Florida USDA Rural Loan

Florida USDA Rural Loan

The USDA Rural Housing loan is still a little know mortgage program many buyers still are not aware of.  This government backed 100% home mortgage offers a home buying opportunity hard to find these days.  USDA ( also known as 502 Guaranteed, RD, Rural Development or Rural Housing) not only allows Florida buyers a way to purchase a home with NO down payment, but also come with a lot of other perks.  In the post below we will discuss all the important USDA eligibility and loan qualifying criteria.   If you have questions, please reach out to us by calling ph: 800-871-2636. We service all Florida & Georgia Home buyers.

Before we start, let’s discuss some of the pro’s and con’s of the 100 percent USDA mortgage:

USDA Mortgage “Pro’s”

  • USDA is the only mortgage program today (for civilians) that allows a home purchase with no down payment.
  • In addition to no down payment, USDA allows for buyers to get their closing costs paid by the home seller, or added into their loan under certain circumstances.
  • USDA loan applicants are NOT required to be first time home owners.
  • The USDA home inspection and appraisal requirements are the same as the other loan programs today – no special requirements.
  • Home buyers are NOT required to have a minimum amount of savings.
  • Secure and safe 30 year fix terms at low interest rates.
  • No USDA loan amount limits – home buyers qualify based on their income and debt to income ratios.
  • Lower monthly mortgage insurance. USDA requires a monthly mortgage insurance costs each month like most home loans when the buyer is putting down less than 20%. The benefit with USDA is the monthly PMI costs is nearly 40% less than FHA or conventional loans.  Already pre approved for a FHA loan? Be sure to check into the USDA as well for the cheaper mortgage insurance, it could save you hundreds each month.
  • Applying for a USDA loan doesn’t require any special education, first time buyer class or down payment assistance – it’s already 100% financing.  Borrowers can get pre-approved and start searching for a home all in the same day.

USDA Mortgage “Con’s”

  • The property to be purchased must to be located in a USDA approved area. In addition the USDA program has income caps – please read below for more info.
  • Student loans – Student loan debt is not deferred when qualifying for a USDA loans. Because of this, USDA loan applicants with significant student loan debt may have encounter obstacles in regards to debt to income ratio limits.
  • Closing time frame – The USDA loan program is unique because the loan files are processed in two stages. First by the lender, bank or broker originating the loan, then the file goes through a final review at the local USDA office. This means that USDA loans will take a few extra weeks to close when compared to FHA, VA or Conventional loans.  Please note: USDA 502 Guaranteed loans can only be proceed by approved mortgage companies, not directly by the USDA.  USDA only processes their “Direct” loan in house. This program is geared towards very low income, subsidized housing.

Florida USDA Rural Housing Eligibility

The USDA mortgage has a few core eligibility requirements that must be met in order to use the program.  Let’s take a closer look below.

  • The location of the house – The house you decide to purchase must be located in a select rural approved area according to the USDA property map here. You can input the property address and check to see if the house resides in an eligible location. The home can be any single family, town home and select FHA approved condo.  Mobile homes and manufactured homes are not allowed.  If you need assistance finding USDA approved homes in your area, please contact us below.
  • The income for the household – The USDA Rural Development mortgage has income limits or “caps” in place. More importantly, the income caps apply to all income producers living in the house, even if they are NOT listed on the loan application. USDA limits vary based on the number of members living in the household, number of dependents, elderly and county. Contact us below to discuss in detail.

USDA Loan Approval Standards and Guidelines

USDA rural loans are not different than other mortgage programs, as they all have standard qualifying guidelines that must be met. Let’s discuss the USDA guidelines below:

  • Credit Score – USDA lenders will want to see applicants have a 620 or greater credit score to be approved. However, a 620 credit score do not guarantee loan approved. All mortgage companies have additional requirements in place for applicants that have experienced a past financial hardship like foreclosure, short sale or bankruptcy. These are called “overlays”  Example – if you have a 690 credit score, but had a foreclosure 2 years ago, you would likely need to wait additional 1-2 years.
  • Job/Income History-  Two years of stable income will likely be needed. You are not required to have the same job for two years, just a stable history. Example:  Let’s say you have been working as school teacher for 4 years. You recently left one school and started working at another school. In addition, you took a few weeks off in between.  This is okay!  Or maybe you needed to take a month off for hardship reasons – this likely would be okay as well.  Recent graduates are the exception of this rule as they do not need a solid a two year job history.  Self employed borrowers will need two years of tax returns. Any part time jobs will need two years of stable history to be included.
  • Debt to income – Like all other home loan programs, USDA has debt to income ratio limits.  Borrowers can read more about this under the USDA eligibility section.
  • A copy of the borrowers bank statements will be needed during the approval process. Although USDA does not require a min amount of savings, applicants will want to insure they can document any deposit out of the ordinary.  Normal weekly, bi weekly or monthly employment deposits are normal and to be expected. However, random deposits will be documented with a copy of the check, and deposit slip. Gift funds from family are also allowed with USDA loans, just be sure to keep a proper paper trail when it comes time to document. Additionally, the gift donor may be required to provide their bank statements as well. These requirements are not exclusive to USDA loans, they are essentially required on all government loans today like USDA, FHA, VA.

