Joshua's Blog

Understand The Simple Steps To Build Credit Scores

Joshua Bucio (Hartland Mortgage Centers, Inc.) — Tue, 04 Aug 2009 23:41:38 -0500

Your credit scores are made up of five different factors. Once you understand what affects your credit scores, it will make it easier to understand there are simple steps to increase the scores.

Here is the direct link to understand the simple steps to build credit scores:

http://www.genuinemortgageadvice.com/understand-the-simple-steps-to-build-credit-scores/

New Tax Credit For First Time Home Buyers This Year 2009

Joshua Bucio (Hartland Mortgage Centers, Inc.) — Mon, 02 Mar 2009 23:33:58 -0600

Free money, yes free money for buying a home this year!

You can get a tax credit of $8000 or 10% of the purchase price (whichever is less) that you can claim on 2008 or 2009 taxes if you bought or plan on buying a home this year.

Unlike the first time home buyer tax credit last year, you DO NOT have to pay this money back. (There are some rules to follow with not having to pay this money back and I have a direct link below to the IRS form that lists these rules). Add this to the historic low interest rates, surplus of inventory on the market, and home prices being much lower, this is a great year to buy your first home.

This is what's necessary to qualify for the tax credit:

You must be a first time home buyer. If you haven't owned a home in 3 years or more, you will qualify as a first time home buyer.
You buy a home anytime between January 1st, 2009 - November 30th, 2009.
Single income filers cannot make more than $75,000 per year. Joint income filers cannot make more than $150,000 per year. (Higher income buyers may receive a partial credit)

If you bought or plan on buying the home in 2009, you have to follow a few rules in order to qualify in not having to repay the money.

Here is a direct link to the actual IRS Form 5504 that explains all this in detail. This form has been updated Februrary 2009.

I always like to hear your feedback about incentives like this. Would this encourage you to buy a home this year? If not, what exactly are you waiting for? I like both postive and negative feedback.

Here is a detailed list you can print or save about the tax credit.

2009 First Time Home Buyer Tax Credit

For more information regarding this credit go to 2009 federal housing tax credit.

Understanding the Benefits of a VA Mortgage Loan_Wisconsin

Joshua Bucio (Hartland Mortgage Centers, Inc.) — Wed, 05 Nov 2008 00:32:31 -0600

Veterans Administration (VA) mortgage loans in Wisconsin are becoming very popular. Mainly, because of the lack of no down payment mortgages available. Home buyers are facing the reality that qualifying for home loans are becoming more difficult. This specific government mortgage loan program proves home buyers with another option.

Just to recap, a person that is currently active in the military or is a veteran of the military, is eligible for a VA mortgage loan.

Here are the benefits for a VA mortgage loan in Wisconsin:

1. No Down Payment Is Allowed - Yes, this is a true no down payment mortgage loan that allows you to finance 100% of the purchase price.

2. No PMI (Private Mortgage Insurance)Payment -With just about any other mortgage loan, if you don't have a 20% down payment, you are required to pay PMI as part of your total monthly payment. Combined with no down payment, not having to pay PMI allows many home buyers to qualify for a larger VA mortgage loan.

3. Not Credit Score Driven - Credit scores are normally a major factor in determining whether or not you are approved for a mortgage loan. VA mortgage loans are approved based on the ability to repay the mortgage payment. Along with this, compensating factors are used to help strengthen your loan application, which helps in getting you approved with lower credit scores. There is no particular credit score that will or will not approve your VA mortgage loan, so don't let this hold you back.

4. Favorable Fixed Interest Rates - Now, interest rates are determined on a variety of factors, so every situation will be different. What to remember is how favorable a VA mortgage loans fixed interest rates are. These fixed interest rates can rage anywhere from only 0.25% - 1% higher than regular conforming fixed rates. So, a veteran or active military borrower will be approved for rates that are not much higher than someone that has great credit and a large down payment.

