Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Low 3% Down Payments

            After a brief disappearance in the economic downturn, 3% down payment loan products are back. This is especially important to our first-time buyer market and our returning buyer who has had a 3 year or longer wait period after an adverse credit occurrence. This is a helpful product to get back into the home purchase arena.  Fannie Mae (FNMA) loans, conventional conforming products are now available. Check your local market for loan limits in high cost areas but for most of the country the loan limit for a FNMA loan is $453,100.

All loans will require private mortgage insurance (PMI). This expense may be less costly monthly for a borrower with a higher credit score than the mortgage insurance carried on a FHA loan that requires a 3.5% down payment. PMI also can be dropped at some point down the road when there is enough equity in the home versus FHA which will require life of loan mortgage insurance if a minimum down payment was made.

Additionally, there may be down payment assistance programs to help with the 3% down payment. There are separate guidelines for those products. Gifts from family members are also allowed on the FNMA conventional programs.

For more information on low down payment options, please contact me and we will discuss what will work for you.


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Talking Down Payment

There seems to be misunderstandings about what it takes in down payment to purchase a home. Well, I will give you valuable information. You can purchase a home with very little down payment and at times, no money down.  Down payments come in all sizes.

VA loans: If qualified for a VA loan you are eligible for a zero down payment loan. Determining this will be based on service time, discharge type and whether you have used your VA benefit before. VA loans are also available in higher loan balances which depend on location in the country. In the higher loan balances (JUMBO) you may receive better terms for down payment than what is available through other types of JUMBO financing.

FHA loans: The minimum required down payment is 3.5% for a typical FHA loan. Maximum loan amounts are determined by county. All FHA loans require mortgage insurance, so no matter how much you put down, you will have mortgage insurance in some amount for a specified time period.

CONVENTIONAL CONFORMING loans: Following Fannie Mae guidelines a 1st time home buyers can get in for as little as 3% down payment. The maximum loan amount in most markets is currently $453,100. Check your area for your maximum loan amount. Mortgage insurance most likely is required for loans that have a less than 20% down payment but there are many ways to handle how mortgage insurance is paid through the loan. What I mean is, it can be paid for in cash at closing so that it is not included in your monthly payment. It can be financed into the interest rate, or paid monthly or a sum can be paid for in cash and the balance paid monthly. Check with your lender what options are available to you.

There are a number of other types of programs, USDA, JUMBO Conventional, Down Payment Assistant Loans, RENOVATION Loans and lender PORTFOLIO products. Each have their own set of guidelines. If you have questions about what is available for your situation please let me know and leave a comment below.


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Are You Buying a Home in Hard Hit AZ Cities? The Pathway to Purchase Program Offers Down Payment Assistance to Eligible Buyers

Do you plan to buy a home in one of the Arizona cities hit hard by foreclosures in the last decade?

You may be eligible for down payment assistance (DPA).

What is down payment assistance? As explained in a previous blog, down payment assistance is a grant or forgivable loan. Once you qualify for a first loan to buy a house, you receive the down payment assistance to pay the down payment and/or closing costs for the home. It’s free money.

Pathway to Purchase

The Arizona Department of Housing is partnering with the Arizona Home Foreclosure Prevention Funding Corporation to provide the Pathway to Purchase program (P2P). Pathway to Purchase helps homebuyers in Arizona cities hit the hardest by the foreclosure bust to come up with a down payment.

Borrowers apply for a first loan through the Pathway program. This is a 30-year fixed-interest rate loan. Once you apply for the first loan, you receive a second loan to cover the down payment and closing costs up to 10% of the purchase price with a max of $20,000. If the purchase price is $200,000, for example, then the second loan is $20,000. If the purchase price is $250,000, the second loan is still $20,000. This second loan is forgivable—it has no payments and no interest, and after five years, it goes away.

