5% Down Payment Florida Jumbo Loans

5% down jumbo loan florida

5% down payment Florida jumbo loans are back. These new 95% jumbo loan programs allow home buyers to obtain mortgage financing that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. With interest rates so low some home buyers would like to consider a jumbo loan to get more house for their money. Even better is the 5% Florida jumbo loan does not require monthly mortgage insurance like many other loans with a low down payment. Below we take a brief look at the jumbo loan basics and discuss all the things you need to know.

First, a jumbo mortgage is a home loan that exceeds the typical lending limits of the Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), the Federal Housing Administration (FHA) or the Veterans Administration. Loans sold to either Fannie or Freddie are called conventional loans or conforming loans because the mortgage amount “conforms” to the underwriting guidelines and lending limit of these companies. Loans above the following limits are called jumbo loans ( there are expectations in higher cost locations)

  • 1-unit home – $417,000
  • 2-units (duplex) – $533,850
  • 3-units – $645,300
  • 4-units – $801,950

Until recently, jumbo home buyers had to put 10-20% down if they wanted to purchase a home and borrow over the conventional loan limit of $417k.  Our new 5% down Jumbo mortgage with no monthly PMI is a great financing option for Florida borrowers who want to purchase a home or refinance. This program will allow Florida buyers to purchase a home up to $850k with only 5% down, and have the option of No monthly PMI. There are not many banks, lenders or mortgage companies offer this program today. This is especially good for borrowers in higher priced luxury location like Miami, West Palm Beach, Naples, Coral Gables, Jupiter, Sarasota, Boca Raton, Cape Coral, St. Petersburg, Tampa, Orlando, etc.

A few notes for the 5% down payment Jumbo loans:

  • 95% loan to value financing is only available for borrower that can fully document income, assets, etc.
  • For borrowers that cannot do full documentation, please check into our non-conventional loan programs here.
  • To obtain the max 95% financing, borrowers will need a 680+ credit score.
  • The program can be used to purchase a single family home, townhome or condo.
  • Jumbo interest rates can vary based on the term and credit score. Borrowers will choose between secure fixed rate options or adjustable rate terms (ARM)
  • Applicants can choose an interest rate buy down, or reduced closing costs options.
  • Second homes, vacations home and investment property purchases are permitted, but will require a slightly higher down payment of 10% down or more.
  • Jumbo rate-term, plus cash out refinance options are available for home owners that already have a high cost mortgage.
  • Higher loan amounts available. Up to 90% LTV financing to $1,500,000 with 700+ credit score. Up to 85% LTV financing to $2,000,000 with 720+ credit score. Please contact us if you are financing over 2 mil.

Five Stars is Florida’s Jumbo loan leader. We have specialist standing by 7 days a week to serve you . Please call ph: 800-871-2636, or just submit the “Request Information” form located at the top of this page.

USDA Closing Cost Fees

USDA closing costs

We often received many questions about USDA closing cost fees and financing charges. Generally speaking, for a new home purchase the buyer can expect to pay 3 -6% ( based on purchase price) for closing costs and pre -paid escrow requirements.  The exact amount can vary greatly depending on the home purchase price and state. The home seller will have “customary” closing costs that they are responsible for, and the buyer will have the same. Again, these closing costs are “customary” and not set in stone and can vary based on the state.  But in the end, everything is negotiable.

One of the great benefits of a USDA rural loans is not only is the program 100% financing, but it allows added flexibly in regards to closing costs. First, the sellers is permitted to give concessions (pay for) the buyers closing costs. There is no limit on this. These closing costs and escrows can be negotiated into your purchase contract and paid by the seller as part of the deal terms. In some cases this option may not be feasible with the seller.  When this option is not possible, there is a second option as well.

The second option for closing costs involves including the costs, or rolling in the cost into your new loan. This option has nothing to do with the home seller.  USDA will permit any pre approved buyer to roll in their closing costs if the homes appraised value supports the increase. Your new home must appraise high enough for this option to be used.

