Mortgage Programs

What Is An Idaho Reverse Mortgage ?

Posted on by Rick & Jane May

What is an Idaho Reverse Mortgage ?

 

An Idaho Reverse Mortgage, also known as a HECM (Home Equity Conversion Mortgage), is a loan made to a person age 62 or older. There are no income, credit or health requirements associated with the loan.

 

The amazing thing about the Idaho Reverse Mortgage is that you can take out a lump sum payment (tax free) to yourself or you can have a monthly payment sent to you (tax free) every month or you can have a line of credit set up for when you need it.

 

All of these things without having to make a monthly payment for the rest of the time you occupy the property as your primary residence for as long as you live.

 

So you are probably wondering how does the Idaho Reverse Mortgage Loan Work? Below I have outlined the different payment options that are available to as a borrower to receive.

1. Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

2. Term – equal monthly payments for a fixed period of months selected.

3. Line of Credit – unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.

4. Modified Tenure – combination of line of credit plus scheduled monthly payments for as long as you remain in the home.

5. Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

 

Idaho Reverse Mortgage HECM loans does not require any form of repayment as long as the home is your principle residence. Lenders recover their principal, plus interest, when the home is sold.  The remaining value of the home goes to you or your heirs.

 

One of the great things about an Idaho FHA Reverse Mortgage Loan is that you can never owe more than your home’s value.  If you sale your home and the proceeds are not enough to pay the amount that is owed, then FHA will pay the lender the amount that is owed. FHA collects an insurance premium at closing from all borrowers to provide this coverage.

 

The amount you can borrow depends on your age, the current interest rate, other loan fees, and the appraised value of your home or FHA’s HECM mortgage limit for your area, whichever is less. Generally, the more valuable your home is, the older you are, and the lower the interest rate, the more you can borrow.

 

There are no assett or income limitations in order for you to be eligible for a HECM.

 

If you or anyone you know has any questions about the Idaho FHA Reverse Mortgage feel free to contact me.

 

Q: What are the Borrower Requirements for an Idaho (HECM) Loan ?

– Be 62 years of age or older
– Own the property outright or have a small mortgage balance
– Occupy the property as your principal residence
– Not be delinquent on any federal debt
– You must participate in a consumer information session given by an approved HECM counselor

 

Q: How do I know how much of a mortgage I qualify for?

Mortgage amounts are based on:

– Age of the youngest borrower
– Current Interest rate
– Lesser of appraised value or the Idaho HECM FHA mortgage Limit

 

Q: Do I have to have a job or income to qualify? What are the financial requirements?

– No income or credit qualifications are required of the borrower
– No repayment as long as the property is your principal residence
– Closing costs may be financed in the mortgage

 

Q: What kind of properties are allowed?

– Single family home or 1-4 unit home with one unit occupied by the borrower
– HUD-approved condominium
– Manufactured home that meets FHA requirements

 

Q: When do I have to Repay the loan?

A: An Idaho HECM Reverse Mortgage must be repaid in full when you die or sell the home. The loan also becomes due and payable if:

– You do not pay property taxes or hazard insurance
– You permanently move to a new principal residence
– You, or the last borrower, fail to live in the home for 12 months in a row. An example of this situation would be if you (or the last borrower) were to have a 12-month or longer stay in a nursing home.
– You allow the property to deteriorate and do not make necessary repairs.

 

If you or anyone you know could benefit from an Reverse Mortgage loan please feel free to contact me with questions.

 

 

Top 10 Boise Idaho Mortgage Links/Articles/Questions

1. Boise, Idaho FHA Reverse Mortgage Home Loans
2. No Money For a Down Payment? No Problem Try an Idaho USDA Rural Development Home Loan
3. How does the Idaho FHA Reverse Mortgage Loan Work?
4. 3 Great Idaho First-Time Home Buyer Mortgage Loans
5. Common Idaho FHA HECM Reverse Mortgage Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
 9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Idaho VA Loan Pre-Approval Letter

Posted on by Rick & Jane May

An Idaho VA loan pre-approval letter is a document granted by an Idaho VA mortgage lender that states that based on preliminary information such as the potential borrower’s credit, assets, and income, that they qualify for a Veterans Administration loan of a specified amount.

