Mortgage Assistance Raleigh NC

August 31, 2009

I’ve been fielding quite a few calls lately from people wanting to get their mortgage modified.  Although we don’t provide loan modification services, I quickly realized that the majority of the callers really didn’t need their loans completely altered by their servicer/provider – they just needed to refinance.  The one problem that was preventing them from doing so was their value.  Either they experienced a drop in the home values in their specific area, or they had a higher rate and hadn’t been in the home long enough to accrue any equity.  Either way would prevent most people from refinancing, but through some not so new programs, the value obstacle is eliminated.  The programs at hand: the Freddie Mac Relief Refinance & the Fannie Mae DU Refi Plus.  fanniemae_bldEach has slightly different eligibility requirements but both will help you move down to a lower rate effectively lowering your monthly payments.  These are not standard transactions; much of the usually considered information may be ignored while lots of additional non-standard requirements will be weighed.

1. The main item that needs to be looked at before even considering either of the programs is the owner of your loan.  To qualify for either of these programs, your loan must be owned by either Fannie or Freddie – not sure about your loan?  Not a problem; you can check both entities on these two websites.

2. The next most important item is your current payment status. You must be up to date with regards to your payments and cannot have any late payments over the last 12 months.  This item really represents a simple risk evaluation on their part – up to date?~~not much of a risk , a couple lates?~~more likely (in theory) to default.

3. The loan to value considerations are quite lenient.  Both programs allow up to 105% loan to value and if you’re slightly over that, you’ll have to pay the balance down to 105% with your own funds and provide documentation to show that you did.

4. Neither of these programs offer much relief for those with run-away seconds.  Both do not allow new subordinate financing or replacement financing.  What this basically means is you’re not going to be able to roll both loans together and if you’re having trouble paying your mortgage because of a high rate second, these programs won’t be much help.  There are other ways to deal with situations like this – give us a ring and we’ll help you find a solution.

5. Some other limitations and items to note:

  • Mortgage Insurance is not always required
  • Unlimited CLTV
  • Limited Cash-Out

There are plenty of other requirements and caveats, but if you’re good on these first four – you’re definitely on the right track.  We’ll need to gather a full loan application from you in order to qualify you, but total time needed for that is around 30min (20 filling out the loan application on-line and about 10-15 minutes on the phone speaking with one of our loan consultants.

As with any of my blog posts, if you’ve got questions, I can help. (919)459.6533

DNJ Mortgage
1350 Sunday Drive
Raleigh, NC 27607
919.459.6560


100% Financing Raleigh NC

August 28, 2009

USDA_Rural_Development-logo-D870D5C861-seeklogo.comThe United States Department of Agriculture: not just an organization for developing farming and agricultural policy.  The USDA’s Rural Development office has the goal of attempting to “improve the economy and the quality of life in rural America.”  Near the end of 2007, RD had provided over $80 billion in loans and grants which by now, the total amount is probably in the 90’s.  It all makes sense if you think about it – not many people want to live far away from the city and all of its amenities but if there’s 100% financing for the homes out there, why not?  Hey, I just personally bought a home in USDA territory with 100% financing, so I’m the perfect person to tell you what to expect and how to qualify.  First we’ll start with a useful link that you’ll need to orient yourself and because of the coding of the site, you’ll need it as a starting point to access all the points of eligibility. [ USDA Eligibility Page ] Go ahead and click on the link and take a quick look – you’ll see a navigation bar on the left, we’re going to be focusing on the property and income eligibility pages.

[Credit Scores] Like any loan program, a borrower must meet certain requirements to be eligible.  USDA loans require a good/fair credit score, much lower than traditional conforming loans, but still basically in check.  As of today, the majority of lenders that offer USDA loans require a 620 minimum credit score; not too bad – even with some dried up collections or lack of available credit, 620 is pretty achievable.  There are situations where your broker/loan representative can provide a written letter of credit explanation to the lender in case you’re close to the 620 cut-off.

[Income] There are income requirements or guidelines that you must fall in line with.  This program is primarily designed for those who have a median income.  A quick example: the income limit for two adults (no children or other residents) is $88,400.  If you’re unsure of your income eligibility – go to the USDA Eligibility Page, look for the first “Income Eligibility” section and click on the “Single Family Housing” link.  This will bring you to an income form that you’ll be able to perform an income calculation with.  Back to the example: just because you may be moving into a home with your significant other, doesn’t mean you have to both be on the loan- call us and we’ll get into the details a bit more.