Example –

Home purchase price – $150,000

Closing costs and escrows to be paid by home buyer – $5,200

Appraised value –  $156,000

In this example it would be ok to roll in all of your closing costs into the new loan, the home appraisal supports it. Your total loan amount would be $155,200 plus the 2.75% USDA guarantee fee.

Now you have your USDA contract fully approved and closing costs are taken care of as well. What else can the home buyer expect to pay?  Generally you will be required to pay an escrow or earnest money deposit when your purchase contract is accepted by the home seller.  This amount is usually around $500- $1,500 depending on the sales price. It’s best to refer to your realtor for the proper good faith deposit amount.  This deposit money will be placed into a separate escrow account by the closing agent and applied in the end. Appraisal and home inspection fees will also be paid in advance by the buyer – these costs are generally $400.00 – $650.00 together. Depending on the sellers concessions you negotiate, or the appraisal value, you can often receive the advance money you paid (deposit on contract, appraisal fee, home inspection fee) back at closing! So in the end the home buyers can end up investing little to no money in the transaction. Again, proper contract negations is the key.

If you have questions about USDA closing cost fees or interest rates, please contact Five Stars at ph: 800-871-2636 or just submit the Request Information form on this page. We are available to serve you 7 days a week.

2016 Jumbo Loan Guidelines

2016 Jumbo Loan

Jumbo loans are designed for Florida buyers who are purchasing or refinancing a home that is priced higher than the conforming loan limit set by Fannie Mae and Freddie Mac. Five Stars is a leader in financing Jumbo loans up to $8 million. We offer the best terms and lowest interest rates for owner occupied and second home Jumbo mortgages in Florida.  Five Stars is one of the few lenders that still offers Jumbo financing up to 95%.

Below we will take a look at the latest 2016 Jumbo Loan Guidelines.  Before we start, let’s review exactly that a Jumbo loan is.  A jumbo mortgage is any single loan amount over the conforming loan limit of $417,000 throughout most of the United States. When Fannie Mae and Freddie Mac limits do not cover the full loan amount on high valued homes, the loan is referred to as a “Jumbo Loan” While jumbo loan guidelines may change from year to year, these loans are currently reserved for those who need to borrow anywhere from $417,000 to $8,000,000. In parts of the United States where housing is high cost (parts of California, New York, Florida) the bottom end is set at $625,500.  In addition, FHA even still offers 3.5% and 5% down payment in high costs location with loan amount of over $729,000. Contact us to learn more about FHA high costs loans.

2016 Jumbo Loan Guidelines:

  • 95% Jumbo financing up to $850,000 – primary home, full documentation, 680+ credit score
  • 90% LTV to $1 million on condos
  • 90% LTV to $1 million on primary homes
  • Eligible loan terms include fixed rate terms  in 10, 15, 20, 25 and 30. In addition to adjustable rates (ARM) 5/1, 7/1, 10/1
  • Up to $8 million loan amounts
  • No mortgage insurance
  • Higher DTI allowed with higher credit scores
  • Self-employment with 2 years tax returns okay
  • Income sources include W2, self-employed and liquid assets
  • No seasoning requirements for cash out refinance
  • No Prepayment Penalty

Some notes: Borrowers will want to insure they have a 680+ credit score to take advantage of the lowest interest rates.  Higher down payments will likely be required for home buyers that have credit scores below 680.  Home owners that already have a conventional loan or jumbo can contact us below to learn about Jumbo Cash Out refinance options. Interest rates are still low as we start 2016, and a cash out refinance / debt consolidation could save you hundreds each month.

Home buyers can contact us by calling ph: 800-871-2636  (7 days a week) to start the pre approval process or to learn more about the latest lender and bank Jumbo loan requirements.  For fast 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.

