FAQs for the 100% Conventional Financing +Marketing Material to Swipe and Adapt, This Friday is the Halloween Breakfast (and flu shots), Market Report

The first part of last week turned out to be better for the bonds although we lost almost everything Friday we gained earlier in the week. For more on the market report, see below. Don't forget our Halloween Breakfast (with or without the flu shot :)) from 8-9 AM this Friday 10/31. Also, we have had a lot of calls since Friday's announcement of the 100% Conventional Financing so I have given you below the Frequently Asked Questions as well as Marketing Material that you can "Swipe and Adapt" to use for your buyers and database (and could use on your listing material also!). Let us know when we can be of assistance to you and your buyers. Linda Reminder: Halloween Breakfast and Flu Shots- THIS FRIDAY!!!!!!!! It is fitting that we will hold our annual flu shot clinic here at the office (3200 Broadway Blvd in Garland) on Halloween morning- I think that they are pretty scary- don't you :) although I do get one every year myself. We will have a nurse at our office from 8-9 AM for flu shots on October 31 if you would like one. I do need an RSVP for the flu shots by 10/29 so that the nurse knows how many shots to bring. The flu shot cost is $25 per person. So, to make it fun (and we are always looking for a reason to throw a party), we will be serving breakfast at the same time (Friday morning, October 31 from 8:00-9:00 AM). We will have scrambled "brains" :) (eggs) with tortillas with all the trimmings and homemade pico made by Chef David (my husband) who most of you know is an excellent cook. So whether or not you are getting a shot, come on by for food, fun and prizes. We look forward to seeing you here! Did you know....... Did you know that this week is Hero Awareness Week? Let someone in your life that you admire and look up to know how much they mean to you. It will make their day (and they probably need to hear it also!). Frequently Asked Questions on the 100% Conventional Financing How does the 100% Financing Work? The loan is 100% financing with no Down Payment required. We can work the program on a 97/3* however we would typically find that the 95/5* would work better in interest rate pricing and PMI factors. *The first lien (in the case of the 95/5) is a standard conventional loan and the 5% is financing is paid by a Community Second that we have available and ready! Because the Community Second is NOT set to a bond program, we don't have to wait until "funds are available"- they are ready now. In addition, we do not have to ask the seller for the 5%- it comes directly from us through a Community Second lien. What is the seller allowed to pay? The seller is allowed (not required :)) to pay up to 3% of the sales price toward the buyer's closing cost and prepaids (i.e., if the sales price is $100,000, then the seller can pay $3000). Is there a minimum out of pocket for the buyer No, there is no minimum out of pocket for the buyer. However, keep in mind that although there is no down payment, the seller is allowed to only pay 3% of the sales price towards the buyers cost. If the 3% does not cover the closing cost and prepaids, the buyer will need to be out of pocket the remaining (or get a gift- restrictions apply- ask us for details) Is there PMI on the loan? Depending on Sales Price and Credit Score, there is possibly no Private Mortgage Insurance (PMI)! Ask us for details on this. Make certain that you do not promise your buyer that there is no PMI until we have talked to them and know the specifics. We will let you know if we can offer this option to your client. Is this a First Time Home Buyer Program? No, this is not a First Time Homebuyer Program. However, the buyer cannot own a home at time of closing. Note: They can do a simultaneous close in which they sell their current (and only) property and purchase another one and still use this program. What do the Credit Scores need to be? Credit scores must be 620+ (and must run through automation underwriting, i.e., DU or LP). We will take the lowest middle score of the buyer(s). For example, if the buyer has a 620, 640 and 660 and the co-borrower has a 680, 690 and 700- we will use 640 as the lowest middle score. Note that there are NO exceptions on the 620+ credit score. It is important also to note again that the loan must run through automation in order to qualify. How high can the household income be and still qualify for this program? Buyer's income can go up to $90,000. Note also (unlike many other programs), if we don't put a specific buyer on the loan, we do not have to count their income in the max household income limitations. So for example, if the husband makes $50,000 per year and the wife makes $60000 per year, if only the wife is on the loan, only her income is counted in the max household income (but obviously she must qualify for the house payment + her debt vs. her income). What is the minimum and maximum sales price on this program? There is not a minimum or maximum sales price on the program; however, it is important to remember that the qualifying income cannot be more than $90,000. Note that a $90,000 income would qualify for approximately a $250,000 home (assuming low revolving and installment debt). What are the terms of the loan with the program? This is a primary residence, single family or duplex (buyer must be living on at least one side), full doc, 30 year fixed mortgage. It cannot be used for investment properties and/or with stated income and it also must be a Conventional loan. What do I need to do if I have a buyer that I think would qualify for this program? Great question :). Give us a call at 972-278-3400 or email us at ldavidson@serviefirstmtg.com and we will be glad to speak to the buyer to see if they qualify. We will also discuss other options (i.e., FHA, Freddie/Fannie and possible USDA and/or VA if applicable) so that the buyer understands all their options and the pro/cons of each loan. It is our goal to look at the short and long term needs and goals of the buyer to determine what mortgage product is best for them. What happens if a buyer cannot purchase a home right now due to credit or other issues? Another great question! We have a detailed "Don't Give Up (DGU) - Get Mortgage Ready" program that we will put the buyer on giving them specific action plans and time table. In addition, we will stay in touch with the buyer over the course of the time needed to qualify as part of our exclusive DGU program. Once the buyer is "Mortgage Ready" then we will complete the loan approval and refer the buyer back to you. Marketing Material to "Swipe and Adapt" for Your Clients and Database A lot of potential buyers are now feeling as if they can't buy a home until they save money for a large down payment. This is not always the case and if buyers want to purchase a primary home, there are ways that are still available to get 0-3% down financing. These programs do require that the buyer qualify for the house, which is a good thing as it won't put people in homes that they can't afford. The credit history does not have to have been perfect; financing for homes can be obtained for people with credit scores of 580 and higher, as long as they can show a good rental payment history. It is important to understand also that a buyer does not have to be a first-time homebuyer to get 100% financing. However, as a first-time buyer (haven't owned real estate for the last 3 years), they may qualify for a $7,500 tax credit on the Federal Tax Returns this year (made possible by the Housing Bill 3221), making purchasing now even more attractive with interest rates low and inventory high. I can give you further information on the $7500 Tax Credit if you would like- just give us a call. In the meantime, here are some ways to purchase a primary home with 0-3% down: I have access to a 100% (no money down) Conventional loan with a credit score of 620+. This is an exclusive program and possibly could be without PMI (depending on the credit score and sales price). The lender that I work with is only one of three lenders in this area that has this select program and I am excited to be able to offer it to my clients. FHA mortgage allows a gift or loan from a family member - A family member can loan or gift the 3% down payment required (also note that there are actually 22 ways in which FHA allows a buyer to come up with the 3% down payment required!). FHA loan limit has increased to $271,050 making it a very attractive loan in Dallas/Fort Worth. There are First Time Home Buyer Bond Programs available. Many of these programs are getting their new allotment of funds this month, so it is a great time to look at this. Zero down VA loans are available for those who have eligibility for having served in the military. In addition, using the VA in conjunction with the Texas Veterans Land Board program (TVLB) could give a buyer a 30 year fixed interest rate down to 4.75 fixed (restrictions apply)! USDA Rural Housing loan - this program actually has the ability to include closing costs in the mortgage as well as no down payment and no monthly mortgage insurance! There are income and location limitations but many people are surprised to see exactly what areas do qualify (i.e., Rockwall, Wylie, Forney, Little Elm and Azle, just to name a few). Interest rates are still low, and buyers can purchase a home with a lower payment. It is a great time to purchase a home. Training Class in November- "Rescuing the American Dream" Due to a lot of calls, we are going to teach one last class in November which is "Rescuing the American Dream". This will be a 90 minute class with quick overviews of what type of financing can be done now, how to market the changes to your clients, as well as a quick overview of short sales and foreclosures and the new housing bill HR 3221. It will be fast, fun and will equip you with knowledge that you can use to market this knowledge to your clients. The class will be held in my office (3200 Broadway Blvd, Suite 120, Garland) on Tuesday, November 4 from 1 PM- 2:30 PM. This will be the last class of the year that we will hold here at the office. Note, however, that I am available for classes in individual offices/ meetings. To RSVP for the 11/4 class, simply call 972-278-3400 or email us at ldavidson@servicefirstmtg.com.