This program is available only in these 17 Arizona cities:

Arizona City Avondale Buckeye Case Grande
Coolidge Douglas El Mirage Fort Mohave
Goodyear Huachuca City Laveen Maricopa
Red Rock Sierra Vista Snowflake Tucson
Yuma

 

Program Requirements

There are a few requirements, of course. Borrowers can’t own another residential property at the time of close, including inherited and manufactured homes. The annual income of all borrowers can’t be more than $92,984. The purchase price can’t be more than $371,936. And the credit score of all borrowers must be 640 or greater.

In addition, the loan must be for the purchase of an owner-occupied, primary residence, and the borrowers must move in within 60 days of close. The property can be a single-family home, townhome, or condo. The loan cannot be used for a refinance or new construction loan or for manufactured or mobile homes, and borrowers cannot receive cash back after the loan closes. Co-signers are not allowed.

The Pathway program requires a DTI of 45%. DTI is debt-to-income ratio—the borrowers’ total monthly debts divided by their gross monthly income. If you have a $1,000 mortgage payment, $200 in credit card payments, and a $300 car payment, for example, and a $4,000 gross monthly income, your DTI is $1,000 + $200 + $300 / $4,000 = 37.5%.

To participate in the program, you must take a HUD-approved homebuyer education class. Generally, you can take the class online, in person, or by phone.

Note that the lender’s requirements may trump some of the program requirements based on whatever loan the buyer qualifies for.

What Next?

Only ADOH-approved lenders can offer Pathway to Purchase. The good news is, Caliber Home Loans is an approved lender. Give us a call if you’re buying a house in one of the cities listed above. We’ll walk you through the process, get you money for your down payment, and put you in your dream home before you know it.


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No Down Payment Means No House? Think Again

No Down Payment Means No House? Think Again

Arizona Down Payment Assistance Programs Are a Great Option

You want to buy a house and you’ve been trying to save the down payment for years. But something always gets in the way. Your car breaks down. Your eight-year-old needs braces. Rent keeps going up.

You’re beginning to think you’ll never own a home.

Think again.

Arizona has three great down payment assistance (DPA) programs for middle income borrowers. And they’re not just for first-time home buyers.
What is down payment assistance? Down payment assistance is a grant or a forgivable loan. Once you qualify for a first loan to buy a house, you receive the assistance money to pay the down payment and closing costs (prepaid taxes, home owners and mortgage insurance, and so on).

Two of the DPA programs are offered by the Arizona Department of Housing (ADOH) and the third by the Industrial Development Authority of the County of Maricopa (IDA). Note that the lender’s requirements may trump some of the assistance programs’ requirements based on the loan programs the buyer qualifies for.

Pathway to Purchase

The Pathway to Purchase program (P2P) helps home buyers in certain cities in Arizona put together a down payment. It works like this. You apply for a first loan through the Pathway program, which is a 30-year fixed-interest rate loan. Once you apply for the loan, you also receive a 2nd loan for the down payment and closing costs up to 10% of the purchase price with a max of $20,000. If the first loan is $100,000, for example, then the second loan will be $10,000. This second loan is forgivable—it has no payments and no interest, and after five years, it is forgiven.

There are a few stipulations. You can’t own another residential property at the time of close; your annual income can’t be more than $89,088; the purchase price can’t be more than $356,352; and your credit score must be 640 or greater.

This program is available only in these Arizona cities:

Arizona City, Avondale, Buckeye, Case Grande,
Coolidge, Douglas, El Mirage, Fort Mohave,
Goodyear, Huachuca City, Laveen, Maricopa,
Red Rock, Sierra Vista, Snowflake, Tucson,
Yuma

Arizona Home Plus HFA Preferred Loan Program

If you are eligible for the Home Plus program, you can get up to 5% of the loan amount (not purchase price) for down payment assistance, depending on the type of loan you qualify for—and as much as 6% if you are qualified military personnel, such as a veteran, active duty military, active reservist, and active National Guard. This program is not available in Pima County, and with some types of loans, it is not available in Maricopa County.