Be sure view the helpful video below that recaps all the latest 2016 Jumbo and non conventional loan guidelines:

Serving all of Jumbo Home Buyers Nationally including Florida –  Boca Raton , Bradenton , Brandon , Cape Coral , Clearwater , Clermont , Cocoa Beach , Coral Gables , Crestview , Crystal River , Daytona Beach , DeLand , Deltona , Delray Beach , Destin , Dunedin , Englewood , Fernandina , Flagler Beach , Fort Lauderdale , Fort Myers , Fort Pierce , Fort Walton Beach , Gainesville , Green Cove Springs , Hallandale , Hobe Sound , Hollywood , Homestead , Inverness , Jacksonville , Lakeland , Lake City , Lake Mary , Live Oak , MacClenny , Melbourne , Miami , Milton , Mount Dora , Naples , Ocala , Ocoee , Orange Park , Orlando FL , Ormond Beach , Palm Bay , Panama City , Pensacola , Pompano Beach , Port Charlotte , Port St. Lucie , Punta Gorda , Santa Rosa , Sarasota , Siesta Key , Springhill , St. Augustine , St. Petersburg , Sunny Isles , Tallahassee , Tampa , Titusville , Venice , Vero Beach , Wesley Chapel , West Palm Beach , Winter Garden , Winter Haven , Winter Park , Winter Springs , Zephyrhills 2016

January 2016 Interest Rates

January 2016 Interest Rates

Welcome to 2016, we want to wish everyone a happy new year. Let’s talk about January 2016 interest rates and what new home buyers can expect.  First, many economists and mortgage experts have predicted that interest rates are going to start moving higher in the coming months. In fact the Federal Reserve increased overnight interest rates for the first time in seven years just last month. Most feel that the Fed will increase interest rates multiple times in 2016. If this happens, home buyers can be assured that mortgage rates will go up.

If mortgage rates start to move higher it is not going to be overnight. Mortgage rates tend to more slowly, much like the overall economy. Unless there is a huge jump in home prices and a drastic reduction in the unemployment rate, do not expect to see mortgage rates moving very quickly. That said, it never hurts to consider a new home purchase or refinancing while rates are still near all time low levels in January.  With the 30 year fixed mortgage rate around 4% now is a great time to purchase or refinance.

Current interest rates as Of January 1, 2016

FHA / VA Loans –  3.75%

100% USDA Rural Housing Loans – 3.75%

Conventional loans (20%+ down payment) 4%

Jumbo Loan Rates – vary based on credit score, down payment and loan amount. For a quick quote please submit the “Request Information” form at the top right side of your screen.  Mobile users can find the short Request Info Form here.

*Keep in mind a few things – the rates listed are for a 30 year fixed. Lower terms (15 year fixed, etc) will have lower rates.  The rates noted assume best credit, over 740+ credit FICO scores. Home buyers with lower credit score will likely take higher adjustments to their final interest rate.  Example – a buyer with a 660 credit score will likely see a 3.85% or 4% rate.  The rates assume NO loan discount points, but buyers can always pay loan points to buy down their interest rate lower if they choose. The interest rates listed also assume a standard 30 day lock in period.  Higher rate lock in periods (60, 90 day, etc) will result in higher rate adjustments – similar to lower credit scores.

For home owners that currently have a USDA, FHA or VA mortgage:

Remember that millions of homeowners that have government backed home loans are eligible to refinancing their loan and possibly save hundreds each month.

USDA 502 Guaranteed –  Home owners that currently have a USDA backed home loan can learn about the USDA Pilot Refinance here.

FHA Streamline – Home owners that currently have a FHA mortgage can read about the FHA streamline refinance here.

VA Interest Rate Reduction Refinance (IRRRL) –  Home owners that currently have a VA mortgage can learn about the latest 2016 VA guidelines here.

We expect mortgage interest rates to remain stable in January 2016. As the economy moves onward and upward more people will have money to purchase homes. When the economy is stronger banks tend to increase interest rates on home loans and other loan products like credit cards, etc. Before assuming you cannot qualify for a low interest rate reach out to us today. Whether it’s a home purchase or refinance, Five Stars has specialist standing by 7 days a week to help you lock in the lowest interest rates in January 2016. For quick service please submit the “Request Information” form at the top right side of your screen or call ph: 800-871-2636. Mobile users can find the short Request Info Form here. We serve borrowers in all 50 states.

AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY

First Time Buyer Loans 2016

2016 First time buyers

First time home buyers will have an assortment of home mortgage options in 2016.  With interest rates staying low in the near term, 2016 is looking to be a great time to purchase.  Below we will talk about the most popular First time buyer loans 2016, if you have questions, please call us at ph: 800-871-2636

We assist first time home owners in all states:  Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming

FHA mortgage

FHA Mortgage: The most popular first time buyer program remains the FHA loan. The FHA loan is a government backed loan and one of the easiest types of mortgage loans to qualify for. In addition buyers can have less-than-perfect credit and still qualify.  Below we have listed the benefits of the program, and things to consider.

  • FHA are great because they allow a maximum of 96.5% financing, the home buyer only needs a 3.5% down payment. This can be a big plus for first time home buyers since they often don’t have a lot of money set aside specifically for purchasing a home.
  • The FHA program permits the home seller to pay buyers closing costs – up to 6 percent.
  • The down payment money can come from a variety of sources including HUD down payment assistance grants.
  • The down payment money can also come from a gift from family.
  • Those with “so so” credit may still be able to qualifyFor traditional mortgages, a borrower will generally need a minimum credit score greater than 640. FHA loans are much more tolerant of lower credit scores, requiring a minimum score of just 580. However, a 620 credit score will be needed for the max 96.5% financing.
  • FHA also permits generous debt to income ratio limits, higher than any other loan program.  Please learn more about FHA loans here.

 

USDA mortgage

USDA Rural Housing Mortgage:  Like FHA, this is a government backed home purchase program. The big advantage of the USDA loan is the program allows for 100 percent financing. But there’s a catch, the home must be located in a USDA rural defined area, and the family income must be below a certain limits. Let’s talk more about the details below.

  • USDA Loans require NO payment up to 102.75% financing in select eligible areas. The extra 2.75% is for the USDA up front guaranteed fee.
  • Reduced monthly mortgage insurance costs (PMI) when compared to other loan options like FHA. Nearly half the costs.
  • USDA closing costs can often be included or rolled into the loan with higher appraisal. Closing costs can also be paid by the seller up to 6 percent.
  • No early payoff penalty.
  • There is NO maximum loan amount with the USDA program. Homebuyers are approved based on debt to income
  • You do NOT need assets to qualify for USDA loans. No minimum requirements on bank savings.
  • Qualifying for a USDA loan with lower credit scores is possible. Please note our current min required credit score is 620.
  • USDA mortgages are secure 30 year fixed rate terms at low market interest rates comparable to FHA and Conventional home loans.
  • USDA loans are for ANY new & existing single family residence located in a Rural Development eligible area. See the USDA address lookup map here. The home being purchased can be a regular sale, short sale, foreclosure home, bank owned, etc.
  • The USDA housing program is NOT solely reserved for first time home buyers. Move up buyers can use the USDA program.
  • Household income must be below the 2016 USDA income limits. Read more about USDA rural loans here.

 

VA home buying process

VA Mortgage:  If you have VA benefits, and little money to put down on a home, this is the option for you.  Te government VA program offers 100% financing for approved military families and Vets.

  • 100% financing for new home purchases. VA even offers 100% cash out refinance for home owner that currently have a VA loan.
  • No mortgage insurance – PMI required. This perhaps the best benefit of the VA loan.
  • No prepay penalty ever.
  • Secure 15 or 30 year fixed rate terms.
  • VA mortgage interest rates are the lowest of any loan program available today.
  • VA loans have similar closing costs to other loans, even though they offer 100% financing. The home seller can pay buyers closing costs as well.
  • One time funding fee is charged like all Government home loans – but it can added into the loan just like the USDA and FHA loans.
  • Loan amount limits up to $417,000 – select high costs locations higher.
  • VA offers an assortment of refinance options should interest rates go lower, or the homeowner want to cash out some equity down the road.
  • VA 100% home loan can close in as little as two weeks.
  • Perfect credit scores are required,  buyers with credit scores down to 600 may be approved.  Learn more about the latest 2016 VA loan guidelines here.

