McKinney Grant Program Offers Up to $10,000

The City of McKinney’s Community Services Department is helping first-time homebuyers fulfill their dreams of owning a home. The Homebuyer Assistance Program provides down payment and closing costs assistance up to $10,000 for first-time homebuyers purchasing in McKinney with low to moderate income. Funds are made available through a grant from the Texas Department of Housing and Community Affairs' HOME Investment Partnership Program.

Some requirements of the program include:

• First-time homebuyers. A first-time homebuyer is an individual or household who has not owned a home in the last three years or is a displaced homemaker.

• Proof of U.S. citizenship or permanent legal resident alien status.

• Qualifying for a mortgage loan with a private lender.

• Income that does not exceed 80 percent of the Area Median Income.

• The home purchased through the program will be the principal residence.

• The home must be located within the city limits of McKinney.

• Completion of a HUD and City of McKinney approved homebuyer counseling workshop.

Contact Jenny today for more information or to see if you qualify for this grant program.

JENNY'S TIPS: FHA vs Conventional Loans and VA Loans

One of the most popular questions I get asked by my home buyers is "What is the difference between FHA loans, conventional loans (Fannie Mae and Freddie Mac) and VA loans?"  VA loans are available for qualifying Veterans only. 

Here is a general comparison:

                                                                                                                                                

FHA                                 Conventional                     VA Loans

 

3.5% Down                     5% with high                        0% down
Payment                          credit score                     

6% Maximum                  3%                                         6%

Contribution

for closing cost                  

Up Front Mortgage         No Upfront MIP                Varies depends

Insurance Premium                                                 on Veteran's status

(MIP) Financed into

the Loan                                                                                     

 

 

Monthly Mortgage         Monthly Mortgage                 None

Insurance                        Insurance with 20%

                                       Down

580 minimum                 Higher credit score               620 typically

credit score                     required                           

                                                                        

Max 1 FHA Loan            Max 4 Loans:                        Depends on

per person on                  1 Primary Residence           Veteran's entitlement  

primary residence           3 Investment Properties

These are general guidelines. Borrowers should be reviewed on a case-by-case basis. In today's market, mortgage guidelines are constantly changing as regulators try to "fix" the industry. The trend is that mortgage qualifications will only get tougher.  Best to talk to an experience loan professional and do a pre-qualification analysis. 

JENNY'S TIPS: How to Dispute Errors on your Credit Report

Your credit report is a record of your credit activities. It lists all of your credit card accounts and loans, the balances as well as your payment history. It also shows if any action has been taken against you because of unpaid bills such as a lawsuit or bankruptcy filing. Because businesses use this information to evaluate your applications for credit, insurance and employment, it’s important that the information in your report is complete and accurate, especially if you plan to make a big purchase like a home.

The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Under the FCRA, both the credit reporting agency (CRA) and the organization that provided the information to the CRA (usually the credit card company) must correct any errors or incomplete information in your report.

If you do encounter a mistake on your credit report, several steps need to be taken to correct the matter:

1. The first thing to do is get a copy of your credit report from each of the three major CRAs: Equifax, http://www.equifax.com/; Experian, http://www.experian.com/; and TransUnion, http://www.tuc.com/.

2. In a written letter, tell the CRA what information you believe to be inaccurate. Include copies (not originals) of documents that support your position. Provide your complete name and address, identify each item in your report you dispute, and request deletion or correction. Be sure to make copies of your dispute letter and enclosures.

3. Send your letter by certified mail, return receipt requested, so you can document what the CRA received.

Mortgage Market Trend

The near-term trend trajectory for mortgage interest rates hinges on the current pace of inflation - both at the factory gate and on Main Street.

Market participants expect Wednesday's Producer Price Index (released at 8:30 a.m. ET) to show an overall gain of 0.8% driven by higher food and energy prices -- while Thursday's Consumer Price Index (released at 8:30 a.m. ET) is projected to show a composite gain of a more modest 0.3%. As long as the actual values for these two big inflation reports match or fall below their respective forecast mortgage interest rates will likely move sideways to perhaps fractionally lower. That's the good news. The bad news is that if one, or both, of these reports exceed the consensus estimate -- mortgage investors will almost certainly be quick to push mortgage interest rates higher.

This is not the time to aggressively take mortgage market risk - especially for loans planning to "lock" within the next five trading days.

JENNY'S TIPS: Are you pre-qualified or pre-approved for a loan?

Before you begin to shop for a new home, you should figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be important when you decide to make an offer on a house.

To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you more of a competitive advantage when the time comes to bid on a home because you have actually been approved for a loan for a specified amount.

To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.

GOOD NEIGHBOR NEXT DOOR PROGRAM: Home Loans for Police, Teachers, Firefighters, and EMTs

Source: Creative Commons

Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters, and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a 50% discount from the list price of a home. In return, you must commit to live in the property for 36 months as your sole residence.




For more details: http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm

TIPS FOR REALTORS: Tax Refund as Down Payment

Right now is the perfect time to call all your clients and encourage them to use their tax refund as down payment to purchase a home! From an underwriting perspective, tax refund is an accumulated income from buyers and is perfectly acceptable to use as down payment.

Some buyers are locked in with an apartment contract for as long as 12 months, and may not be ready to buy now. They should be referred to an experience loan officer to help get them ready. Preparation is vital when comes to getting a home loan approved. Let me help your clients today!