Government loan programs FHA and VA Flex 97 - Mortgage Expert Advisor South Florida

Government loan programs

FHA loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA loan programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.

FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans.

Some of the other benefits of FHA financing:

Only a 3 percent down payment is required.
Closing costs can be financed.
Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
More flexible underwriting criteria than conventional loans
FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
Loans are assumable to qualified buyers.

VA Loans

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loan include:

Negotiable interest rates.
Closing costs are comparable and sometimes lower - than other financing types.
No private mortgage insurance requirement.
Right to prepay loan without penalties
The Mortgage can be taken over (or assumed) by the buyer when a home is sold.
Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

Flex 97 Programs

What better way is there to show homeowners that are serious about them and about our commitment to helping them buying a home!

Our Flex 97, give your buyer options that weren’t available in the past. Funds for down payment, closing costs and/or prepaid items may be obtained from the buyer's own funds, gifts from a family member, or grants from an employer, non-profit, or government agency.

Who needs this type of program?

First-time home buyers with good credit who lack funds for down payment, but have access to non-traditional sources
Current homeowners looking to move up, but have minimal equity in their current properties
Customers looking to buy more home
No down payment is required by the buyer!
Single family 1-unit properties
Warrantable condos and PUDs
Non-Warrantable Condos
Purchase transactions
Conforming fixed-rate loans (7/1 ARM allowed on Flex 97)

Lower monthly payments

With reduced MI premiums, your buyer will have a lower total monthly payment.

TOP 8 DOCUMENTS NEEDED FOR MORTGAGE APPROVAL

Many people approach me everyday and not surprisingly, all of them at the beginning of our conversation or towards the end have the same question. What documentation the lenders will need? No matter all cases are not the same here is a general rule which helps individuals to get organize. The guidelines to obtaining a mortgage are changing every day, the following is a list of the most common requested documents.

1. Federal Tax Returns for the last 2 years - If you have filed for an extension for the previous year, have your W-2 & income statements on-hand.

2. Your Pay Stubs - Have a minimum of a month’s worth of pay stubs. Financial institutions prefer to see pay stubs that include your name, social security number, employer’s address & year-to-date earnings.

3. Credit Report - Even if you are applying for an FHA loan (that does not use a FICO score to approve a loan), all financial institutions are interested in your debt to income ratios & information on how you have handled debt in the past. Although the financial institution pull the credit report directly from Transunion or Equifax, it is important for you to know what is on your credit & make sure it is accurate.

4. Bank Statements - Mostly likely 2 to 3 months of your last bank statements.

5. Employment History - A record of steady employment in the same field is very favorable.

6. Assets List - Mutual funds, retirement accounts, real estate, stock & any other assets are helpful in determining your worthiness & getting you a low interest rate.

7. Cancelled Rent Checks or Landlord Info - If you currenly rent, being able to prove that you pay your rent is important.

8. Real Estate Contract - The lender needs to understand the terms & conditions of the property you are purchasing, as well as a description of the property. As a realtor, I will normally forward a copy of the completely executed contract over to the lender/mortgage broker.

The key to a stress-free mortgage approval is doing the leg work beforehand to ensure that all the necessary paperwork is organized & ready for your lender’s review. Besides saving aggravation, it is also the key to your best interest rate.

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