How to choose between an FHA, VA or Conventional Home Loan?

How to choose between an FHA, VA or conventional home loan?

People who work with home loans every day can forget just how confusing their jargon can be to outsiders. Here is a quick overview of the three main types of mortgage from which both first-time buyers and old hands may choose. In America, the money borrowed by home buyers is almost invariably provided by commercial lenders, but the federal government guarantees at least part of the debt for Federal Housing Administration (FHA) loans and Veterans Administration (VA) mortgages.

FHA loans

FHA loans are currently the most popular form of borrowing among home buyers. That federal guarantee reduces the risk that lenders take on when providing these mortgages, which allows them to require smaller down payments (as low as 3.5 percent of the appraiser's valuation of the home) and less perfect credit (sometimes a score of 580 or so is sufficient) than they do from other borrowers. Closing costs can also be lower too, according to the FHA's website.

VA mortgages

VA mortgages are designed to give special privileges to those who served their country in the military and the surviving spouses of those who died on active service or as a result of their service. The loans are only available to those who meet strict eligibility rules.

Perhaps the two key advantages of VA mortgages are:

1.            They require zero down payment -- providing the price paid doesn't exceed the appraiser's valuation of the property.

2.            Credit score requirements are low -- maybe as low as 620.

VA mortgages may also be less expensive than comparable FHA loans, because private mortgage insurance premiums are not payable. Closing costs are limited, and you can also pay off your loan early without penalty.

Conventional mortgages

Just to make life difficult, different people define "conventional mortgage" in different ways. Some say it's synonymous with "conforming loan," which means one that conforms to Freddie Mac's and Fannie Mae's standards.

However, others say a conventional mortgage is any home loan that isn't guaranteed by the government under programs such as those managed by the FHA and VA -- and that seems a more helpful definition.

Mortgage lenders view each application in the round. Someone with a high credit score but a low down payment (or vice versa) may or may not meet an individual company's criteria. Currently, most in theory require a minimum 5 percent down payment, although in practice more may be required.

Anyone who can qualify, may well find the overall cost of a conventional loan to be lower than those from government-backed programs, so people who are borderline cases might wish first to explore the conventional route.

For more information about this subject or about loans please contact us at 713-373-0345 or email us info@nuhomegroup.com

Frank Marta

Mortgage Broker/ Owner

NMLS: 245813|835796

Office: 713-373-0345

How Do Lenders Know The Maximum Loan Amount Buyers can Afford?

If you are new to the real estate market, the cost of a home may appear daunting. You may feel that you cannot qualify for any home loans, based on your income. However, lenders have a logical and clever way to formulate the best loan amount for you. It is possible to own a home, even with a limited budget. Lenders take your unique income and financial background to create a loan package perfect for your monthly budget.

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The Debt-To-Income Ratio

The main financial formula that lenders use to determine your maximum home loan amount is a ratio of debt-to-income, or DTI. Your household’s gross, pre-tax income is added up. It is then compared to your non-housing and housing expenses to find a manageable budget for a home loan. In general, a high income or low debt allows you to finance a larger loan amount, but each situation is entirely unique in the real estate world.

What Qualifies As Non-Housing Expenses?

Lenders understand that you have other financial commitments that require a monthly payment. Non-housing expenses typically include child support, student loans, alimony and car loans. These monthly debts are usually fixed amounts, giving the lender an idea of your financial limits. If you only have a few of these non-housing expenses, your chances of a larger home loan amount increases. You have more available monthly cash flow to dedicate to the home loan in these cases.

Federal Housing Administration’s Guidelines

Lenders do have monetary lending limits as set forth by the FHA, or Federal Housing Administration. Prospective homeowners still need ample funds outside of the mortgage payment for everyday needs, from groceries to paying the electricity bill. To avoid predatory lending practices within the mortgage industry, the FHA regulates that home loan payments cannot exceed 29 percent of a household’s gross income.

