Boise Mortgages

This article is part one in a two-part brief on Idaho FHA loans. Here we look at quick-facts for Idaho FHA loans, such as allowed property types, loan limits & terms, borrower eligibility, and current FHA interest rates. In part two, we’ll talk about the “Four C’s” of credit, specific to FHA borrowing.

The Federal Housing Administration, generally known as FHA, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. FHA is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.

An FHA home loan is a federal assistance mortgage loan, insured by the FHA. To promote home ownership, these loans require a small down payment and offer the most choices for someone wanting an Idaho refinance loan, especially with cash out.

If you’re considering an FHA loan, you should know the “Four C’s” of credit, specific to FHA lending:

Four C’s of Credit:

1. Credit History

Notables:

• FHA does not require the borrower to have perfect credit.
• Credit report should have no late payments for the last 12 months (exception would be on the new FHA Secure program for ARM loans that have recently adjusted).
• FHA is not FICO-driven, meaning borrowers do not need to have credit scores to qualify.
• Collections generally do not have to be paid; however, it is the underwriter’s discretion to require payment in full based upon amount of, age of, and number of collections.
• Judgments must be paid off prior to or at time of closing.

Bankruptcy Guidelines:
Chapter 13

• Borrower required to be in re-payment program for 12 months with no late payments (proof required).
• Borrower must receive permission from the court to enter into a mortgage transaction.
• Cash-out refi to pay off the bankruptcy.
• Credit Counseling is viewed the same as Chapter 13 (acceptable 12 month payment history and written permission from counseling agency required).

Chapter 7

• Must be 2 years from the discharge date, with no late payments. Full bankruptcy and discharge papers required.

Foreclosure

• Must be 3 years from date paid.

Debt-to-Income (DTI) Calculations

• Installment loans with less than 10 months remaining are not required to be calculated in DTI unless they are significant enough to affect mortgage payment ability.
• Student loans deferred for 12 months or more are not required to be calculated in DTI.

Social Security Numbers

• FHA requires lenders to verify Social Security Numbers.
• Only acceptable verification document is Social Security Card.
• FHA validates all Social Security numbers at time FHA case number assigned.

2. Credit Report

• Last 12 months must be very accurate.
• Most updated copy is retrieved from the major credit bureaus.
• If debt needs to be paid off, get it paid and obtain new credit report.
• Inaccuracies or late payments must be explained in writing.

3. Capacity to Repay

Employment:

• Borrower must have 2-year history of employment.
• College education is acceptable as part of 2-year history as long as entering workforce in field of study.
• Employment gaps greater than 60 days need to be addressed.
• If re-entering work force from extended absence, six month current history is required.
• Frequent job changes, within same line of work, but continues to advance in income/benefits, considered favorable.
• Bonus, Overtime, Commission and Part-time/Secondary income requires a 2-year history. Less than 2 years, but more than 1 year may be acceptable in certain cases.
• Self-employed borrowers require 2-year history. If borrower working for family, tax returns and proof of borrowers ownership in business required. 25% or more is considered self-employed.
• FHA is a full/alternative documentation program, meaning stated income is not an option, and bank statements documenting income are not acceptable.

Income:

• Alimony/child support must have 3 years continuance and 6 months history of consecutive payments.
  Social Security and/or Retirement Income must have 3 years continuance.

Ratios:

• Debt to Income ratio = 31/43.
• For new construction or energy efficient homes = 33/45.
• Higher ratios may be acceptable with compensating factors.

Compensating factors:

• Current housing expense equal to or greater than proposed housing.
• Large down payment/low LTV.
• Conservative attitude towards the use of credit.
• Previous credit history shows ability to devote a greater portion to housing.
• Borrower receives compensation or income not reflected in effective income.
• Minimal increase in housing expense.
• Cash reserves after closing.
• Potential increase in earnings.

4. Cash to Close

The down payment can be from the following sources:

• Own funds from checking/savings account (must be seasoned for 60 days and documented via bank statements or verification-of-deposit).
• Proceeds from sale of existing home.
• 401K (use 60%).
• Gift Funds; requires gift letter, copy of check, copy of deposit slip, and verification donor has means to donate.
• Secured loans.

