FHFA Announces Maximum Conforming Loan Limits for 2018

(Press Release - click here to visit the original article)
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2018. In most of the U.S., the 2018 maximum conforming loan limit for one-unit properties will be $453,100, an increase from $424,100 in 2017.  

Baseline limit

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third quarter 2017 House Price Index (HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.  According to FHFA's seasonally adjusted, expanded-data HPI, house prices increased 6.8 percent, on average, between the third quarters of 2016 and 2017.  Therefore, the baseline maximum conforming loan limit in 2018 will increase by the same percentage.  

High-cost area limits

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit the maximum loan limit will be higher than the baseline loan limit.  HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a "ceiling" on that limit of 150 percent of the baseline loan limit.  Median home values generally increased in high-cost areas in 2017, driving up the maximum loan limits in many areas.  The new ceiling loan limit for one-unit properties in most high-cost areas will be $679,650 — or 150 percent of $453,100.  

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.  In these areas, the baseline loan limit will be $679,650 for one-unit properties, but loan limits may be higher in some specific locations.

As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2018 in all but 71 counties or county equivalents in the U.S.   

Questions about the 2018 conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov.

• For a list of the 2018 maximum loan limits for all counties and county-equivalent areas in the U.S. click here.  
• For a map showing the 2018 maximum loan limits across the U.S. click here.   
• For a detailed description of the methodology used to determine the maximum loan limits in accordance with HERA, click here. 

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The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.9 trillion in funding for the U.S. mortgage markets and financial institutions. Additional information is available at www.FHFA.gov, on Twitter @FHFA, YouTube and LinkedIn.

Contacts:

Media: Stefanie Johnson (202) 649-3030 / Corinne Russell (202) 649-3032
Consumers: Consumer Communications or (202) 649-3811

The Top 4 Reasons Why A Loan Doesn't Go Through

1. Credit Scores

This is probably the scariest and most common reason why people's applications won't go through - but this is exactly WHY you should talk to a Loan Officer early in the process, they can set you in the right path in case you don't have a perfect credit score. Also, there are products that only need a mid 600 score which a lot of people don't know. The sooner that you address this problem, the sooner that you can fix it and move on with the process of buying a home. 

2. Debt to Income Ratio

This is something that can be a little hard to understand but basically if you have too much credit card debt or maybe an auto payment that is high compared to the amount of income you earn every month, you may not qualify for the amount that you'd like. Yes, you may still qualify but knowing how much you qualify for is important when shopping for a home. Speak to a L.O. before you start home shopping and figure out what you can afford. 

3. Cash Due at Signing

Depending on the type of loan that you get, you may be required to bring a lump sum of cash to closing. There are programs that allow you to bring 1-3% and then there's other programs that require 20%. The more you put down, the lower the interest and the shorter loan you can get. Either way, it's important to have some money set aside for closings costs and unexpected expenses. 

4. Change in Employment / Financial Responsibilities

If you lose your job while applying for a home loan or if you buy a car or open a credit card while in the process of getting a loan might affect your chances of getting one. This can also be a factor even if you decrease the number of hours that you're working. For example if you were working full time and then end up working part time or maybe you're just not working enough hours. These are all different scenarios that could prevent your application from getting approved in the end. 

This list is a short one, but it covers some of the basic things you want to fix to avoid doing when you apply for a home loan. Even though some of these circumstances are unexpected, some can prevented or you can prepare for them. If you have any questions about any of this, please make sure to give me a call so we can get you straight for when you decide to apply! 

State Housing Finance Agency Programs

How can you make owning a home a reality? You know, a lot of people that I talk to everyday don’t realize that homeownership could be a reality for them. Why? Finances. Most people stress out about money and that they don’t have enough of it to buy a home. What’s so amazing about homeownership is that in some cases, your bills will stay about the same as if you were renting and in some cases, they may be lower! That’s pretty insane right? But it’s true, depending on what type of home you decide to purchase, your mortgage payment could be lower than your current rent. 

