Contributed by Felisa Schlosser of Prospect Mortgage
In today’s market, lush with distressed short sales and run down REOs, there is a unique opportunity to renovate the property you can afford into the property you can be proud to call home. For those who already own a home and have always wanted to upgrade the kitchen, bathrooms, plumbing, heating/AC system, etc, a renovation refinance loan can turn that dream into a reality. Also for you investors out there, renovation loans are an excellent way to transform an average property into a highly attractive rental. With rates as low as they are today, the cost of financing your renovations will prevent you from having to sink so much capital into your investment. Prospect Mortgage is the nation’s LARGEST INDEPENDENT RENOVATION LENDER, and we have a renovation loan that will work for almost any property. All we need is a foundation and we can finance the building of the entire home!
You just love the house. Except for the leaky pipes. Or maybe the kitchen is too small. For the house that’s almost perfect, we have the perfect solution: Our Renovation Mortgage, a mortgage and home improvement loan all in one.
• Purchase or refinance
• Remodel the kitchen or bath
• Renovate or add a room
• Paint the house or add siding
• Add a porch, deck or patio
• Replace a leaky roof
• Put in new flooring, carpeting or tiling
• Conserve energy with new windows
• Mortgage based on after-improved value
• Once loan is closed, repairs begin
• Improvements for accessibility (i.e. disabilities)
• Solar upgrades
• Update electrical wiring, plumbing or heating systems
Plus much more!
FHA 203K Renovation
This program offers the unique features that make FHA loans excellent financing solutions in today’s market:
• Purchase or refinance
• 1-4 unit properties (owner-occupied only)
• FHA down payment (3.5%*)
• Flexible credit qualifying
• Assumable loans
Fannie Mae HomeStyle® Renovation
he HomeStyle® Renovation Loan program allows you to combine the cost of the home with renovation or remodeling costs, and finance it all in one loan! The loan can be used to purchase and renovate most residential properties*.
• Finance up to 80% of your purchase and renovation costs**.
• Soft costs (architectural services, engineering, permit fees, etc.) may be financed.
• Available for owner-occupied 1 – 4 unit properties, 1-unit investment properties and 1-unit second homes.
Fannie Mae HomePath® Renovation
For Purchase and Renovation of a Fannie Mae (REO) owned property that is designated for a HomePath® Renovation Mortgage.
• Primary, Second home and Investment properties are eligible.
• Provides financing up to 97% with no MI (mortgage insurance) coverage, depending on property type.
• Allow a borrower to purchase a property that requires light to moderate renovation.
The one loan amount includes both the funds for the purchase and renovation – up to 35% of the as completed value, not to exceed $35,000, which includes a 10-15% contingency, 1004D and title update.
*Restrictions may apply. **Limited to 1-unit residential properties. HomeStyle is a registered trademark of Fannie Mae.
Have questions? Don’t know which renovation loan is right for you and your property? Call me up. I am here to help!
Any opinions are those of the loan officer and may not reflect the opinion of Prospect Mortgage. Continue reading
Contributed by Mark Chrisman of West Coast Mortgage
It seems to be the only positive thing going on financially in our country right now. You’ve heard it on the news, read it in the paper, and you can’t miss all of the advertisements for low mortgage rates. So, is it for real? Are mortgage rates at record lows? Should you quit reading this article and start refinancing right this second? As a matter of fact, that might be a good idea.
Currently I am writing 15-year fixed loans at 3.250% with no closing costs. 30-year fixed rates are at 3.875% with no points, and 5/1 ARMS can be locked at 2.500%. Rates fluctuate constantly, but for the right borrower who acts fast, even for someone who has a great rate now, this can mean several hundreds a month in savings.
Last year about this time we saw 30-year mortgage rates hit record lows. The mortgage industry had been in a transition period: the heyday of the early 2000’s was long gone, banks had failed, rates had gone up, the tax incentives had expired, even the massive institutional lenders were still trying to recover from the TARP hangover. I knew a lot of people who had left the business altogether.
Suddenly the media declared that rates were at an all-time low and the entire world wanted to refinance. A frenzy ensued. Within weeks lenders were so backed up with applications, many of them raised rates just to try and get caught up. Appraisers that were knocking out full appraisals in 3 days were quoting 3 week turn times. Lenders took away 30 day rate locks and replaced them with a minimum 45 day lock, then they bumped it to 60 day locks, at the borrower’s expense. I have a friend who was a recruiter for one of the large banks and she blasted out an e-mail “URGENT: 500 experienced underwriters needed immediately.”
Then it all went away as fast as it came. In November we saw rates jump half a percent in a couple days. Borrowers who had taken too long to submit their required paperwork or had not locked in hopes of even lower rates were out of luck.
Many lenders learned from what happened last year and they have implemented procedures to handle sudden influxes of loan applications, but huge increases in volume are still going to create delays. If you missed the opportunity last year and are thinking about refinancing, even if you are just curious about what rates you qualify for, you need to start the process today. A good mortgage banker can let you know in a very short time if a refinance is right for your situation. If rates stay this low, and especially if they drop even more, the first borrowers in line with a complete file will be the only ones guaranteed to close before it all disappears.
Mark Chrisman is a Mortgage Banker with West Coast Mortgage, specializing in purchase, refinance, and equity loans including Conventional, FHA, VA, and Jumbo loans.