Five Stars is Florida USDA rural loan resource.  Happy to serve all FL buyers including Lakeland, Jacksonville, Orlando, Tampa, Sarasota, Naples, Tallahassee, Ocala, Gainesville, Pensacola, St. Augustine, Daytona Beach.  Buyers that have questions or want to learn about getting pre approved can call 800-871-2636 or just fill out the Request info form on the top of your screen.

USDA RHS Funds 2016

USDA RHS funds 2016


Rural Development’s Fiscal Year 2016 Funding has just been authorized by Rural Development. USDA 502 Guaranteed mortgages are now eligible to close as normal.
Any loan which received a prior conditional commitment will receive an updated commitment within the next couple days removing all contingent upon verbiage. Once the updated commitment is received by Rural Housing, these loans will be eligible to close. Loans which have not received a prior conditional commitment will receive full commitments from RHS going forwards. These loans are eligible to close as normal once the full commitment is received.

All new USDA loans as of October 1st will require the new 2.75% USDA Guaranteed fee. This fee structure will remain in place until October 2016.

If you have questions about a USDA loan currently in processing, please contact you lender direct for status. New USDA loan applicants in Florida or Georgia can contact us by submitting the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.  Please also feel free to call ph: 800-871-2636.

USDA RHS Funds 2016


St. Petersburg VA Loan


St. Petersburg VA Loan

VA home mortgages are a great choice for St. Petersburg home buyers that have eligibility. No other mortgage program in 2016 offers 100% financing in Pinellas County. Getting pre approved for a VA loan is also simple thanks to streamline processing.  Once you determine the VA loan is right for you,  you can complete the loan approval process in minutes.  This process involves a few steps: selecting a approved VA lender (preferably one located in Florida)  pre-qualifying for the VA loan, selecting your home, writing a purchase contract, getting the property appraised by the VA, and finalizing the loan closing.

First and foremost, it’s important to remember the following information before beginning the VA home loan process :

  • The applicant must be an eligible veteran who has available VA entitlement.
  • The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan. The loan cannot be used for investment or second home purchases.
  • All applicants need to have reliable credit – generally over 620 credit score.
  • The income of the household must be shown to be enough to meet the mortgage payments, cover the costs of owning a home. VA, like all home loans, has max allowed debt to income ratios. The mortgage lender will be able to discuss specific income and other qualifying requirements.
  • Know what loan term and down payment ( if any) you want.

How to find a VA Approved Bank or Lender in St. Petersburg Florida:

Before you begin the application process, it is a good idea to get a copy of your credit report. This can be obtained from one of the three major credit bureaus – Experian, Equifax, and TransUnion. Once you have your credit report, the next step is to find a VA approved lender –  preferably someone local. If you are purchasing a home in Florida, it’s probably best to select a VA lender located in Florida.  Each state has some twists and turns, it’s always best to work local. Five Stars is right here in North Fla, and we service both Fla and GA. Call us anytime at Ph: 800-871-2636

Getting approved for a VA home loan:

Pre qualifying for a VA loan is the best way to determine how much borrowing power you have. Pre-qualifying involves completing a VA loan application. Based on that information, you can find out if you qualify for a given loan. Note that pre-qualifying only gives an estimate of the amount of mortgage payment you can afford, based on the information you provide. While pre-qualifying is not a requirement, it is highly recommended. Without pre-qualifying first, you may find yourself looking at houses that you wouldn’t necessarily be able to afford. Once you pre-qualify, you’ll have a strong idea of how much income you’ll need to qualify. You’ll also know what price range of houses you can manage, which is important for the next step.

Selecting The Perfect Home:

By now you have been VA mortgage pre approved and have a good idea of your purchase price point. You can now begin the process of selecting your new home. Finding a home can be accomplished through several ways:

  • Online: There are many web pages dedicated to listing homes for sale. These pages are often useful for finding homes that are out of your travel range, and often include numerous pictures and detailed information. Zillow and Trulia are both great choice to research online.
  • Using a real-estate agent: Again, Zillow or Trulia is a great way to find a qualified realtor.  Many people use real estate agents to navigate through the paperwork involved in buying a new home. Recommendations from friends, etc is also a great way to find a realtor.

 Writing the Purchase Contract:

Also referred to as a “sales contract” or “purchase agreement” , the document represents the finalized terms and conditions upon which the transfer of real estate will take place.  A purchase contract is essentially an agreement between the buyer and seller to buy the house on agreed upon terms, whatever they may be. The Purchase contract will among other things address:  restrictions and easements, liens on the property, inspections, prior leases, disclosures, preparing of documents for closing, and maintenance of the property up to closing.

