Credit Tip from National Credit Care: Part 3

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Part 3
Statutes of Limitations?

Maybe it's due to the horrendous natural disasters Florida, Texas and California must endure, or the fact that everyone else feels good by all that Vitamin A provided by the sun but boy oh boy do those States look out for you if you owe someone money!

There are four categories of debt that each state decides the length it is collectable for: Oral agreements (I agree, sounds rather worthless they carry a bigger punch than one would assume); Written agreements (where your typical collected would be located, like a medical debt); Promissory Notes (installment loans like your mortgage or student loan); and Open-ended Account (your revolving accounts like a credit card.) Check out this sweet table HERE if you want to know your States statutes of limitations for a particular debt. The different between legally owing someone for 3 years compared to 15 years is a crazy difference.

Just remember one thing (a story we get every other minute), when you hear someone boast to you of a tremendous story that they negotiated a debt for pennies on the dollar, it's because the debt was probably outside the States collectable period and therefore paying anything was far too much. Not to mention they could be looking at that same collection for another 7 years on their credit report due to reactivity. Just because debt is not enforceable in court doesn't mean the collector still cannot try to fool you in paying in what they believe is still owed. I hope you enjoyed this information, don't hesitate to get those referrals over asap to your URL LINK so we can close you some more loans.


Devin Norcross
Regional Director and Manager National Credit Care
Cell: (303)500-7697 Office: (866)595-6313 Ext. 403 Fax: (877)754-5724 Email: devin@nationalcreditcare.com http://www.nationalcreditcare.com/

FHFA Announces Maximum Conforming Loan Limits for 2018

Good news: the Federal Housing Finance Agency (FHFA) announced that it will raise the maximum conforming loan limits for Fannie Mae and Freddie Mac mortgages. 

Beginning Jan. 1, 2018, the maximum loan limit will be $453,100, up from $424,100 in most markets throughout the U.S. (higher limits will be in effect in higher-cost areas).

Borrowers can put as little as 3% down on conventional loans with conforming rates.

Avoid the “High Balance” interest rate bump.

More access to mortgages with fewer “High Balance” overlays.

Find out more information by following this link!

2 Hour CE Credit Class "Renovation Financing"

When: Thursday November 30th, 11am –1:30
Where: Stony Point Conference room (1 St. Floor)
9020 Stony Point Parkway, Richmond, VA 23235
Cost: $15 payable to RAR, or cash.

LUNCH INCLUDED

Brought to you by Prime Lending and sponsored by RAR, this DPOR approved CE class includes acquisition, tax credits and abatement, mortgage qualifying guidelines and programs, energy efficiency financing, market analysis, and much more!

Learn all you need to know to help your buyers and sellers use renovation financing to make and save more deals.  Longest running CE class on Renovation in Virginia.  

“The worse the house the better”.

VA Home Loans – A Valuable Benefit

A VA home loan is a great benefit to military personnel during and after their service. PrimeLending understands the importance of a “home base” for military and their families and is proud to be able to help active and retired military use this product to meet their unique needs.

VA home loans are partly guaranteed (typically a quarter of loan value) by the U.S. Department of Veterans Affairs and offers the following advantages:

• No down payment
• Higher loan value
• No private mortgage insurance
• Limit on closing costs
• Option for seller to pay closing costs
• No penalty fee for early payoffs
• Possible VA assistance if you have difficulty with payments

Once certified, an applicant can apply to use the guaranty on these financing and refinancing opportunities:

• Purchase or build a residence
• Purchase a condominium or duplex
• Purchase and imporve a residence
• Purchase a manufactured home/lot
• Refinance an existing home loan
• Install energy improvements

Qualified service members are those that have received a discharge other than dishonorable from an eligible branch of the service, including the U.S. Army, Navy, Air Force, Marines, Coast Guard, Nat. Guard and Reserve and US. Military academies. They also meet the service requirements charted below.

There is a VA Loan to Fit Your Needs

VA Fixed Rate Home Loans

A 30-year fixed rate option gives you a stable, predictable monthly payment. These loans are great for people settling down in one house over a long period of time. They give deployed soldiers a warm place to come home.

A 15-year fixed-rate option could help current service members who would like to build equity more quickly. You pay more monthly, but this pace builds more equity in your home.

