This week we step out of our normal routine for an opportunity to speak with Ron Brown from New American Funding, a direct lender of FHA, VA, and Conventional loans. As you will hear, Ron walks us through the basic qualifications for an FHA loan and why an FHA loan might be right for you. Now is the time to stop thinking about a home loan and whether or not you qualify, just pick up the phone and call him.
To start the “journey” or home buying process you only need a couple of documents, tax forms, etc., and a brief conversation with Ron about where you would like your journey to take you. With that information, Ron can begin to determine your specific road map designed to put you on your new front porch.
Homes are affordable and the FHA requirements are as little as 580 credit score and 3.5% for a down payment. Think about it, you could potentially be paying the same for rent as you would be a mortgage.
Another little useful piece of information Ron shares are the seasoning requirements for buyers who have already purged their debit through foreclosure, short sale or bk and now realize the amazing opportunity of today’s market with low prices and lower interest rates.
Believe it or not, you can be back out there looking for a home with an FHA loan in as little as 3 years or a conventional loan in as little as 2 years. If that isn’t motivation to ditch your bad debit and underwater house and still be able to take advantage of low prices and rates in a couple years, I don’t know what is. Have you thought about Short Selling, if not, you may want to, in three years you could put 3.5% down and have more equity then you will in 5 years with your current home.
For you investors out there, Ron also talks about a couple of conventional loans and opportunities for short term loans that could help you take advantage of the strong rentals which are currently on the market.
We have included a small outline of some of the time lines, but we encourage you to call Ron and get the information specific to your situation.
Current Seasoning requirements on BK and Foreclosure and loan modifications:
Chapter 7: 2 yrs
Chapter 13: 2 yrs
Foreclosure: 3 yrs
Short Sale: 3 yrs (unless borr was not late prior to short sale and was not trying to take advantage of the market)
Chapter 7: 2 yrs
Chapter 13: 2 yrs
Short Sale: 2 yrs
VA High Balance:
Chapter 7: 7 yrs
Chapter 13: 7 yrs
Foreclosure: 7 yrs
Short Sale: 7 yrs
Chapter 7: 4 yrs*
Chapter 13: 2 yrs from discharge date or 4 yrs from dismissal date*
Foreclosure: 7 yrs*
Deed in Lieu: 2 yrs if subject loan is 80% ltv (loan to value) or less
Short Sale: 2 yrs if subject loan is 80% ltv or less
BK Chapter 7: a four year waiting period is required measured from the discharge date or dismissal date of the BK. A 2 yr waiting period is permitted if extenuating circumstances can be documented.
BK Chapter 13: a four year waiting period is required for a Chapter 13 dismissal. A 2yr waiting period will be permitted with extenuating circumstances.
Multiple BK filings: for a borrower with more than one BK filing in the last 7 years, a 5 yr waiting period is required
Foreclosure: A seven year waiting period is required, and is measured from the completion date of the f/c. A 3 yr waiting period is permitted if extenuating circumstances can be documented and the ltv rules are applied, has to be a purchase of a principle residence or a limited cash out refi on an owner occ, second home or non owner.
What are extenuating circumstances: they are non recurring events that are beyond the borrower’s control that result in a sudden, significant and prolonged reduction in income or a catastrophic increase in financial obligations.
When your borrower has done a loan mod in the past we can offer him a loan if the following has happened:
- You have 12 months seasoning since the loan mod
- No late’s prior to the loan mod
- Borrower provides a copy of the modification (showing it is a permanent mod)
- The modification could not have provided forgiveness on principle owed or interest owed
This applies to conventional and FHA and VA loans
Thank you for listen to the rants, raves and pontifications of the Shandrow brothers. If you want to take advatange of their expertise and experience, or know someone who needs our help, give us a call at 800-804-9506 and we would be happy to help.