[PMI] A great aspect of this program is the fact that you’re not going to have to pay PMI or private mortgage insurance.  When financing a home for more than 80% of its value, you have to pay mortgage insurance until you’ve accrued 20% equity in the home.  The PMI payment can range from $50 to $150 depending on the amount borrowed and the terms of the loan.  This is definitely a chunk of your monthly mortgage payment and when it’s gone you notice.  A definite plus to the USDA option.

[Interest Rates] The rates that are available for this program are fairly aggressive and very similar to what’s available for conventional rate products.  If you’re super curious to what an available USDA rate would be today, just ring us and we’ll let you know.

[Area Eligibility] You’ll be quite surprised how much of our lovely state is eligible for USDA programs – around 92% of North Carolina.  I recently helped a friend search for properties in and around Salisbury NC.  She had her eye on a bungalow in a small neighborhood on the west side of town.  After we consulted the eligibility map, we saw that theusda_maphome was just outside the eligibility zone, about 1 block away from being eligible.  She quickly spotted a similar home up the road and the rest is history.  The map is a bit tricky to use, but it should work in any browser and if you take a minute, you’ll be able to see what’s what.  There’s also an address finder application that you can use – do note however that it doesn’t find EVERY address on the map – you may want to contact us if you’re not completely sure.  Most Realtors will advertise USDA eligibility prominently on their listings, so you may not have to dig too much.

[$8,000 Credit] I mentioned the tax credit a few times previous, but it IS available to those who purchase a home with a USDA loan before November 30th.

So there you go, the basics on what’s required, what’s provided and what to expect.   The loan process runs parallel to that of conventional products – inspections, appraisals, etc.  This is definitely a solid way to buy smart and own in some really wonderful parts of NC.  I brushed the surface so if you’ve got any questions or have any comments, just contact us – we’re always available to talk in person or over the phone.

DNJ Mortgage
1350 Sunday Drive
Raleigh, NC 27607
919.459.6560


daily mortgage interest rates from DNJ Mortgage Raleigh NC –

August 27, 2009

twitter-iconI set up a twitter account awhile ago, mainly just to secure the DNJ mortgage name from would-be fakers.  I recently realized that it’s a perfect opportunity to help our clients and our prospective borrowers keep in touch with current interest rates, our current rates.  Because we have amazing relationships with a healthy portfolio of wholesale lenders, our rates are almost always lower than what you’d find at your local bank.  I’m definitely not doing this so I can be lazy and just point rate calls to the twitter page – not at all.  In reality, you can obtain any rate you’d like, as long as you have the $$.  The rates that will be updated daily are full cost – ie. they are the lowest rates that you can get without paying points, that is, as long as you qualify.  Loan to value, FICO scores, loan amounts, etc will still weigh in on the rate that is ultimately available for your certain situation, but regardless, we’re still keeping you informed with what is available.  I’m going to try and do a fixed 30yr rate and some arm products and whatever is amazingly low during that given day.  After some thought, it seems like rates would be the only thing that I’d personally want to see tweeted from my mortgage company, so I think people will find it quite useful.  So join up and follow us as we help keep you in the loop.

DNJ Mortgage
1350 Sunday Drive
Raleigh, NC 27607
919.459.6560
http://twitter.com/dnjmortgage


What is your home’s value?

August 26, 2009

The low down

Figuring out your home’s value is a bit more difficult than ever, and doing it for free is darn near impossible.  But to get a basic idea, you can approach the situation with some info from this post.  But to disclaim up front, no value from these methods should be relied upon when making a serious decision about your mortgage or financing situation.

Traditionally, like I explained in a previous entry about the HVCC, appraisers would stick to certain areas of town and would slowly develop their expertise with regards to the homes and neighborhoods in that area.  They could often provide some idea of a home’s value in a certain area just by considering its location relative to other homes they’ve appraised.  This guestimate would help the borrower determine if moving forward with the refinance was worth the cost involved.  Because of the HVCC, this practice isn’t an option anymore.  Recently, people have started to pay closer attention to their tax values when attempting to determine their value.  The tax value of most homes is a fair to good indicator of the value but I’ve noticed in the last two years that these values are farther and farther from realistic figures.  So I’m going to give you some alternate methods of exploring your home’s perceived value.  None of these will include any value increases that may be expected from remodeling or updates.  When major home renovations are done, only a full appraisal will provide an accurate value.  You should not make any decisions just based off of these methods – the market in Raleigh as well as everywhere else is quite turbulent and determining the true value of your home should be left to a professional appraisal.