So how do we get you in a home without having a big downpayment? There’s quite a few State Housing Finance Agency programs which can help with not only the downpayment but with some of the closing costs too. Yes, you will have to bring some money to the table but it could be much lower than what you think! And if for whatever reason this isn’t an immediate goal for you, it’s important to meet with a Loan Officer to help you establish goals and checkpoints in order to get your finances in order and eventually become a homeowner. 

If you ever want to learn more information about what kind of assistance programs are available to you, make sure to give me a call! I’d love to speak with you about it. 

New Tax Reforms Could Benefit the Wealthy

How to Get Rid of Private Mortgage Insurance

08/28/2017 12:52 pm ET
By Marilyn Lewis
You can find the original article by clicking here

If you have private mortgage insurance, you’re probably looking forward to the day when it ends, sweetly reducing your mortgage payment. Here’s good news: While PMI eventually is canceled automatically, there are several things you can do to make that day arrive faster.

You pay for PMI, but it protects your lender, not you, against the risk that you’ll stop making your mortgage payments. You aren’t the only one paying for it; about 13% of all mortgages in the U.S. have PMI. On average, homeowners with PMI make payments for 5 1/2 years before the insurance ends, according to U.S. Mortgage Insurers, a Washington D.C.-based industry group.

PMI is the only type of lender protection that you can escape. Department of Veterans Affairs mortgage funding fees can’t be canceled. Neither can Federal Housing Administration mortgage insurance premiums, which are paid to the government. Lender-paid mortgage insurance is paid in full when the loan is issued, and the borrower repays it through a higher interest rate. With all of those, you must sell or refinance to get clear.

Homeowners with PMI have six options for getting rid of it.

1. Wait for automatic cancellation

You don’t have to do a thing. Eventually, your mortgage insurance will fall away. Your lender is required to cancel your PMI when either of these things happens:

Your mortgage reaches 78% loan to value. The federal Homeowners Protection Act of 1998 requires lenders to terminate PMI, free of charge, at that loan to value ratio. To find your LTV, divide the loan balance by the original purchase price or calculate it here. For example, with a balance of $250,000 and a purchase price of $320,000, the LTV is 0.78, or 78%.)
The mortgage hits the halfway point. Regardless of your LTV, your lender terminates your PMI automatically when the mortgage is halfway finished — in year 15 of a 30-year mortgage, for instance. That could happen before the lender’s equity reaches 78% if your mortgage has a balloon payment, an interest-only period or principal forbearance.
Lindsey Johnson, executive director of U.S. Mortgage Insurers, an industry group representing large insurers, tells borrowers to request a written copy of their PMI cancellation schedule and their lender’s requirements. Call the number on your monthly mortgage statement and do it now, she says, long before you need it. That way you’ll know when your payments are supposed to stop and can watch your progress.

2. Request early cancellation

You can save money by acting to remove PMI sooner. “When your mortgage balance reaches 80% of your home’s original value — the lesser of the sales price or the appraised price at origination — your mortgage servicer must cancel [PMI] at your written request,” says Marc Zinner, vice president of commercial operations at Genworth, one of the largest private mortgage insurance companies.

Use your PMI schedule, which is based on your home’s original value, to track your progress. Make a written request to your lender several months before the mortgage is scheduled to hit 80% loan to value and get the process moving.

To make the case for early cancellation you’ll also need:

A good payment history. The rule is no payments 30 days late in the past 12 months and no 60-day late payments in the previous 24 months. Timely payments count when it comes to getting rid of PMI. Late payments can put you in a high-risk category, making it harder to cancel.
No other liens. Your mortgage must be the home’s only debt, including second mortgages, home equity loans and lines of credit.
Proof of value. An appraisal, at your expense, to prove the home’s value hasn’t fallen. Certain lenders accept a broker price opinion instead.
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3. Get a new appraisal

If property values are rising where you live, you can request early cancellation based on the home’s current value. You’ll probably need a new appraisal for that.

Before spending $300 to $500 on an appraiser, check your lender’s rules. Some lenders require borrowers to use certain appraisers. Others accept a broker price opinion, a quicker process costing about half or less of an appraiser’s fee.