VA Adjustable-Rate Mortgages

The flexibility of an adjustable rate mortgage can be appealing to current military service members expecting to move in the next few years. ARM homeowners pay a low introductory interest rate for the first few years, then move or refinance before it adjusts upward.

VA Jumbo Home Loan

The VA will guarantee a maximum of 25% on your home loan up to the conforming loan limit of $424,100. For a loan greater than that amount a VA Jumbo Loan is needed. With a VA Jumbo Loan you can apply for a home up to $1,000,000 and will only need a down payment of 25% on the difference between $424,100 and the asking price of the home.

For example, you want to purchase a home that costs $500,000. You would be required to pay 25% down on the amount over $424,100.

$500,000 - $424,100 = $75,900. Then $75,900 x 25% = $18,975. This would be your down payment. This payment is still considerably lower than the 10% traditionally required for jumbo loans.

Cash-Out Refinance Loans

A cash-out refinance helps you handle big-ticket items – college, health expenses or debt, for example. Effectively, you pay off the remaining balance and take out a new loan for the appraised value of the house. Much of the difference goes into your pocket as cash.

Interest Rate Reduction Refinance Loan (IRRRL)

An Interest Rate Reduction Refinance Loan (IRRRL) helps service members refinance at a lower interest rate. Refinancing can help lower your monthly payment, change your term or turn an ARM into a fixed rate. Other advantages include:

• No appraisal or credit underwriting
• No Income and/or asset verification
• No out-of-pocket expenses
• Rolling all costs into the new loan
• No new COE - just validation of loan

Don't Live in the Past, Live Your New Home

The Renovation Loan Rundown

The 5 Core Steps of a Renovation Loan

Whether a seasoned investor using a HomePath Renovation or HomeStyle loan, or a first time homebuyer purchasing your first home that needs some TLC, and using an FHA 203K or HomePath, please know that the steps for obtaining and securing a renovation mortage are always the same.

I call these "The 5 Core Steps of a Renovation Loan".  These steps begin once you have a ratified contract in hand.

1. Application and approval - Applying for a renovation mortgage is no different than applying for a regular, non-renovation mortgage.  All required documents are pretty much the same.  W-2's, paystubs, bank statements, etc...are fairly run of the mill from loan to loan.  Once submitted, the underwriter rendors a decision on the loan, usually an approval. 

2. Work write up or bid - Both of these documents do the same thing; they tell underwriters and appraisers what will be done to the home during renovation, and what that work will cost. 

3. Appraisal - All renovation appraisals are completed "subject-to" or as if the work was already done.  Important: The appraisal cannot be ordered without Step 2 (above). 

4. Project management - This is documenting who is doing the work and validating thier credentials.  We as lenders can't tell a borrower which contractor to use, but we can tell them that they must use a contractor.  Some exceptions apply.

5. Close and renovate - Once the first 4 steps are completed, then a closing date can be set.  When the loan closes, the seller is paid, the realtor is paid, and the money for the renovation is put into an escrow account that our draw department manages.  On some loans an advance draw is made right after closing, and on others the draws are issues based on work completed to date.

So those are the 5 steps.  However, remember, if you remove steps 2 & 4, you are looking at a regular loan.   So there are really only 2 additional steps on a renovation loan.  They are not easy, but they don't have to be hard. 

Call me anytime to learn all you wish to know about renovation loans.

Eligible Repairs and Renovations

The above before and after picture is one of many examples of what can be done with a home.  So today let's talk about the kinds of repairs and renovations that are eligible under are renovation loan.  

The short answer is everything.  But to help a homeowner narrow down what they really want to do, you only have to remember these three limitations...

A. What the borrower qualifies for, as this will be needed to get loan approval.

B. What the property appraises for, as it has to appraise for at least the acquisition cost.

C. Program loan limit.  This varies by program, for example; the FHA loan cieling for Richmond Virginia is $535,900.  So as long as the loan amount does not exceed that, than all is fine. 

Beyond those three parameters, a borrower can finance pretty much everything and anything else they would want to do to home, as long as they finance at least the bare minimum to meet local building code.  This includes HVAC, electrical, plumbing, additions, baths, kitchens, structural alterations, environmental (mold, asbestos, etc...), flooring, roofing, and on and on.