Some Quick and Easy (& not so accurate) Methods-

1. Zillow

Zillow.com provides estimates of home values and real estate trends for most US cities.  Zillow accomplishes this by purchasing large quantities of real estate data, mapping lot sizes, and comparing recently sold comparable sized homes in that area.  Because its system is run primarily from purchased data that is not always 100% accurate, its estimates are sometimes completely off the mark.  I’ve used it and the majority of the time the estimate provided is plus or minus $8,000 from the tax value of the home.

2. eppraisal & Yahoo

Eppraisal and Yahoo just report an average of the values given on other websites (zillow and cyberhomes).  The values on these sites seem a bit on the high end and aren’t very reliable or realistic, in my opinion.  Comparing my home, there’s a $30k difference between the tax value and the eppraisal estimated value.  I’m not sure about you, but my financial planning doesn’t work with that kind of variance.  The only good aspect of these two services is that they provide recent sales data for you to compare.

3. Cyberhomes

This runs closer to what zillow has to offer but tends to estimate more conservatively.

-Determining the value via a per sqaure footage calculation-

If all the free home valuation websites have narrowed your value down to a $50k+ range and you’re ready to explore some more serious calculations, you may want to get out a sheet of graph paper and log into your County government tax & property website.  I’m going to use Wake County’s as an example.  The property search page where you enter your address can be found here.  After you’ve got the account summary for your home opened, you’ll see what value the city has determined your taxes be based from (image #1).  At the top in blue you’ll see a series of links.  What you’re wanting to consider is what you’ll find on the recent sales page (image #2).  This page will show you all the data on the most recent sales in the immediate area (image #3).  Now here’s where your work begins.  To find a semi-accurate value to work from, you’ll need to 1. calculate the per square foot price of your home (tax value/sqft) and 2. compare it to the per square foot price of homes that were recently sold, dates for these sales are in the very last column on the right.  Make sure you’re comparing the sqft price for homes that are close to your home’s size, location, and amenities (garage, pool, etc).  If you’re calculation brings you to a $180/sqft price and the identical home next-door just sold for $150/sqft, then you know that your tax value doesn’t represent your actual value.  And again, if you’ve updated all your fixtures to solid gold marble accented pieces, this method will not reflect those upgrades.  This process isn’t totally accurate and shouldn’t be used to base any of your decisions off of, but it will provide a much closer estimate of your value than just dialing up your address on zillow.

 

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DNJ Mortgage
1350 Sunday Drive
Raleigh, NC 27607
919.459.6560


first time home buyer tax credit raleigh nc

August 25, 2009
The $8,000 Tax Credit Breakdown For First Time Buyers
Available until December 1st 2009 with some speculation, although no rumors have been confirmed, that the credit will be extended through 2010.
The Basics –
This program provides a credit worth 10% of the purchase price with a maximum amount of $8,000.
This credit doesn’t have to be repaid.
Only first time home buyers are eligible for this credit. Technically, by IRS standards, a first time buyer hasn’t owned a primary residence for the last three years.
Any home qualifies, whether you’re building or even considering a houseboat!
Am I Eligible?
1. You must have purchased a home this year or plan on finalizing a purchase on a home before December 1st 2009.
2. Are you a first time home buyer? Technically, you’re not a first time buyer if you owned your primary residence in the last three years. If you file jointly with your spouse, neither of you could have owned a primary residence in the last 3 years. But, if it’s an unmarried or joint purchase, the credit is available for the eligible person. A great example of this would be if a home is being purchased jointly by a parent and their son or daughter. Owning a vacation or rental property wont disqualify an applicant.
What are the income limits?
The single taxpayer income limit is $75,000 and for married taxpayers who file jointly, the limit is $150,000. There are some provisions for people with modified adjusted gross income above these two points. We can provide you an estimate of the amount of tax credit you’re eligible if your income falls outside these ranges.
I swear I heard that this credit had to be paid back!
Nope; that tax credit was put forth by Congress in 2008 and because it had to be paid back was really just an interest free loan. This program provides a true tax credit as long as you keep the house for your primary property for no less than three years (if you dont, you’ll have to repay the credit). This credit isn’t a tax deduction; those are discounts subtracted from your income to calculate a decreased tax amount (not the same deal).
Do I have to wait until I file my taxes to get this tax credit?
No! Talk to your tax professional about amending your last tax return.
Can I get this tax credit with a FHA or USDA loan?
Yes – this credit is available for almost any loan product.
For non-US citizens
As long as you’re a non-resident alien and you’ve owned a principal residence in the last three years, then you should be able to claim the tax credit.Do make sure you meet all IRS requirements set forth in the IRS Publication 519.
Overview of the first-time homebuyer credit on the IRS’s website. http://www.irs.gov/newsroom/article/0,,id=204671,00.html
DNJ Mortgage
1350 Sunday Dr
Raleigh NC 27607
919.459.6560
integritylender.com

