Posts Tagged ‘fha mortgages’

Little Known Fact about FHA Mortgage Reserves

One advantage of an FHA mortgage loan is the ability to deposit cash into your bank account with no need for seasoning. Once the deposit is made, you can get a verification of deposit showing the current balance. Unlike standard conforming mortgage loans, the money does not need to be averaged over 60 days. This is especially important if a borrower is “iffy” in getting an approval.

In some cases, a declined application can get an approval with a good amount of reserves. “Reserves” is the amount of liquid money you have available should you run low on income temporarily. A lender will take the amount of your reserve savings and divide that by the amount of your total monthly house payment. This is the number of months’ reserves they count. Six months or more could help a potentially declined application get an approval.

I share this because sometimes a borrower may have other money that is not deposited in their bank account. But by depositing it in their bank account, they can get credit for the reserves, which also makes the lender feel more comfortable.

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FHA Loans in Charlotte - Loans to $303,750

One common misconception about FHA mortgage loans is that they are mortgage loans for the “poor man.” That is far from the truth. Even before the new economic stimulus package, the FHA mortgage limit in Charlotte was $230,470. Now with the stimulus package, the FHA mortgage limit for a single family home in the Charlotte area (including the cities of Concord, Monroe, Matthews, Gastonia, and Huntersville) are $303,750.

However most home buyers over the $150,000 mark don’t seem to give the FHA mortgage a real thought. Maybe its because of the image that has been associated with using Federal funds. Maybe its the fact that over the past several years there was a big push to avoid mortgage insurance (which FHA mortgages have), but now that mortgage insurance is tax deductible, that is a moot point. Whatever the reason, one should seriously consider the advantages of an FHA mortgage loan when buying in the Charlotte area.

The low monthly mortgage insurance, the low downpayment requirement (only 3%), the easier qualifications and easier documentation all make compelling reasons to consider the FHA mortgage. That being said, FHA mortgage loans are not for everyone. I will address those considerations in another post.

But for now, one should understand that the FHA mortgage loan is not just a “poor man’s loan.” There are great advantages to use the FHA mortgage program in Charlotte. And with our expertise, we can help you determine if a Charlotte FHA mortgage loan is right for you.

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Moving to Concord NC?

It seems more and more people are doing just that! Concord NC and Cabarras county are growing! As a matter of fact, Cabarras county NC is ranked as the 29th “fastest growing counties” in the country!

This is no surprise to anyone that lives in the Concord / Charlotte area. Concord NC has so much to offer. Concord is very well known for NASCAR racing, with many NASCAR teams making the Concord area home. Shopping at Concord Mills is a treat in itself, as many shoppers plan day trips to the very unique outlet mall. There are also many area lakes to enjoy. An easy life awaits anyone looking to move or buy a home in Concord NC.

Concord’s real estate market is hot. Being so close to Charlotte but having lower property taxes makes Concord NC a great draw to new residents. And with the increased limits to Concord FHA mortgage loans, a home buyer can buy a home in Concord and get great FHA mortgage loans up to $303,750. This allows a very large selection of beautiful homes to qualify for Concord FHA mortgages.

If you are thinking of moving to the area, seriously consider Concord NC. Great shopping and entertainment, combined with great mortgage programs in Concord are making this area grow fast! No wonder the Concord NC area is the 29th fastest growing area in the country!

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FHA underwriting taking up to 2 weeks

When buying a home in the Charlotte area and using a Charlotte FHA mortgage loan, be sure to allow enough time for the underwriting process. Due to overwhelming demand, the time it is taking for underwriters to actually touch and review a file (known as turn time) is currently averaging 7-10 business days. This means that once your Charlotte FHA mortgage loan application is submitted to underwriting, you will not get an answer back for approximately 2 weeks.

When making an offer for a home for sale in Charlotte, be sure to ask for a little more time to close your loan. In the past 30 days has been sufficient. However, turn times then were 48-72 hours. While we are still closing majority of our FHA mortgage loans in Charlotte within 30 days, I am advising any clients to allow 45 days on the contract. This prevents any potential issues with going beyond the “close by” date.

With PMI companies turning off 100% mortgage loans, using FHA mortgages in Charlotte is a good move. Charlotte FHA loans are less restrictive, have better pricing, cheaper monthly mortgage insurance premiums and now allow loan amounts to over $300,000 for Charlotte FHA mortgages.

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No Money Down… No More!

The day of the 100% mortgage loan in Charlotte is over, at least for now. While lenders are still offering Charlotte 100% mortgage loans, the private mortgage insurance companies are refusing to insure them. This means that zero down home loans are no longer available!

This change affects more than just Charlotte mortgage companies. This is a nationwide change from the PMI companies. So no matter where you live, no money down loans are done.

For those that really need 100% financing home loans in Charlotte, we still have options to work with. Many lenders still allow gift funds from family or work and the Charlotte FHA mortgage program has mortgage loans with as little as $100 down when buying a Charlotte HUD foreclosed home.

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Concord NC gets increased FHA mortgage loan limits

Earlier today, HUD released the updated FHA mortgage loan limits for the Charlotte-Gastonia-Concord metropolitan area. Now FHA mortgages in Concord can go up to $303,750. That is terrific news for this area, for both home buyers and home owners.

Home buyers should really enjoy this. Concord NC is a great area to live.  According to information from City-Data.com, the new FHA mortgage limits for Concord will now allow roughly another 1,500 Concord homes to qualify for great FHA mortgage financing. With low rates, easy financing terms and affordable low monthly mortgage insurance payments, Concord FHA mortgages can open a new door for those that might not otherwise qualify to buy a home!