To fine-tune this law, the FHA also took non-housing expenses into consideration. If you add your monthly home loan payment and non-housing expenses together, the total amount should not exceed 41 percent of your gross income. This law protects homeowners from taking on too much debt at any one time, especially if a lender is questionable.

Additional Decision Factors

Lenders can alter the home loan’s amount and interest rate slightly if you have a large down payment saved up or an extremely high credit score. Good credit histories still play a large role in determining loan amounts and corresponding low interest rates. Overall, lenders must look at your entire financial picture to make a fair and well-informed decision on a final loan amount.

For more information about this subject or about our loan programs please contact us at 713-373-0345 or by email info@nuhomegroup.com

NMLS# 245813/835196

Could I Purchase after a Foreclosure or Short-Sale?

Could I purchase again after a foreclosure or short-sale?

As much as people think you can’t, that’s far from the truth. Good news! You absolutely can!

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What Are Extenuating Circumstances?

A death in the household or a permanent disability were typically the only extenuating circumstances that could help you secure a new home loan. With the new “FHA Back To Work program”, initiated November 16, 2013, recovering homeowners can find a reasonable mortgage only 12 months after a foreclosure, without exorbitant interest rates and charges.

Homeowners are slowly emerging from economic hardship. Lenders see the past foreclosure as a huge blemish on their credit report, effectively denying them a loan. Recovering from that foreclosure has been difficult, however. With these new extenuating circumstances noted in the “FHA Back To Work program”, the hardship definition is expanded. For example, foreclosures caused by loss of employment, reduced wages or an out-of-business employer count as extenuating circumstances. With the economic world turned on its ear in 2007 and 2008, the government understands that responsible homeowners need a boost to jump-start their lives again.

Household Income Loss

Extenuating circumstances must include a 20 percent loss of household income for six months or more. To verify this loss, you can offer FHA proof of termination from your employer or a signed tax return noting your loss in that particular year. Income loss must accompany a long-term hardship to show that a foreclosure was the only choice at the time. A 20 percent income loss is roughly equal to a monthly mortgage payment, showing that you couldn’t pay the amount reasonably.

Recovery In Process

You must have proof that your household is currently recovering from financial loss. On-time payments of utilities, and other bills, are a good start. If you had a mortgage modified or altered, and show on-time payments for the past year, you can qualify for FHA Back To Work benefits. Proof of employment, such as a statement from your employer, or pay stubs extending 12 months back are good resources to reflect your recovery process. Because you can pay your bills now, after the economic problems of the past, makes you a perfect candidate for a new home loan.

Counseling Mandatory

HUD, or U.S. Department of Housing and Urban Development, offers housing counseling for those homeowners looking for Back To Work program benefits. If you have successfully recovered from a significant economic event, this housing counseling session gives you an opportunity to learn more about home loans, and your responsibilities under this new FHA loan program. After finishing the counseling session, you should be able to secure a home loan based on new FHA regulations surrounding extenuating circumstances.

Contact NuHome Group today to ask about the FHA Back-To-Work program! This new FHA program gives homeowners another chance at the American dream.

Any Questions about this subject or any questions about our loan programs please contact us at 713-373-0345 or email us info@nuhomegroup.com

NuHome Group 713-373-0345
1445 North Loop West Suite 105 Houston, TX 77008
Frank Marta NMLS# 245813/835196

Should I Buy a Used Home or A New Home?

Should I Buy a Used home or A New Home?

Untouched and Clean

The most obvious benefit to buying a new home as opposed to old, existing, or used is that it’s brand spanking new. It’s untouched, it’s clean, everything is in good working order and nothing needs to be repaired.

That’s a pretty huge incentive to buy new. You won’t have to worry about the typical costs of homeownership for the first several years, right?

Another benefit to buying new is that the home should have all the latest amenities. Remember when it was all the rage to have stainless steel appliances and granite countertops?

Additionally, new home buyers often get the opportunity to fine-tune the home they buy by selecting certain features, colors, styles, etc., and even financing any add-ons into the mortgage.

And speaking of mortgages, most home builders have their own financing departments that make it easy to get a mortgage. Whether it’s the best deal is another question, but if you simply want in, your odds are probably better with a new home.  The builder has a vested interest to get you financing.