VA Home Appraisal:

Your lender will order the home appraisal once your contract is complete. This is needed to  finalize the loan as the home must be worth the selling price. It is important to remember that while the VA appraisal estimates the value of the property, it is not an inspection and does not guarantee that the house is free of defects. Homebuyers should hire a reputable home inspector to help give everything a close look. VA guarantees the loan, not the condition of the house – be aware of this.

 VA Loan Settlement:

If the appraisal is acceptable to all parties and the lender determines that you loan is approved, the VA closing process begins. All parties go to the loan closing and sign the note, mortgage and other related papers. The lender and title agent, or closing attorney will explain the loan terms and requirements as well as where and how to make the monthly payments. When the loan is reported to the VA, the Certificate of Eligibility is annotated to reflect the use of entitlement and returned to the Veteran. The loan closing procedure may vary in some states, but after the signing your loan will fund and you receive the keys!

Need some help with a VA loan around St. Petersburg?  Please contact us by submitting the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.  Please also feel free to call ph: 800-871-2636

St. Petersburg VA Loan – Pinellas County  Belleair Beach, Clearwater, Crystal Beach, Dunedin, Gulfport, Indian Rocks Beach, Indian Shores, Kenneth City, Largo, Madeira Beach, North Redington Beach, Oldsmar, Palm Harbor, Redington Beach, Redington Shores, Safety Harbor, Seminole, South Pasadena, St. Pete Beach, Sunset Beach, Tarpon Springs

USDA Loan Criteria Georgia

USDA Loan Criteria Georgia

USDA still provides 100% financing home loans in many parts of Georgia.  Many homebuyers are surprised to learn exactly what locations are still considered rural eligible. The truth is many locations just outside of the major cities like Macon, Albany, Columbus, Savannah,Valdosta and Augusta still qualify for USDA financing today. USDA home financing is a perfect solution for Georgia first time home buyers that want to purchase their first home, but have limited funds to do so. Below we will look at the USDA Loan Criteria Georgia, and benefits it provides home buyers.

  • NO Down Payment – Unlike most other types of mortgage financing, USDA mortgages in Georgia require no down-payment which makes it easier for first time home buyers to own homes.
  • Less Than Perfect Credit Scores Possible – because USDA 502 guaranteed loans are backed by the government, those with a “less than perfect” credit borrowers have an easier time getting approved for an USDA loan. As of 2015 /2016 the programs requires a min 640 score to be approved.
  • Low 30 Year Fixed Interest Rates – Since Rural Housing guarantees these loans against default, therefore USDA loans usually have better interest rates than most conventional mortgage loans. Also since they are guaranteed by the federal government, lenders are more likely to offer the program. The USDA program is a standard 30-year fixed mortgage with no early payoff penalty.
  • Low Monthly Mortgage Insurance –  Monthly PMI is much less when compared to other FHA and conventional loan programs. In fact the monthly mortgage insurance is almost half as less as the FHA loan.

USDA rural housing does have a few eligibility requirements, and understanding these requirements is very important. USDA household income and property location are the two keys.  It is a good idea to find out the eligibility based off your household income and the location of the home you are planning on buying or refinancing. At Five Stars we will guild you though the entire process.  We encourage any Florida or Georgia home buyers that have questions to call us at 800-871-2636.

The USDA home loan has many different names. It is often called the USDA Rural Home Loan, Rural Development or 502 Guaranteed Home Loan. All USDA 502 loans are offered through approved USDA lenders only. Of course 100% financing is main benefit to USDA financing and even today it remains the only no money down loan program in Georgia (excluding the VA loan) We will go over most important USDA lending requirements below. 

USDA Mortgage Eligibility. To be approved and eligible, borrowers must:

  • Have an adequate and dependable income. A solid two year job history is often needed.
  • Be a U.S. citizen, qualified alien, or be legally admitted to the United States for permanent residence.
  • Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household – EVEN IF THEY ARE NOT APPLYING FOR THE LOAN. Applicants may be eligible to make certain adjustments to gross income— such as annual child care expenses and $480 for each minor child—in order to qualify. Please click here for the USDA income calculator.
  • Have a credit history that indicates a reasonable willingness to meet obligations as due. 640 min credit score ( 620 scores can be done with strong compensating factors)
  • Have repayment ability based on the following debt to income ratios: Housing debt cannot exceed 30%.  Total monthly obligations with housing / gross monthly income cannot exceed 42%.  

USDA Property Eligibility:

You’d be surprised as to what homes are in USDA eligible areas. Reach out to us if you would like to discuss the USDA approved area around your town.   Typically towns on the outskirts of larger cities ( like Macon, Albany, Columbus, Savannah, Valdosta and Augusta)  and less than 30,000 residents apply, however you would be surprised where the areas are. Please click this link Property Eligibility and begin your search. If you have any questions, please contact us below.

  • Guaranteed loans can be made on either new or existing homes; Existing homes must be structurally sound, functionally adequate, and in good repair. There are no restrictions on the size or design of the home financed.
  • The home must a primary residence  – no investor home purchase. Property cannot be income producing (Farm, Cattle Ranch, etc)
  • Homes must be located in rural areas, check the map above. The seller of the home is not important, only where the property is located.