Here’s a caveat: To cancel based on current value, you must have owned the home for at least two years and have 75% LTV. If you’ve owned the home for at least five years, you can cancel at 80% LTV.

4. Boost value with home improvements

Depending on your market, you may be able to boost your home’s value with a well-chosen remodeling project. Remodeling Magazine says projects that enhance curb appeal, like upgraded siding, doors and windows, add the most value for the money spent.

5. Refinance your mortgage

Refinancing might also let you escape PMI, but make sure the premium payments you avoid are greater than your refinancing costs (use this calculator to decide).

6. Sell your home

The last resort when it comes to ditching PMI is to sell the home. It’s unlikely you’ll want to or need to, however, given the range of other choices.

Know your rights

Occasionally, borrowers and lenders knock heads over canceling PMI. If you run into insurmountable obstacles when trying to cancel, complain to the Consumer Financial Protection Bureau at 855-411-CFPB (2372).

Ray Rodriguez, a regional sales manager for Cherry Hill, N.J.-based TD Bank, says lenders vary in how they work with borrowers over canceling PMI. Think about mortgage insurance when getting a mortgage, he says. Tell the lender you need a copy of the loan’s PMI cancellation policies before you’ll sign the mortgage agreement.

“It’s the lender or whoever is going to service this loan who will make the rules on this,” Rodriguez says. “Your lender should know their servicing policy right upfront. If they say ‘No’ or ‘If’ or ‘Maybe’ and you call two other lenders and they say, ‘Absolutely, we would do that for you,’ you can vote with your feet.”

Marilyn is a personal finance writer at NerdWallet, specializing in mortgages and homeownership.

Special Announcement: VHDA Maximum Income Limits Update

From the VHDA:

"We are pleased to announce new VHDA maximum income limits will become effective with new applications beginning September 1, 2017. Although most area limits increased, the Charlottesville MSA limits are slightly lower. This is due to in a reduction in the published HUD area median incomes for the Charlottesville MSA. Standard program limits apply to all loan programs (FHA/FHA Plus/VA/RD/Fannie Mae) and MCC’s. Lower income limits apply to the VHDA Grant Program. Income limits have also increased for the FHA Streamline Refi and VA Interest Rate Reduction loan programs. These limits are available in the FHA Streamline Refi and VA IRRRL program guidelines. A chart with the new limits is attached. VHDA’s website will be updated September 1, 2017 to reflect the new limits."

Pro's, and Con's, of Buying New Construction

If you’ve been shopping the Richmond Real Estate Market you’ve probably find yourself a little frustrated. There is a higher demand for housing than there are houses themselves. This is due to a number of things: there is a growing job market, people from surrouding metropolitan areas are moving to Richmond, the cost of living is reasonable and it is centrally located in Virginia. This makes Richmond an attractive place for people to move to. Fortunately, builders throughout Central Virginia have taken notice to this problem and they are proactively building to accomodate the housing demand. 

Pro’s

- It comes with a warranty so there won’t be a lot of out of pocket expenses if something breaks down

- No previous tenants, so you get a fresh start in a new home, everything will be brand new

- Most people in the neighborhood will be homeowners, at least for the first few years there won’t be a lot of rental properties

- In most cases you get to pick certain components of your home, such as: hardwood floors, additional bedrooms or bathrooms, finishes, etc. 

Con’s

- There is no way to see the finished home, the model home can provide an insight but not a definite design

- Sometimes your home might be finished before others, so you might have to deal with construction in your neighborhood

- There probably won’t be much room for negotiation

- Most houses will have a uniform look, at least on the outside, which depending who you ask may or not may be a good a good thing

This list doesn’t cover all the Pro’s and Con’s, but it does cover some of the most important ones. 

If you don’t know how to get started in the process of buying new construction, make sure to give me a call, because the very first thing you’ll want to do is get pre-approved. This way, you’ll know exactly which kind of new construction you can afford and you’ll be ready to make a purchase when the time comes. 