Please contact us by submitting the Request Info form at the top 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 national mortgage info.

FHA interest rates December 2015

December 2015 FHA Interest Rates

FHA interest rates December 2015 have started very much the same as November. As of December 2015, current FHA 30 year fixed rates are about 3.5% for low risk borrowers – over 740 credit score.  Borrowers with lower credit scores in the 600-720 range can expect interest rates around 3.625 – 4.0%. The FHA mortgage rates indicated assume a standard 30 days lock in period with NO added discount points. All applicants do have the option to lower their interest rate via rate buy down (paying points) if they choose to do so.

Please note interest rates do frequently change each week. Home buyers are encouraged to contact us below for the most up to date FHA rates.

FHA loan interest rates have been about the same all fall, with small .125%-.25% adjustments up or down. December interest rates are about the same as the previous months, no big changes. In fact FHA interest rates have stayed in a relatively tight range for all of 2015. Qualifying borrowers will often find that owning their own home is cheaper than renting. They will likely remain the case as long as rates stay low like they are today. I expect no drastic change as we move into 2016. Frank Stanley – FHA Loan Specialist.

Also remember if you are an existing homeowner with a FHA loan, you still have options to refinance your loan into a lower rate and possibly save money each month.  The FHA streamline refinance program allows homeowners that currently have FHA mortgages to refinance into a lower interest rates. These programs, exclusively reserved for those that have a FHA mortgage,  make the refinance process simple by offering a streamline process with little documentation.  In addition, the FHA streamline refinance allows home owners to refi without a new appraisal or home inspection.  So if your home value is  underwater, it’s perfectly fine.  You are not required to have a certain about of equity. need any equity in your home. Read more about the FHA refinance here.

FHA purchase and refinance closing times as of December 2015:  Currently the closing times ( from the time of fully executed contract) is taking about 3 weeks.

Five Stars is a leading National FHA loan resource. Contact us if you have questions about a new FHA loan application, interest rates or the refinance options –  please contact us at ph: 800-871-2636 or just submit the Request information form at the top of your screen.

AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY

2016 VA Loan Guidelines

2016 VA Loans

The VA home loan remains a great option for eligible Vets to purchase a home with no money down.  Below we will discuss the latest 2016 VA loan guidelines and any changes buyers need to be aware of.   The VA mortgage qualification requirements and eligibility requirements that are currently in place will pretty much remain unchanged for 2016. VA interest rates have continued to remain low for the last few years and 2016 looks to continue the trend.

The VA mortgage offer several benefits to military home buyers and their families. The biggest advantage is the benefit of 100% financing with no monthly mortgage insurance costs. In addition the program allows for the home seller to pay the buyers allowable closing costs.  The result is buyers can get a mortgage with very little to NO money down. Generally speaking, it is easier for borrowers to qualify for a VA loan compared to other loan programs like FHA, USDA or Conventional.  VA allows for lower credit standards and more flexibility overall. According to the Department of Veterans Affairs, the “VA guarantees a portion of the loan, and this backing allows the lenders and banks to provide you with more favorable terms.”

Not all applicants that apply for a VA will be approved. Like any other mortgage loans, this program has certain qualification requirements and standards associated with it. This article takes a current, updated look at VA loan requirements for 2016.

Standard VA Eligibility Requirements: Department of Veterans Affairs

You can think of VA mortgage qualification as a two step process. You must meet two sets of requirements, in order to qualify for such a loan. First, we have the basic eligibility requirements set forth by the U.S. Department of Veterans Affairs (VA). The department manages the program and establishes the minimum requirements for VA loans in 2016.