Concord FHA loans also allow a home buyer to purchase a HUD foreclosed home in Concord with only $100 down. This special program waives the required 3% down payment, making home ownership even more affordable!

Homeowners in Concord now have more options. With the new FHA loan limits in Concord, home owners can qualify for a cash out refinance loan up to $303,750 and up to 95% of the property’s value! With the FHA cash out refinance in Concord, there are no major interest rate adjustments for cash out, making the FHA mortgage rate in Concord much more appealing than conventional mortgages. And conventional mortgages can limit you to only 90% of the property’s value!

This is the best time ever to look into a Concord FHA mortgage loan.

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Charlotte FHA Loan Limits are $303,750

Great news for Charlotte home buyers!

FHA loan limits are increased in Charlotte to $303,750. That is an increase of over $70,000!

This was just posted to HUD’s website. While the limits have been increased, please bear in mind that lender’s may be a little slower in implementation. Technology and system limitations will need to be addressed, as well as how they will manage and package loans on the secondary market. This may take some time, but with HUD opening this door I do not expect lenders to drag their feet either.

As this market continues to fluctuate, be sure you are working with a lender that can stay on top of the changes.

Please celebrate responsibly! LOL

Increased FHA loan limits for Charlotte

When the Economic Stimulus package was passed earlier, we knew the FHA limits in Charlotte were going to increase, but no one knew exactly how much they would increase by.

New FHA Mortgage Limit for Charlotte: $303,750

Earlier in the year, the FHA mortgage limits for Charlotte were increased to $230,740. Now, with the final interpretations published by HUD, the new FHA mortgage limit for Charlotte - Gastonia - Concord is $303,750.00! With the customary 3% down, this means that a home selling for $313,000 can now qualify for a Charlotte FHA mortgage!

This is great news for the Charlotte real estate market! FHA mortgages are flexible, require less money down in many cases and offer lower monthly mortgage insurance. Plus, with an FHA mortgage, Charlotte home buyers may not have as many credit score limitations imposed upon them!

This increase in Charlotte’s FHA loan limit is temporary. It is set to return to normal at the end of the year. So take advantage while you can!

PMI Companies: “680 or Better Please”

If you are seeking 100% mortgage financing with conventional lending, you better get ready to come to the table with solid credit. While Fannie Mae is still offering 100% mortgage loans for Charlotte home purchases, private mortgage insurance companies are making it tougher. Private mortgage insurance companies insure mortgage loans over 80% loan to value against borrower default. So if a borrower fails to pay and the lender must foreclose, the private mortgage insurance company would protect the lender from excessive loss. With the rise in foreclosures around the nation, beginning in March, these private mortgage insurance companies will refuse coverage to any borrower seeking a 100% mortgage loan with credit scores under 680. And since they are the foundation of risk management for Fannie Mae loans, it will handicap Fannie Mae’s ability to provide no money down mortgage loans without great credit.

The good news is that Charlotte FHA mortgage loans are still a viable option for home buyers with credit scores below 680. As a matter of fact, many Charlotte FHA lenders will still accept FHA mortgage loan applications with credit scores down to a 580. There are still a few that ignore credit scores, but those are getting fewer and fewer everyday.

The bottom line is this… Everyone involved in the mortgage process is looking for a return to traditional mortgage programs and guidelines. Lenders, investors and now the PMI companies want good credit and good equity in the mortgages they offer and insure.

If you have less than perfect credit, don’t dispair. While things aren’t as easy as they were a year ago, there are still programs to make your dream of owning a home come true. It may take a little more work and time now, but with the right advice you can make it happen.

Call us today and let us help you get qualified for the home of your dreams in Charlotte (or anywhere in the Carolinas!) Or apply online and get things going quicker!

877-411-9327 Phone or Apply Now.

FHA is not Subprime

That’s the message lenders are trying to get out. To make this message heard, many lenders are putting their own parameters on the FHA loans they will underwrite, above and beyond normal FHA guidelines and requirements. With this article, we will get into what and why.

As of this posting, most FHA lenders are now imposing new minimum credit scores for many of their FHA products. FHA itself does not have any minimum credit scores. However, with the death of subprime many loan officers have been trying their best to force their subprime business into an FHA “manual underwrite” loan mortgage.

“Manual underwrite” means that a borrower does not have the minimum criteria for an automated approval, and therefore a decision must be manually underwritten by a person, not an automated computer system. The manual underwrite was implemented to allow borrowers with less than perfect credit, or limited credit references to provide enough alternative reasons to prove that they can handle a mortgage. Traditionally, for every 10 loans submitted in this manner 5-7 loans would actually get approved and be able to close. However, with the recent trend of typical “subprime” borrowers being submitted for manual underwritten FHA decisions, FHA lenders are seeing only 1-2 out of 10 being approved. And with the steep increase in submissions, that has required lenders to hire more underwriters to keep up with demand. Hiring more people to approve less loans means overhead increases… the costs of each loan is increasing.

To combat this rise, many FHA mortgage lenders in Charlotte and the entire country are imposing their own credit requirements. We are seeing 580 as the average score that most lenders seem to be seeking. That makes sense as most potential borrowers with mid to low 500 scores will typically have more frequent collections and recent late payments. With these changes, lenders are really asking for loan officers to better qualify their potential FHA mortgage loan borrowers. With these changes being implemented, the best news is that underwriting turn times should get back to less than 2 weeks!

Not sure where you stand? As a Charlotte FHA mortgage lender, let us help you get approved for an FHA mortgage loan. If you don’t qualify right now, we can help guide you in the right direction. If you do qualify, we can help you find the best FHA mortgage loan in Charlotte.

Apply Now or Call 877-411-9327.