Friday, November 17, 2017

Mortgage Insurance Explained

There are two different types of mortgage insurance. 
    1. Mortgage Insurance Premium or MIP
          2. Private Mortgage Insurance or PMI

Mortgage insurance is required on any real estate loan that has a loan to value (LTV) above 80%. Not everyone can save up 20% for a down payment so MIP or PMI allows a buyer to put less down and pay insurance to protect the lender against default and foreclosure.

To explain the difference between MIP and PMI:
MIP is used for FHA loans that require a small down payment of 3.5%. You pay MIP in the form of an annual up-front mortgage insurance premium or (UFMIP) this can be financed into your loan and the current amount is 1.75% of the principal balance. In addition to this UFMIP is a monthly premium of .55% added to your mortgage payment each month.

Example:   250,000 Loan Amount x 1.75% = $4,375 Annual UFMIP 
                   250,000 Loan Amount x .55% = $1,375 /12 = $114.58 Monthly MI

FHA MIP is on your loan until the loan is paid in full or you refinance into a conventional loan and remove it after you have 20% equity in your home.

PMI is for conventional loans when you put less than 20% down. The rate factors are based on the individuals credit history and risk factors. Typically ranging from .35% to 1% of principal balance. Most insurance companies require a 660-fico score before they will cover your loan.
There are different ways to pay this type of PMI, you can choose to pay it all upfront at time of closing or as a monthly premium or a combination of both.

Lender’s also offer a slightly higher interest rate to cover the cost of the insurance called lender paid MI. I don’t recommend this if you plan to stay in your home for more than 5 years, because the higher rate is for the life of the loan and the best part about this type of PMI is you can request to have it removed after you have 20% equity in your home.

When you request your PMI to be removed you must do it in writing and they will require an evaluation of value to done on your home to establish your LTV and confirm you have 20% equity. You may have to pay for an appraisal to confirm value.

The Homeowners Protection Act of 1998 became effective in July 1999 and is known as the PMI Cancellation Act.  It was enacted to protect homeowners from the difficulty of cancelling PMI from their home loan. Now if you forget to request removal the lender is required to remove your PMI automatically when your LTV reaches 78%. I still recommend you keep track of your home’s value annually if you have PMI.

How you can avoid PMI and MIP is with a VA loan. Veterans who qualify can get 100% financing. With a VA loan there is a funding fee that is normally financed within the loan but no monthly mortgage insurance. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Wednesday, November 8, 2017

Piggyback Loans are Making a Come Back!

A piggyback loan is used when a buyer doesn’t have 20% down. This loan is considered a purchase money loan and goes in second place after the first lien. In most cases we are seeing a combination that is 80/10/10 meaning you get an 80% loan, a 10% piggyback/second loan and you put 10% down payment. Other combinations are 80/15/5 and an 80/20. All making a comeback..
By doing this it eliminates the requirement for principal mortgage insurance (PMI)

We are seeing more lender’s in 2017 take on this risker scenario not seen since before the 2008 mortgage crisis. These loans are an alternative for the buyer who doesn’t want to pay mortgage insurance.

Mortgage insurance is paid on any loan that exceeds 80% loan to value (LTV) there are several different ways (PMI) can be paid. I’ll go into mortgage insurance on my next blog post.
Piggyback loans are typically at a higher rate than the first loan and often made by the same lender.
I have seen some lenders match the rate of the first if the borrower’s risk factors are low. Meaning the borrower has a higher credit score and low debt to income ratio.

The only loan above 80% LTV that avoids PMI is a VA loan for our military folks. The VA loan for purchase and refinance is 100% financing and the ability to add their VA funding fee and closing costs to the loan, so the Veteran has no out of pocket money required. Great deal for our veterans. 

I am not sure if bringing back the piggyback is a good idea or not, they did cause their share of problems for both homeowners and lenders, causing many foreclosures which is why they disappear for so many years. I see an ever changing environment in the lending industry with lenders taking on more risk. Good or bad not sure!