 

It is different from a pre-qualification in that some or all of the submitted information is reviewed for accuracy before the letter is issued.

 

Having a pre-approval letter from your Idaho VA lender will show home sellers that you are a qualified buyer and may lead to your offer being more seriously considered.

 

Once you have obtained your Veterans Administration loan pre-approval letter, you will then be able to begin making offers on homes you are interested in purchasing.

 

In order to get your VA loan pre-approval letter, your lender may require the following:

  • At least one months pay stubs or LES (if still active duty).
  • W-2′s and Tax Returns for the past two years.
  • Two months bank statements for any/all assets.
  • Your DD 214 form (if no longer on active duty).
  • Statement of Service from S1 (if still active duty)

 

Your pay stub is needed to show that you are currently employed, as well as your current income. W-2 statements (for the past two years) then show how much you normally earn in a year.

 

If you are currently still on active duty, your Statement of Service must show a minimum of 12 months remaining on your contract.

 

Finally, your DD 214 form will enable your Idaho VA mortgage lender to decrease the amount of time necessary for processing your certificate of eligibility. Once again, this is not required, but it is generally a smart idea.

 

The reason why this is a smart idea is that the majority of direct lenders with the Veterans Administration can put in an order for your certificate of eligibility, which determines whether or not you are eligible for a VA loan.

 

The process can be very quick as long as you turn in all these documents as soon as possible to your loan officer.

 

After your Idaho VA loan officer or lender has the described documents, he or she can submit your information in the VA loan analysis software to determine your eligibility. The calculation that will determine your eligibility is:

 

(Monthly Income) – (Proposed Mortgage Payment + Insurance + Taxes + Utilities for the house + Monthly Credit Card Payments Due) = Residual Income

 

Residual income is the amount of money that you have after you have paid the sum of your monthly bills. The VA will use their judgment after they have calculated your residual income to decide if you will have a satisfactory amount of money left over after you have paid your bills.

 

The VA has established various requirements for what your minimum residual income will have to be, such as what part of the country you live in, the size of your family, how old your children are, and various other factors.

 

When obtaining VA pre-approval letter, be aware that simply getting the letter does not commit the lender to giving you a loan. It just means the initial information has been reviewed. In order for the mortgage application to be approved additional information and documentation about both the borrower(s) and the property must be reviewed to be sure that all of the guidelines are met.

 

If you have any questions about a VA home loan feel free to contact me.

10 Advantages Of Getting a FHA Mortgage in Boise Idaho

Posted on by Rick & Jane May

10 Advantages Of Getting a FHA Mortgage in Boise Idaho

1. Only 3.5% down payment which may include closing cost
2. Down payment and closing costs may be gifted from relative or employer
3. Higher qualifying ratios
4. Higher loan to value ratio
5. Cash out refinance up to 85% LTV
6. Can have a non-occupant co-borrower ( immediate family or established relationship)
7. Upfront MIP(mortgage insurance premium) can be financed
8. No pre-payment penalties
9. If interest rates drop you can do an FHA Streamline Refinance without an Appraisal.
10. Seller may pay up to 3% of Borrowers closing costs if stated in Sales Contract

If you have any questions about FHA Mortgages feel free to contact me.

 

Top 10 Boise Idaho Mortgage Links/Articles/Questions

1. FHA Streamline Refinance in Boise, Idaho
2. Idaho FHA Reverse Mortgage
 3. Changes Are Coming For Boise, Idaho FHA Mortgages
 4. 3 Great Idaho First-Time Home Buyer Mortgage Loans
5. Idaho FHA and VA Manufactured Loan Programs for Refinancing and Purchasing Homes
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
 9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Understanding the FHA Mortgage Insurance Premium (MIP)

Posted on by Rick & Jane May

* Disclaimer – all information in this article is accurate as of the date this article was written *

The FHA Mortgage Insurance Premium is an important part of every FHA loan.

