Depending on the carrier, it appears you will have to pay MI either in the monthly payment or upfront but at least you now have an option.

I have not closed one of these yet, but I will keep my readers abreast of the progress.

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Patrick Randles

Nova Home Loans

520-495-7210

Patrick.Randles@novahomeloans.com

There are many important advantages to the VA Loan. The first advantage is that no down payment is required. The second advantage is that mortgage insurance is not required either.  These together make a strong case for going for a VA loan if you are eligible. However, there is one downfall. There is a variable funding fee. The fee for a first time user of a VA guaranteed loan is 2.15%. This number is reduced if there is a down payment, but then if you have a substantial down payment you could get a conventional loan without mortgage insurance and not need a VA loan. This fee can be rolled into your loan to lessen the initial out of pocket expenses.

To be eligible for a VA loan you must have either:

-          90 days of continuous active duty service during WWII, Korean War, Vietnam War or Persian Gulf War.

-          181 days of continuous active duty service who enlisted before 09/07/1980 but did not serve during wartime.

-          24 month of continuous active duty service after 09/07/1980 but did not serve in wartime.

-          Six years of Selected Reserve or Guard service (must be member of an active unit).

-          Spouses may be eligible if the veteran died on active duty from service related causes, was an MIA, POW, or was part of WWII.

*Active Duty Training (ADT) done by Guard or Reserve units does not count toward your active duty service requirements.

VA loans are fixed rate, fully amortized (must pay on principle and interest) and have terms from 10years -30years. Adjustable rate loans are available but check with your loan originator to see which programs are offered. Refinances are also possible but again check with your loan originator for details.

I would recommend a VA loan to vets who are short on cash and have the desire to own their own home. It is a benefit you earned, use it.

John Randles

Loan Officer (NMLS #893471) and USAF Vet (1985-1991)

1. Loans with LPMI- (Lender Paid Mortgage insurance)- there is no refi for folks that opted to go this route when they purchased (or refinanced) their home. 05/17/2012 Update- This may no longer be the case. We have two lenders who say thay can do these loans. I have not gotten into it yet, but I will continue to update the blog as I know more. Depending on who your mortgage insurer is, you may have to pay the MI either as part of the monthly payment or as a one time upfront payment at close of escrow. I will know more in the next few weeks.

2. Lenders are sending people paperwork without having an approval from DU. DU is the acronym for Desktop Underwriter- FNMA’s automated underwriting system. Without a DU “Approve Eligible” and a “PIW” (Property Inspection Waiver) the refinance is not approved and therefore, you could simply be spinning your wheeels. It is crucial that your taxes and income have been reviewed and that DU has been run. Any response other than “approve eligible” is an issue and the appraisal waiver (PIW) is huge.

Why do I bring this up? I find myself competing for business against lenders who have not run DU and don’t have a property inspection waiver. Without these items, your loan terms could change (i.e. your rate is going up since the loan to value is incorrect in the system) or you could be turned down altogether.

Here is my example- Borrower calls me and even forwards a quote from Greentree. It looks very agressive which is good for the customer. They have told him that the property is worth $320,000 and there is no appraisal fee listed on the Good Faith Estimate (but there is no indication of a waiver either).

After much back and forth, we run the credit report and go to get our DU approval. Oddly enough, we don’t get an appraisal waiver until I drop the value in the system to $306,000. This is crucial as it impacts either the rate due to the change in the loan to value or the funds to close in order to keep the loan to value the same.

While I know perfectly well that Greentree has not run DU, the customer calls them back to confirm this fact. I was correct. The person on the phone isn’t authorized to run DU. Only an underwriter runs DU and it could be 3-4 weeks before they do so. Also, they will not let you lock in the rate until it is run so you will float for the next 3-4 weeks.

Seriously????!

What good is your quote if you can’t lock in the rate? We could be at 5% interest in a month. That makes no sense at all. I guess that is what happens when the person answering the phone does not have the authority to run DU.

The long and short of it is you need to work with someone who will run DU from the start. Not only do you want to know that you have received an approve eligible, you want to know about the property inspection waiver (PIW) and at what value you received this appraisal waiver.

From there, if you have a second mortgage, you want to be sure the findings indicate that it will need to be subordinated again. If this is not in the verbage, the findings could show that your approval is with the 2nd being paid off so make sure this is the case.

Lastly, I would recommend that you ask for a copy of the findings (the approval). They do not have to give them to you, but if they want your business they might do it. That way, you can verify the income being used, the correct amount of the existing liens, the value that FNMA is accepting thus allowing the appraisal to be skipped and if you have a 2nd, you can verify that it has been input correctly and it will be re-subordinated.

As we go on with this loan product, understand that FNMA, Freddie Mac and the lenders are changing it as we go along. I absolutely hate to say that, but we are seeing it on a regular basis. I don’t want to say we are biting our nails, but…

If you want another opinion, call me at 520-495-7200. I am a licensed loan originator in the state of Arizona and I run DU for my customers.

______________________________

Patrick Randles

Nova Home Loans

6893 N Oracle Road #121

Tucson, AZ 85704

www.NovaHomeLoans.com/patrick.randles to apply now

FHA 203k program- Rates and fees are substantially higher than other loan programs. If FHA loans are currently at a note rate of 3.75%, 203k loans could be as high as 4.5% to 5% interest depending on the lender. Plus you will most likely have to pay points just to get that rate. So, with rates being where they are, you will most likely refinance after finishing up your rehab and while your lender may tell you that they are doing a “cost free” refinance, that usually means you are taking a higher rate in lieu of paying those closing costs.