I think it’s important to make sure that you research the difference between paying PMI or getting a second lien and the rates offered on the piggyback vs the factor used for the PMI.
Other things to consider is the tax benefit of each and with this new tax plan being introduced by our current president. Most of us can deduct our mortgage interest and mortgage insurance but that is likely to change if the new plan passes, at least to some degree depending on the size of your mortgage.

Thank you for visiting my blog and I encourage you to leave a comment or questions. Let me know if my blog has helped you to answer any questions you had. I would love to have ideas about what you all would like to learn about regarding financing or real estate.
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Thursday, October 26, 2017

How To Pay Off Your Mortgage Ten Years Sooner!

Most home loans are for a 30-year term. To calculate how you personally can pay off your home  10 years sooner, you will need to get your most recent mortgage statement or go online and get your pay off balance. Now get your interest rate from your statement and using a mortgage calculator. You can use mine at it’s at the bottom of my home page. Just plug in your balance, leave the down payment box empty, add in your interest rate, then change the term from 30 to 10 or 15 or whatever you want the term to be and hit calculate. This will give you the principal and interest you will need to pay each month to pay off your mortgage in the term you picked. 

Now remember if you have property taxes, home owners/hazard insurance and any mortgage insurance that you pay in your mortgage payment each month too, this is called and impound or escrow account. You will need to add that figure to your payment. These figures should also be on your mortgage statement. If it’s not you can probably find the amount online in your account payment history.  

One more thing to note and it’s important. Most mortgage servicing company and lenders may not know what you are doing if you send in more than your normal payment. If you plan to pay extra to pay off your mortgage early, send the extra by mail and by check and add instructions for them to apply this extra amount to your principal balance, you don’t want them to mistakenly add it to any interest due when they receive the payment. Keep good records of your over-payments and check your principal balance every quarter to make sure they are being apply to your account correctly.

If you would like an amortization table of the new amount/term you will be paying, I would be happy to do this for you FREE. Give me a call and we can go over any questions you may have.

Thank you for visiting my blog and I encourage you to leave a comment or questions. Let me know if my blog has helped you to answer any questions you had. I would love to have ideas about what you all would like to learn about financing or real estate. Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Saturday, October 21, 2017

10 Ways To Pay Off Your Mortgage FAST!

1. Using a mortgage calculator to figure out how much more you will have to pay each month to lower your principal balance and shorten your term. Paying a little bit more then your normal payment will  save you on the interest each month and in turn shorten your term. 

 2. Divide your payment in half and make that payment every two weeks instead of once a month. Because there are 52 weeks in a year at the end of the year you will have made 13 payments instead of 12. Most mortgage servicing companies and lenders will allow you to set this up. They will most likely have a setup fee but you will be saving interest each month and paying off your mortgage early saving you money. Check with your lender to see if they will except partial payments in advance of due date. You will need to get ahead of your current payment to get this in motion.

 3. Refinancing your 30 mortgages into a 
15-year or even 10-year term mortgage will save you an incredible amount of interest. This has become very popular as baby boomers look at retirement and want to stay in their homes.

 4. Refinancing in general could be an option for you to save money, I always advise my clients to do an annual mortgage analysis to make sure your current mortgage is working for you and see if there might be is a better loan product available that could save you money.

 5. Blending a traditional mortgage with one or more deposit saving accounts. Both the mortgage and savings are established with the same bank/lender. Each mortgage payment is made and the interest is calculated on principal of your mortgage loan, minus the aggregate in your savings accounts, you still have access to your savings. This is a very common financial tool used in many countries that our US banks really don’t want you to know about.

 6. Setting goals to pay off your home early can also mean sacrifices no one wants to work a second job, but increasing your income with a second job or other type of work that can increase your income and pay this extra income to the principal on your mortgage will work to get it pay off early.

 7. Cutting up those credit cards is another sacrifice you could do to create extra income. Once they are paid off, start making that same payment to your mortgage principal.

