San Diego Mortgage testimonial from some great repeat clients.
Since starting in the mortgage business back in 2001 I have found that maybe 1 in 20 clients that come to me for credit improvement and counseling actually follow through with the plan to improve their scores and buy a home. Unfortunately old habits are hard to break and most people fall into the old routine once a huge improvement is not made in 30 days or so. An important thing to remember is that the FICO score model is made to show stability and most of the time it takes 3 to 6 months to get a big jump in scores and up to a year of doing the right things might be necessary.
This testimonial is from some clients that did EXACTLY what they were told to do and now because of it have a new home with a fixed mortgage at a ridiculously low rate.
Congratulations David and Tina, you worked as hard as I did and I’m sure you appreciate the fact that you earned it every time you pull up in your driveway or jump in your swimming pool.
A few weeks ago I made a post about the new San Diego FHA loan limits effective October 1, 2011. Effective immediately HUD has changed the FHA loan limits once again for San Diego and all other counties. The new loan limit is going to help out homebuyers in the higher price ranges because instead of $546,250 the FHA loan limit has been changed back to $697,500 for single family homes.
While the conforming loan limits that Fannie Mae and Freddie Mac have set decreased to $546,250 for San Diego County higher FHA loan limits will help bridge the gap for higher-end homebuyers helping home values in the over $600,000 price range.
I have received numerous questions lately about what the new San Diego County mortgage loan limits are for FHA, VA and Conventional financing so I decided that this would be a good time to start posting again . Sorry for the extended leave from the Blog but my days (and nights) have been spent pushing loans with both hands. This first post will cover San Diego FHA loans and I will follow up later with the VA and Conventional loan limits.
FHA loan Limits for San Diego County;
Effective October 1st 2011 and through December 31st 2011 the San Diego County FHA loan limit for a Single Family Home or Condo is $546,250.
For a Duplex (2 unit) the limit is set at $699,300.
On a 3 unit (tri-plex) property it is set at $845,300 and for a 4 unit property the limit is $1,050,000.
These limits can be seen “straight from the horses mouth” HERE on the HUD website.
As you can see although the FHA program only allows owner occupied homes to be financed with only a few exceptions a 2,3 or 4 unit property can be purchased as long as a buyer plans to and occupies one of the units. If you have questions about FHA or any other San Diego Mortgage program give me a call at the office @ six one nine 285 two nine 21.
Many of the ways that we used in the past to increase FICO scores cause more harm than good with the current rules for lending but we do still have a few powerful tools that can increase scores quickly to help you buy your San Diego dream home. One of these techniques is requesting a validation of debt. To be clear I am not saying to dispute items on your credit report at the bureau level because with the new rules a mortgage can NOT be funded with any active disputes showing on your credit report.
As stated in The Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) anyone can require a creditor to validate a debt that they claim you owe. In this section of the Fair Debt Collection Practices Act it states that a creditor has 30 days to validate the debt that they claim you have or it MUST be removed from your credit report which will in turn raise your credit score. Unless you are completely sure that a bad debt is being reported accurately this technique should be used before paying or negotiation to pay a collection or charge-off account.
Many of the credit reports that I see on a daily basis have incorrect balances for collections, phantom debts and incorrect debt obligations listed on them and by using this technique many of them can be cleared up. With the score increase that this one technique can bring many perspective home buyers may get the FICO score needed to qualify for a mortgage loan and buy a home in San Diego.
For a complimentary credit evaluation or to get a copy of our form letter to send to falsely reporting creditors please call me at 619 285.2921 so that we can help you achieve your goal of owning a home.
Feb 9th 2011
Great news for San Diego home buyers!
H.U.D. has anounced that the loan limits for FHA mortgages in San Diego will stay at last years levels. All home loans under $417,000 or under are considered “conforming” and have the best pricing but for a single family home in San Diego County the maximum loan amount is still $697,500 with up to 96.5% loan to value!
In most cases FHA financing can only be used for owner occupied homes but H.U.D. does allow purchase of up to a 4 unit property with the program as long as the buyer is going to live in one of the units. The San Diego FHA loan limit for a duplex is $892,950, for a tri-plex is $1,079,350 and for a 4 unit building is still at a whopping $1,341,350 all at the same 96.5%.
If you have any questions about using FHA financing for your San Diego home purchase call me at 619-285-2921
January 14 2011
Let me start by stating the fact that 75% of loans in San Diego and across the country are Fannie Mae and Freddie Mac products.
Both GSE’s started with a call “risk-based pricing” to be able to price in risk from borrowers who have lower credit scores. It looks like these fee-based premiums are now for most Freddie Mac and Fannie Mae loans even for borrowers with stellar credit.
Under the new pricing borrower with 800 credit score is putting 24% down will have to pay .25% to fee. To put this in perspective on a $400,000 loan that’s $1000 more in fees. A borrower with a 679 score at 79% loan-to-value would be hit with an astronomical 2.75% fee on the same $400,000 house that’s $11,000 in fees! Some of the other new adders are for condominiums there is a .75% fee and there is an adverse market fee which is pretty much every neighborhood in the country (according to Freddie and Fannie ) of .25%.
