Down Payment Assistance Is Not Dead!

Down Payment Assistance Is Not Dead!

Many first-time homebuyers, who would otherwise qualify for a mortgage, lack the funds to cover the down payment and closing costs necessary to purchase a home. In fact, this is the largest barrier to becoming a homeowner.

Some people are fortunate enough to be able to get a gift for the down payment from a parent or other relative. But, with the recent economic down turn fewer people have money to give. And, with the seller-assisted down payment assistance programs being banned a couple years ago many first-time homebuyers have had to sit on the sidelines and wait to afford a new home.

Down Payment Assistance is Alive and Well!
At Envoy Mortgage, we offer a program that will assist these first-time home buyers purchase their new home -- and maybe help the housing market turn around. Here are some of the features of the program:
• Up to $6,000 in down payment and closing cost assistance
• Up to 100% financing available
• Fixed rate with terms up to 30 years
• Available with FHA or conventional loan programs
• Reduced mortgage insurance for conventional loans
• Available to first time home buyers, veterans or spouses of veterans (In certain, targeted areas, these restrictions do not apply – contact me for more information)
• Below-market interest rates
• Up to 45% debt-to-income ratios

With this program, we have been able to help first-time homebuyers make the leap into homeownership. Call me today for more information on this program.

Yet another reason to choose me and Envoy Mortgage for all your financing needs!

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Fannie Mae HomePath® Buyer Incentive Program

Fannie Mae has added a buyer incentive to their HomePath® mortgage program (For more information on the Home Path Program go to Fannie Mae Home Path Mortgage ). Fannie Mae is currently offering buyers up to 3.5% in closing cost tassistance through June 30, 2011.

The HomePath® property buyer must meet the following qualifications to be eligible:

• Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible.
• The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive.
• The sale must close on or before June 30, 2011. No exceptions will be made to this deadline.
• Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive.
• Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.
• If a buyer's total closing costs are under 3.5%, the difference will not be available as a credit to the buyer.

Note: Fannie Mae can give no assurance on the time required to close, but initial offers submitted after May 15, 2011 are particularly questionable for closing by the incentive deadline of June 30, 2011.

Call me today to find eligible properties in your area and to start the mortgage approval process. I can be reached at 708.473.7688 or BarkerLoans@gmail.com. To apply online please visit www.BarkerLoans.com.

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Fannie Mae HomePath® Mortgage

The HomePath® program is a special financing program to provide financing for purchasers of Fannie Mae Real Estate Owned (REO) properties (as a result of foreclosure or other similar action such as deed-in-lieu of foreclosure) that Fannie Mae has deemed eligible for HomePath® Mortgage financing.

FEATURES AND BENEFITS:
• Low down payment (Up to 97% LTV available)
• You may qualify even if your credit is less than perfect
• Available for primary residences, second homes and investment properties
• Down payment can be funded as a gift, a grant, or a loan from a nonprofit organization, state or local government employer
• No appraisal required
• No mortgage insurance required

FLEXIBLE TERMS:
• 15- and 30-year fixed rate
• Adjustable options available

ELIGIBLE PROPERTY TYPES**:
Single Family Properties Only
Planned unit developments (PUDs)
Modular homes
**Geographic and unit restrictions apply. The property must be designated on HomePath.com as eligible for HomePath financing. Programs available only to qualified borrowers. Programs subject to change without notice. Underwriting terms and conditions apply. Some resitrcitions may apply. HomePath is a registered trademark of Fannie Mae. 0510


Call me today to find eligible properties in your area and to start the mortgage approval process. I can be reached at 708.473.7688 or BarkerLoans@gmail.com. To apply online please visit www.BarkerLoans.com.

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FHA Announces Change to Mortgage Insurance

In a move to bolster the Mutual Mortgage Insurance Fund (MMI), FHA has announced an increase to the annual mortgage insurance premium paid by borrowers with FHA-insured mortgages. While the Up-front Mortgage Insurance Premium will remain unchanged at 1.0%, the annual Mortgage Insurance Premium will increase from 1.0% to 1.25%. The increase will amount to a monthly payment increase of $20.84 for a $100,000 mortgage and an increase of $41.66 for a $200,000 mortgage.

At the end of 2010, the MMI had reserves of $3.6 Billion – well below the minimum requirement. The increases are expected to bring an additional $3 Billion into the MMI annually, based upon the current projections.

"After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA's capital reserves and help private capital return to the housing market," says FHA Commissioner David H. Stevens. "This quarter point increase in the annual MIP is a responsible step towards meeting the congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost-effective mortgage insurance option for borrowers with lower incomes and lower down payments."