As with the Pathway program, the first mortgage is a 30-year-fixed loan, with no minimum loan amount. Your income can’t be more than $89,088, the purchase price can’t be more than $356,352, and your credit score must be higher than 640. If your credit score is higher than 680, however, you’ll get a higher percentage of the maximum assistance.

Arizona Home In 5 Advantage Loan Program

The Industrial Development Authority offers the Home in Five program, which is strictly for homes purchased in Maricopa County. Home in Five provides down payment assistance up to 4% of the loan amount for eligible buyers and up to 5% for “hero” buyers: qualified military personnel, first responders, and teachers. The actual amount depends on the type of loan and the buyer’s credit score. The first loan is a 30-year-fixed interest rate loan.

This program has certain requirements as well. Your income can’t be more than $88,340, the purchase price can’t be more than $300,000, and your credit score should be at least 640—but the higher your credit score, the higher the assistance up to the program’s maximum.

What Do the Programs Have in Common?

In all three programs, the loans must be for purchases of owner-occupied, primary residences. They cannot be for refinance or new construction loans or for manufactured or mobile homes, and buyers cannot receive cash back after the loan closes. Each type of loan and each program have their own requirements about the type of property allowed: new or existing homes, single family, multi-unit, condos, townhomes, and so forth.

All programs require a DTI of 45%. DTI is debt-to-income ratio—your total monthly debts divided by your gross monthly income. If you have a $1,000 mortgage payment, $200 in credit card payments, and a $300 car payment, for example, and a $5,000 monthly income, your DTI is $1,000 + $200 + $300 / $5,000 = 30%.

In addition, to participate in these programs, you must take a homebuyer education course. Generally, you can take the course online, in person, or by phone.

Next Step

Give us a call to see which program is best for you. We’ll walk you through the process, find you the right program, and get you into a home before you know it.

 

 


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Is Refinancing for You?

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Many of my clients are looking at the pros and cons of refinancing their current home loans due to rate and program changes in the past several years. There is potential to lower their rate or payment on their current mortgage. In the long run, refinancing can be very beneficial. There are many reasons why people will consider a refinance, so I will break it down into the top 4 reasons that I have had experience with.

Changing from an Adjustable Rate to a Fixed Rate Mortgage: Some homebuyers initially go for a low rate adjustable rate mortgage (ARM). This program allows for a fixed set interest rate for a period of time, typically 3, 5 or 7 years and when that time is up the mortgage will re-adjust based on the terms set forth in the initial note. The fixed interest rate allows buyers to refinance and lock in a similar monthly payment for the life of the loan.

Interest Rate or Monthly Payment: The most common reason to refinance is to lower your interest rate or drop mortgage insurance and in turn lower your monthly payment. For example, if you are five years into an existing 30-year mortgage and refinance for a brand new 30-year fixed loan, you are able to re-set the time clock back to 30 years. This extends the amount of time you have to pay off your loan and will possibly lower your monthly payments. If you have sufficient equity in your home you may also be able to refinance out of your current loan program that may have mortgage insurance.

Shorter Term to Amortize the Loan Faster: Some homeowners use the lower interest rates to pay down their mortgages faster. A basic example would be a homeowner with 20-25 years left to pay on a 30-year mortgage. By refinancing, they can move to a 15-year fixed rate or 20 year with usually only a modest change in their monthly payment. This would allow the homeowner to pay off their loan in a shorter time frame and lower the amount of interest they will pay overall.

Equity: Homeowners may want to use the equity that they have accumulated based on improving home values and do a cash out refinance. This money can be used for many things, from paying off other debt to doing home improvements.
Take some time and talk to a mortgage professional to figure out the best option for you. Some things you should think about are:
– Credit score (at least 620 or higher)
– Steady income for at least the past 6 months to 2 years
– Amount of equity in your home (at least 20% preferably)
– Will this make significant change?
– How long do you plan on staying in the home?

