Prior to the real estate crash that began in 2007 it was hard enough to get good mortgage loans for special real estates sales like: Charleston, SC jumbo loans, mortgages for investment properties, and fractional ownership home loans. Now after the economic and banking crash banks willing to lend money on riskier assets has become all but impossible without giving up your first born. Below are the basics with getting started with financing investment properties in the Charleston, SC area. I am a local Charleston SC real estate broker with over 13 yrs mortgage experience and once founder/CEO of Mortgage Professionals, LLC wholesale mortgage firm. Please feel free to contact me to discuss your home buying plans in Charleston so we can figure out the best method to achieve your goal. Although I do not write mortgage loans any longer I know and work with the best mortgage lenders in the country and still know what I am doing with regards to how to get financing. Mortgage Loans for second homes is different from that of purchasing homes for investment purposes only. Reserve requirements vary depending on the number of financed properties owned (including primary residence): 1-4 financed properties owned:
2 months of reserves on the subject property if it’s a second home.
6 months reserves on subj. property if it’s an investment property plus 2 months reserves on each other second home or investment property.
5-10 financed properties owned:
2 months of reserves on the subject property if it’s a second home.
6 months of reserves on the subject property if it’s an investment property plus 6 months reserves on each other financed second home or investment property.
Note: Freddie Mac’s guidelines are *currently* 6 months PITI. Other underwriting changes for investment properties include:
70% LTV for purchase of 1-unit and 70% for 2-4 units.
720 minimum low-mid credit score.
No history bankruptcy or foreclosure in the past 7 years.
Rental income must be documented with two years tax returns.
Don’t forget that there is a significant price hit of 0.75% to fee from Fannie and Freddie with investment properties on top of the credit score/loan to value adds (LLPA). Seller contribution is limited to 2% of the sales price with investment property. Underwriters will be very strict on investment properties in today’s real estate climate so be prepared.
If you are thinking of buying investment property contact me and we can discuss your options before we go house hunting.
Finally. Phew!.. I was beginning to get worried, and I think most were that the small bright spot in housing was beginning to dim. Mortgage rates were SO low for so long I guess it was inevitable that they would have to come up but a few months ago I don’t think people thought they would skyrocket a half point over night almost. However that’s exactly what happened this summer when the Fed Chairman talked about possibility of the government cooling its purchase of treasuries (a.k.a tapering) thus increasing mortgage rates.Mortgage lenders in Charleston SC have seen applications for home loans fall slightly in the latest weeks as a drop in demand from home buyers outweighed an increase in demand from those looking to refinance, the Mortgage Bankers Association said this week.Worry no more, currently rates are back down to a very attractive 4%. As of October 3rd, mortgage interest rates fell to their lowest level since June, but will likely level off. As of today rates are at 4.08% and have been that way every since the first week in Oct. Fingers crossed. The latest drop in rates came amid declining consumer confidence and because of the of the government shutdown, says Frank Nothaft, Freddie Mac chief economist.Why is it that the bond market is so vital to mortgage rates you ask? Treasure bonds are mortgage backed securities and the purchase and sale of treasuries directly impact the rise and fall of rates throughout the day. Since the economic crash the U.S. Government has artificially affecting mortgage rates to keep them low through purchasing billions of dollars of treasury bonds each month with the public’s money. That’s not such a bad thing.. Seems to be a good investment don’t you think? Artificially you ask? Yes; because truthfully (at least in my opinion) investment firms, financial advisers, IRAs, and the like in the markets who buy and sell these should be the only thing effecting this not the government.Mortgage rates pushed up from historic lows in May and bounced higher to mid-August before leveling off. They’ve been trending downward in recent weeks since the Federal Reserve said last month it will not begin tapering its monthly purchases of mortgage-backed securities and Treasuries, which has kept interest rates low.