Generally speaking, you are eligible for the program if you meet any of the following criteria listed below:  If you are a homebuyer and have questions, please call us 7 days week at ph: 800-871-2636 or just submit the Request Information form at the top of your screen.

  • You are a veteran who served 181 days during peacetime (active duty).
  • You are currently on active duty and have served at least 90 continuous days.
  • You were discharged from the military due to hardship.
  • You are a veteran who served 90 days during war time (active duty).
  • You served at least 6 years in the National Guard or Reserves.
  • You are the un-remarried spouse of a veteran who died while in service or from a “service connected disability.”

Service members who have received a dishonorable discharge are generally not eligible for the program. As you can see, the eligibility requirements for VA loans in 2016 are fairly broad in range. They are meant to include most service members who have served in the military for a certain length of time. Just remember the two step system mentioned earlier. These are the minimum requirements established by the government. But the government does not actually originate VA loans. Instead they are processed by private lenders, banks and mortgage brokers, the government simply guarantees a portion of the amount being borrowed. In addition to meeting the basic eligibility guidelines above, you must also meet whatever VA loan requirements are imposed by the lender. Please read the VA lender requirements below.

VA Lender Qualifying Requirements in 2016

The Department of Veterans Affairs establishes clear and specific guidelines when it comes to length and type of service. But the information they offer about other VA loan requirements is somewhat vague.

For instance, the Department says “you must have suitable credit, sufficient income, and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan.” But they offer no specific definition of suitable credit or sufficient income. This leaves borrowers scratching their heads and asking a lot of questions: What credit score is needed to be approved for a VA loan? How much can I get approved for based on my income? What about my other debts, how are they calculated?  This is where the two-step system comes into play. Here’s what you need to know.

It’s possible to be turned down for a VA loan, even though you meet the government’s minimum guidelines for program eligibility. Meeting the Department’s requirements is not enough. You must also meet the lender’s requirements, specifically when it comes to credit scores and debt-to-income ratios. These are two of the most important factors when it comes to qualifying for a VA loan in 2016. 

VA Credit scores: As mentioned earlier, the Department of Veterans Affairs does not have any specific requirements for credit scores. But you can bet the mortgage lender does, and this can vary from one lender to the next. Most lenders are looking for a credit score of 620 to be approved. However, this does not guarantee loan approval as there are waiting periods for applicants with recent financial hardships like foreclosures, bankruptcy, etc. On the flip side, some borrower with low debt, etc could be approved with slightly less credit scores.

VA Employment History: Like most home loans today, VA will require a steady two year employment history with no large breaks in employment. Switching employers is often ok, as long as there was no significant gap from one job to the next.  Borrowers that receive strictly disability or social security income are exempt from this rule. However, they must provide adequate documentation providing “continuance” of such income.

VA Debt-To-Income ratios: The VA debt-to-income ratio, or DTI, is another important VA loan requirement. This is a comparison between the amount of money you earn (gross monthly income) and the amount that goes toward your fixed monthly expenses (recurring debts). Generally speaking, your total DTI ratio, including the house payment, should not exceed 41%. This requirement is imposed by the lender, not by the VA. So it varies from one mortgage company to the next. Exceptions are often made for borrowers with excellent credit, significant savings in the bank, etc. Lender and brokers call this “strong compensating factors of the loan”  Income may come from a variety of sources including but not limited to: base military pay, non-military employment, commissions, self-employed income (min 2 year history) retirement income, spouse’s income, and alimony.

VA Mortgage Documents: When it comes to VA home loan requirements in 2016, documentation is key. The banks and lenders will request a wide variety of documents to verify your income and assets, as well as your current debt situation. They also need to verify and document your ability to repay the loan, in keeping with new lending requirements. Documents needed for VA financing typically include the Certificate of Eligibility (COE), the Uniform Residential Loan Application (URLA), bank statements, tax returns and W-2 forms, the DD Form 214 for veterans who have left the military, and a variety of standard VA documents. If you need assistance finding these documents, we can help.  Just call ph: 800-871-2636 7 days a week.

