Guest Writers & Contributors
THE Mortgage Coach~Back to Work by Barry O'Meara ~ Comments & ?'s welcome •
barryo@stearns.com
SANTA ROSA, CA. ~ Once again, home values in Sonoma County are on the rise. Month after month indicators show we are paving a solid road to recov- ery.
Our housing
market is resting on solid foundation that is
building equity
back into our com- munities and brings back consumer con- fidence.
to buy is now and the time to move up is now.
Whether you are
a first time home buyer or a move up buyer, the first step to buying a home is to know what you would qualify for. As prices go up, your dream home could slip past you. It is impor- tant to know what financing options are available and what their guidelines are. No longer can you find a “stated income” loan that would be considered affordable. The guidelines and rules for financing a home are constantly changing but docu- menting your income is a con- stant.
When qualifying for a home loan there is one thing that will determine which loan programs you should be con-
Without
passion man is a mere latent
force and possibility, like the flint which awaits the shock of the iron before it can give forth
its spark. Henri-Frédéric Amiel
Earth laughs in flowers. ~Ralph Waldo Emerson The time
sidering, and that is- credit pro- file. A low credit score could make conventional financing too expensive.
When lenders
price out a conventional loan they add risk-based pricing
adjust-
ments. These adjustments are often referred to as Loan Level Pricing Adjustments
(LLPA). Under
these pricing guide- lines, a low credit score with a high loan-to-value could add points to your loan or limit you to FHA financing.
One of the biggest events that can truly affect your credit score is a foreclosure, bank- ruptcy, or short sale. With all the economic turmoil that has fallen on so many, you’re not alone. In response to this, HUD has changed its guideline to help those affected.
The pro-
gram is called “Back to Work- Extenuating Circumstances”. These new guidelines were announced in HUD’s Mortgage Letter 2013-26.
The effec-
tive dates are August 15, 2013 through September 30, 2016. The big change is
the time
required to pass before a lender can issue credit to a borrower that already has experienced a short sale, bankruptcy or fore- closure. This is so new it has not even been updated into our underwriting guidelines.
The
current guidelines have a 3 year waiting period. Under this new guideline you will only be required to wait 12 months. There are two parts to this.
“Back to Work” means they will be documenting your income. Make sure you understand how an underwriter will determine your income. The other half is “Extenuating Circumstances”. This means you will need to document that there were exten- uation circumstances that lead to a drop in income. This may require some letters of expla- nation, w-2’s or taxes.
This
is a new guideline and could take some time for lenders to iron out the details. It is now a full documentation world, so be prepared.
This may seem like a small
step but it is a step in the right direction. Some day we could be looking at similar guide- lines
used in Conventional
Underwriting. For now, anyone with a tarnished credit history, FHA is your only option.
UPBEAT TIMES • September 2013 • 7
Sugar Ray Always Shops at Western Farm
Center!
Meet Sugar Ray, an eight year old Standard Apricot
Poodle. Sugar Ray has been visiting WFC forever, owner of California Luggage, Burnie Schwartz tells us. Poodle fact: Originally bred in Germany as a type of water dog, the poodle is skillful in many dog sports, including agility, obedience, tracking, and even herding. This requires a healthy diet. Bernie says, “WFC is great!
They have everything Sugar Ray needs, even seatbelts for dogs as well as very helpful staff!”
Our Fall Bulbs Arrive the First Week of September! Irises
Fresh Breath for Your Cat & Dog!! Daffodils
Freesias Tulips
All of these bulbs are best planted around September through October and bloom in early spring. So, come see us while supplies last!
Since 1967 we’ve been the favorite place to shop for your pets & farm animals! Vaccination clinics every Sunday from 9:30am to 11:30 am
www.westernfarmcenter.com Open Mon-Sat 8am-5:30pm • Sun 9:30am-4pm
UPBEAT TIMES • September 2013 • 7
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