Best Financing Tips

Best Financing Tips

Call for my list of professional loan officers, this is the kind of valuable
information they provide to help you work out financing challenges!

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(The following is excerpted from one of my favorite loan officers emails)

"Buying a double.  It is a fantastic way for a new homeowner to get into homeownership and it’s an amazing way to build wealth over the long-term.
I spend a lot of time game planning how to finance these, so below are my cliff notes that I share with clients: 

·         Conventional financing
        o   Typically requires 15% down on a double that will be a primary residence
            with a maximum loan amount of $620,200.

        o   Does not allow a double to be used as a second home – must be categorized
            as a primary residence or investment property.

   §  If labeled investment, down payment requirement jumps to 25%.
            §  I get this scenario a lot – they want to rent one side and use the other side
               when they are in town.  They can do this from a tax perspective, but there
                is no gray area with Fannie.  It’s either a primary or an investment.

        o   We are allowed to use 75% of the rent to qualify a homebuyer, so a person
            can often afford a larger price point than on a single family

   §  One thing to pay attention to if you are the listing agent – we do get the
               leases for the current tenants, so if we are categorizing it as a primary we
               will want to ensure that our buyer is moving in within 60 days of closing.

         o   ***Loophole – Freddie Mac has a HomePossible program that allows 95%
               financing on a primary residence double

   §  The key is that the buyer must make below $65,600 or the property must
               be located in a “No Income Limit” census tract.  If it is located in this
               census tract, the property qualifies on its own and the buyer can make any
               income level.

   §  Here is the link to search specific addresse 
               http://www.freddiemac.com/homepossible/eligibility.html

            ·         If you search a property and it comes up with “Home Possible Income
                   Limit:  No Income Limit” then any potential buyers can finance up to
                   95%.  This changes the pool of potential buyers drastically!!


·         FHA Financing

o   FHA doesn’t make a distinction based on property type – so they finance up to 96.5% for doubles too!

o   Maximum loan amount for FHA on a double is $403,125.

o   Tighter appraisal standards than conventional, but still a very functional loan.

·         Jumbo Financing

o   If your client needs a loan amount larger than $620,200, then there are jumbo loans available.

o   Most of them cap out around 75% loan to value, so they do need a bit more down."

 

IMPORTANT REMINDER
Contact me for my favorite Loan Officer Names List
Linda Babineaux  504-957-8014 cellular

 

Check back often for more great loan officer tips on my Blog site!