You can even pick among different sizes and floor plans to get just the right amount of space, as opposed to having to conform to what’s available in the existing market.

You might be thinking, hey, this sounds great, sign me up now! Why on earth would I want a used home with dodgy popcorn ceilings and laminate countertops?

But wait, there’s more to homes than what’s on the inside and outside of a home.

Don’t Forget About Location…

Let’s face it; the old saying is that location is everything in real estate is true. It’s always been true, and always will be true. That is, if you want to see your property actually go up in value.

And guess what. Brand new homes aren’t being built in the best locations. When it comes down to it, there’s no space for a new development in an established or central location.

Sure, you might see a new condo development, but new homes most likely won’t be that central. They’ll be on the outskirts of town, or in a “trendy” or “upcoming” area.

In other words, there’s going to be a commute if you buy new, and the location might be questionable at best in terms of value.

With an existing or used home, you can buy in the heart of the city, or in an area you know well that is insulated by a lack of available space and construction.

That buffer means the property should hold up well in terms of value, even during a downturn, assuming the area isn’t subject to obsolescence. A used home might also give you the ability to walk to work, or to restaurants, bars, shops, and so on.

At the same time, a used home doesn’t necessarily have to be old inside. If you shop around, you might be able to find an old home that has already been remodeled to your liking.

And even if it hasn’t, that shouldn’t stop you from buying it and making renovations if it’s got good bones.

New Homes Are 20% More Expensive

Back in May, Trulia determined that new homes (built in 2013-2014) cost roughly 20% more than similar existing homes.

They also found that two in five Americans would prefer to buy a new home, compared to just 21% opting for an existing home and 38% declaring no preference.

But when it came to that 20% markup, only 17% would actually pay the premium to get the new house.

So to get this straight, you might have to pay 20% for a new home AND you won’t be in a central location. You’ll be in an untested location that might wind up being a ghost neighborhood in a decade if things don’t work out as planned.

Of course, if you opt for new you’ll probably have all the latest technology and no major issues. If you go with an older home, you might have major bills on your hands when the roof gives out, or you discover serious plumbing issues.

So you’ll need to do your due diligence when buying an old home to ensure the property is in adequate shape. Then again, I’ve heard really negative stuff about new homes too, with many claiming workmanship has gone to you know what these days.

At the end of the day, it’s probably okay to consider both new and used homes when looking for a property. As long as you take the time to inspect the property and the neighborhood, negotiate the right place, and make sure you can afford the place, you should be okay.

Lastly, you should make sure you actually want to own as opposed to rent because owning comes with many more responsibilities, whether you buy new or used.

Advantages to Buying a New Home

• Brand new, clean, no major issues
• Move-in ready (no wait or work to be done)
• Cool new technology
• Green features could reduce utility costs and/or provide tax incentives
• Trendy design
• Ability to customize
• Can finance additions into mortgage
• Possibly easier to get financing with home builder
• Less competition, more choices on floor plans

Disadvantages to Buying a New Home

• More expensive than buying used
• Location probably isn’t ideal
• Despite being new, workmanship might be questionable
• Could be subject to costly HOAs, even if it’s a house
• Neighborhood dynamic is unknown
• Property values might be more volatile
• Construction nearby (eyesore and noisy)
• More cookie-cutter, less unique

Advantages to Buying an Existing Home

• Possibly cheaper
• Better, more central location
• Can buy in an established school district
• Can own in a more reputable and recognized neighborhood
• Old house might have new upgrades
• You can always renovate if need be
• Older houses tend to have more character, custom design
• Could actually be built better than a new home

Disadvantages to Buying an Existing Home

• Harder to find an existing home (less inventory)
• Might have major problems you don’t initially notice
• Financing could be tricky (if unpermitted work, etc.)
• Could still be more expensive than buying new
• Fewer amenities, especially as homes get more tech-integrated
• The neighborhood might be in decline
• More competition to get your offer accepted
• Might have to settle for a smaller, less ideal home to get right location

For more information about this subject or on loans please contact us at 713-373-0345 or email us info@nuhomegroup.com

Frank Marta NMLS# 245813/835196

I help a lot of first time home buyers and as a first time home buyer I understand there are many questions or concerns that they may have.  I simply put together a short summary of the Loan Process here at NuHome Group.  This summary is very brief to help not complicate things.