VA Occupancy (Primary Homes) : The VA also has specific requirements for occupancy status. Simply put, you must use the home as your primary residence. You cannot use this program to finance the purchase of an investment or vacation (second home) property.

VA Appraisal: Just like any other home loan program, the Department of Veterans Affairs requires all homes being purchased with a VA loan to undergo a property appraisal. This is when a licensed appraiser evaluates the home to determine how much it is worth in the current market. Generally speaking, the house must be worth the amount you have agreed to pay for it, and it cannot exceed the VA loan limit for the county in which it is located. The house “must be adequate collateral for the requested loan,” according to the Department. Please contact us to discuss the VA loan purchase limit in your city.

Certificate of Eligibility (COE)

Borrowers who wish to use a VA loan to buy a house must first obtain a Certificate of Eligibility (COE). This document is issued by the Department of Veterans Affairs. The borrower must then present the COE to the lender when applying for the loan. The COE essentially says that the individual meets the Department’s minimum eligibility requirements.

To obtain a COE, applicants must provide evidence of their eligibility. This can be done in several ways:

  • Veterans who have separated from the military can provide a DD Form 214. It must show the character of service and the reason for separation.
  • Active-duty military personnel, National Guard members, and reservists can provide a statement of service signed by the personnel office (typically) or the unit commander.
  • Discharged members of the National Guard who have never been on active service can provide NGB Form 22 or 23.
  • Discharged members of the Selected Reserve who have never been on active service can provide a copy of the latest annual retirement points statement and evidence of honorable service.
  • Call us at ph: 800-871-2636 – we can help.

This is a basic overview of COE documentation requirements. For more detailed information, visit the home loans section of the Department of Veterans Affairs websitewww.benefits.va.gov/homeloans

VA Refinance Options for 2016:

The VA program also has some easy refinance options for home owners that already have a VA loan.

VA IRRRL: The VA streamline IRRRL refinance helps veterans lower their mortgage rate and payments. When rates are low, vets can refinance into a new loan based on today’s rates, and often reduce their monthly payment quickly and easily. The streamline program, also called the Interest Rate Reduction Refinancing Loan (IRRRL) eliminates many of the obstacles that hold up applicants on other types of refinances. The VA Streamline is much easier because:

  • No new appraisal is needed – unlimited loan to value is allowed. Great for borrowers upside down or underwater on their home value.
  • No paystubs or W2s are required
  • No bank statements are required
  • No home inspection is required
  • Underwater homes are eligible
  • The required funding fee is lower than for VA purchase loans
  • Closing costs can be wrapped into the new loan, the result is little or no out-of-pocket expenses

100% VA Cash Out Refinance:

One of the best reasons for using a VA mortgage to refinance an existing loan is the 100% loan to value feature. If a home currently has a loan provided by Fannie Mae, Freddie Mac, FHA, USDA or a private lender then the VA will allow veterans to refinance that loan to a VA mortgage and borrow up to 100% of the home’s appraised value in order to complete the loan. This is a great benefit since most other 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 U.S. home owners that do have good equity in their home, and want to consolidate high interest debt. VA interest rates are low, it make sense to cash out to pay off super high interest credit cards, car loans, or installment loans. The VA cash out refinance will require:

  • Full appraisal to determine home value
  • Full documentation for income and assets – most the normal borrower documents needed on a standard VA purchase loan
  • Up to 100% loan to value allowed, but not required

Applicants that have questions can contact us at ph: 800-871-2636 or just fill out the Request Info form at the top. Mobile users can find the short Request Info Form here.

We serve Vets in all 50 states including:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming

USDA Loan Application 2016

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New home buyers can learn about the latest 2016 USDA Rural Housing loan basics in the video below. 100% USDA home financing is great for first time home buyers that want to purchase a home, but have limited money saved for a down payment.  Please contact us with any questions at ph: 800-691-8826 or just submit the Request Information form on the top of your screen. Mobile users can find the short Request Info Form here.

USDA Loan Application 2016

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