Down payment-assistance program via a FHHL-approved down payment assistance provider.

Make sure you have a complete understanding of all closing costs, including Reserves, Broker Fee, Tax Service Fee, and any other fees, before you get to closing.

Collateral

A property appraisal is required:

• Repairs required to correct any health and safety hazards.
• Weather related escrows allowed.
• Must be a FHA-approved appraiser.
• Additional inspections required if determined by appraiser and/or underwriter.
• New construction additional guidelines.

–
Article written by Lisa Kratz and Mike Little
Apex Mortgage in Meridian, Idaho  |  (208) 888-9251  |  www.myidahohomeloan.com

<< Part 1

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This article is part one in a two-part brief on Idaho FHA loans. Here we look at quick-facts for Idaho FHA loans, such as allowed property types, loan limits & terms, borrower eligibility, and current FHA interest rates. In part two, we’ll talk about the “Four C’s” of credit, specific to FHA borrowing.

The Federal Housing Administration, generally known as FHA, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. FHA is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.

An Idaho FHA home loan is a federal assistance mortgage loan, insured by the FHA. To promote home ownership, these loans require a small down payment and offer the most choices for refinancing, especially with cash out. If you’re considering an FHA loan, here are some quick facts to help with your decision.

Idaho FHA Programs

• 97% Purchase
• 97% Refinance - change Rate and Term of loan)
• 95% Refinance - cash out

Idaho FHA Mortgage Terms

• Fixed Rate
• 3/1 ARM
• No Interest-only loans are provided

Home Types

• 1-4 family unit
• Condo (must be FHA-approved)
• Owner-occupied only

Idaho FHA Borrower Eligibility

• Individuals only - no corporations, partnerships or trusts.
• You must have a valid Social Security number.
• Permanent and non-permanent resident aliens OK with evidence of SS number, satisfactory employment and credit history.
• Non-occupant co-borrowers income, assets, liabilities, and credit history are all used in determining eligibility.
• Borrowers are only allowed one FHA loan at a time.
• Non occupant co-borrowers OK.

Down Payments

• Down payment assistance programs available.
• Gift funds OK for down payment, reserves, or closing costs.
• 6% seller contribution allowed - up to 4% toward down payment.

Visit www.hud.gov for more information.

Idaho FHA Loan Limits
Each Idaho county has a different limit:

• Boise / Nampa - $303,750
• Payette County - $271,050
• Blaine County - $427,500
• Twin Falls - $271,050
• Valley County - $462,500
• Mountain Home - $271,050
• Jackson Hole / Teton - $693,750
• Washington County - $271,050
• Gem County - $303,750
• Adams County - $273,750

Anything over $362,790 is considered FHA Jumbo and has additional pricing hits.

Current FHA Interest Rates

• 30-year fixed-rate: 6%, 6.184% APR, 1.875 points.
• 15-year fixed-rate: 6%, 6.241% APR, 1.25 points.

FHA uses the 1-year Treasury Constant Maturities Index to determine interest rate changes. For ARM’s the maximum amount the interest rate may increase or decrease in any one year is 1 percentage point. Over the life of the loan, the maximum interest rate change is 5 percentage points from the initial rate.

– 

Article written by Lisa Kratz and Mike Little of Apex Mortgage
Meridian, Idaho  |  (208) 888-9251  |  www.myidahohomeloan.com.

– Part 2: The Four C’s of Credit – 

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10) Selection. In 2007, Treasure Valley home sales were down 45 percent (from 2005). A few years ago you’d have a tough time finding the home of your dreams. You’d ultimately compromise on a lot of items, such as distance to work, or which schools the kids went to. But today, whether you’re looking to downsize or upsize, or whether you want a large home with acreage or a little condo in town, the selection is at historic highs.

9) Price. “Affordability is returning to the Treasure Valley,” says a local Realtor with Re/Max. In today’s buyer’s market, the often-ridiculous competitive bidding, and automatic-escalation clauses are just not happening. The usual ‘feeding frenzy’ that occurs when buying and selling a home works to the seller’s advantage. The purchase price gets higher and higher from buyers’ anxiety of “this is the perfect home – I have to have it!” If anything, sellers are competing for your business!