The $8,000 Tax Credit Breakdown For First Time Buyers

Available until December 1st 2009 with some speculation, although no rumors have been confirmed, that the credit will be extended through 2010.

-The Basics –

  • This program provides a credit worth 10% of the purchase price with a maximum amount of $8,000.Our property
  • This credit doesn’t have to be repaid.
  • Only first time home buyers are eligible for this credit. Technically, by IRS standards, a first time buyer hasn’t owned a primary residence for the last three years.
  • Any home qualifies, whether you’re building or even considering a houseboat!

Am I Eligible?
1. You must have purchased a home this year or plan on finalizing a purchase on a home before December 1st 2009.
2. Are you a first time home buyer? Technically, you’re not a first time buyer if you owned your primary residence in the last three years. If you file jointly with your spouse, neither of you could have owned a primary residence in the last 3 years. But, if it’s an unmarried or joint purchase, the credit is available for the eligible person. A great example of this would be if a home is being purchased jointly by a parent and their son or daughter. Owning a vacation or rental property won’t disqualify an applicant.

What are the income limits?
The single taxpayer income limit is $75,000 and for married taxpayers who file jointly, the limit is $150,000. There are some provisions for people with modified adjusted gross income above these two points. We can provide you an estimate of the amount of tax credit you’re eligible if your income falls outside these ranges.

I swear I heard that this credit had to be paid back!
Nope; that tax credit was put forth by Congress in 2008 and because it had to be paid back was really just an interest free loan. This program provides a true tax credit as long as you keep the house for your primary property for no less than three years (if you don’t, you’ll have to repay the credit). This credit isn’t a tax deduction; those are discounts subtracted from your income to calculate a decreased tax amount (not the same deal).

Do I have to wait until I file my taxes to get this tax credit?
No! Talk to your tax professional about amending your last tax return.

Can I get this tax credit with a FHA or USDA loan?
Yes – this credit is available for almost any loan product.

For non-US citizens
As long as you’re a non-resident alien and you’ve owned a principal residence in the last three years, then you should be able to claim the tax credit.  Do make sure you meet all IRS requirements set forth in the IRS Publication 519.

Overview of the first-time homebuyer credit on the IRS’s website. http://www.irs.gov/newsroom/article/0,,id=204671,00.html

DNJ Mortgage
1350 Sunday Dr
Raleigh NC 27607
919.459.6560


getting ready for a new home purchase – raleigh nc

August 18, 2009

photo36I just got off the phone with a friend who’s ready to start shopping for a new home and I thought I’d do a brief recap of the recommendations that I provided him. I blogged previously about getting yourself prepared for a refinance, and this post will run along the same lines. Doing your due-diligence goes quite a long way with regards to financial situations like this. When you initially speak to a loan officer, they will “pre-qualify” your situation. What they’re basically doing is considering your stated income and debt levels and possibly doing a credit check to estimate what dollar amount you would be qualified to borrow. It’s a “in theory” type of situation. In theory, if your income and the rest is what you’re saying it is, here’s the $amount you’re qualified t

o borrow. When you’re ready to actually move forward and make an offer on a home, you’ll need to get pre-approved. This is when the loan officer will request items that will verify your financial situation and calculate your exact debt ratios and the result is that you’re basically approved on the broker’s side for the loan (pending underwriting by the lender).

Most people in the home buying process took some time with a professional and have narrowed their purchase range to a certain $ amount and have shopped around a bit. Whether you’re ready to move on a home or not, you’re still going to need to dig some items up, so here’s a quick list.