Time to close- several months. As a loan officer, I can’t tell you how many times a customer has been in the market, written an offer on a short sale and by the time they got the approval from the lienholder, something has changed and they either are no longer interested or simply can’t purchase the home. I am all about the 30 day close. Strike while the iron is hot. FHA 203k loans can take 90 days to close. Lots can happen in 90 days.

My solution- Nova Home Loans offers an escrow holdback program. As the borrower, you get a quote from a licensed contractor for the repairs. There are some stipulations:

• Repairs are limited to required in the appraisal report. The term is “subject to”…
• Nova will hold 150% of the cost of repairs. This is just in case there are cost overruns.
• There is a small fee based on the loan amount
• Not financeable
• Licensed Contractors only. No “do it yourself” repairs.
• Final Inspection by appraiser is req’d. Cost is roughly $100 and it must be ordered within 10 days after close of escrow.

To sum it up: if you or your buyers are looking at a home with some damage or lacking flooring or in need of repairs that could be handled in about 1 week, look into our escrow holdback program (assuming buyer has add’l funds for the costs). This will avoid paying higher rates, fees and then refinancing again after closing. Plus, we will be done in 30-45 days.

Call me at (520)850-7485 to discuss your scenario. This program is good for FHA and Conventional loans but not USDA Rural loans.

__________________

Patrick Randles

Nova Home Loans

(520)495-7200

6893 N Oracle Road #121

Tucson, AZ 85704

If you are not happy with the service you have received from your Wells Fargo branch, we can help.

Here is the link to see if FNMA does own your mortgage: http://www.fanniemae.com/loanlookup/

From there, Wells Fargo is allowing unlimited loan to value (LTV) and unlimited combined loan to loan to value (CLTV) if you have a first and a 2nd. That means it does not matter how much you owe or how much your house is worth assuming you have been making the payments without 1 30 day late in the last 12 months. Awesome!

My recommendation-if your rate is over 5.5%, check the link above to see if FNMA owns your loan. If so, shoot me an email (patrick.randles@novahomeloans.com) or call me at 520-495-7210 to see if we can save you some money!

__________________

Patrick Randles

Nova Home Loans

6893 N Oracle Road #121

Tucson, AZ 85704

Here is the link to see if FNMA does own your mortgage: http://www.fanniemae.com/loanlookup/

From there, GMAC is allowing unlimited loan to value (LTV) and unlimited combined loan to loan to value (CLTV) if you have a first and a 2nd. That means it does not matter how much you owe or how much your house is worth assuming you have been making the payments without 1 30 day late in the last 12 months. Awesome!

My recommendation-if your rate is over 5.5%, check the link above to see if FNMA owns your loan. If so, shoot me an email (patrick.randles@novahomeloans.com) or call me at 520-495-7210 to see if we can save you a ton of money!

__________________

Patrick Randles

Nova Home Loans

6893 N Oracle Road #121

Tucson, AZ 85704

Here is the link to see if FNMA does own your mortgage: http://www.fanniemae.com/loanlookup/

From there, Flagstar is allowing unlimited loan to value (LTV) and unlimited combined loan to loan to value (CLTV) if you have a first and a 2nd. That means it does not matter how much you owe or how much your house is worth assuming you have been making the payments without 1 30 day late in the last 12 months. Awesome!

My recommendation-if your rate is over 5.5%, check the link above to see if FNMA owns your loan. If so, shoot me an email (patrick.randles@novahomeloans.com) or call me at 520-495-7210 to see if we can save you some money!

__________________

Patrick Randles

Nova Home Loans

6893 N Oracle Road #121

Tucson, AZ 85704

For years, buyers have straddled (or crossed) this line. These days, you need to be careful. It is now commonplace when you close on a second home for the lender to send out an investigator. This person will verify that you are in fact the resident. If you are renting this property out or someone else is occupying the property, they could elect to send you a “notice of acceleration”. Long story short is that you either need to remedy the situation or pay of the note.

If you have any questions on this, please give me a call.

________________

Patrick Randles

Nova Home Loans

(520)850-7485

1. All we do is home loans. We don’t offer checking accounts and we can’t finance your car. We specialize in one thing- Home Loans for people in Arizona.

2. You won’t get lost in the shuffle- We are still closing loans in less than thirty days. Can Bank of America or Wells Fargo say that?

3. We can offer all of the loan products available. We have conventional, FHA, VA, USDA and even IDA bond money loans. The big banks only have one source. If there is a loan product we don’t have, we can and will go out and get it. We have access to over 30 lenders. Can Wells Fargo get a loan for a Canadian National? No, but Nova can get that one closed.

4. Your transaction matters to me. I will not pass your loan onto another loan officer or someone out of town. I will handle the transaction from start to finish and you will have one point of contact that you can reach during the day, in the evening and even on the weekends.

If you are considering the purchase of a new home, give me a call for a free consultation. _________________

Patrick Randles

Nova Home Loans

Arizona’s #1 FHA and VA lender

6893 N Oracle Road #121

Tucson, AZ 85704

(520)850-7485

Patrick.Randles@NovaHomeLoans.com

Personally, I have lived in Oro Valley since graduating from the University of Arizona in 1993 with a degree in accounting. I have been originating mortgages in Arizona for the past 5 years with the majority of it being done in Oro Valley, Marana and Northwest Tucson. Contrary to loan officers at the big banks, I am licensed as a mortgage loan originator in the state of Arizona. I have no intention to lend in all 50 states as this small corner of the world is my focus.

I pride myself on knowing the business and getting the loan done in a timely fashion with a minimum of aggravation. We are also very competive on rates and fees. If I can be of assistance to you or anyone you know, please do not hesitate to contact me @850-7485

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Patrick Randles

Nova Home Loans

6893 N oracle Road #121

Tucson, AZ 85704