 8. Do a price analysis on all your other expenses to see if it’s possible to reduce some of your monthly bills. Cell phone, cable and internet, electric. If you use your checking account to pay all your bills, some banks have reports on the different type of expenses you spend your money each month, use these reports to see where you spend and where you can reduce your spending. Take that savings each month or even quarterly and make a payment toward to mortgage principal.

 9. Investment accounts, 401K, Roth IRA’s, IRA’s, annuities, life insurance with cash value, etc. Checking these accounts annually to see if using them to pay off or reduce your mortgage debt is financially right for you. Determine your gain vs the interest paid on your home and see where you are and what is working and what is NOT.

10. Using your home as a money earning asset, renting it out. Renting a room or space in your home. If you have the ability to turn remodel old basement or attic into a rental space you can earn a second income from your home. If you have a lot of land or large lot consider renting a space to someone living in an RV or storing it for them while they are not using it. Be creative and do what works for you.

With all of these different ways to pay off your mortgage early please make sure you are careful and if you need help contact me. I can whip up an amortization table or do an mortgage analysis pretty quickly for you and help you with any questions you might have about any one of these 10 ways.

Thank you for stopping by my blog,  I appreciate and welcome your comments and questions.

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Monday, July 24, 2017

USDA Home Loan Program NOT just for Farmers

USDA is a power loan helping first-time and lower income home buyers realize the American dream of owning their own home. You don’t have to be a first-time homebuyer to qualify. This loan features ZERO down and allows you to incorporate 2% of your closing cost into your loan. 

USDA loans are eligible in rural and suburban areas in the US, they allow many types of property of be included. Townhouse, Condominiums, Single Family Residents as well as multifamily units. You can also use a USDA loan for refinancing your current home. It’s THE most affordable loan product in the marketplace with zero down, the lowest mortgage insurance rates (MI) with a 1% upfront fee and .35 monthly rate.

USDA is a loan program provided by the US Department of Agriculture. But don’t let that discourage you thinking this loan is for AG land or farmers only, not the case at all.

USDA guarantee the loan, this means the US Department of Agriculture backs the lender if for some reason you default on your loan and reimburses the lender, this insurance allows lenders to approve loans at a higher risk with zero down.

It’s easy to get started to see if you qualify, contact me for a fast, easy and free prequalification process. I will provide you with a preapproval letter for your Realtor, you can then go shopping for your home.

Once you find a home you’ll want to make sure it’s in an approved USDA area prior to submitting an offer.  You can easily check at USDA link Income/Property Eligibility to see if your income and property are eligible. 

Your home will be appraised to insure value, the lender will send your file to USDA for final approval and once they sign off on your loan approval, you close escrow and move into your home. It’s about a 60-day process. In most cases USDA will take no more the 14 days to review and approve your loan once submitted by your lender.

I hope this information has been helpful to you.

I always welcome and encourage your comments and questions.
Thank you for stopping by my blog, enjoy your day!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Saturday, December 10, 2016

HomeStyle Renovation Loans Purchase or Refinance

This loan is a Fannie Mae product, what I think makes it very special is that it allows investors to participate. It’s also great for primary and second homes for the owner-occupied borrower.

I hate to start out with limits but at least you know if its a good fit for you or someone you know.

1-4 Units can be Primary residence owner occupied
1 Unit Second home owner occupied
1 Unit Investor

On a purchase transaction, the Loan-To-Value(LTV) is based on two factors and the lesser of the two apply.
  1. Purchase price plus the cost of the renovation
  2. The “AS Completed Value”

For the Limited Cash-Out Refinance (LCOR) the LTV is determined by dividing the original loan amount by the completed appraised value.

Another cool aspect of this product it allows for subordinate and community seconds, this is very helpful to first time buyers with down payment assistant grants from their city or county.
You must use an approved by the lender contractor and if your financing doesn’t exceed 10% of the “AS Completed Value” you can be a “Do It yourself worker” but to do this the property must be 1 unit and owner occupied. 