  1. Most recent paystubs for the past 1 month. (The person processing your loan will need to make sure that your gross income figure is correct so they’ll need a full 30 days of income proof. Most larger companies provide an online system that you can simply export a screen capture or email a pdf of your previous stubs. Brokers do not need the original copies, but if provided, we’ll make copies for your file.
  2. W2’s for the last two years. (People do move jobs quite a bit, and pay rates fluctuate depending on what type of profession you’re in; these w2’s will help us calculate any additional non-salaried pay, bonuses, etc. into your income calculation.)
  3. Signed copies of your tax returns for the last two years (Lenders are getting stricter with their underwriting process. These tax returns aren’t always required but as the industry continues to tighten their restrictions, you may want to dig them up just in case. The tax returns you provide will help to not only verify your income, but your overall expenses and deductions helping the underwriter to gain a more complete picture of your financial profile. Tax returns are absolutely necessary for those who are self employed or independent contractors.
  4. Bank statements for the last 60 days. (This helps to verify your cash flow and your assets on hand. These are only useful when printed out right before you’re about to submit the remainder of the paperwork to the lender/broker.)
  5. Any retirement or investment account statements.(Same as above)

The best advice that I can give is that if you’re unsure of how your unique situation may affecta purchase orstackofpapersrefinance, dig up these documents, and go see your mortgage professional. A little face time and number crunching can save you a lot of trouble. I’ll continue with some additional info related to this post with regards to the costs that you can expect to see for closing a purchase.

Today’s market was mixed. Stocks recovered a bit from yesterday’s slide. Rates are holding

steady right around 4.9% –

DNJ Mortgage
1350 Sunday Drive.
Raleigh, NC 27607
919.459.6533


what is a buydown and how can it save me money – ralegh nc

August 18, 2009

This is a partial re-blog of something my associate Cari DeCandia wrote.

There are two types of buy-down programs: temporary and permanent.

A permanent buy-down is where the borrower or seller pays discount points to the lender to have a lower interest rate for the term of the loan. Often a permanent buy-down does not make financial sense due to the amount of time needed in that loan to recoup the costs of the buy-down.

A temporary buy-down is where the borrower, seller, or lender pre-pays interest for the first one to three years in order to have a lower interest rate. The most common types of temporary buy-downs are:

3-2-1 buy-down
2-1 buy-down
1-0 buy-down

With a 3-2-1 buy-down…if your note rate is 6.5%, for the first year your interest rate would be 3.5%, 4.5% the second year, 5.5% the third year and 6.5% years four through thirty.

With a 2-1 buy-down…if your note rate if 6.5%, for the first year your interest rate would be 4.5%, 5.5% the second year and 6.5% for the remaining years in the term.

With a 1-0 buy-down…if your note rate is 6.5%, you would have an interest rate of 5.5% for the first year and 6.5% years two through thirty.

Temporary buy-downs have been most commonly used by sellers/ builders that are trying to entice buyers with lower than market interest rates for the first few years resulting in a lower monthly mortgage payment.

Why temporary buy-downs and the “No Closing Cost Loan” are perfect together?

If your loan amount is greater than $200,000, DNJ Mortgage has the ability to use the commission the bank pays us for originating the loan to pay for the buy-down cost as well as closing costs. This gives our customers a better than market interest rate at no cost to them. We can continue to refinance at no cost using a buy-down program to maintain the lower than market interest rate.

Example:Customer has a current loan amount of $250,000 with an interest rate of 6.625% on a 30 yr fixed. Current monthly payment is $1600.78.

Based on current market conditions we are able to offer them a no closing cost rate of 6.5% with a one year buy-down. This gives them an interest rate of 5.5% for the first year and then the loan converts to a 30 yr fixed at 6.5% after the first year. By refinancing at no cost, they received an interest savings of $2500 in just one year. At the end of the year, they have three options:

  1. Keep the loan and maintain the 6.5% interest rate.
  2. Refinance again with no closing costs into another one year buy-down.
  3. Refinance with no closing costs into a different loan product (ARM, 15 yr fixed, etc).

As you can see, using the no closing cost loan along with a temporary buy-down provides are customers with several benefits including:

  1. Lower than market interest rate at no cost them resulting in lower monthly payments.
  2. Increased interest savings.
  3. A hedge against higher interest rates during periods of economic strength.

DNJ Mortgage
1350 Sunday Dr
Raleigh, NC 27607
919-459-6560