5. Multiple VA Mortgage Loans - This program is well know for first time home buyers, but what many don't know is that this program can be used a second and sometimes a third time by the same borrower. Whether it is a refinance or the purchase of another home in the future, the VA mortgage loan in Wisconsin, can be used multiple time. This is determined by your certificate of eligibility. Once your certificate of eligibility is received, it will state if you are eligible for another VA mortgage loan in Wisconsin.

Whether you, your family, friends, or co-workers are active in the military or are a military veteran, please share this valuable information. Many people do not understand the benefits of a VA mortgage loan. Education is important when deciding what mortgage loan best fits your situation.

5 Ways To Avoid PMI and Lower Your PMI Payment

Joshua Bucio (Hartland Mortgage Centers, Inc.) — Wed, 17 Sep 2008 12:28:44 -0500

Remember, these options can be used for a new home loan or refinancing an existing mortgage.

Below are 5 ways to avoid PMI if you have less than a 20% down payment or less than 20% equity in the home for a refinance. This is quality information that most people don't write about, so I won't keep you waiting...

1. Single Premium. (this option is becoming very popular)
With single premium, you can pay for mortgage insurance with a single payment at closing. This can be paid as an upfront payment or financed into the loan. This option will usually provide significant monthly savings, so it's a great way to avoid the monthly PMI payment.

Here are the benefits for this option:

No PMI is due at closing when financed into the loan.
A lower monthly payment.
Possibility of qualifying for a large loan, since the monthly payment is lower.
The premium is partially refundable when the home is sold or refinanced ahead of term.
Only one mortgage loan, so you don't have a high interest rate, more closing costs, and more paper work that comes with a second mortgage loan.

BPMI (regular PMI) vs Single Premium (comparison chart to view)

2. Free After Five. (not as popular, but guaranteed to eliminate PMI)
This option automatically terminates the PMI after 5 years, provided you kept a good mortgage payment history for those 5 years. Even if you haven't built up 20% equity in the property, the PMI payments will be eliminated. You will avoid PMI, while still being covered until you have 22% equity in the home.

Here are the benefits for this option:

PMI payments are eliminated after 5 years, regardless of how much equity you have.
You will receive continued coverage after the PMI payments have ended.
Only one mortgage loan, so you don't have a high interest rate, more closing costs, and more paper work that comes with a second mortgage loan.

BPMI (regular PMI) vs Free After Five (comparison chart to view)

3. Split Edge. (a good way to lower your PMI payment)
This program allows you to split the PMI with the lender. The cost is shared through paying a refundable, upfront MI payment. This will reduce your PMI payment and your overall mortgage payment. It could also get you qualified for a large loan.

If you are buying a home and the seller is give you credits for the closing costs and prepaids, why not use these credits to pay for some of the up front premium and lower your PMI payment. In turn, you will lower your mortgage payment, compliments of the seller!

Here are the benefits for this option:

Lower monthly PMI payment, in turn lowers your overall payment.
Refundability of the unused MI premium if the loan is paid off early.
Only one mortgage loan, so you don't have a high interest rate, more closing costs, and more paper work that comes with a second mortgage loan.

BPMI (regular PMI) vs Split Edge (comparison chart to view)

4. LPMI - Lender Paid Mortgage Insurance. (very popular way to avoid PMI)
You can completely eliminate PMi with this program, in exchange for a small adjustment to the interest rate. You will avoid PMI completely and not have to pay the extra monthly payment.

Here are the benefits for this option:

Avoid PMI all together without having that extra monthly payment.
Mortgage interest is tax deductible, where you have to qualify for PMI to be tax deductible. Check with your accountant for more information.
Only one mortgage loan, so you don't have a high interest rate, more closing costs, and more paper work that comes with a second mortgage loan.

Click here if you haven't read my original post on how to avoid PMI.

5. Piggy Back. (the original way to avoid PMI)
This option avoids PMI by taking out a second mortgage loan. You finance the first loan up to 80% of the purchase price (or appraised value, depending on if it's a purchase or refinance), then finance the rest with a second mortgage. This used to be a great way to avoid PMI, but with recent changes with lenders, second mortgages are more difficult to approve, let alone find. Also, they come with a higher interest rate and more closing costs.