Qualification- you would need to provide certain documentation to be pre-qualified. Thirty days of Pay stubs, 2 recent months bank statements, 2 years tax returns w/ W-2's (2013-2012) or 1099’s and other forms of income may be requested, a front and back copy of your social security and photo ID is required.

Approved- you must know that the approvals are only good for 90 days, which is including finding your house. Thus only gives you about 45-60 days to find the house.  If you can’t find a home within that time frame then you may need to be re-qualified.

Find house- work with your Realtor/ Representative to find you house.  Remember if you are buying with FHA Financing there may be some restrictions.  I have noticed that there have been many cases of people having trouble finding houses where the seller's don't want FHA financing.  This can be troublesome.  So make sure which you know what type of financing your obtaining (FHA or Conventional). 

Negotiating the deal- there are some things that you should know about when negotiating for your home.  If you ask for seller contribution for the purchase of your house the seller will give you the negotiated amount to be applied to your closing costs.  FHA allows 6% and Conventional allows 3% or closing.  If the seller pays the Title Policy and survey this will help lower closing costs. 

Executed Contract- Once the offer is accepted you will be expected to pay the Earnest money to the Title Company for them to take the house off of the market.

Inspection- Once you have an executed contract you would need to have an inspection on the property you’re in process of buying. This very crucial and will help you know what exactly is wrong with the property if any.  For example, this inspection will notify you whether the property has: Roof, electrical, AC, or plumbing damage.  These are some of the the major things you are normally confronted with. If your problem is cosmetic then, it is at the discretion of both the seller and the buyer.

Appraisal- an appraisal is required for the banks to review. This is a professional analysis of the property and its value.

Disclosures- Once you have a pre-approval and contract then you would set an appointment at your earliest convince to sign disclosures so we can send your file to underwriting.

Loan Submission- Loan is ready to be reviewed by a Lender. In other words, your loan will be sent to a bank for review.

Conditional Approval- the loan will have conditions to be met in order for the approval.  Once these conditions are satisfied then your loan would be sent to closing.

Closing- Before we can close your loan or schedule for closing we would need the Lender to provide us with the closing instructions for the Title Company.

Scheduling closing- Depending on the title company and the TIME OF MONTH!  We will schedule the closing based on the Title Company’s availability and the buyer’s convenience and availability.

Closing table- you would go to the Title Company and sign all documents.

Funding- Certain documents are sent to Lender to review and assure that they have been signed.

Keys- keys are given to you when the loan is funded and money is dispersed.

Move in- Normally, 3 days before closing, you can start transferring the utilities so you can have your utilities by your official move in date.

That's about it.  No problem, right?!  I hope that this helps you better understand NuHome’s Loan Processing.

For more information about this subject or about loans contact us by phone at (713) 373-0345 or via emailinfo@nuhomegroup.com.

Be sure to check out our website!!!

www.nuhomegroup.com

FHA, VA, and USDA Highlights!!

