Category Archives: Loans

Update: ICON’s Floor Plans, VIP Loan Preapproval

One of the more anticipated Market Street condo developments at 2299 Market, ICON, is now welcoming loan preapprovals for its units. Though the sales office is not yet open and the project is still under construction, you can complete a preapproval with the development’s in-house lender. This will certainly launch you to the top of the VIP list when it comes to purchasing one of the 18 one- and two-bedroom condos that will be available. Continue Reading

Mortgage Debt Relief Act Extended Through 2013

For homeowners considering a short sale or loan modification in 2013, most of last year was a nail biter. That’s because many loan industry insiders believed there was a strong chance that the Mortgage Debt Relief Act of 2007 would simply expire on December 31, 2012. Would these homeowners then be on the hook for paying taxes on their forgiven debt in 2013?

Last summer, I blogged about the perils of the tax relief act expiring. I had been talking with a few individuals who were considering short sales, and there was a very real chance that they ultimately could be responsible for paying a very large tax bill in the process—one they couldn’t afford.

The good news is that the “fiscal cliff bill” passed by Congress last week included a provision for extending the tax relief through 2013.

Bottom line for sellers thinking about pursuing a short sale this year: It’s best to start that process as soon as possible. Short sales require key prep work and lenders take time to approve the sales. Additionally, buyers in contract on short sales sometimes walk away in the middle of the transaction, which can significantly lengthen and complicate the sale process.

The Facts Behind Credit Reports & Loans

This time of year often sees prospective home buyers start to lay some groundwork for a home purchase in the following year. And based on many such individuals contacting me about potential house hunts this month, I’m guessing it wouldn’t hurt to put up a few posts about the many aspects behind getting your loan preapproval.

I recently ran a post about the reasons lenders need to pull credit reports when completing loan preapprovals. In keeping with that reality, I thought I’d share some tips from my colleagues at Guarantee Mortgage about how credit report details factor in to your loan preapproval. Because the more buyers understand about the process, the more confident they can be about making decisions along the way. Continue Reading

Live/Work Loft Loans: Talk to Your Lender First

Live/Work Loft Loans: Talk to Your Lender First

You’ve just hit the open house circuit and found a great loft like the one pictured at 25 Lucerne #1 in SoMa. You want to write an offer and you’re preapproved—a no brainer, correct? Not necessarily, according to my colleagues at Guarantee Mortgage.

A majority of lenders have recently become concerned about “buyback” issues. For example, a lender makes the loan, sells it to Fannie Mae or Freddie Mac, and then is asked by the latter institutions at a later date to buy back the loan because of the live/work nature of the property. Fannie Mae and Freddie Mac are primarily concerned with such restrictions affecting the future value of the property. Continue Reading

Keep Your Credit Fresh

Though the real estate market has certainly rebounded this year, there are still many obstacles that can get in the way of obtaining a home loan.

If you’re deep into your house hunt—or in contract on a property—here’s some advice: Don’t buy the BMW just yet.

Lenders are now running “credit refreshes” on the day of funding. This means that before a lender will transfer loan money into the escrow account so that you can complete your purchase, the lender is running a new credit report to see if anything has changed since the credit report at loan approval was issued.

Worst-case scenario is that you no longer qualify for the loan, or the file may have to go back to underwriting, which will delay closing.

The best way to avoid this issue is to avoid buying appliances, furniture, cars or other large purchases using credit prior to recording your new loan. And if you do so after your preapproval is completed and you’re simply house hunting, make sure you update your lender so you have a realistic sense for what you can afford based on your fresh score. (Thanks to my colleagues at Guarantee Mortgage for pointing out this helpful advice.)

Offset Your Mortgage in a Multi-Unit Building

For buyers who are looking for a home in a centrally located neighborhood, an excellent option is to owner occupy a flat in a multi-unit building and rent out the other units. That’s how I was able to afford to purchase my own property in Noe Valley in 1998; renting out the lower flat afforded us the opportunity to own our home, as well as have a long-term income stream. I’ve had several clients purchase such properties this year, and the purchase price could often be workable when you have at least 20% down and factor in projected/existing rents. And the presently hot rental market is certainly making this housing option more appealing. Continue Reading

Lender Trends See Buyers Scratching Heads

The real estate lending landscape has changed significantly in the past couple years. Lenders are girding themselves against fraud in many ways, and that trickles down to what sort of documentation they’ll request from buyers in transactions.

Two areas that have raised questions recently center around gift money and personal information requests. Our team at Guarantee Mortgage recently presented an explanation about the issues related to these topics, so I thought I’d share this very practical information with you. Continue Reading

The Latest List of FHA-Approved Condo Buildings in San Francisco

The list of FHA-approved condo buildings isn’t a long one. So if you’re looking for a condo and are planning to use an FHA loan with a small down payment, you’ll be limited to a small selection. Many buildings’ FHA approval expired last Fall, so condo properties have to renew their approval on a regular basis now. And keep in mind that certain restrictions apply; some lenders won’t lend if there is already an owner with an FHA loan in the building, for example. Or a minimum number of units have to be owner occupied. Continue Reading

Lenders Held to Good-Faith Estimate

Lenders now have to stand by their initial good-faith estimate that they provide borrowers, according to the Department of Housing and Urban Development (HUD).

Closing costs are given to loan applicants up front, but these good-faith estimates can sometimes change when the loan is finalized. However, as of January 1st, lenders will be forbidden from increasing some charges at the closing table and will be limited to a 10% increase on other fees. If the costs of such services such as title insurance or credit reports turn out to be substantially more than initially indicated on the good-faith estimate, the lender will have to east the difference. Continue Reading

New FHA Condo Rules Restrict Buyers

New Federal Housing Administration (FHA) financing rules for condo buyers are already limiting purchases—particularly in new developments.

The FHA is now limiting the number of buyers who can obtain loans insured by the agency in one building, effective as of Monday. The rules also put limits and a lot more restrictions on loans granted to buyers purchasing units in buildings which have too many delinquent owners, poor finances and high quantities of rentals. Continue Reading

Contact Eileen for Real Estate Help

Eileen Bermingham

Corcoran Global Living

415.823.4656

eileen@insidesfre.com

DRE# 01352627

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