How much house can I afford?
In Central Florida where mortgage credit is tight, the rule of thumb is you can afford to purchase a home priced up to 3.75 times your gross annual household income. At $112,000 household income, that’s a $420,000 house. In San Francisco where credit is looser, it can be higher at 4.25 times household income. A $141,000 household income can buy a $600,000 home.
According to FHA 2019 Annual Management Report, the average FHA Loan is:
• Average Loan Amount: $195,068
• Median Household Income: $55,775
• Median FICO Score: 666
According to Dept of Veteran Affairs 2018 Annual Benefits Report, the average VA Loan is:
• Average Loan Amount: $264,197
• Median Household Income: $77,124
• Median FICO Score: 741
What are the advantages of buying a home using FHA Purchase Program?
1) Small 3.5% down payment for owner occupant
2) The Seller are allowed to contribute up to 6% to help the Buyer with the closing costs
3) Low minimum FICO score of 580
4) 30, 25, 20 and 15 year fixed or 5/1 adjustable rate loans are available
5) FHA Mortgage Insurance can be deducted against your taxes
6) Gift funds allowed for entire down payment, closing costs and prepaid items
How much is FHA Mortgage Insurance Premium (MIP)?
The Annual MIP is approximately 1.20% and the Upfront MIP is approximately 1.75% of the loan balance depending on FICO score. Borrowers of FHA-insured mortgage pay both upfront and annual mortgage insurance premiums. The upfront premium is paid when the loan is originated, and the annual premiums are paid each year thereafter.
What are the advantages of buying a home using VA Mortgage Program?
1) No money down. Down payment is not required. Eligible for 100% financing.
2) The Seller are allowed to contribute up to 4% to help the Buyer with the closing costs
3) 5-year adjustable-rate mortgage
4) Standard and high balance loans available
5) Low minimum credit score of 580
6) 15 or 30-year fixed-rate mortgage
7) Eligible for 95% and 100% cash-out refinancing to take money out in home appreciation
8) The interest rate on a VA loan is typically a little lower than Conventional interest rate
How much is the VA Funding Fee?
The VA Funding Fee is added to the loan and is financed into the loan when you close. The Funding Fee is 2.15%.
What is the advantages of buying a home using USDA Mortgage program?
1) $0 down payment
2) Low minimum credit score of 640 as of December 1, 2014.
3) Closing costs can be rolled into the financing
What are the advantages of buying with HomeSteps Financing?
1) As low as 5% down payment
2) No Appraisal Required which eliminates paying an additional fee
3) No Personal Mortgage Insurance (PMI) Required
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How much is FNMA Escrow Deposit requirement?
• Minimum of $1,000 for purchases under $200,000
• Up to 3% for purchases $200,000 and above
• Non-refundable 10% of purchase price for cash buyers
What is a Jumbo Loan?
• Loan amounts over $424,100 up to $2.5 million
• Minimum 20% down payment required for owner occupant
• Adjustable-rate options are available
What is the Loan Limit on a Conforming Conventional Loan and VA Loan?
• Loan amounts up to $484,350
What is the Loan Limit on FHA Loan?
• Loan amounts up to $314,827
What are credit score?
It is a number, roughly between 500 and 850, that represents a consumer’s creditworthiness. The best mortgage rates and terms go to borrowers with credit scores of 740 and higher. A “low” credit score is in the “fair” to “poor” ranges as outline below:
• 750 and higher = excellent
• 749 to 700 = good
• 699 to 650 = fair
• 649 to 600 = poor
• 599 or lower = bad
How do I find out what is my credit score?
The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. Click here to see a video on getting your free credit report.
Can you finance closing costs?
• FHA, VA and Conventional Loans do not permit financing out of pocket settlement costs into the loan.
• USDA allows for financing closing costs when the appraised value is higher than the sale price.
When did Orlando Housing price bottomed out?
Orlando, Florida USA residential real estate market bottomed out at the end of year 2011 and toward the early part of 2012.
What type of home loans will be prohibited starting in 2014?
• Interest Only Loans
• Balloon Payment Loans
• Loans lasting more than 30 years
What are the requirements needed to get an Owner Occupied home loan?
In mortgage lending, the term “owner-occupied” means a residence primarily used by its buyer. Mortgage lenders give lowers interest rates loan and lower down payment requirement for primary residence mortgages. Home Loans backed by FHA-insured mortgages requires the home owners to live in their house for at least one year after purchase before leasing them out.
What are the minimum down payment when buying rental properties?
• 20% minimum down payment on the first property
• 25% minimum down payment on the subsequent properties
On an Investment Property, how much can a Seller contribute toward Closing Costs?
• Maximum of 2%
What is the interest rate to refinance vacant land?
It starts around 8%.
How long does it take for getting confirmation on Title Commitment?
It takes 3 weeks.
What are the advantages of buying a Fannie Mae foreclosed property using HomePath Loan?
1) Small 5% down payment for owner occupant as of November 16, 2013 with credit score of 660.
2) No Appraisal Required which eliminates paying an additional fee.
3) No Personal Mortgage Insurance (PMI) Required which can save you up to $50/month.
4) An additional $35,000 to renovate home via HomePath Renovation Mortgage program.
The HomePath® loan program has ended effective October 7, 2014.