The changes to the annual mortgage insurance premium will take effect with all loans insured after April 18, 2011.

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Fannie Mae Announces Changes to LLPAs

What is an LLPA?

LLPA stands for Loan Level Pricing Adjustment. An LLPA is an additional fee on top of any points and closing costs paid for a mortgage based upon the Loan to Value Ratio (LTV) and the borrowers’ credit score. So, the higher the LTV and lower the credit score the more you will have to pay for a mortgage. This can take the form of additional points and/or higher rates. LLPAs are risk-based adjustments to the cost of a mortgage (e.g. rates and points).

Effective with loan locked on or after January 18, 2011, loan level price adjustments (LLPAs) will change as outlined below. This is in response to recent Fannie Mae changes.

Changes have been made to:
• LLPAs by Credit Score/LTV
• LLPAs for Subordinate Financing
• LLPAs remain the same for DU Refi Plus



For the first time, the LLPAs for some LTV/Credit score combinations are actually lower. This is in response to higher quality loans being delivered to Fannie Mae and Freddie Mac, the Government Sponsored Entities (GSEs) that own most conforming mortgages in the country.

For information on LLPAs for programs or property types not listed here, please contact me at BarkerLoans@gmail.com or 708-473-7688.

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Why Do I Have 3 Different Credit Scores?

I get this question from customers all the time. Mortgage lenders typically pull credit reports from the 3 main credit repositories – Transunion, Equifax, and Experian. All three of these repositories generate a credit score, which is a numerical representation of your credit history. While the exact formula for computing these scores is a trade secret, we know that your credit score is affected by your payment history, amount of credit available, amount of credit used, and any collections and/or judgments against you.

But why wouldn’t they all have the same score for the same borrower? There are many reasons the scores may differ, but the main ones are:

1. Not all creditors and lenders report to all 3 credit repositories. So, the three repositories do not all have exactly the same information



2. Creditors report to the repositories at different times. Your balance with ABC credit card may be different at the 3 repositories because one may not reflect the last payment or purchase you made on your account and another may.



3. There are several different scoring models that are used. In fact, each repository uses different scoring models depending on the purpose of the score or the requirements of the creditor/lender. So, different models will analyze your credit data differently and give you a different score.

This is why most mortgage lenders pull credit reports from all 3 repositories and use the middle score. By using the middle score, lenders are attempting to get as accurate a credit profile as they can for their customers.

What can I do to improve my credit score?
First, and most importantly, use credit wisely. Do not over extend yourself with credit and always make your payments on time.

Second, the amount of credit you use should be as small a percentage of your available credit as possible. For example, if you have $10,000 of available credit, your score will be higher is you are only using $500 of that available credit than if you are using $7,000 of it.

Third, make sure you know what is on your credit report. The Fair and Accurate Credit Transaction Act of 2003 (FACTA) allows a consumer to request a copy of their credit report, free of charge, from all 3 repositories. To learn how to obtain your free credit report, and for other reasons to monitor your credit, read my blog article, FREE Credit Reports.

For more information or help with your credit, please contact me at BarkerLoans@gmail.com or 708.473.7688.

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FREE Credit Reports

Most of us know that we should be checking our own credit reports periodically to make sure the information is accurate. And, we have all seen the banner and pop-up ads offering us free credit reports. But, can we really get our credit reports for free?

Yes, you can. The Fair and Accurate Credit Transaction Act of 2003 (FACTA) was passed by Congress to, among other things, allow consumers to monitor their own credit reports from the three main credit repositories – Equifax, Experian, and Trans Union. These free credit reports may be obtained on the internet, over the phone, and through the mail through a centralized source that was established specifically for this purpose (you cannot obtain a free credit report by contacting the credit repositories directly.)

On the internet go to http://www.annualcreditreport.com to get copies of all three credit reports. You can also call 877-322-8228 to obtain the credit reports by phone or you can download a form to mail in at http://www.annualcreditreport.com/cra/requestformfinal.pdf.

Why should you check your credit periodically?

First, the credit reports may contain information that is inaccurate. Most of the credit you obtain, and the rate you pay, are based upon your credit history and credit score. If your credit reports have inaccurate information you may be paying more for credit than you should.

Second, all of us have heard of identity theft on the news. The key to minimizing the damage done by identity theft is to stop it as quickly as possible. By checking your credit report at least annually you can spot activity that may be identity theft and take steps to stop it as soon as possible.

What if the information on my report is inaccurate?

All three credit repositories will list the steps you need to take to dispute an inaccurate listing. When you receive your reports, simply follow the steps for each of the three credit repositories.

Another site that has a lot of great information on FACTA, identity theft, and privacy issues is www.privacyrights.org.

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