 

There are actually two types of Mortgage Insurance Premiums associated with FHA loans:

1.  Up Front Mortgage Insurance Premium (UFMIP) – financed into the total loan amount at the initial time of funding

2.  Monthly Mortgage Insurance Premium – paid monthly along with Principal, Interest, Taxes and Insurance

 

Conventional loans that are higher than 80% Loan-to-Value also require mortgage insurance, but at a relatively higher rate than FHA Mortgage Insurance Premiums.

 

Mortgage Insurance is a very important part of every FHA loan since a loan that only requires a 3.5% down payment is generally viewed by lenders as a risky proposition.

 

Without FHA around to insure the lender against a loss if a default occurs, high LTV loan programs such as FHA would not exist.

Calculating FHA Mortgage Insurance Premiums:

 

Up Front Mortgage Insurance Premium (UFMIP)

 

UFMIP varies based on the term of the loan and Loan-to-Value.

 

For most FHA loans, the UFMIP is equal to 2.25%  of the Base FHA Loan amount (effective April 5, 2010).

 

For Example:

>> If John purchases a home for $100,000 with 3.5% down, his base FHA loan amount would be $96,500

>> The UFMIP of 2.25% is multiplied by $96,500, equaling $2,171

>> This amount is added to the base loan, for a total FHA loan of $98,671

 

Monthly Mortgage Insurance (MMI):

  • Equal to .55% of the loan amount divided by 12 – when the Loan-to-Value is greater than 95% and the term is greater than 15 years
  • Equal to .50% of the loan amount divided by 12 – when the Loan-to-Value is less than or equal to 95%, and the term is greater than 15 years
  • Equal to .25% of the loan amount divided by 12 – when the Loan-to-Value is between 80% – 90%, and the term is greater than 15 years
  • No MMI when the loan to value is less than 90% on a 15 year term

 

The Monthly Mortgage Insurance Premium is not a permanent part of the loan, and it will drop off over time.

 

For mortgages with terms greater than 15 years, the MMI will be canceled when the Loan-to-Value reaches 78%, as long as the borrower has been making payments for at least 5 years.

 

For mortgages with terms 15 years or less and a Loan -to-Value loan to value ratios 90% or greater, the MMI will be canceled when the loan to value reaches 78%.  *There is not a 5 year requirement like there is for longer term loans.

 

 

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Related Articles – Mortgage Approval Process:

Top 10 Boise Idaho Mortgage Links/Articles/Questions

1. FHA Streamline Refinance in Boise, Idaho
2. Idaho FHA Reverse Mortgage
 3. Changes Are Coming For Boise, Idaho FHA Mortgages
 4. 3 Great Idaho First-Time Home Buyer Mortgage Loans
5. Idaho FHA and VA Manufactured Loan Programs for Refinancing and Purchasing Homes
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
 9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Why Do I Need To Pay A VA Funding Fee?

Posted on by Rick & Jane May

The VA Funding Fee is an essential component of the VA home loan program, and is a requirement of any Veteran taking advantage of this zero down payment government loan program.

 

This fee ranges from 1.25% to 3.3% of the loan amount, depending upon the circumstances.

 

On a $150,000 loan that’s an additional $1,875 to almost $5,000 in cost just for the benefit of using the VA home loan.

 

The good news is that the VA allows borrowers to finance this cost into the home loan without having to include it as part of theclosing costs.

 

For buyers using their VA loan guarantee for the first time on a zero down loan, the Funding Fee would be 2.15%.

 

For example, on a $150,000 loan amount, the VA Funding Fee could total $3,225, which would increase the monthly mortgage payment by $18 if it were financed into the new loan.

 

So basically, the incremental increase to a monthly payment is not very much if you choose to finance the Funding Fee.

 

Historical Trivia:

Under VA’s founding law in 1944 there was no Funding Fee; the guaranty VA offered lenders was limited to 50 percent of the loan, not to exceed $2,000; loans were limited to a maximum 20 years, and the interest rate was capped at 4 percent.

