VA Certificate of Eligibility - An Infograph

Are you eligible for a VA home loan?

View this infograph below and find out! Want to read the whole article? Check out http://www.salending.com/va-certificate-of-eligibility.

Realtors: Introducing FNMA Renovation Loans

We’ve all seen the shows… I stay up late at night watching “Property Brothers” on HGTV. I admit it. I am hooked. I love to imagine the possibility of someone getting a really good steal because they have vision and a good understanding that you can pretty much take any house and turn it into your dream home. I love watching a total dump be transformed into a model home or something even better.

I know that you all have clients like this…they have these grandiose ideas of what they want in a home but have absolutely no clue as to what this type of homes actually cost. Their budget is $200,000 but the only house that has all of the items on their “must haves” is actually about $500,000. They are floored. Disappointed. Disillusioned. They think that they have to settle for something much less and most of them actually do.

Your clients may say something like, “This home is perfect…BUT we sure wish that it had another bedroom…” or “This house has great bones and it is in a great area, but the last time anyone updated it was 1972…” Do you have a listing that you have as a “CASH ONLY” house because of its foundation problems or perhaps smells of the hundreds of cats that used to inhabit the house? Does your client want a foreclosure that needs a LOT of work? Does someone you know want to purchase a fixer-upper in a great area of town without having to pay a premium for an already updated home?  Do you LOVE the house but wished it had a pool? If you have answered YES to any of these questions then, well do I have a deal for you!

Let me introduce the FNMA Renovation loan. It is a loan that combines a home purchase or refinance with home improvement financing in one loan with one closing. This type of financing provides a very convenient way for borrowers to make renovations, repairs or improvements for up to 50% of the “as-completed” value.

Popular improvements this year have been things such as:  an in ground pool, foundation repair, new roof, addition of bedrooms, total inside renovation and updating of homes…you name it and you can pretty much do it as long as it is a permanent type of repair/renovation/addition.

Here are some highlights:

• On a purchase, the maximum loan amount is calculated by using the lower of up to 90% of the purchase price plus the cost of improvements or the appraised value with the improvements completed.

• On a refinance, the maximum loan to value is 90% of the “as-completed” value (current value as if the improvements were already done).

• The maximum loan amount is $417,000.

• Completion of improvements must be completed within 9 months of closing.

• The purchase contract is written just like any other contract, but with a longer option period so that the buyer has time to get bids and pick out a contractor. The closing timeframe is typically 45 days from start to finish.

• There is one closing and the interest rate is locked at the time of contract.

• Payments are made on the full loan amount.

• Single family homes only and they must be owner occupied or second homes.

• The contractor must be approved by Benchmark Bank. We do a thorough check to make sure the contractor’s references, insurance etc. are valid.

• All draws must be signed and agreed upon by both the contractor and the borrower

• If there are excess funds left over after the renovations are completed, they will be applied towards the balance on the existing loan.

This is definitely one of the most under-utilized, but coolest loans out there today when it comes to renovations. It differs from the FHA 203k loan in the sense that there is definitely more wiggle room with the type of renovations that can be done. Additionally, if you have a client that actually wanted to put money down, the monthly MI options (or the ability to NOT have MI) far outweigh the FHA 203k. You can opt for 20% down on a renovation loan to avoid the monthly MI,whereas on and FHA loan, the MI NEVER goes away. This loan has definitely become more attractive especially with the new changes on FHA loans.

Affiliated Mortgage Home Loan Division of Benchmark Bank is very proud to be able to offer this loan to our clients with great interest rates. If you have ANY questions, please call Jennifer Guidry, NMLS #323935, at 210-491-2502 or visit the website at SALending.com