If you own a business and have a loan for it, and you are planning on buying a home, you might be wondering if the business loan will affect whether or not you can get a mortgage. A business loan can impact your credit score if you are the sole proprietor of the business and take out the business loan in your name instead of the business’ name, or if you personally guarantee the loan. A lender will be looking to see if you and your credit are stable when they decide to give someone a mortgage loan.
There are some mortgage agencies, like Fannie Mae, that will not do a loan for an investment property buyer that already has what they consider to be excessive financed properties.
If you are buying a new primary residence, there is no limit to the number of financed properties that you already have.
However, if you are buying a second home/vacation home or rental property, you cannot have more than 10 financed properties already. Read the rest of this entry »
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 »
With a VA loan, the United States Department of Veterans Affairs requires that the closing costs on a VA refinance be recouped in 36 months or less. If the recoupment period is over 36 months the loan will be rejected.
In other words, the refinance closing costs divided by the monthly savings has to be 36 or less, signifying the number of months in the recoupment period.
For example, if the closing costs on a VA refinance are $3,000 and the monthly savings on the refinance are $400 a month, the recoupment period is 7.5 months because $3,000 divided by $400 a month in savings = 7.5 (well within 36 months). Read the rest of this entry »
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 »
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 »
The 10 Year Treasury Bond was around 1.8% as of October 28th 2019.
The 10 Year Treasury Bond is not a direct correlation to mortgage rates. It is simply good to know historical information on treasury bond rates.
On August 2nd 2019 the 10 Year Treasury Bond was 1.846%.
On September 3rd 2019 the 10 Year Treasury Bond was 1.461%.
Below are some interesting historical numbers:
In 2018 the average yield of the 10 Year Treasury Bond was 2.91%.
In 2017 the average yield of the 10 Year Treasury Bond was 2.33%.
In 2007 the average yield of the 10 Year Treasury Bond was 4.63%.
In 1997 the average yield of the 10 Year Treasury Bond was 6.35%.
In 1987 the average yield of the 10 Year Treasury Bond was 7.18%.
In 1977 the average yield of the 10 Year Treasury Bond was 7.42%.
Where is the 10 Year Treasury Bond headed next? Stay tuned!
*The source for these numbers comes from:
A VA loan is a mortgage loan guaranteed by the Veterans Administration. There are numerous mortgage guidelines for a VA mortgage. I wanted to list some of the more important ones below, but you always need to speak to an experienced mortgage loan officer and have them discuss your specific circumstances as there are many other things to consider in addition to the below. Read the rest of this entry »
Jumbo mortgage loans are usually confusing to the average mortgage consumer. No one seems to know what defines a Jumbo mortgage loan, and no one realizes that there can be different underwriting guidelines for Jumbo mortgage loans than for non-Jumbo (also called Conforming) mortgage loans.
Jumbo loan amounts may vary county by county.
It is first important to know that there can be three different loan amount categories. There are:
- Conforming loans, which in 2019 go up to $484,350
- Conforming “High Balance” loans, which can go from $484,351, to as high as $726,525 if you are in a high cost area.
- Jumbo loans (also called Non-Conforming loans) are loans higher than the county Conforming loan limit.
I frequently have people ask me for “one of those no-cost refi’s”. Some people think that mortgage lenders are so hard up for business that they are willing to lose money and simply pay the closing costs for the mortgage borrower. I don’t know of any businesses where losing money is part of the process of making money. A no-cost refi actually comes with a cost…a higher interest rate.