Highlights of the USDA Guaranteed Rural Housing Loan Program

  • Loans may be for up to 100 percent (102.75% LTV if the 2.75 % guarantee fee is included in the loan) of appraised value or for the acquisition cost, whichever is less.
  • $0 money down.
  • Mortgages are 30-year fixed rate at market interest rates.
  • Loans may include funds for closing costs, the guarantee fee, legal fees, title services, cost of establishing an escrow account and other prepaid items, if the appraised value is higher than sales price. Sellers may contribute to the buyer’s closing costs.
  • Home buyers make application with approved Florida USDA lenders. Please contact us if you would like to begin the process.
  • Buyers must personally occupy the dwelling following the purchase.
  • Loans may be made to refinance either existing USDA Rural Development Guaranteed housing loans or our Section 502 Direct housing loans.

Continue reading

Gainesville VA Refinance Options


VA refinancing can be a great option to help Gainesville home owners reduce their monthly mortgage debt and save money. In addition to the streamline refi options, VA has a wonderful cash out refinance that allows up to 100% loan to value. The Department of Veterans Affairs provides options to do both, a VA Streamline Refinancing loan to reduce the rate and term of your current loan. In addition, the VA Cash-Out Refinancing loan that permits home owners to “cash out” equity. Below will take a closer look at the Gainesville VA refinance options and qualifying criteria that is involved for home owners that have a VA mortgage benefits.

Alachua County VA home owners that have questions anytime can us at ph: 800-871-2636. Five Stars is Florida’s leading VA loan resource local serving all of Florida including Alachua County:  Archer, Gainesville, Hawthorne, High Springs, La Crosse, Micanopy, Newberry and Waldo FL.

Gainesville VA Streamline Refinance Requirements:

In order to get approved for a VA streamline refinance, you must meet the following requirements:

  • Timely mortgage payments with no more than (1)  30 day late pay within the past year.
  • The new VA monthly mortgage payment must be lower compared with the original VA mortgage payments prior to the refinance (often the case when switching from an adjustable rate mortgage (ARM)  to a fixed rate mortgage).
  • Cash Out not permitted on the IRRRL or Streamline program (only the cash out program below)
  • The property in which you choose to refinance must be the one that you previously uses your VA entitlement for.

The VA streamline refinance is also known as the VA IRRRL program (which stands for Interest Rate Reduction Refinance Loan) and they are the same program.

VA Streamline IRRRL General facts and Guidelines:

  • The VA streamline has less documentation than a regular refinance which means you can close quickly.
  • Most lenders can do VA streamline without a new appraisal, saving the home owner money. However, the VA cash out program will always require a new appraisal.
  • Most loan applicants can roll all closing costs and fees into the new loan so there are no out-of-pocket costs when doing a VA streamline.
  • One rule for the VA streamline is that the new monthly payment must be lower than the previous loan’s monthly payment. One exception to this rule is when you are refinancing an adjustable rate (ARM) mortgage or the new loan term is less than the old one.
  • Your new loan interest rate must have a lower interest rate than the previous loan. An exception is if you are refinancing from an adjustable rate loan – like 7/1 ARM into a 30 year fix.
  • With the VA streamline program, your new loan can be a fixed rate or adjustable rate term.
  • Your monthly loan payment may increase if you finance energy efficient home improvements, finance your closing costs including the funding fees, finance points, or get a higher interest rate if you move to a fixed rate loan.

100 percent VA Cash Out Refinance

  • Eligible Veterans that do have equity in their home can “cash out” of to 100% of their homes value.
  • New appraisal always required.
  • Full income and asset documentation required.
  • Use the money for just about anything – consolation of higher interest debt, home improvements, pay for your school tuition, etc.

VA Home Loan Underwriting Requirements:

VA mortgage loan underwriting requirements are focused on the borrower’s credit and income, but also include provisions designed to ensure the borrower will use their loan for purposes approved by the VA. The VA has certain underwriting requirements, and lenders typically supplement these with their own requirements as well. An example of VA underwriting requirements is that applicants must live in the property within a certain period of time after closing, and use the property for approved purposes. Additionally, most lenders, banks or brokers may require a minimum credit score to qualify for a loan (normally a 620 score)  Anyone that uses their VA loan (purchase or refinance) will be required to pay the applicable VA funding fee. See the latest 2015 VA funding fee and loan amount limits here.

As for what property can purchase with a VA mortgage loan, borrowers can use their VA entitlement to purchase existing or new single-family houses, but that’s not all. Other approved uses of a VA mortgage loan include:

  • Purchase of an approved town home or condo.
  • Finance of custom new home construction – by builder.
  • Home improvements, repairs or upgrades, including “green” upgrades.
  • Refinance of an existing loan to lower interest rates or monthly payments.