Grants Available for 1st Time Home Buyers in Virginia

VHDA is pleased to announce a special allocation of funding available to eligible first time homebuyers financing with either of VHDA’s Fannie Mae Programs.

Details

Assistance in the amount of $1500 provided towards the borrowers closing costs (including prepaids and upfront MI) – not toward downpayment

This is a grant – no deed of trust – no repayment required

Funding is limited – funding available for 150 purchases transactions – first come first serve

We anticipate funds will be utilized very quickly

Lower income limits – lower income limits apply (limits are lower than the VHDA grant program see attached limits)

Limited time – loans must close by October 17, 2017

Closing Costs assistance may be used in conjunction with VHDA’s DPA Grant and MCCs

Borrowers may not receive cash back at closing

Lenders may offer the closing costs assistance to borrowers currently locked with a VHDA Fannie Mae loan

- Chesterfield, Hanover, and Henrico income limit is $62,960, Richmond City is $62,960.

Why Summer might be the best season to buy

We've all heard of a busy #Spring Real Estate Market. The Fall is another time in which Real Estate picks up. Winter tends to be too cold and people seem to be preoccupied with the Holidays. Summer might be a fantastic time for you to move into a new home because of the simple fact that the Spring frenzy has ended.

During the Spring season we see a lot of activity in the market, it can be harder to nail down moving plans because everyone has the same mentality at this point. Moving companies are getting lots of requests from people taking advantage of great weather. The market tends to be more competitive, more desirable homes might get several offers. That's added stress that you might not need. Real Estate Agents will have a bit more time in their hands now that the worst season is behind them, giving you the attention you deserve.

The Fall might be another season to consider if you're thinking of buying but historically we see some of the same issues we have during the Spring and if you experience any delays in the transaction you may end up having to move in the middle of Winter. This is why the Summer could be the perfect season to buy!

As always, if you have any questions on how the home buying process works, don't hesitate to give me a call!

Concerned about Student Loan when applying for a Mortgage Loan? Read below why you shouldn't be!

If you've graduated in the past ten years or so, you might still be paying student debt. Depending on your career path this could equal thousands of dollars. Even with low interest rates, student loans can feel like a big burden especially if you're thinking of buying a home. Most people think that if they have a big student debt that they may not qualify for a mortgage loan because their debt to income ratio might be too high.

In the past, mortgage lenders would calculate 1% of your student loan as your monthly payment. So if you had $100k in debt, which is possible if you chose to be a doctor or a lawyer, your monthly payment would be considered to be $1,000 per month.

Fortunately the rules have change. Your actual student loan payment could be much lower and as long as this is reflected on your credit report we are able to use that as your monthly payment. In many cases this will result in buyers being able to borrow a more realistic amount that fits their budget.

This change on how we calculate student debt took effect this year and it does not apply to all loans, just certain types of loans. If student debt is something that has been keeping you from buying I strongly suggest that you revisit applying for a loan now that things have changed benefitting buyers.

As always I am here to provide information on how to apply for a loan and making the process of buying much easier for our buyers! Don't hesitate to call me if you're thinking of buying, you'd be surprised on some of the things we can do to help our clients.

Meet Your Builder!

Being in my industry right now is great. The housing market is better than it has been in many years. The economy and jobs have been making a steady comeback for the past few years and we're finally seeing some of those benefits. The only problem is that even though people are looking to buy homes, there isn't a ton of inventory out in the market. Why? Interest rates were high when people bought a number of years ago and people want to make sure they aren't losing money when they sell. It's a reasonable way of thinking but it puts potential buyers in a bit of a bind!

So as you can probably imagine builders are trying their best to provide more housing opportunities for buyers. There's lots of builders out there right now and getting to know them all can be overwhelming. Realtors should get familiar with all the different builders because it opens up a whole other market for their buyers.

Different builders have different: styles, quality, locations and square footage. Each builder brings something to the table that the next doesn't and it's important for lenders and realtors to get familiar with those differences. At the end of the day if we find the right home for our clients, we are successful at our job.