Location. Everyone wants to be close to something… even if that means buying a home that “gets you away from it all!” The immense selection caused by the current market saturation of vacant homes in Boise and the rest of the valley means you get to choose. Close to shopping or downtown? Close to school? Close to family? Local restaurants? Freeway access? What are the area’s crime statistics?

7) New Homes Priced Right. “Builder Don Hubble has purchased billboard ads touting homes for as little as $98,000. Corey Barton is building homes in Kuna for $149,900 that two years ago would have gone for $200,000.” Not long ago, buyers had to sometimes “play games” if they wanted a new home: lotteries, waiting lists for new construction, etc. Today there are thousands of specs ready for immediate occupancy!

6) Don’t Settle. Sellers in today’s market fully understand that not only can the buyer take all the time they need, they can (and should) insist on an appraisal paid by the seller, complete home inspection, partial closing costs paid by the seller, etc. Buyers can, for example, pin sellers down on details revealed in a home inspection, insisting things are fixed.

5) Affordable Prices. Usually investor-purchased real estate makes up a significant portion of home sales. This reduces the amount of true, for-sale-by-owner homes and causes exaggerated price inflation as these investors seek only the maximum return on their investments, and regular home buyers compete with landlords. Though they will someday return, investors have trimmed back in this Idaho real estate market, making it less competitive for new home buyers.

4) Rates. Interest rates are teriffic right now, especially on Idaho FHA loans.

3) Financing Available. In a previous article I wrote about new, more relaxed FHA regulations, and other types of financial instruments to secure Idaho home loans, that defy the notion that “no one’s getting a mortgage loan right now.” The truth is, if you have a steady income, and a decent (not required to be perfect) credit score, the chances of finding a suitable loan program for you are as good as ever!

2) Just Make an Offer.” Many sellers/builders have been sitting on their for-sale homes for a very long time, and some simply must sell… and soon. So feel free to make that ridiculous offer. Even if it’s not accepted, the old days of “tear up that insulting offer!” are gone. They’ll negotiate. This sure beats the bidding wars and feeding frenzies where the only question was “who has the highest bid over asking price?”

Last, but certainly not least…

1) The Treasure Valley is a Great Place to Live. In a previous article, I wrote about the kudos recently given to Boise, and Idaho in general for its attractiveness as a place to live, work, and play. Idaho is home to major technology companies, and our outdoor recreation is second-to-none. It’s no wonder the state and treasure valley receive “best of” awards year after year. All things considered, it really is a great time to buy in Boise (or Eagle, or Meridian, or Nampa, or Caldwell, or… )
Idaho Rocks the Casba!

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Article written by Lisa Kratz and Mike Little of Apex Mortgage
Meridian, Idaho  |  (208) 888-9251  |  www.myidahohomeloan.com

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Think again! Here are the Top 10 reasons to use a local mortgage broker over an on-line lender:

10. Local economy. Using a local lender helps keeps your money in Idaho, helping our local economy.

9. Harder working. A local lender will work harder, with more to win or lose. They live, work, and play in your “backyard,” so they know your appreciation will lead to good word-of-mouth advertising, and that your criticism could mean just the opposite.

8. Loan nuances. A local loan officer will take the time to study your individual and unique situation, then shop your particular loan to compete for the most competitive rate, vs. trying squeeze you into a one-size-fits-all box.

7. Faster closings. Being “right there when you need them” has its advantages. Communication is streamlined. Reactions are quicker. Start-to-finish, home loans and refinances are usually about 30% faster when dealing with a local lender.

6. Local flavor. Local lenders know the unique housing market, neighborhood trends, and geographically can be viewed by loan underwriters.

5. You’re not a number. Unlike on-line loan “clearance houses,” local mortgage lenders are diligent, hard-working loan officers who will take your loan personally, and as seriously as you do.

4. No phone menus. People hate phone menus! Isn’t it great to talk to a real live person who always immediately answers your calls?

3. Service level. Local lenders provide a better, higher service level. This personal attention goes a long way.

Large lending institutions turn away thousands of applicants point-blank if their income or credit score is below a certain number.

An Idaho Local Lender will take the time, for example, to explain how to fix a credit score.

What if there’s a problem during the loan process? You have more control when working with a local lender.