Often time, prospective home-buyers become homeowners by securing a secured mortgage loan in the first instance and then subordinate them with a second mortgage loan, often known as the home equity loan. Due to the poor economic condition in the economy, too many households and individuals are suffering from lack of funds and therefore are not being able to manage the mortgage payments on both their first mortgage loan and second mortgage loan. While the first mortgage loan or the original loan on the property can be modified, most struggling homeowners are wondering about the chances and prospects of modifying their second mortgage loan. If your first mortgage loan has been modified under the Home Affordable Modification Program, you can be sure that this Federal government modification program will also help you achieve affordable payments on your home equity line of home equity line of credit.Second liens on your home – Modifying themThe second mortgage loans are usually called home equity loans or second liens. Technically, the second liens are bound to be subordinate to the first mortgage loans. While you opt for loan modification on your first mortgage loan, the high payments on the second mortgage loan can still be taking a toll on your personal finances. But you need not fret as there is a federally sponsored program called the Home Affordable Second Lien Modification program, abbreviated as the 2MP, they might help the struggling homeowners to alleviate the stress of making sky-high payments on their second liens.Eligibility criteria for modifying your second mortgage loanNow that you know that there is a federally sponsored program through which you can modify your second mortgage loan, you must be wondering about the eligibility criteria. Your first mortgage loan requires to be modified under the HAMP, and apart from this, the 2MP applications shouldn’t have missed 3 continuous monthly installments on their HAMP modification arrangements. The second lien or home equity account needs to be opened before 1st January, 2009 if the borrower wants to qualify for the 2MP. You should not have been convicted of theft, felony or forgery in relation with a mortgage transaction since the last 10 years. Besides, the individual mortgage lenders who participate in 2MP might even have their own requirements; for instance, you might have to owe at least $5000 on your second mortgage loan for qualifying for 2MP.The potential benefits of loan modification through 2MPIf you’re someone who’s struggling to meet your monthly mortgage payments on the second mortgage loan, you can follow some guidelines in order to qualify for the same. Check out some benefits that you may reap when you modify your second mortgage loan through the 2MP.1. The interest rate that you pay on an interest-only home loan might be slashed off by 2%
2. The interest rate on the second mortgage loan will be revised by up to 1%
3. The lender may forgive a portion of the second mortgage loan under the terms of the 2MP
4. The forbearance that you receive on the first mortgage loan can be carried over to the second
5. The repayment term of the second mortgage loan could be extended to 40 years.The names of the servicers who are presently participating in 2MP are Bank of America, CitiMortgage, Inc., GMAC Mortgage, LLC, J.P Morgan Chase Bank, NA, Bayview Loan Servicing, LLC, Wells Fargo Bank, NA, Nationstar Mortgage LLC and many more. Check the availability of your lender before taking the plunge into the 2MP. Take into account the above mentioned details on second mortgage modification so that you may take an informed and measured decision. The sooner you modify the loan, the easier it will be for you to repay the loan and safeguard your home.
A jumbo mortgage loanis one where the amount borrowed is above conventional conforming loan limits. This standard is set by the two government-sponsored enterprises Fannie Mae and Freddie Mac, and sets the limit on the maximum value of any individual mortgage they will purchase from a lender. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are GSEs (government sponsored entities) that purchase the bulk of U.S. residential mortgages from banks and other lenders along with the FHA, allowing them to free up liquidity to lend more mortgages. When FNMA and FHLMC limits don’t cover the full loan amount, the loan is referred to as a “jumbo mortgage” in which private investors are in the marketplace to provide these necessary funds. The average interest rates on jumbo mortgages are typically higher than for conforming mortgages due to the inherent risk the investors are taking on riskier backed assets. On October 1, 2011 the jumbo conforming limit of $729,750 in “high cost” areas was reduced to $625,500.As of 2010, the limit on a conforming loan in “general” areas was $417,000 for most of the US, apart from Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the limit was $625,500. The limit in “high cost” areas was $729,750 and $938,250, respectively.
Jumbo mortgage loans are a higher risk for lenders. This is because if a jumbo mortgage loan defaults, it may be harder to sell a luxury residence quickly for full price because less of the population can afford pricier homes. Luxury prices are more vulnerable to market highs and lows in some cases. That is one reason lenders prefer to have a higher down payment from jumbo loan seekers. Jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan. The interest rate charged on jumbo mortgage loans is generally higher than a loan that is conforming, due to the higher risk to the lender. It can be more expensive to refinance a jumbo loan due to the closing costs, because taxes, insurance and other related costs are so much greater. Some lenders will offer the service of an extension and consolidation agreement, so that a jumbo refinancer will not have to pay for mortgage tax again on the same principal balance. In other cases, title insurance companies will offer up to a 50% discount, often required by law for those refinancing within 1 year to 10 years. The largest discount is for refinancing within one year. Some consumers seeking a jumbo mortgage choose to seek advice from a competent professional familiar with jumbo mortgage loans.
OPTION 2 – Some investment brokers and/or large investment firms will lend money to their clients for jumbo luxury loans but secure it against liquid assets they manage for them. Often times these loan are lower in cost since their is collateral backing the loan to the borrower.
USA Today reported that mortgage rates are rising and if you have checked recent mortgage websites you’d see the changes for yourself. WASHINGTON (AP) — The nationwide average rate on a 30-year fixed mortgage rose for the third straight week May 23, hitting their highest levels since mid-March.The Fed has been buying treasuries for over three years now to keep rates lower and boost the not only the housing market but also the economy. It’s only reasonable that this can’t continue forever, considering the fiscal problems in Washington. The average on the 15-year loan jumped to 2.77%, up from 2.69% last week. The record low of 2.56% was hit on May 2.