This loan product requires a 10% contingency reserve and the proceeds for the reno must be placed in an interest-bearing bank account that the lender has control over. Draws are set up and inspections need to be completed before each draw is paid out. Once completed the lender will require the appraiser to provide an Update/Completion Report form 1004D.

For investors doing one home at a time to buy/sell or keep and rent this is a great option and much cheaper then short term high interest rate loans from hard money lenders. Although if that is easier for you based on your documentation or lack of it, I can help you with those too! But you will be surprised how easy the HomeStyle loans are and the rates are great! 
Got questions, contact me or simply give me a call, I would love to talk with you. If you are ready to apply and get pre-approved go to my website Roxy's Website

Realtors, I encourage you to learn more about the loan products that will help you sell your listings and help your buyers with alternatives. This loan product is a valuable tool to do just that. I also have loans for sellers to help them fix, remodel or update their home in preparation of listing it. As you know, these modern fixes help sell homes and increase profits. I offer incentives to sellers that need short term money to make these improvements. 

Ask me about our Certified New Home program and Seller Home Warranty program that insures the home while it's listed. 

No Manufacture Homes (MH) area allowed on the HomeStyle program. But don’t worried I have lots of options for MH. Stay tuned to my blog for my next post on MH, you can join/follow my blog from FB over on the right side of my blog, please do!  

I always like to leave you with a link for research so here are some tips direct from Fannie Mae

I always welcome and encourage your comments and questions.
Thank you for stopping by my blog, enjoy your day!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Sunday, December 4, 2016

FHA 203K Rehab Loans for Purchase or Refinance.

There are two types of 203K rehab loans, the standard and the streamline. FHA (Federal Housing Administration) is a division of HUD (Department of Housing and Urban Development. FHA administers the mortgage insurance for primary residential homes 1-4 units, that allows buyers the opportunity to purchase existing homes with 3.5% down payment. I will explain both types and some of the basics for both.

If you have been shopping for a home you’ve probably noticed many are in need a repair, remodel or a complete overhaul due to foreclosures and bank owned properties. This is a great example where a 203K standard can be used for a purchase. This rehab loan will cover a complete tear down to a complete rehab of all rooms, appliances, roof, electric, plumbing. If you are already a homeowner and would like to rehab or remodel your home, you can also refinance into a 203K standard.

If you are a Realtor this product could help you sell your listings! There are other loan products for seller but that’s another blog post. If interested email me for ways to sell your listings by offering your seller simple fixes that can make a huge difference in the seller net profits.

How a 203K Standard works; The seller or your lender depending on if you are buying or refinancing, your new loan is funded at closing. The 203K is a one time close loan. The funds needed for your rehab portion are deposited into an interest baring account at a bank or credit union and construction costs are paid out from this account just like a construction loan or at the completion of the project. With the 203K standard 5 draws are allowed. Inspections are required before each draw.
Loan maximums are like any FHA loan they are based on your county limits.
Click Here to find your state/county limits

The minimum on the rehab portion is $5000.00. IF your repairs or rehab were at or under $35,000 you would use the 203K Streamline or Limited.

Your FHA/HUD Consultant can make suggestions based on the scope of the project.
The lender will insist on a contingency reserve of between 10-20% to cover construction overages plus your payment of principal-interest-insurance-taxes (PITI) and mortgage insurance (MI) during the construction phase for up to 6 months if the property is uninhabitable. Your FHA/HUD Consultant will determine and make recommendations for the amount of the contingency and the duration of how long the property will be uninhabitable during construction.

You must have an approved FHA/HUD Consultant, that person reviews your plans, architectural drawings, material list and bids. The consultant will be required to complete two reports; A Feasibility Analysis Report (FAR) and a Specification of Repairs or SOR. The consultant will do an inspection before each draw to make sure all the work is done per HUD guidelines
Their fees range from $400 - $1000 depending on the size of the project.

