding debts can affect how much you are able to borrow. But in some instances, you may be able to pay off the debt in order to qualify for a larger loan.

If you reduce the number of installment payments to 10 or fewer, the loan may not be included in your debt-to-income ratios. However, if the debt requires a large monthly payment, an underwriter may consider it a risk in your debt-to-income ratio. Read the rest of this entry »

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Getting A Mortgage In Community Property States

January 17th, 2021
divorced couple

What is a community property state?

In the U.S., nine states have tried to alleviate the pressure of divorce by passing community property laws.

In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, community property laws require divorcing couples to split assets acquired during a marriage equally. Marital property includes earnings, all property bought with those earnings, and all debts accrued during the marriage.

When getting a mortgage in a Community Property State, a spouse might not be on the new mortgage but their credit report will still be pulled and their debts will be added to the debt-to-income ratios of the mortgage borrower. However, this only applies to FHA & VA mortgages taken in the above states, not on Conventional loans. Read the rest of this entry »

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Mortgage Forbearance in 2020

August 29th, 2020
no money

Forbearance, only do it if you absolutely have to. Some people are taking a Forbearance on their mortgage as a way to take a break on their mortgage payment when they really do not need to.

But forbearance does not mean you can skip mortgage payments and never pay them back. You have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.

Taking a forbearance will also impede your ability to refinance. Having a forbearance on your credit report means you cannot get a new mortgage. You would have to bring the loan current. Read the rest of this entry »

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SELF EMPLOYED LOANS DURING COVID

July 25th, 2020
COVID

Newly revised mortgage guidelines for self-employed people due to the Covid-19 pandemic:  There are temporary requirements for assessing income derived from self-employment.  The additional due diligence is due to the disruption from the pandemic.  Mortgage lenders now need to consider if and how a business has been impacted and the likelihood of income continuance.

There is additional income documentation required and you may need an audited Profit & Loss statement with supporting documentation for the Profit & Loss statement.  The continuity and stability of income is what will be considered. Read the rest of this entry »

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Mortgage forbearance

July 1st, 2020
no cost

Forbearance – you should only do it if you absolutely have to. Some people are taking a forbearance on their mortgage as a way to take a break on their mortgage payment when they really do not need to.

Forbearance does not mean you can skip mortgage payments and never pay them back. You have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.

Taking a forbearance will also impede your ability to refinance. Having a forbearance on your credit report means you cannot get a new mortgage. You have to bring the loan current to do so. Read the rest of this entry »

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How Much Mortgage Can I Afford?

May 28th, 2020
approved or declined

When you buy a new home, you need a mortgage to purchase it. And before you get a mortgage, you need to determine how much mortgage you qualify for. Different sources may qualify you for different mortgage amounts. And how much you qualify for does not necessarily equate to how much you can afford.

How much you can afford is based on your personal budget. When a mortgage lender tells you how much you can qualify for, that is the highest mortgage amount they’ll approve you for. But this may not be the mortgage size you end up closing on.  Read the rest of this entry »

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6 Tips on Choosing a Mortgage Lender or Broker

April 10th, 2020
bad versus good

People spend a  lot of time looking for the perfect home. There are the countless hours spent poring over real estate listings, the weekend trips to open houses, and the days of driving with your realtor from showing to showing. However, choosing a mortgage lender or broker is often treated as an afterthought—many buyers simply go with their own bank or a broker/lender recommended by their realtor without researching competitive rates and looking for lenders who will also educate them.

This is a critical mistake. Read the rest of this entry »

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VA $0 Down Payment Loans To Infinity?!

March 29th, 2020
house and calculator

Prior to 2020, veterans could borrow more than the Veteran’s Administration (VA) Loan Limits capped amount, but had to have a down payment of 25% of the difference between the maximum loan limit and the sales price. As of January 1, 2020, the VA has started to allow $0 down loans that exceed the county loan limits.

So now, if a veteran wants to buy a home for $1,000,000 with no money down, they can. $2,000,000? Sure thing. $3,000,000? No problem! However, there are rules and guidelines that come with this new change. Read the rest of this entry »

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