I have always recommended one of the first 4 ways to avoid PMI, since they offer so many more benefits.

So, the next time you have less than a 20% down payment or refinancing an existing mortgage that doesn't have 20% equity in the home, don't forget there are other options.

If you have additions questions about these, please don't hesitate to email or call. If you prefer, you can send me your information online here and I'll get back to you shortly.

3 Ways To Obtain A No Down Payment Mortgage - Wisconsin

Joshua Bucio (Hartland Mortgage Centers, Inc.) — Mon, 21 Jul 2008 23:10:47 -0500

Here are the three options you have when looking for a true no down payment mortgage loan. I've also laid out some details of each program, so you can get an idea of what they are all about.

1. VA (Veterans Affairs) Mortgage Loan - Whether you or your spouse are currently in active duty or a military veteran, you can be eligible to obtain a VA mortgage loan. No down payment is required with this loan program. A VA loan has many benefits for military personal, that is should be taken advantage of. Here are the list of benefits that come with a VA mortgage loan...

- No down payment.
- Less of a PMI (private mortgage payment) payment.
- Favorable and secure 30 year fixed interest rates.
- No minimum credit score to qualify. Even if you have bad credit, a VA loan is approved based on your ability to show you can afford the mortgage payments.

You have two ways to be approved:

1. Approval through an automated underwriting engine.
2. A manual underwrite. Sometimes, the automated engine doesn't approve your application, but that's OK. It still allows your application to be underwritten manually by an underwriter. Basically, if you can show ability to pay the mortgage with good employment history, you will most likely be approved.

You may be able to obtain a VA loan multiple times. A form called the, Certificate of Eligibility, is required when applying for a VA loan and this determines whether or not you have enough "eligibility" left to qualify for another VA loan. Sometimes, a borrower doesn't use all of his/her eligibility, which can be used again for a future purchase on a new home.

2. Rural Housing Mortgage Loan - If you find a home in a rural area and your adjusted annual gross income doesn't exceed the moderate income limits for the area, you can qualify for a rural housing mortgage loan. No down payment is required with this loan program. A rural mortgage loan has many benefits for a borrower that is looking to purchase a home in a rural area. Here are the list of benefits that come with a rural mortgage loan...

- No down payment.
- No PMI. (private mortgage insurance)
- Favorable and secure 30 year fixed interest rates.
- Seller can pay up to 6% of the purchase price, to the buyer, for closing costs and prepaids. This allows the buyer to truly not have to bring money to closing, since there is no down payment.

You may finance up to 102% of the appraised value or purchase price, whichever is lower. The 2% is meant to finance the closing costs and prepaid items like the escrow account, so you truly do not have to bring money to closing.

3. FHA Mortgage Loan With A Down Payment Assistance Program - If the seller agrees to participate in a down payment assistance program, the buyer can use these funds towards his 3% down payment when applying for a FHA loan. This is how you can truly do a no down payment FHA mortgage loan. A down payment assistance program allows the seller to gift 3% of the purchase price to a 3rd party service, which in turn the buyer can use the 3rd party service and it's funds for the down payment. Here are the list of benefits that come with a FHA loan...

- No down payment, when using a down payment assistance program.
- Less of a PMI (private mortgage insurance) payment.
- Favorable and secure 30 year fixed interest rates.
- No minimum credit score to qualify. Even if you have bad credit, a FHA loan is approved based on your ability to show you can afford the mortgage payments.

You have two ways to be approved:

1. Approval through an automated underwriting engine.
2. A manual underwrite. Sometimes, the automated engine doesn't approve your application, but that's OK. It still allows your application to be underwritten manually by an underwriter. Basically, if you can show ability to pay the mortgage with good employment history, you will most likely be approved.

These are the only 3 options that are available in this current lending environment. Fortunately, there are no down payment options available and I'm glad to say I specialize in working with first time home buyers to help them obtain these types of mortgage programs.