This is why I love being part of the Home Building Association of Richmond, there's so many great events that help connect Realtors, Builders and all sorts of Contractors. One of their biggest events is coming up soon, Builder Bash. The tickets for this event are sold out and it will take place at Bon Secours Washington Redskins Training Center on June 8th at 5pm. I suggest that you visit http://hbar.org/ to keep up with coming events if you'd like to get involved and get to know some really great people in the industry. I'm glad I joined!

Working with a Local Lender vs. Non-Local

Have you seen tons of ads online and on TV about mortgage rates and how low they are? Telling you that you can't get lower rates like that anywhere else? Yes, if you've been recently looking at houses it seems that these advertisements are everywhere and for good reason. Rates are not the lowest but they are pretty low compared to just a few years ago. The crazy thing is that the rates are mantaining even though the housing market seems to be booming.

The way to go might seem to use the "online tools" advertised or just do it with whichever bank you already have, it's so easy right?! Wrong. Getting a mortgage is not an easy process, at least not when you do it alone which is what it will feel like when don't work with a local agent. Having a real life person can make all the difference, especially when it is a local lender!

Options
Buying online should give you more options right? This is a big misconception mainly because there are some loans available to your state in particular that an online bank may not have access to or may not be very well versed in. It's impossible for an online representative to know every product available in every state and even if they are well educated in the subject, it's still impossible for them to know the ins and outs of every product. Being local gives us an advantage because of the products exclusive to your area and our experience dealing with them.

Flexibility
Don't qualify right away or need a little leeway with your mortgage? A local agent typically can be more forgiving and flexible on what we can offer based on your situation, in some cases even make exceptions. Big banks aren't really allowed to do this because they have strict guidelines to follow and even though we have guidelines too, it's easy for us to talk to our managers and get creative on how to help our clients. Our goals is to get you in your dream home!

We know the area
When you buy a mortgage online or even with the bank you usually do business with, it's not local therefore they don't have a full understanding of your needs. Knowing the area also helps because we can make sure you are getting a good deal and evaluation of the property. We'll know how much you'll need for the type of property you're looking to buy based on our extended knowledge of the area and prior loans.

Accessibility
When you use a big bank or an online option, you don't always get the same person on the phone or via email. Even if you do, they may not remember you because they work in such high volumes. Local lenders make it their priority to be a part of the process and keep you in the loop, we can even meet with you if you have questions! You can't this level of services when you don't shop local.

So when you're looking to buy, the first thing to do is shop for a mortgage with a local agent! Ask for references and check their presence online, make sure that they are good because this can make an experience that may seem complicated and intimidating into a pleasant one!

Golfing for a good cause: Special Olympics VA

I believe in giving back to the community and as my personal business grows, I want to make sure I am doing so. The Special Olympics is a great cause that I encourage people to get familiar with. We live in a very sport centered culture and I believe that everyone should be able to participate, the Special Olympics allows just that. We're not all the same and it is incredible to see an organization dedicated to embracing physical diversity.

This year, I decided to do a small part in making their Golfing Tournament a possibility. First Home Mortgage and myself are sponsoring one of the golf holes at this year's Golfing Tournament. I encourage friends and colleagues to register to play or support this cause by also becoming a hole sponsor. We all know someone with a disability and it is important to show them our support, no matter how big or small.

I hope to see some of you out there and if you're curious on how to get involved, click here to visit and get more tournament information or click here to learn more about the Special Olympics in VA.

Learn about VHDA

So if you're new to the home buying process, looking into a VHDA loan may not be a bad idea! We have many different products that we offer here at First Home Mortgage and this is just one of them. If you have any questions at all about how to apply, please give me a call and i'll make sure to take great care of you! 

Find out more infomation about VHDA by visiting their site by clicking here

Had a great talk about Financing!

Even though there was so many people without power yesterday, we had a pretty good turn out at the Salisbury Country Club for our Class "Top Financing Questions Every Realtor Needs to Know". This gave our Realtors 2 CE Credits.

We work very closely with our Realtors to make sure that they know how to answer financing questions when their clients ask. And yes, we don't expect them to know all the answers but that's why we offer these free classes for Realtors so they can have SOME answers.

