The FHA 203K Streamline Rehabilitation Loan Program is a great loan that can used to purchase a property and it offers the ability to make up to $35,000 in non-structural repairs/improvements.

This loan can be used for improvements of HVAC, roofing, plumbing, electrical, energy efficient appliances, weatherization, flooring, lighting, cabinets and the list
goes on…

Certain criteria must be met when utilizing 230K Streamline Rehab Loan;

• The work must be completed by a licensed contractor. Who is approved by the lender and provides a detailed bid for the work to be completed.
• The bid is provided to the appraiser who uses it when compiling his determination of value. Future appraised value is used.
• Work must commence within 30 days of the close of escrow.
• Can only be used on 1-4 unit single family residences which are owner occupied.

There are many more nuances to the FHA 203K Streamline Rehabilitation Loan that mortgage professional can discuss with you to determine if this loan is right for you.

Not all lenders offer the FHA 203K loan, consult with Robert Turrietta.

I am excited to announce we are now able to expedite FHA Flips through our own processing and underwriting departments.  It’s important to note the following conditions that will apply:

• Home Inspection is required.
• Two full FHA appraisals are required.
• 45 Day Escrows are recommended.

You’ve saved a down payment and feel you’re ready to buy your first home. You have no idea of what it’s going to take to secure a mortgage loan. You’ve read the headlines and know getting a home loan these days is much harder than it was five years ago. But what does it take to qualify for a home loan?

The first thing you need is credit history.  Most lenders now require a minimum credit score of 620 and three trade lines (accounts) with satisfactory payment history for 12 months. If you have not established credit seek the advice of a mortgage professional.

If you have established credit but have issues with one or more of the following; payment history, collections, charge offs, judgments, repossession or maybe a past bankruptcy, short sale or foreclosure seek the advice of a mortgage professional. They will be able to offer the best advice on your specific situation to improve your credit worthiness.  These issues may require you to pay off or pay down some account balances, or wait the required time period after a bankruptcy, foreclosure or short sale.

Next, income is required.  You must have a constant source of income to be used as a basis for repayment of the debt. In order to ensure you can pay the existing debt you have, and repay the new mortgage a basic calculation will be used to determine your debt-to-income ratio (add up all the debt that you currently have, plus the new housing payment and divide it by your gross monthly income). The maximum allowable debt to income ratio varies for each type of loan. If your debt to income ratio exceeds 50% you may need to pay down some of your existing debt. Seek the advice of your mortgage professional.

Assets, or in simple terms, cash in the bank! Down payment requirements vary with loan type. For example, FHA (Federal Housing Administration) has a minimum down payment requirement of 3.5% of the purchase price of the home, whereas a conventional loan may have a down payment of 10 to 20%. Gift funds are allowable for most loans. Your mortgage professional will advise you of specific criteria for your loan type.

You’ll also need to take into account the closing costs for the purchase. A rule of thumb is roughly 3% of the purchase price is needed for closing costs. In some instances, the seller may contribute towards the closing costs. There are maximum amounts the seller is allowed to contribute and these vary with loan type. Consult with your mortgage professional for specific details for your loan.

Lastly, you’ll need to provide a loan application, authorization to have your credit reports pulled and supporting documents for the loan you hope to secure. Below is a list of typical items a lender will ask for.

• Pay stubs to encompass a 30 day period.
•  Federal Tax Returns for the most recent two year period.
• W2’s and/or 1099’s for the two most recent tax years.
• Bank statements for all accounts showing most recent two month activity.
• The statement of any IRA, brokerage or investment account you will be withdrawing funds from to close your loan. 

Although this is a very basic list of items needed to initiate the preapproval of a loan, you will most likely be required to provide additional documents once the loan is reviewed by underwriting. Your mortgage professional will advise based upon specific loan type and your personal situation.

After months of submitting offers  you’ve finally gotten into contract!  You’re excited and planning home improvement projects and looking at new furniture…..STOP!!!!!

Until you’ve closed completely closed escrow don’t commit any of the PITFALLS that could derail your purchase altogether. Too often consumers get ahead of themselves or unconsciously make a move they end up regretting. Please consult with your lender before attempting any of the following common mistakes.

1. Don’t apply for any new credit!  Do not make any major purchases. Credit inquiries will lower your credit score immediately and may jeopardize your ability to qualify for your loan.
2. Don’t close any credit account! Unless you’ve been advised by your lender, do not close any credit accounts. Unused open credit accounts are a good thing, this says you don’t rely on credit.
3. Don’t miss making any payments! In today’s credit market your credit is monitored until the closing of your loan. One single late payment can drop your credit score 75 points or more.
4. Don’t dispute anything on your credit report! In today’s credit market  lenders may require that any disputed item on your credit report be removed. Your lender will advise you of any items to address.
5. Don’t move money around! Unless you’ve consulted with your lender don’t transfer money from one account to another. Lenders are required to verify the transfers and document deposits.  Don’t open any new bank accounts, your credit may be checked by the banking institution, these types of inquiries will lower your credit score.
6. Don’t change jobs! Your lender has qualified you based upon your current employment and income. Unless you’ve consulted with your lender don’t make any changes in your employment until after you’ve closed your mortgage loan.

Please consult with your lender before making any decision which may jeopardize the ability to make your dream of homeownership a reality.

“There are disputed items on your credit report”,

By now we’ve all heard these words, and have had to say these words:

“the dispute must be removed or the transaction can’t close”.

First things first, get the story from the borrower on what happened to create the dispute. Before the borrower even leaves your office get on the phone with the creditor and request the letter from them. This task is easier for the lender to accomplish with the borrower in their office and on the phone with them rather than leaving it up to the borrower to accomplish on their own. You run the risk of losing the transaction due to the borrower getting frustrated with the process.

Once the letter stating the dispute has been removed and is in your procession fax it to CBC Innovis and start the re-score process. Usually, this takes 5-10 business days from start to completion. You’ll receive notification from CBC Innovis once they’ve heard from the three bureaus indicating the account has been updated. At this point you’re clear to re-pull the new report.