You must have a Licensed General Contractor (GC) who oversees the complete project and works with the FHA Consultant to meet the FHA guidelines. Your GC will normally have subcontractors for electrical, plumbing, roofing all depending of the scope of the project. YOU can help on certain jobs but only under the direct supervision of your GC. The contractor must start the work within 30 days after your loan funds. The lender allows up to 5 months for contractor to finish the project and get the occupancy permit.

You must have an approved FHA Appraiser who will do an initial appraisal before funding of all the rehab plans, bids and cost breakdown and provide in the report the AFTER rehab completion Value. If this 203K is for the homeowner who is refinancing the appraiser will need to report on the “AS IS” value as well as the AFTER-completion value.

Here’s how a 203K Streamline or Limited works; This is a simpler process, you don’t need the FHA/HUD consultant although they are valuable and you might want one anyway! Just not required. This loan has a limit of $35,000 in rehab money available after close. Again the minimum is $5000. You still need a Contractor and Appraiser.
The contractor has 4 months to complete the work.
The type of repairs you can do range from remodeling kitchen/bathrooms to buying all new appliance. A new roof, electrical, plumbing and fixtures, even landscaping can be included. You just need to keep it at or under $35,000.

They are called streamline because the process is much easier and quicker.
However even the 203K standard may seem difficult it’s NOT, most of the work is done by others including your lender (ME) the Consultant, Contractor and Appraiser we all work together to make it all come together. It’s a GREAT way to get a home under market value and make it yours. I highly recommend these loans, they are both great products.

As for you the borrower, qualifying for either of these FHA 203K standard or streamline is basically same as any FHA loan, some lenders restriction may apply in addition to the FHA guidelines. Best way to see if you qualify is to contact me and I’ll get you pre-approved. 
It’s FAST,EASY and FREE! Go to my website to apply and let's get started Roxy's Website
Here’s a couple links to help you with some research, I always recommend doing your research and educating yourself and I am also happy to help with education and research.

Find a FHA/HUD consultant in your state… just add your state in the drop down and all the approved consultants in your state will be listed. After your lender(ME) I recommend talking with a consultant, they can help you with many questions and a referral to the best contractors, who are experience in working with FHA203K projects. They know who are the best in their field.

There are many other interesting factors for multi-family units and how you can use the 203K product. I didn’t get into these types of properties here, because this is a blog not a book. So, if you have questions contact me, or just call me. I would love to talk with you. 

If you are an investor and thinking..... how can I do this too? 
Because who wouldn’t want to buy distressed properties to resell or keep and rent. FannieMae has a product for you too! It’s called the HomeStyle Loan, stay tuned and join my blog over on the right side and I’ll post information and guidelines on that product next.

Thank you for stopping by my blog, I appreciate and welcome your comments and questions.
Have a wonderful day! 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Thursday, November 24, 2016

Roxy's Real Estate News Blog: HOUSE FLIPPING ON THE RISE

Roxy's Real Estate News Blog: HOUSE FLIPPING ON THE RISE: Flipping is such a popular craze. Not sure about you but I am a regular on HDTV and I love Chip and Joanna Gains. This type of estate inve...


Flipping is such a popular craze. Not sure about you but I am a regular on HDTV and I love Chip and Joanna Gains. This type of estate investing strategy is not for everyone but if you are thinking about diving into this flipping home strategy you are not alone. 

The flipping market has been busy with some 51,434-single family homes and condos flipped in the second quarter of 2016, this is a six-year high. With an average $60K profit, it’s no wonder this strategy is HOT!

I have some points of interest you might want to consider if you have considered house flipping.

Most flipper investors or at least about 71% are using all cash to fund their deals. Most are using funds from investors that invest in people who buy houses to flip and they partner with them for a predetermined percentage of the profits plus interest on their funds. That’s one way, another is with a short-term bridge loan, this could be for a large amount to cover several properties and as each home is sold they are removed as security from the original bridge loan. There are many ways to fund these projects. I see many lenders wanting to get involved providing new programs with the flipping industry in mind. So don't stress about the money, it's available.