2. Low overhead. Local mortgage brokers don’t have the overhead that large conglomerate lending firms have. This passes the savings onto you the homebuyer/homeowner!

1. Connections. Local lenders have the expertise, knowledge, and local connections to make things happen. They’re on a first name basis with appraisers, underwriters, title company managers, real estate agents, etc..

The value of these established relationships cannot be overstated, making “Connections” our #1 reason to use a local mortgage broker over an online lender.
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Article written by Lisa Kratz and Mike Little
Apex Mortgage in Meridian, Idaho  |  (208) 888-9251  |  www.myidahohomeloan.com 

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Despite the negativity surrounding the economic slump, the high price of gas, and a declining real estate market, Boise Idaho remains a diamond in the rough, and Boise Idaho Mortgage loans continue to get funded, as more people make the move to the Gem state.

And it’s no wonder — Idaho is renown for its natural beauty, and Boise is home to top-performing national companies like HP, Micron, and Simplot. As one newspaper put it: we’re blessed by our computer chips and potato chips.

In its Top Ten list for 2008, Kiplinger ranked Boise Idaho as # 4 nationwide, as one of the “Best Cities in which to Live, Work and Play.” Kiplinger’s team of experts looked at factors such as population growth, percentage of workforce in the “creative” class, income growth and cost of living in coming up with their top 10 list. The creative class consists of scientists, engineers, educators, writers, artists, entertainers and others, who add economic and cultural influence to a city and make it a great place to live.

Forbes Magazine recently ranked Boise as the second-best place to start a business and a career, and the seventh Up-and-Coming High Tech City. Cities were ranked according to economic growth, cost of living, jobless claims, tax rates, etc.

And USA Today recently wrote there is “No End In Site For Idaho’s Growth,” citing Boise Idaho as the heart of American’s biggest economic boom. “In Idaho, the state with the nation’s fastest-growing economy, homebuilding hasn’t crashed as it has across much of the USA, and a two-decade run of prosperity continues.”

These authors attribute Idaho’s population and financial growth to several factors, including our computer technology, agriculture, and scenic attractions such as fishing, hiking, white water rafting, skiing & snowboarding, and other outdoor activities that draw tourists by the tens of thousands.

Nationally, many homeowners are struggling to make ends meet, and U.S. companies are facing stiff challenges such as difficult credit, soaring commodity prices, and expanding corporate tax rates. Nonetheless, Idaho remains strong with a solid economy and upward job growth.

Idaho Stats:
Size: 82,747 square miles (state rank: 14)
Population: 1,466,465 (state rank: 39)
Density: 17.7 people per square mile
Retail sales: $13.5 billion
Manufacturer shipments: $15.2 billion
(source: Bureau of Economic Analysts and Census Bureau)

If you’re seeking a Boise mortgage, please give me a call today, or submit your info online at www.myidahohomeloan.com.

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Article written by Lisa Kratz and Mike Little of www.myidahohomeloan.com
Apex Mortgage  |  Meridian Idaho  |  (208) 888-9251

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A recent poll conducted by the Associated Press found that consumer debt is making millions of Americans physically ill. Credit card debt is not only a pain in the neck, but also, apparently, in the heads, backs, and stomachs for millions of us trying to manage debt, the high price of gas, and financial sanity in the current economic slump.

Looking for a tax-sheltered sanctuary from the debt storm? Many are finding financial (perhaps even physical) relief by refinancing their homes. Now, in fact, is an excellent time for refinancing!

1. Convert high-interest credit card debt into lower-interest mortgage payments — the interest on which is tax-deductible.
2. Access cash from available home equity — use it to pay off other debts and/or bolster liquid reserves in case of emergency.
3. Lower interest rates could mean lower payments — if you refinance into a longer-term loan.

Many people are considering downsizing or simply selling their homes to get out of debt. But it’s a buyer’s market: the supply of houses is high, prices are down. The National Association of Realtors® say right now is the strongest buyer’s market we’ve seen in a long time, so it might not be your best time to sell. Homeowners seeking consumer debt relief should instead consider an Idaho mortgage refinance to consolidate debt and take advantage of the current low interest rates, getting a lower payment on a longer loan, offsetting any cost to refinance.