FHA HIGHLIGHTS FHA- 580+ FICO for PURCH, RT, C/O including Flips & High Balance! FHA - Repair Escrows OK! FHA - 203k Full & Streamline w/ 580 FICO! FHA - HUD REO $100 Down Homes OK! FHA- MFG HOMES OK - 580+ FICO - 620+ FOR SINGLE WIDE   FHA- No LTV Caps! FHA- NO OVERLAYS!!! FHA - YSP Credit UNLIMITED!!! FHA- No DTI CAP - Follow AUS Findings!!! FHA- NO Minimum Credit History or Trades with AUS Approval! FHA- No VOR Unless Required by DU Findings! FHA- Transfer appraisals from ANY lender/AMC OK! FHA- Borrowers with 1 FICO OK! FHA- Collections - HUD Guides Apply - Medical & Charge Offs Ignored! FHA- Mortgage Late OK if AUS Approved!!! FHA- Non-Occupant co-signers - NO MINIMUM FICO! FHA- ESCROW STATE - Non Purchasing Spouse derog’s ignored - only affects DTI FHA- Borrower w/ Work Permits, Non-Resident Alien OK! FHA- 1 Day off Market for Cashout Refi! - Must be off market before date of loan application! FHA- Rental Income on 2-4 Units OK for FTHB!!! FHA- Streamline - 580 Score for- Conforming & JUMBO! No Appraisal, No Income, No Credit Qualifying!!! FHA- Streamline - Max 1x30 in past 12 mos - Cannot be late within past 90 Days! FHA- Streamline -Investment and 2nd Homes OK! FHA- Streamline NO SCORE - Ignore other property

VA HIGHLIGHTS VA- Min 580 FICO regardless of Loan Amount! VA- MFG HOMES OK - 580+ FICO - 620+ FOR SINGLE WIDE  VA- LP or DU FINDINGS OK!!!  VA- NO OVERLAYS!!! VA - YSP Credit UNLIMITED!!! VA- No DTI CAP - Follow AUS Findings!!! VA- NO Minimum Credit History or Trades with Approved or Refer AUS Findings! VA- No VOR Unless Required by DU Findings! VA- Borrowers with 1 FICO OK! VA- NO COLLECTIONS paid UNLESS required by AUS! VA- Up to 2x30 OK on RT, Cashout, Purchase! VA - IRRRL 580+ W/ Appraisal 100% LTV! VA - IRRRL 620+ W/O Appraisal ANY LTV! VA-IRRRL 620+ W/O Appraisal HIGH BALANCE!  VA- IRRRL Job Listed on 1003 Only VA- IRRRL No Income OK VA - C/O Refi's up to 100%!! VA- Approved/Eligible - Unlimited DTI!   VA- REFER/ELIGIBLE - 43% Max Ratio VA- 580+ - All Purchases and all REFIs!!! VA- No Seller Title Seasoning!!! VA- Seller can pay all closing costs & Prepaids + ADDITIONAL 4% VA- 1 Day Off MLS FOR all Refi's including Cashout!

USDA HIGHLIGHTS USDA- Min 580 FICO USDA- Order your own appraisal through any AMC USDA- 640+ - No Overlays to GUS Findings USDA- 640+ - No Trades/Alt Trades OK - No Collections Paid USDA- 580-639 - Refers OK - Max 29/41 Ratio USDA- 640+ - No Rent Verify No VOR USDA- 640+ - No Tradeline Requirement USDA- No Title Seasoning USDA- Max Loan $417k - 102% LTV Of Appraised Value USDA- .40% Monthly MI, 2% Guarantee Fee USDA- No Asset Verification if No Funds needed to close, No reserves USDA-Gift Funds Allowed - Max 6% Seller Concession USDA-Ratios to 36/48 w/ 640+ and GUS Approval w/ Comp. Factors USDA - File sent to RD within 24 Hours of UW Clear! USDA - No Rent Verif. Required Unless we need Ratio Waiver & GUS Refer USDA - Streamline Refi ok w/ 580+ FICO

For more information about this subject or loans contact us by phone at 713-373-0345 or via email info@nuhomegroup.com

Frank Marta NMLS# 245813/835196

www.nuhomegroup.com

Burn The Ships!!!

I was recently at a business training to learn more about real estate. Instead of the training being focused on logical and practical operations it was more of a sermon.  The guest speaker spoke about how we give ourselves the option to fail by the way we emotionally express ourselves on a daily bases.  He said “We just give up too easily sometimes.”  I agree with him on that point.  Then he went on about explaining the words we declare sometimes. He stated, “We worry ourselves and even curse ourselves, then wonder why we receive the results that we get.”  I couldn’t argue that for one second. As he went on about his lesson he used metaphoric “ships that we have in our lives.”  These ships represent; doubt, the familiar, the place of comfort, and simply things that we go back to when times get rough.