Loan approval essentially requires the borrower to be a good credit risk and able to repay  the loan. The property must meet the VA home standards, otherwise known as VA minimum property requirements.  Homeowners in Alachua County / Gainesville can contact us at ph: 800-871-2636 or just submit the quick REQUEST INFORMATION form on the top left side.

October 2015 Florida Home Interest Rates

October 2015 Florida Home Interest Rates

October 2015 Florida home interest rates are starting the month on a good note.  Florida FHA 30-year mortgage rates have remained below 4% percent for over nine weeks now.  Many Florida borrowers will still be seeing the same rates compared to last week, with the gains being seen in the form of lower closing costs or higher lender credit.  There have only been a few days better for interest rates since May 2015.

As October begins, FHA interest rates are in the 3.625% range for buyers paying no added discount points. USDA and VA loans are always about the same as FHA rates.  Be mindful that the rates assume best case scenario – generally borrowers that have a credit score over 740.  Of course loan applicants with lower credit scores will pay slightly increased rates due to the increased risk to financial institutions. Borrowers paying 1 point will generally see rates about .25% lower. Whether paying points is a good idea or not, will depend on many variables your loan officer will discuss.

All mortgage rates ( VA, FHA USDA and Conventional loans) are near their lowest level in 4 months.  If you are under contract to close in the next 60 days, now may be a time to lock in your interest rate.  Please read more about locking in your loan rate below.  Keep in mind that rates change nearly each day  – Florida and Georgia home buyers that need a quick rate quote are encouraged to contact us at ph: 800-871-2636 or just submit the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.

What Exactly does it mean to “Lock In” Your interest rate?

“Locking” your mortgage means that you and your lender (broker or mortgage company)  have agreed on an interest rate and price for your home loan. Once your loan is locked, that’s the rate and price you get, regardless of what happens in the financial markets. If rates go up, you’re protected but if rates go down, you won’t benefit of a lower rate either. Your rate is set and you close your loan at the rate you’ve locked it. Locks have expiration dates ranging from 30 to 120 days  with most lenders, and the longer your lock period, the more it costs. Example – if the par interest rate today is 3.75% for a 30 days lock, it might be 3.875% for a 60 day lock. If you don’t close your loan by the end of the lock expiration date, you could end up paying a higher interest rate or lock extension fees.

When Should A Borrower Lock In Their Rate?

You can lock in your loan at any time during the process. Until you lock your interest rate, you are said to be “floating” your mortgage. The only obvious requirement is that you lock in before you can close on your purchase or refinance. The decision to lock or float your loan can have a long term impact so it’s important you make the right choice. Your trusted loan specialist can often time provide some insight on rates and the upcoming economic events that may impact rates.

Simple Refinance Options:

Existing home owners that currently have a FHA, VA or USDA loan have some flexible streamline refinance options available – even if you have no equity.

USDA Rural Housing – Learn more about the USDA Pilot Refinance here.

FHA –  Learn more about the FHA streamline refinance here.

VA – Learn all about the VA IRRRL loan here.

All of these refi options are streamline and require little documentation. In addition, there is no equity requirements or out of pocket costs. Underwater on your home loan? It’s OK because these program do not require a new appraisal value.  In most cases borrowers can add there closing costs into their new loan to eliminate out of pocket expenses as well.

Questions? We want to help –  Fla & GA home buyers please contact us at www.FiveStarsMortgage.com  for more information.

How not to pay USDA closing costs

How not to pay USDA closing costs

USDA Rural Housing is a wonderful government backed mortgage program that still permits up to 100% financing in eligible locations through the US. In addition zero down payment, the program also allows home buyers a number of options to get their closing costs paid. Below we talk a little on how not to pay USDA closing costs out of pocket. Please contact us at 800-871-2636 with questions, or visit us at http://www.fivestarsmortgage.com/usda-rural-loan for more information. 

  • Increase your contract offer amount:  Let’s say you decide to purchase a home and decide to offer $140,000, additionally you need around $5,000 for all the closing costs and pre paid escrow items (taxes and homeowners insurance) Submit the offer at 145K and ask the seller to pay $5,000 towards your closing costs. As long as the home appraisal comes in at $145,000 or above, this is perfectly ok.  Furthermore it’s all the same to the home seller as their net proceeds would be the same.  Note, all of these things are negotiable, the offer amount and / seller contributions will depend on many factors. A experienced realtor will offer a great deal of help.
  • Add the closing costs into your loan –  Let’s assume the home seller doesn’t want to contribute anything towards your USDA closing costs. Buyers can add all the closing costs needed assuming the home appraises high enough.  USDA loans are great in that buyers can roll the closing costs up to appraised value. This differs from the first option in that this is not a seller contribution and you have to wait until the contract is approved and appraisal is back to know if it will work and for how much. Word of caution, be sure you have a “Plan B” as a backup in the event that the home doesn’t appraise high enough to cover the closing costs. If the home you purchase is $150,000 and the appraisal only comes back at $150,000 – you will need to have the means to pay all closing cost out of pocket. However, you can receive gift funds to cover the closing costs expenses.
  • Credit from lender – Each interest rate either costs you money or pays you back money that can be used to cover closing costs. As an example if the rate of 3.875% cost you $200 and 4.25% paid you $5000 that money can be used as a credit towards closing costs.  You need to discuss this option in detail with the mortgage company and understand the long term impact in regards to payment and interest.
  • Combo of all three –  It’s not one way only with USDA, you have flexibility.  Buyers can have the seller contribute some of the costs, and roll in the rest of the closing costs into the loan assuming the appraisal supports it.  Or have the lender pick up some of the costs via higher interest rate.  Example: Home purchase price is $160,000  – appraisal amount is $162,000. The buyer will need $5,000 for all closing costs and escrows. In this example the home seller can pay $2,000, the buyer can roll in $2,000 into their loan, and the lender pays $1,000 as a credit towards closing costs. The home buyers comes to the closing with no out of pocket cash.