The most important thing is YOU!
This endeavor is not for everyone. You need to invest in yourself and get yourself educated before you just dive in, because this can be very risking if you don’t know what you are doing. I am not saying you need to go spend thousands of dollars on one of those Gurus that’s been flipping houses successfully for years. But instead go out there and buy real estate investing books, join some forum groups and talk to like-minded people. BiggerPockets is one of the best I know of and is very useful for many real estate investors for education, networking and deal-
making and will prove to be a great resource.

Do research on this industry and learn as much as you can. Learn marketing for leads and find out where the best areas for distressed homes are located, research county records for vacant homes that the city or county has in their inventory. Talk to Realtors! DO YOUR RESEARCH. Hopefully you will then know when you will make your first move and get started.  BE careful, most newbies realize very quickly this is not easy money and is a lot of hard work.

I do know a few flippers, I have helped them on the money side, they do love it and are making money. They started with one house and now are working several.  I know you can too, just be smart, get educated, start small, but do get started if this is what you want to do. Procrastination is your worse enemy for any kind of success. Get in the right mindset to succeed in your house flipping dream and get busy!

I found a couple article to help you start your research … go ahead and check them out!
And as my 10-year-old grandson claims you can learn just about anything on YouTube! So, don’t forget YouTube as a research source because he is correct.

Please leave your comments and questions, they are appreciated and encouraged. 
Join my blog on the right directly from your FB account and you will see my blog post first. 
Thank you for stopping by, have a great day! 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Thursday, November 10, 2016

Thinking About Becoming an Investor of Multifamily-Housing Rental Property

NOW is an excellent time for becoming an investor of multifamily rental property. 
We are seeing a 6-year surge in apartment rentals. Why you say? Millennial renters, although we realized an increase in homeownership in 2016’s first two quarters we are seeing more and more households opting to rent instead of buying. There are many reason (see my last blog post) but overall this increasing market is looking more appealing to investor than ever before.

There are some HOT markets for buying multifamily units these are the top 5 in the nation.
  • Orlando, FL
  • Phoenix, AZ
  • Atlanta, GA
  • Fort Lauderdale, FL
  • Las Vegas, NV
If you are selling your multifamily units, you will do well if your property is in the Hottest selling market in the nation, these are the top 5 in the nation. 
  • New York City, NY
  • Pittsburg, PA
  • San Francisco, CA
  • Miami, FL
  • Nashville, TN
It is very important to do your due diligence and research the area and properties you are considering. Professional help from a Realtor can be useful but as an investor you don’t want to rely completely on anyone but yourself.

Location, Location, Location is always going to be the most important factor of any property you buy.

There are several tips about finding the best location.
  •        Finding the best property in the best neighborhood, or the worse property in the best neighborhood, because rehabbing a rundown property can make for a great investment if the location is in a well sought out area.
  •        Check with the Police or go to the library to see about the crime rate in the area before you buy. No one wants to rent in a high crime area.
  •        Check the schools and find out their state racking. Are they within walking distance from the property you are looking to buy.
  •        Parking is another very important factor, does your potential property have tenant parking for one or two vehicles or is it street parking only.
  •        You will need to know what the average rents in the neighborhood are producing. 
Investing in multi-family property can be very lucrative, but they can also be financially draining. Do your homework, find good professionals to work with you, a Realtor and a good loan broker, I am available if you need either.  Most investments properties require more money down then regular residential loans.
You will want to learn about managing a rental property and know the tenant/landlord laws in your state. You will need to decide if you will manage or you plan to hire a managing company to run your properties.

Get the facts and know what you are doing BEFORE you invest!

Here are some websites and organizations that can provide information.

Thank you for visiting my blog, please leave your comment and questions! Join my blog on the right to receive a notice when I have a new post.

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926