I understand the risk-based pricing model is to charge more for borrowers who pose more risk but it seems now that everybody needing a loan is seen as a risk by the GSE’s.
This is only a few of the price increases that make it nearly impossible for San Diego home buyer to get that ” billboard” interest-rate that most companies advertise.
Above is a chart of a few of the price adds that go into effect next week. Please note that none of these ads apply the 10 or 15 year mortgages.
If you or someone you know can use my help or advice on a home mortgage product or guideline please call me at 619-285-2921 or APPLY HERE
You had finally found the perfect San Diego home. It was located where you wanted to live, in the right school district and had all of the amenities. You envisioned growing old in this home.
You were pre approved for your new San Diego Home Loan and did everything you were told to do. You even signed your final loan paperwork and were waiting to get your keys, when it suddenly happened. Loan denied. You can’t believe it! You signed all of your paperwork, paid for inspections, signed at the escrow office…the bank approved your loan for your San Diego Dream home. How could this be?!
Fannie Mae buys most of the mortgage loans in the US so they make the rules. Fannie Mae has a new policy that all loans must have a credit report pulled prior to funding. This is done after underwriting and usually after your loan signing. If you apply for new credit or make big changes with your accounts it could delay your San Diego mortgage loan or worse, get it denied.
We know it’s exciting to buy a new home and equally exciting to go shopping for new appliances but do not do this until you have been handed the keys! This and the clerk offering you 10% off of your new purchase if you put it on their card and its at 0% for a year. Regardless of how good your credit score is heed this warning or you’ll spend years talking about how a washing machine caused you to lose your first home.
Tips to ensure a successful San Diego mortgage loan transaction:
Don’t max out or overcharge existing credit cards – Running up your credit cards is the fastest way to bring your score down, and it could drop up to 100 points overnight. Once you are engaged in the loan process, try to keep your credit card balances below 30% of the available credit limit.
Don’t consolidate your credit card debt onto one low interest card – the balance on the new credit card (after the debt transfer) is under 30% or 50% of your available limit as defined above.
Don’t raise red flags to the mortgage underwriter – Don’t co-sign on another person’s loan, or change your name and address. The less activity that occurs while your loan is in process, the better it is for you.
Stay current on existing accounts – Late payments on your existing home mortgage, car payment, or anything else that can be reported to a Credit Reporting Agency can cost you dearly. One 30-day late payment can cost anywhere from 50 to 100+ points on your credit score.
Continue to use your credit as you normally would – Red flags are easily raised within the scoring system. If it appears you are diverting from your normal spending patterns, it could cause your score to go down. For example, if you’ve had a monthly service for Internet access billed to the same credit card for the past three years, there’s really no reason to drop it now. Again, make your changes after the loan funds.
Now more than ever an experienced San Diego Mortgage Planner is critical to avoid getting your home loan request denied. Call me at 619-285-2921 with any questions you may have about current requirements to get financing for a home purchase.
Yesterday on the radio show (thank you again Jeff for having me on) I mentioned how home buyers who are waiting to see if San Diego Real Estate prices will drop more might be missing the boat on the total cost of waiting. Here is a quick example on how interest rate can affect the total cost of the home more than home value in this market.
Let’s compare a home with a 5% 30 year fixed mortgage and the same property with a 6% mortgage with a 5% reduction in price. For the example below I used a home priced at $400,000 at 5% interest and the same home at 5% less for the purchase price with the higher rate ( where analysts say rates will be by the end of the year) but the example can be modified for any purchase price and rate range. As you can see the higher purchase price and loan amount has a LOWER payment by $105 per month. I understand that $105 dollars is not a huge amount of money but it might as well be a million dollars if it puts a buyer over the Debt-To-Income level that is needed to qualify for the loan.
In this image you can see that over the life of the loan that $105 per month really adds up to $53,730 in net savings. Hopefully at this point you can see the value of the savings and please note that this is at 0% interest so if the savings was properly invested or even just put in a savings account it would be much more (due to compound interest).
Here is where the real magic happens!! If that extra $105 dollars a month was put toward the mortgage payment you can see that the mortgage would be paid off in 26.42 years instead of 30. this would result in a total savings over the house at a “LOWER” price of $95,766.
For more information on how to reduce the total cost of a new loan or your existing loan (without a refinance) give me a call at the office @619-285-2921.
If you are in front of your radio tonight between 6 and 7 tune in to 107.9 FM to hear the radio show. If not you can hear the show live online at www.my1079.com by clicking the listen now button. I will be speaking about San Diego Real Estate and Mortgage market with Jeff Campbell from Jeff Campbell and Associates and we will be taking questions via his e-mail. Send an e-mail with any questions to myfavoriterealtor(at sign)yahoo.com to have your questions answered on the air.