 I remember reading the story of Peter when he was on the boat. At the time, Peter and a few of his disciples were off shore, there were waves and wind thrusting against his boat. They then saw a man walking on water and were terrified because they thought it was a ghost, little did they know it was Jesus.  Jesus spoke to them saying they should have courage and not to be afraid for it was Him walking on water not a ghost. Peter then told Jesus “Lord, if it’s you, tell me to come to you on the water.” Jesus said “come.” Peter then walked on to the water to go towards Jesus. But when saw the wind he was afraid and began to sink in the water. He cried out “LORD, SAVE ME!” Jesus immediately reached out to his hand and caught him. He said, “You of little faith, why did you doubt?”  

Now picture yourself in Peter’s shoes, taking your first step on the surface of the water because you’re trying to go towards Jesus. Imagine your self walking on water but feeling the strong winds push against you and seeing waves come to you. Would you be scared? Would you look back at the boat to see how far you were from it? Would you have any doubt?  I personally would be frightened; I would probably look around in panic to see where the boat was. This is what we do spiritually when we hear our calling but lose our concentration on the Lord.  We look for something to save us, when we have the best life preserver with us all along.

The Instructor then went on about relating the story of Peter to the story of Hernan Cortes the Spanish Conquistador. Cortes had planned to attack the Mexican Azteca’s with a strategic plan because the Spaniards wanted to conquer Mexico and raid the land for their famous precious treasure that they possessed. The Spaniards were not only seriously outnumbered but they had to be willing to die for their Queen and acknowledge that many would die due to the odds. Nevertheless, Cortes motivated the troops by exposing that they would forever be remembered and spoke about in history. Upon the battle, Mr. Cortes gave one of the best battle cries ever recorded. He shouted "BURN THE SHIPS"!  This was the point of no return. The army was stunned and excited to push forward by these words when in fact, they had no other option. They simply had to give it their all and die for what they believed in. 

That is the point in our faith and in our industry.  It is not Ludacris to be a Broker, Loan Officer, or Realtor in this industry, nor in our faith.  Being faithful in our lives and industry isn’t absurd, it’s courageous.  Let us be brave for “yet in all things we are more than conquerors through Him who loved us. For I am persuaded that neither death nor life, nor angels nor principalities nor powers, nor things present, nor things to come, nor height nor depth, nor any other created things, shall be able to separate us from the love of God which is in Christ Jesus our Lord” (Romans 8:37-39).  I was so pumped up and refreshed after the training; it was personally much need it. Sit back, analyze, and ask yourself “Am I ready to become a conqueror?” YES YOU ARE!!!

I really hope that this story helps it did it for me.

Primera ves Comprando Casa? Necesitas ayuda? Estamos aquí para ayudar!

Está usted interesado en comprar una casa? El equipo NuHome Group le ayudará a conseguir pre-aprobado en menos de 24 horas. La compra de una casa hoy en el mercado actual es una gran inversión. Muchas veces es más barato tener una casa que alquilar. Por lo tanto, no deje que estos tipos de interés históricamente bajos escapen. Compre su casa hoy!

El primer paso en la compra de una casa, está asegurando su préstamo hipotecario. Las compañías hipotecarias tienen diferentes requisitos para los préstamos.

He aquí un desglose de los 3 factores importantes que pueden determinar sus calificaciones.
1. Las puntuaciones de crédito (580 min)
2. Ingresos vs Deuda (Deuda a ingreso de) 

3. Enganche (fondos para cerrar).

Documentación adicional será requerido para conseguir que una aprobación, pero vamos a caminar a través del proceso. Nos aseguraremos de que el proceso de compra se hará más fácil para usted.


Llámenos hoy estamos preferido prestamista para la vivienda de Houston.

NuHome Group 713-373-0345
1445 North Loop West Suite 105 Houston, TX 77008
Frank Marta NMLS# 245813/835196