Moreover, as the economy improves investors are more likely to purchase equities versus MBS (mortgage backed securities) the driver of how the mortgage market trends.As investors, and traders get more comfortable with the economy as a whole their likelihood of staying conservative in treasuries weakens into more aggressive strategies. Thus they pull capital out of MBS and into stocks, and equities resulting in higher mortgage rates.Mortgage rates rose sharply this week because they tend to track the yield on the 10-year Treasury note.The yield rose above 2% Wednesday for the first time since March 14 and was at 2.02% Thursday. Investors began selling government bonds Wednesday after minutes of the Federal Reserve’s last meeting showed several policymakers favored slowing the Fed’s bond purchases, perhaps as early as this summer.
Good new for all; mortgage rates fall once more in Charleston, SC along with the rest of the U.S. 30 Year mortgage rates dropped to 3.40% last week, down from 3.41% the week before and although not a huge drop, anything lower is better than an increase. Last year this time rates were at 3.88% for a 30 year fixed. Even better, for those who qualify, the average rate on a 15-year fixed-rate mortgage hit a record low 2.61% this week, down from 2.64% in the prior week. Freddie Mac began keeping nationwide average records in 1971.
“The housing market is getting a boost with mortgage rates hovering at or near record lows,” said Frank Nothaft, a vice president and chief economist at Freddie Mac. On the housing front, existing home sales averaged an annualized pace of 4.9 million the first three months of the year, the most since the fourth quarter of 2009. Furthermore, new home sales jumped to 424,000 during the first quarter, strongest showing since the third quarter of 2008.
These lower interest rates are almost sure to improve the Charleston, South Carolina housing market and send prices further higher. With the lack of inventory coupled with very low rates many prospective homebuyers are finding it increasingly difficult to find the home they want as supplies dwindle.
For those who know they may only be in their home for 5 years or less; considering an short term adjustable rate mortgage could be the best option as the 5 year treasury ARM have hit a record low at 2.58% down from 2.6% last week which could equate in considerable savings if your rate is anywhere above 4.5%.
VA mortgages Charleston SC | Where to Get VA Loans in Charleston SC | Information About
There seems to be a little confusion to the fine men and women that serve and protect our great country. As a Charleston, SC area real estate agent whose father served in the Army, father-in-law who served 25+ years in Coast Guard and countless other friends who have also served. I want to help by trying to simplify the confusion that is getting a VA loan. The VA loans still offer 100% mortgage financing for veterans that qualify, however as a one time mortgage expert for over 14 years I do not suggest financing 100% if you can avoid it. (View OTHER type of NO money down mortgage). The 2018 VA loan limit increased to $453,100 in 2018 from $424,100 except in 220 high cost counties where they are higher. This represents a 6.8% increase this year. For comparison there are 3,234 counties and county equivalents.
First the VA does NOT lend the money, but in fact the VA guarantees the loan to the bank that agrees to lend the money to the Charleston, SC veteran that has been approved. When buying a house the service member must contact a Charleston, SC VA mortgage lender or bank that offers VA loans and apply. Make sure to find one that is experienced in doing VA loans as they are a little more detailed and stringent than conventional or FHA loans.
Click to See Latest Interest Rates
With a Purchase Loan, VA can help you purchase a home at a competitive interest rate, and if you have found it difficult to find other financing. VA’s Cash-Out Refinance Loan is for homeowners who want to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements. The Cash-Out Refinance Loan can also be used to refinance a non-VA loan into a VA loan. VA will guarantee loans up to 100% of the value of your home. Most VA Home Loans are handled entirely by private lenders and VA rarely gets involved in the loan approval process. VA “stands behind” the loan by guaranteeing a portion of it. If something goes wrong and you can’t make the payments anymore, the lending institution can come to veteran’s administration to cover any losses they might incur. The VA loan guaranty is the “insurance” that we provide the lender.
VA Home Loan Advantages
The guarantee VA provides to mortgage lenders allows them to provide you with more favorable terms, including:
NO down payment 100% financing as long as the sales price doesn’t exceed the appraised value.
NO private mortgage insurance premium requirement.
VA rules limit the amount you can be charged for closing costs.
Closing costs may be paid by the seller.
The lender can’t charge you a penalty fee if you pay the loan off early.
VA may be able to provide you some assistance if you run into difficulty making payments.
You should also know that:
You don’t have to be a first-time home buyer.
You can reuse the benefit.
VA-backed loans are assumable, as long as the person assuming the loan qualifies.
Eligibility – You must have suitable credit, sufficient income, and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan. The home must be for your own personal occupancy. The eligibility requirements to obtain a COE are listed below for Service members and Veterans, spouses, and other eligible beneficiaries.
The spouse of a Veteran can also apply for home loan eligibility under one of the following conditions:
Un-remarried spouse of a Veteran who died while in service or from a service connected disability, or
Spouse of a Service member missing in action or a prisoner of war
Surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003 (Note: a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must have applied no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 6, 2003 that are received after December 15, 2004.)