USDA mortgages are true no money down 100% financing and if structured correctly can be NO up front cost loans. Florida and Georgia home buyers that have questions about how not to pay USDA closing costs, or just want to learn more can submit the orange “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.  Serving all of Valdosta GA, Thomasville, Savannah, Macon, Columbus, Waycross, Tifton, Albany, Warner Robins, Jacksonville FL, Tallahassee, Lake City, Pensacola, Destin, Panama City, Madison.

VA Loan Refinance Brevard County

VA Loan Refinance Brevard County

Veterans in Brevard County  – Melbourne  and Titusville have some great VA refinance options available today. Depending on your current needs and equity position, The VA IRRRL Streamline refinance or Cash Out refinance could make sense. It’s no secret VA interest rates are still near all time low levels. Now be a great time to take advantage of the many VA refinance options available to Brevard County residents.

VA IRRRL Refinance Mortgage ( Also known as the Streamline Refinance)

A VA IRRRL loan is also referred to as “Streamline” refinance. The IRRRL ( Interest Rate Reduction Refinance Loan) guidelines are very simple and straight-forward with little paperwork – hence the name “streamline” No cash can be taken out by the homeowner with this type of VA refinance. Closing costs and energy efficiency improvement costs can be included into the new loan in most cases. VA IRRRL guidelines do not require the lender, bank or VA approved broker to perform a new appraisal check as long as the loan that is being refinanced was originally a VA guaranteed loan. The is great because borrowers in can be upside down or “underwater” on their home loan, it’s doesn’t matter.  Even though things have improved in recent years, many VA home owners in Melbourne, Titusville, Palm Bay, and Cocoa are still upside down on their home loans. Borrowers that just want to lower their interest rate, change loan term or convert their current VA ARM loan to a VA Fixed rate loan can qualify for the streamline refinance mortgage.  Contact at ph: 800-871-2636 to discuss current VA mortgage interest rates.

IRRRL streamline loans are not assumable. No cash back is allowed even if you do have equity, just standard closing costs can be included in the new refinance loan. Second loans or home equity loans (HELOC) existing on the property must be subordinated to the new VA first mortgage.  Home loans rates are still near very low in 2015 and should stay that way into 2016.  Veterans can lock-in their rates by opting for a streamline loan offered by a VA refinancing lender. This IRRRL $0 cost option is the primary driver of its popularity among veteran home owners looking for “rate and term” refinance. One should carefully understand the specific refinance option’s guidelines and requirements to choose the appropriate option that fits their financing needs.

Continued – VA Streamline (IRRRL) Refinance Requirements

VA basically provides the backing for the lender providing financing to the veteran and issues its lending guidelines and requirements. A veteran seeking a VA guaranteed home loan must qualify based on the financing lenders underwriting requirements related to income, credit and assets. A lender can choose to enforce their own criteria (overlays) while evaluating a prospective borrower’s financial profile. VA loan eligibility depends primarily on the debt-to-income ratio. The residual income left for the household after paying for all the housing related expenses, monthly debt payments and taxes is used by mortgage companies to determine the eligibility of prospective seekers of a VA insured home loan. The residual evaluation followed in VA underwriting is much preferred to the plain vanilla debt-to-income ratio used in conventional residential lending guidelines.

Bank and lenders that finance residential properties based on conventional mortgage guidelines usually require a borrower to pay for Private Mortgage Insurance (PMI) when the loan to value is over 80%.  However, VA allows 100% financing with NO requirement of PMI on the loans they guarantee. Instead, an upfront funding fee is assessed on all VA purchase and refinance loan transactions. Veterans receiving disability compensation related to the service are exempt from paying the VA funding fee. Zero monthly mortgage insurance remains a great benefit of VA loans.