What are the requirements for Fannie Mae’s Investor Program?
10% down payment
• Increased to from 10% to 30% down payment in Year 2014
What are the advantages of buying with HomePath Investor Financing?
1) Up to 20 financed 1- to 4-unit properties
2) Individual and LLC borrowers eligible
3) Loan to value max 70%
4) No lender-requested appraisal
5) Flexible mortgage terms (fixed-rate, adjustable rate)
The HomePath® Investor Loan program has ended effective October 7, 2014.
What is Fannie Mae’s First Look Program?
Fannie Mae’s First Look Program provides additional time for owner-occupants to submit an offer on a HomePath property without competition from investors. Starting on January 2, 2014, the First Look period will be extended to 20 days.
What is a Home Sale Contingency clause in a real estate contract?
The home buyers place an offer to purchase a home with a condition that their current home must be sold beforehand. The home buyers want or need the cash from the sale of their current home in order to purchase their new home. Please sign up for a free account and let your local real estate agent help relieve your anxiety of where to go after selling your home. Don’t be left homeless.
What is a Concessions clause in a real estate contract?
The home buyer requests financial assistance from the home seller. Some common seller concessions include monetary contributions to help cover closing costs, appraisal/inspection fees and/or home warranties. More unusual examples would be upgrade allowances or purchasing furniture or appliances for the new home. Please sign up for a free account and let your local real estate agent negotiate hard for you.
What is Homepath minimum escrow deposit amount?
It is negotiable with Pre-Qualification Letter. It is 10% for cash offers. Fannie would likely counter back at 1% of purchase price or $1,000 if the purchase price is below $100,000.
What is CDD fee?
A CDD fee is a “Community Development District” fee. Many planned communities (also known as Planned Unit Developments or PUD’s). The CDD has the authority to issue bonds for financing infrastructure improvements such as roads, sewer, water, and community amenities such as swimming pools, clubhouses, parks, etc. Many communities that charge CDD fees do not charge additional Home Owners Association fees (HOA) for community maintenance or have a reduced minimal HOA fees.
How much are Homeowners Insurance?
The Federal Reserve Bureau has stated that a good rule of thumb for the average cost of a yearly homeowner’s insurance premium ranges between $300 and $1,000. According to the FRB, a way to estimate that amount is to divide the home’s appraised value by 1,000 and multiply that figure by $3.50.
Are there tax advantages to owning a home?
• Mortgage Interest can be deducted against your taxes
• Property Tax can be deducted against your taxes
• FHA Mortgage Insurance can be deducted against your taxes
• Mortgage Points can be deducted against your taxes
When can payments for Private Mortgage Insurance be cancelled?
On most loans, Private Mortgage Insurance must be automatically be cancelled by the lender when the loan reaches 78% of original value through amortization. Private Mortgage Insurance may also be cancelled at the request of the borrower when extra payments bring the loan below 80% of original value.
What documentations are required by lenders?
• Driver License and Social Security Card
• Bank statements in the last 2 months
• Tax Returns from previous 2 years
• W-2, 1099 and K-1 from previous 2 years
• Paystubs within last 30 days showing year-to-date earnings
• Homeowner Insurance Agent contact information
• Residence Address for the last 2 years with landlord contact information (if applicable)
• Divorce Decree and 12 months proof of child support (if applicable)
• Address and Loan information of other real estate properties (if applicable)
How much savings is needed to buy condo?
• Condo financing is difficult to obtain in Orlando. Banks requires 30% or more of the purchased price for down deposit
• Banks will not lend below $50,000
What are the recommended guidelines to get financing for a condo?
• More than 50% of the condo units are owner occupied.
• Less than 10% of rental units are behind on rent for over 60 days.
• HOA have at least 3 years of documented financials.
• HOA has a minimum reserve of 20% of its annual budget.
When is the deadline to file Homestead property tax exemption?
March 1st is the deadline. You can receive up to $50,000 in homestead property tax exemption by filing with the county property appraiser office.
• Orange County Property Appraiser Office
• Osceola County Property Appraiser Office
• Seminole County Property Appraiser Office
What are the requirements on Buying a Florida Vacation Home?
• Down payment of 25% to 30% to purchase a house or a townhouse.
• Allow 45 days to apply for a mortgage. 30 years fixed rate is the most popular mortgage terms.
What are United States requirements and local practices on Buying a Florida Vacation Home as a Foreign National?
• Down payment of 30% to 40% to purchase a house or a townhouse. For a condo or condo-hotel, the down payment requirement is 35% to 40% of the purchase price.
• Allow 45 days to apply for a mortgage. 30 years fixed rate is the most popular mortgage terms.
• Property can be purchased under either an individual name or an US registered company name.
• Borrower must have a US bank account with funds to close prior to closing.
What are some of the additional hurdles when making an offer with a FHA Mortgage?
• FHA will not approve the mortgage if the property has not been owned by the seller for 90 days or more with exception of inheritances and foreclosures.
• FHA requires buyers to pay extra appraisal fees if the property has not been owned by the seller for 180 days or more. Two appraisals are required instead of one.
The materials available at this web site are for informational and educational purposes only and not for the purpose of providing legal, tax or accounting advice. You should contact your attorney or your accountant to obtain advice with respect to any particular issue or problem.