So give yourself some room to breathe and relief from pain-in-the-neck credit card debt, while rates are still low. Contact a qualified loan officer today and discuss a financially-prudent refinance.

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Article written by Lisa Kratz and Mike Little of www.myidahohomeloan.com
Apex Mortgage  |  Meridian, Idaho  |  (208) 888-9251

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A Good Faith Estimate is a required mortgage document that shows the interest rate, Monthly payments, and costs. But thinking that a Good Faith Estimate always reflects accurate, truthful, and guaranteed figures is a mistake. They are often used to “bait” prospective loan-seekers. A Good Faith Estimate that seems too good to be true… probably is.

Refinancing, or borrowing money to purchase a home, involves fees. But there is a surprising difference in these fees between various lenders. To quickly try to win your business, some mortgage lenders will present you with very attractive-looking good faith estimates, with low (or even missing) fees. It’s only weeks later, when you’re at closing time, when some mortgage lenders pull a “bait & switch,” sneaking in their hidden fees and extra charges. By then of course, you’ve invested so much time and energy into the process that it’s as painful to start over as it is to tolerate the extra charges.

Fortunately, there are ways to increase your chances of getting an honest and reputable mortgage lender from the get-go.

• Talk to at least 2 different lenders, review their GFE’s, and talk (yes, “talk”) about them over with each lender, line-by-line.
• Pay attention to whether or not the lender is really listening to you. Every borrower - and every loan - is unique, and there are many types of loans and loan packages to choose from. A good lender will choose the one best for you, rather than try to squeeze you into one that they’re used to dispensing, and/or one that is most profitable for them.
• In refinancing, don’t let the loan officer convince you to NOT make your normal monthly mortgage payment. In this situation, no matter what arises, the borrow HAS to sign the refinance.

Also “bigger” is not “better.” If you choose a large, well-marketed lending firm, thinking you’ll get the “Wal-mart” of lenders, you just might. And while the possibility of getting a low-priced loan exists, it may not be much lower than the other guys, but you’re definitely going to get a no-frills level of service. That’s not good in an industry where communication and personal attention is an absolute must.

Above all, remember what your folks always told you: “If it sounds to good to be true, it probably is.”

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Written by Lisa Kratz and Mike Little of www.myidahohomeloan.com
Apex Mortgage  |  Meridian, Idaho  |  (208) 888-9251

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Since the beginning of 2008, the number of homes on the market for sale in Ada County alone has risen over 17%. The median listing price of these homes - almost 6,000 of them - has been $259,000. The median sales price, however has been $205,000, a difference of almost $55,000! Canyon County trends are similar. And the same trends are holding true beyond Boise, Eagle, Meridian, Nampa, Caldwell, and the rest of the Treasure Valley. It truly is a Buyer’s market!

While current economic conditions might lead us to tighten our belts and hold on to our wallets, savvy investors, home owners, or anyone who has been considering a new Idaho home loan, could be wise in taking advantage of the current Idaho housing market.

Beyond the supply & demand factors (lots of inventory driving down sale prices) mortgage rates are also still hovering at relatively low levels and, due to recent FHA policy changes, more people are qualifying for more expensive homes, even lower-income folks with less-than-stellar credit.

With so many Idaho homes on the market, buyers have the advantage of fine-tuning exactly where they want to live, and can choose very selectively based on schools, crime statistics, distance from work, and other conveniences. Currently, there are many more REO’s (”real estate owned” properties), and many builders, sellers, banks that are eager to unload unoccupied real estate. This gives buyers even more leverage to ask for lower prices and other concessions, such as the seller’s help with down payment and closing costs. With so much leverage, buyers can haggle, sometimes resulting in uncommonly low housing prices.

Contrary to what is making news, Idaho mortgage lenders aren’t simply cutting everyone off due to the sub-prime mortgage crisis and other conditions in the real estate market, nationally and locally in Idaho. Borrower requirements are stricter right now, but if you have a steady job and your debt-to-income ratio is OK, now could be your best time to buy!

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Written by Lisa Kratz and Mike Little of www.myidahohomeloan.com
Apex Mortgage  |  Meridian, Idaho  |  (208) 888-9251

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