Veterans Administration does not handle the loan process or provide the actual funding involved in VA home financing. All factors related to the loan pre-qualification and approvals are exclusively handled by the approved Florida VA lender processing the loan. A VA lender also handles all the paperwork and documentation, not the VA department. Lenders also pre-qualify, complete loan application, gather supporting financial documents, order the appraisal (when needed)  and title, schedule a closing date and fund the loan. These steps performed during the VA loan approval are comparable to those followed in other government financing like FHA and USDA

The interest rates and discount points charged by lenders for financing VA home loans vary greatly according to applicants credit score and overall financial situation.  Borrowers will have both fixed rate and adjustable rate financing terms available.  VA lending guidelines clearly emphasize the occupancy requirement. Only properties to be occupied as a primary residence by the veteran after purchase can be financed through a VA loan program. The primary residence requirement can be waived for borrowers seeking faster financing through the streamlined VA IRRRL loan.

VA loan benefits can also be reused multiple times,  VA home loan benefits offered do not end after one use. Any unused portion of the loan benefit gets carried forward. All state, county and local housing programs or grants have blanket approval from VA. Due to this they can be utilized in combination with VA home loan programs without special permission or review. Grants and programs that are offered to buyers by other non-public entities must be approved by VA before the closing.

The guaranty provided by VA only applies to the lender underwriting and funding the home loan for an eligible veteran. A thorough house inspection is the best way for the buyer to make sure that no significant issues have been overlooked. An appraisal cannot be considered as a substitute for a home inspection as the former a qualified opinion regarding the value of the property based on a rough overview of the property condition, local market and recent sales, while the latter primarily assesses the physical condition of the property by highlighting any issues that needs attention.

VA Cash-out Refinance Requirements

For Brevard County VA home owners that DO have significant equity, a VA cash out refi may be the perfect way to consolidate other high interest debt.  VA cash-out refinance loan allows a qualifying veteran to payoff high interest debt credit cards, college loans and any other debt. One may also use refinancing to make further home improvements to increase their residential home value. Many VA lenders process these loans quickly and efficiently according to the refinancing guidelines set by Veterans Administration. The VA cash out refinance program will require a new appraisal to verify the property current value.   VA cash-out refinance guidelines require that the veteran still occupy the property as their primary residence. When sufficient home equity is available, the Vet can take out up to 100% of the homes value ( see below for more info on the 100% LTV cash out)  All VA cash out loans can also include closing costs and other fees. As long as the LTV requirement is met, the seasoning of the loan may not be needed.

100% LTV VA Cash Out Refinance 

One big benefit for using a VA mortgage to refinance an existing loan is the 100% loan to value feature. The VA will still permit veterans to refinance and cash out up to 100% of the home’s appraised value in order to complete the loan. This is a great benefit since most other loan programs limit the borrower to less than the total value of the home. While the VA does charge a funding fee for each of their loans (for non exempt borrowers)  the funding fee is added on top of the loan amount in order to allow the veteran to refinance without paying anything from their pocket. The 100% VA cash out refi can make very good sense for those residents in Titusville, Palm Bay and Melbourne that do have some equity in their home, and want to consolidate high interest debt. VA interest rates are low, it may make sense to cash out to pay off super high interest credit cards, car loans, or installment loans you may have.  It’s important to note, many banks and lenders cap the loan to value on VA cash out to 80-90% loan to value. Here at Five Stars we still permit up to 100% loan to value ( LTV) cash out refinance.

Proudly serving all of Florida, including > Cape Canaveral, Cocoa Beach, Grant, Indialantic, Indian Harbor Beach, Melbourne,  Merritt Island, Palm Bay, Port St. John, Rockledge, Satellite Beach, Titusville, VA Loan Refinance Brevard County

Contact us by phone seven days a week at ph: 800-871-2636  – For faster service please submit the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.

Florida Non-Conventional Loan

Florida Non Conventional Loan

The Florida housing markets has seen some good improvements over recent years. As a result, select lenders and brokers are offering non conventional home mortgage financing once again.  Let’s face it,  mortgage borrowers with recent financial hardships or self employed often find it near impossible to secure conventional or government home loans. The same can be said for Foreign Nationals or non US citizens. Non conforming or “outside of the box” financing options is what these buyers need. Below we have outlined some new Florida non-conventional loan options that many buyers require today . Need help? We want to hear from you, please submit the “Request Information” form at the top right side of this page.  Mobile users can find the short Request Info Form here.

Bank Statement program for FL self employed buyers.

  • No tax returns, IRS 4506, or P&L statement needed.  Income verification is done by reviewing bank statements.
  • Owner occupied primary homes, 2nd homes and investment home permitted.
  • 680 credit score required for all programs.
  • Owner Occupied primary homes  – Loan amounts up to $625,000 with 20% down – 80% LTV
  • Owner Occupied primary homes –  Loan amounts up to $1,000,000 with 25% down payment – 75% LTV
  • Investment/ Rental home – Loan amounts up to $625,000 with 30% down payment – 70% LTV
  • Investment/ Rental home – Loan amounts up to $1,000,000 with 35% down payment – 65% LTV
  • Available for Purchase, Rate/Term Refinance and Cash Out Refinance.