Buying a home can be a scary process and talking about finances can be very personal for a lot, but in today's market it's more important than ever to have these conversations with our clients early on.

The most important thing to take away from our class is that even though rates remain low and the Real Estate Market remains healthy, we've seen a steady incline in rates, so if you've been thinking of buying, now is the best time to do so!

If you're too scared to ask, make sure that they contact us so we can clear up any questions that they may have, that's what we're here for!

Get Pre-Approved, or Risk Losing!

So last week I sat through a presentation from Laura Lafayette, CEO of the Richmond Association of REALTORS which talked about the trends happening in Richmond and how we are growing as a city. Home purchases are up in general which is fantastic! It's really great news, but it's a little scary for potential home buyers because about 99% of asking price is being met.

What does that mean for our buyers? When you look for a home, you need to have your pre-approval letter! Why? If you happen to look at a house that you fall in love with, you have to be able to put in an offer right away. Even though our approval process is fairly quick, we can't really stop someone from putting in an offer before you if they are pre-approved.

This keeps happening to our buyers and we hate having to give them the bad news on their home being sold because they didn't talk to a mortgage lender first. Laura shared with us that rates may go up this year, which means that more buyers will try to buy homes before they go up. It's more competition to our buyers so preparation is key.

So what happens in the pre-approval process? We get some basic information from you, like driver's license, copy of W2's, etc. We figure out your debt to income ratio and know about how much home you can afford. Why is this important? Getting your finances straight is a crucial part of the approval process, we need to know that your current lifestyle won't suffer with a mortgage payment even though a lot of the times we can lower your current monthly expenses.

Speak to a mortgage professional, we know it can be intimidating but it doesn't have to be. Even if you find out that you're not ready to buy now, we can make sure that we get you in the right path so you can in the near future!

I'll leave you with one closing note, if you're even thinking of looking at houses, please don't get your hopes up by going around and looking at them without a pre-approval letter. You'll end up finding something that you really love just to find out someone was better prepared than you and they'll snatch it up from under you!

No Matter The Loan, Big or Small, We Can Make Our Customers Homeowners

I want to take a moment to talk about one of my clients Zach, who was looking to buy a new home in the Richmond Area. Zach works in non-profit meaning that he works for a good cause but doesn't have a lot of disposable income. Having a restricted budget it was my job to figure out how to get him in a home that he would be happy with and that wouldn't strain him too much financially. 

Even though he didn't have a large budget, he also wanted to buy something that was move in ready and that didn't need a lot of renovations - with the help of Kristina Davis Denzler from Clocktower Realty, we are able to find something that checked off all of Zach's needs and wants. 

His monthly payment is something that he can easily handle, just under $1,000 a month. It's close to the city, just a few minutes away and with enough room to entertain and have people over. 

Having the RIGHT Realtor and the RIGHT Lender can really make all the difference. I want to make a difference when it comes to your Real Estate needs. If you want to find out more of what I can do for you and your family, please give me a call! Spring is just around the corner and it would be really great if can get you into a new home then! 

Member of the Richmond Mortgage Banker's Association

I have some very exciting news to share with all of you. I have become a Board Member of the Richmond Mortgage Banker's Association (RMBA). What better way to help all of my clients than by being part of this amazing group of people who directly influence the Mortgage Industry in Virginia.

So who is the RMBA? They are the people who research the Richmond Mortgage Industry and figure out what needs to be done to it. Then they communicate their findings to the Virginia Mortgage Lender's Association (VMLA), which lobbies and molds legislation so it can protect and benefit our clients' interests. The RMBA is composed of people from all over the Mortgage Industry in #RVA. My goal is always to make it as easy and painless for my clients to be home owners, and getting involved with the RMBA is just another way to make this happen. Homeownership is after all the American dream.

The RMBA also holds regular educational events geared towards loan officers, this is great for me because it provides direct access to tremendous amount of information that benefits my customers.

I am excited to be a part of this organization in 2017 and I can't wait to see what other amazing things come my way!