Escrows For Weather Related Home Completion Items

May 11th, 2022
unfinished house

Lenders are sometimes asked by a mortgage borrower to allow an escrow account to be created for some items to be completed. Repairs cannot be addressed by putting money in escrow. Repairs are usually required to be completed prior to closing. However, lenders may allow an escrow account to be created for items unable to be completed due to weather. Weather related delays are most common in new construction homes.

In my 3.5 decades in the mortgage business, I don’t recall a lender I have worked for ever allowing repair escrows. That is because they are typically messy, and many times end up not being resolved in a timely fashion. There are contractor problems and other situations where the cost exceeds the escrow account reserve. Weather related escrows are a different story, but repair related escrows may be impossible to get approved by a lender. Read the rest of this entry »

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Tidewater Notices on VA Loans

April 12th, 2022
water and beach

If you have never even heard of a Tidewater Notice, you are probably wondering what is a tidewater?! I know the first time I heard the term I was confused. My first thought was, “the property isn’t waterfront, what are they talking about tidewater for?

The Tidewater process by the Department of Veterans Affairs (VA) gives borrowers a way to try to combat a low appraisal valuation before it is even official. Before finalizing the appraisal report, VA appraisers can notify the lender that it looks like the home’s value will come in below the purchase price. This is known as invoking the Tidewater Initiative, or Tidewater for short. Read the rest of this entry »

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Are Well And Septic Inspections Needed To Get A Mortgage?

March 22nd, 2022
septic truck

Well and septic inspections may indeed be required to get mortgage approval. But it depends on the type of mortgage you are seeking.

A conventional mortgage through Fannie Mae or Freddie Mac typically do not require  well and septic inspections. I say “typically” not required because there may be an instance where they are required. Read the rest of this entry »

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How Much Mortgage Does My Car Loan Cost Me?

March 9th, 2022
car loan

When a mortgage lender analyzes your finances to qualify you for a mortgage, they’re looking at all of your debt along with the new proposed mortgage payment. The other debts that they consider outside of your new mortgage payment are debts like minimum credit card payments, car loans, student loans, and any losses from other rental property. They do not look at debts like utility bill payments, car insurance or cell phone bills.

A mortgage lender will approve your loan allowing you to spend a certain percentage of your gross monthly income on your new mortgage payment and your debts.

Let’s see how much more mortgage you could qualify for if you did not have a car loan. Then you can see if paying off a car loan off  leaves you with the cash needed to  make a down payment and pay the closing costs to purchase a new property. Read the rest of this entry »

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New Condo Mortgage Guidelines After The Florida Condo Disaster

February 24th, 2022
building disaster

There have been several announcements regarding condominium deferred maintenance recently.  As a mortgage lender, we must pay attention to announcements regarding  changes in underwriting guidelines from both governmental mortgage agencies that write off all of mortgage guidelines, Fannie Mae and Freddie Mac. We also have to pay attention to guideline changes announced by the various banks that we sell loans to.

Ever since the horrific disaster in Surfside Florida on June 24th 2021 (when the building collapsed due to deferred maintenance), the government agencies and the banks we sell mortgages to have started to incorporate questions related to condominium maintenance into the condo questionnaire. Read the rest of this entry »

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What Can Stop You from Buying a House? Common Obstacles and How to Overcome Them

December 15th, 2021
home buying

You have a down payment saved up, a good credit score, and a low debt to income ratio; it is time to buy your dream home. However, something prevents you from buying the home. What can stop you from buying a house? In this article, we will explore some common obstacles and how you can overcome them.

Read the rest of this entry »

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2-4 Unit Condos Are Easier To Get A Mortgage Loan For These Days

December 5th, 2021
small condominium

In some urban markets a multifamily home is converted to condominiums. For example, a duplex is turned into two condominium units. Or a triplex is turned into three condominium units. Or a fourplex is turned into four condominium units.

The required condominium project review that needs to be done on most condominiums is waived on condos that don’t consist of more than four units. Read the rest of this entry »

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Maximum number of financed properties

November 7th, 2021
monopoly houses

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 »

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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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Getting A VA Mortgage Approved With Student Loan Debt

September 8th, 2021
VA loan US flag

When calculating a student loan payment on a VA loan there are various rules to pay attention to as far as what monthly payment is counted on that student loan debt.

If written evidence shows the student loan debt will be deferred at least 12 months beyond the closing date, no monthly payment is counted.

If a student loan is in repayment or scheduled to begin within 12 months from the date of a VA mortgage loan closing, the lender must consider the anticipated monthly payment in calculating the debt-to-income ratio. A payment is established by calculating each loan at a rate of 5% of the outstanding balance divided by 12 months. Read the rest of this entry »

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