24 Month Bank Statement program for Florida self employed borrowers:

  • 2 years of bank statements needed.
  • Minimum credit score of 580
  • Minimum 6 months of savings/reserves.
  • Primary owners occupied, 2nd homes, condo, townhome, SFR only – NO investment home purchases.
  • Loan Amount up to $750,000 with 9 months saving reserves.
  • Loan Amounts up to $1,000,000 with 12 months saving reserves.
  • 30 year fixed rate terms.
  • Available for Purchase, Rate/Term Refinance and Cash Out Refinance.

Florida Foreclosure & Short Sale Program:

  • 1 day out of Foreclosure or short sale ok in Florida –  NO foreclosure or short sale waiting period.
  • Min 580 credit score needed.
  • 24 months bank statements needed.
  • 30 year fixed, no pre payment penalty.
  • Non US residents ok.
  • Owner occupied and Second homes only. Single family, Condo, Townhome all ok.
  • Up to 80% loan to value for loan amounts up to $750,000  ( 20% down payment)
  • Up to 75% loan to value for loan amounts up to $1,000,000 (25% down payment)
  • Up to 65% loan to value for loan amounts over $1,000,000 (35% down payment)

Florida Foreign Nationals – Non US Citizens:

  • Loan amounts from $100,000 – $3,000,000
  • Min of 12 months of verify savings / reserves required.
  • 2nd homes and Investments homes only.  1 unit properties only.
  • Home purchase, rate/term refinance and cash out refinance allowed.
  • Minimum of (3) strong credit references from country residing.
  • No credit score needed.
  • Up to 65% loan to value. Min 35% down payment required.

Florida Jumbo Mortgage Loan Options:

  • Up to 95% Jumbo Loan Financing – Loan amounts up to $850,000.  680 credit score – Full documentation.
  •  Up to 90% loan to value – Loan amounts up to $1,000,000. 700 credit score – Full documentation.
  • Up to 85% loan to value – Loan amounts up to $2,000,000.  760 credit score – 36 months of savings/reserves.
  • Many more Jumbo mortgage options for 2nd /Vacations homes – Learn more about all the Florida Jumbo loans here.

Please note – no raw land, lot loans, or mobile homes permitted with any of the above programs.

Five Stars is Florida’s leading mortgage resource offering many Florida non-conventional loan options. Please reach out to us at ph: 800-871-2636 with any questions 7 days a week. Buyers can also expedite their request by submitting the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.  Please also be sure to visit www.FiveStarsMortgage.com for the latest mortgage info.

95% Jumbo Loan Financing

95 Jumbo Loan Financing

A Florida Jumbo loan is a mortgage loan amount above conventional conforming loan limits. In most of Florida this limit is $417,000 – some locations in South FL (Miami) are even higher.  This standard is set by the two governmental backed enterprises Fannie Mae and Freddie Mac, and sets the limit on the maximum value of an individual mortgage they will purchase from a lender. When Freddie Mac and Fannie Mae max loan limits don’t cover the full amount, it is commonly known as a “jumbo loan”. The current jumbo mortgage starts at loan amounts greater than $417,000. The average interest rates on jumbo mortgages are typically higher than for conforming mortgages. Why is this?  Florida Jumbo loans are typically considered higher risk mortgages which accounts for the higher interest rates. This is because if a jumbo mortgage loan defaults, it may be harder to sell a luxury residence versus a standard priced house. Luxury properties are more vulnerable to market highs and lows. This is one of the main reasons most banks and lenders prefer to have a higher down payment from jumbo loan seekers.

At Five Stars we offer some of the highest loan to value (LTV) Jumbo loans available in Florida.  We currently offer a non-conforming jumbo loans with a minimum down payment of only 5%.  So If you are a FL homebuyer looking for the lowest down payment Jumbo loan, at the lowest interest rate,  be sure to contact us. We are available to assist you 7 days a week.  For quick service please submit the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.  Please also be sure to call ph: 800-871-2636 and visit www.FiveStarsMortgage.com for the latest mortgage info.

Below we have listed our 2015/2016  Jumbo loan LTV / Credit requirements. Full Documentation, Owner Occupied Primary homes:

  • 95% LTV – up to $850,000 with 700+ credit score.
  • 90% LTV – up to $1,500,000 with 720+ credit score.
  • 85% LTV – up to $2,000,000 with 740+ credit score.

Contact us to learn about Adjustable Rate Mortgage terms (ARM) or vacation/ second home Jumbo requirements.

Up to 95% Jumbo Loan Financing – Serving all of Florida, including Collier, Monroe, Palm Beach, Dade, Broward County:  West Palm Beach, Miami, Key West, Coral Gables, Homestead, Palmetto Bay, Pinecrest, Pinewood, Sunny Isles Beach, Belle Glade, Boca Raton, Boynton Beach, Delray Beach, Juno Beach, Jupiter, Lake Worth, Lantana, Loxahatchee, North Palm Beach, Ocean Ridge, Pahokee, Palm Springs, Riviera Beach, Royal Palm Beach, Sandcut, South Bay, South Palm Beach, Tequesta, Wellington, Naples, Marco