Each homeowner has their own special situation and should take the time to weigh the pros and cons of a refinance. Your mortgage professional is there to help you through this decision. For questions or suggestion please feel free to email me at Ingrid.Quinn@cobaltmortgage.com or visit me at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn


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Down Payment of Your Home Purchase

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Where is my money better spent if I have to make a choice, down payment or discount points? When it comes to putting a down payment on a home there are a number of different options available and each individual has a unique situation. It is best to weigh the options and determine what is going to be best for you in the long run. Different loan programs offer different down payment options:

VA Loans: 100% financing maybe available

USDA Loans: 100% financing maybe available

FHA Loans: minimum down payment is 3.5% of the sales price to FHA’s county maximum. Check your local market for FHA maximum loan limits. https://entp.hud.gov/idapp/html/hicostlook.cfm

Conventional Conforming Loans: 5% down payment is the minimum required for a Conforming Loan.

Non-Conforming Loans: check with your mortgage professional (programs may vary)

3 Things to Keep in Mind:

Larger Down Payment – Just remember, the larger your down payment means the less money you have to borrow. This also means you’ll have more equity already available in your new home. This is important for borrowers in many ways, including lower monthly payments, potentially better loan terms, and the possibility of not having to purchase mortgage insurance.

Discount points – The easiest way to think of discount points is that in order to lower or discount your interest rate, you pay a premium. This increases your closing costs and may have an impact on the money you have available for your down payment. Before you agree to pay discount points, you should consult your mortgage professional about the amount of money you are going to save monthly. From there you can decide if this route will benefit you in the long run. I have written in detail on the subject of discount/mortgage points. For more information on this subject please visit my blog Mortgage Points, What Are They?

Qualifying for a Loan- qualifying for a loan can be tricky, but with the help of a mortgage professional you can look at your options and determine what will be the best way for you to qualify. In some cases you may need to work with a combination of things to fully qualify for the loan you need.

There is no answer that is right for every borrower. Many factors play into a home loan and a mortgage professional is there assist you with the decision making process by laying out your options. Never hesitate to ask questions.

For questions or suggestions please feel free to email me at Ingrid.Quinn@CobaltMortgage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com


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Short Sale/Deed in Lieu Seasoning per Fannie Mae

MortgageTroubles
New Fannie Mae loan changes on the horizon could affect you! If you’ve recently had a short sale or deed-in-lieu of foreclosure (DIL) and are looking to purchase a home again, here’s what you need to know:
Fannie Mae announced that on August 16th of this year there will be changes to regulations. For several years now, Fannie Mae has allowed buyers that previously were involved in a pre-foreclosure hardship (short sale, or deed in lieu), to buy again using Conventional financing in as little as 24 months with a 20% down payment and a minimum 680 credit score.
After August 16th, this early purchase programs is being retired, and replaced with longer waiting period, but with much less strict down payment and credit score requirements. Buyers that experience a short sale or deed in lieu of foreclosure are able to buy again using Conventional financing after a four (4) year waiting period.
From what we understand, it appears that after the four (4) years from a short sale or deed in lieu, that you can qualify using the standard Conventional qualifying requirements of a minimum 620 credit score, and 5% down payment.
Exceptions: If a homeowner can prove that the short sale was due to an extenuating circumstance such as job loss and can provide strong documentation, then the waiting period may still be reduced to two years.
There are still options other than conventional conforming programs to assist buyers purchasing a home prior to 4 years. FHA & VA financing have shorter waiting periods; 3 years for FHA financing and 2 years for VA. Also, there are portfolio products available where a time limit does not exist but terms of that type of a loan are significantly less favorable than previously described programs.
If you have questions or comments, please feel free to contact me. Visit http://www.cobaltmortgage.com/ingridquinn or email me at Ingrid.quinn@cobaltmortgage.com.