Surviving Spouses of certain totally disabled veterans whose disability may not have been the cause of death
Charleston Mortgage Rates and New National Lending RulesThe Federal Reserve has held interest rates steady at near-record lows over the last several years in an effort to entice buyers into the market, and experts don’t expect serious increases in the rate this year. In fact, the central bank said it would not raise short-term interest rates until the unemployment rate drops below 6.5%. Since September the Fed has been buying a total of $85 billion in long-term mortgage backed securities (treasury bonds) each month to help push down borrowing costs (mortgage rates). Part of that is the program known as Operation Twist, in which the Fed buys $45 billion in longer-term Treasuries and sells the same amount of shorter-term ones. As soon as the Fed stops doing this which will eventually happen rates will have to go up.
“Mortgage rates were essentially at a generational low last year — they could move modestly higher this year, but it will be the second-lowest [rate] in 40-plus years,” says Yun, chief economist at the National Association of Realtors.The Consumer Financial Protection Bureau issued new qualified mortgage standards last week that detail criteria lenders must use to determine if a borrower qualifies for a loan.The rule states a qualified mortgage cannot include risky features such as extending beyond 30 years or include exotic terms like interest-only payments or negative-amortization payments, where the principal amount increases. Loans can’t carry fees and points above 3% of the total mortgage and limits the total debt-to-income ratio at 43% — which some worry will restrict credit and discourage home buyers at the lower-end of the income scale from seeking a mortgage. On the other hand, some experts argue the rule that mortgage payments don’t exceed 43% of a borrower’s pre-tax income doesn’t go far enough.“That figure is still high, most borrowers meet that standard easily today,” says Jed Kolko, chief economist at online housing marketplace Trulia. “These rules are not primarily designed to change the mortgage market today, they are to prevent a repeat of the very lax mortgage rules we saw during the bubble.”Lance Roberts, CEO of Streettalk Advisors, would like to see the ratio fall to around 30-35% to help generate more savings, but there could be a downside to bumping up the requirement. “You are going to exclude more low-income and first-time home buyers from being able to buy a house, but that is OK…America is the only country in the world where the poor people live in a three-bedroom house with a pool in the backyard.” Many feel that not everyone is meant to be a homeowner, and that “American dream” is what got us into this problem in the first place.Additional mortgage rules are aimed at curbing over-borrowing, but could make the process longer for potential home buyers and could prevent some potential buyers from being able to qualify for a loan.“The mortgage rates are very low, but only a few people are able to access that low rate,” says Yun. “A modest increase in mortgage rates may not be harmful, provided that there is a return to more normal underwriting standards.”
The average U.S. rate on a 30-year fixed mortgage has fallen to near its record low set earlier this month bringing down the rates for those of us here in Charleston, SC as well.The rate on the most popular mortgage dipped to 3.37% from 3.39% last week, mortgage buyer Freddie Mac said Thursday. Two weeks ago, the rate reached 3.36%, its lowest level on records dating to 1971.The average rate on the 15-year fixed mortgage, often used for refinancing, set a record low of 2.66%, down from last week’s 2.7%.Cheaper mortgages are helping fuel a modest but steady housing recovery, coupled with falling inventory the Charleston SC housing market has seen a dramatic uptick in recent months.The average rate on the 30-year loan has remained below 4% all year. And rates have fallen even further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending.The Fed said it would continue buying bonds until the job market shows substantial improvement. When home prices rise, people tend to feel wealthier and spend more freely. And consumer spending drives nearly 70% of economic activity. Charleston, SC real estate agent and ex-mortgage professional states: ” be prepared for mortgage rates to eventually increase as soon as the fed realizes they can’t afford to continue to purchase bonds in order to fund the housing market recovery. A natural housing recovery not based on artificial measures is what will achieve a proper recovery; buying bonds is simply a band-aid”.Home sales have risen from last year, and prices are rising more consistently in most areas. Charleston SC home builders as well as those around the U.S. are more confident and starting more homes. Lower rates have also persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending.Not only builders in Mt. Pleasant SC, but also throughout the nation last month started construction on single-family houses and apartments at the fastest rate in more than four years, the Commerce Department said Wednesday. And they laid plans to build homes at an even fast pace in coming months — a signal of their confidence that the housing rebound will last.Other recent reports have shown marked improvement in the housing market five years after the bubble burst.Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can’t qualify for stricter lending rules or they lack the money to meet larger down payment requirements.To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans also held steady at 0.6 point.The average rate on a one-year adjustable-rate mortgage edged up to 2.60% from 2.59%. The fee for one-year adjustable rate loans was stable at 0.4 point.The average rate on a five-year adjustable-rate mortgage rose to 2.75% from 2.73%. The fee was unchanged at 0.6 point.