The VA loan was originally designed to be readjustment aid to returning veterans from WWII and they had 2 years from the war’s official end before their eligibility expired. The program was meant to help them catch up for the lost years they sacrificed.

However, the program has obviously evolved to a long term housing benefit for veterans.

The first Funding Fee was ½% and was enacted in 1966 for the sole purpose of building a reserve fund for defaults. This remained in place only until 1970. The Funding Fee of ½% was re-instituted in 1982 and has been in place ever since.

 

The Amount Of Funding Fee A Borrower Pays Depends On:

  • The type of transaction (refinance versus purchase)
  • Amount of equity
  • Whether this is the first use or subsequent use of the borrower’s VA loan benefit
  • Whether you are/were regular military or Reserve or National Guard

 

*Disabled veterans are exempt from paying a Funding Fee

 

The table of Funding Fees can be accessed via VA’s website – CLICK HERE

 

The main reason for a Veteran to select the VA home loan instead of another program is due to the zero down payment feature.

 

However, if the Veteran plans on making a 20% or more down payment, the VA loan might not be the best choice because a conventional loan would have a similar interest rate, but without the Funding Fee expense.

 

The best way to view the VA Funding Fee is that it is a small cost to pay for the benefit of not needing to part with thousands of dollars in down payment

 

 

accurate as of the time this article was written *

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Top 8 Things To Ask Your Lender During The Application Process

Posted on by Rick & Jane May

Knowing what questions to ask your lender during or before the loan application process is essential for making your mortgage approval process as smooth as possible.

 

Many borrowers fail to ask the right questions during the mortgage pre-qualification process and end up getting frustrated or hurt because their expectations were not met.

 

Here are the top eight questions and explanations to make sure you are fully prepared when taking your next mortgage loan application:

 

1. What documents will I need to have on hand in order to receive a full mortgage approval?

An experienced mortgage professional will be able to uncover any potential underwriting challenges up-front by simply asking the right questions during the initial application and interview process.

Residence history, marital status, credit obligations, down payment seasoning, income and employment verifications are a few examples of topics that can lead to stacks of documentation required by an underwriter for a full approval.

There is nothing worse than getting close to funding on a new home just to find out that your lender needs to verify something you weren’t prepared for.

 

2. How long will the whole process take?

Between processing, underwriting, title search, appraisal and other verification processes, there are obviously many factors to consider in the overall time line, which is why communication is essential.

As long as all of the documents and questions are addressed ahead of time, your loan officer should be able to give you a fair estimate of the total amount of time it will take to close on your mortgage.

The main reason this question is important to ask up-front is because it will help you determine whether or not the loan officer is more interested in telling you what you want to hear vs setting realistic expectations.

You should also inquire about anything specific that the loan officer thinks may hold up your file from closing on time.

 

3. Are my taxes and insurance included in the payment?

This answer to this question affects how much your total monthly payment will be and the total amount you’ll have to bring to closing.

If you include your taxes and insurance in your payment, you will have a higher monthly payment to the lender but then you also won’t have to worry about coming up with large sums of cash to pay the taxes when they are due.

 

4. Will my payment increase at any point after closing?

Most borrowers today choose fixed interest rate loans, which basically means the loan payment will never increase over the life of the loan.

However, if your taxes and insurance are included in your payment, you should anticipate that your total payment will change over time due to changes in your homeowner’s insurance premiums and property taxes.

 

5. How do I lock in my interest rate?

It’s good to know what the terms are and what the process is of locking in your interest rate.

Establishing whether or not you have the final word on locking in a specific interest rate at any given moment of time will alleviate the chance of someone else making the wrong decision on your behalf.

Most loan officers pay close attention to market conditions for their clients, but this should be clearly understood and agreed upon at the beginning of the relationship, especially since rates tend to move several times a day.

 

6. How long will my rate be locked?

Mortgage rates are typically priced with a 30 day lock, but you may choose to hold off temporarily if you’re purchasing a foreclosure or short sale.

The way the lock term affects your pricing is as follows: The shorter the lock period, the lower the interest rate, and the longer the lock period the higher the interest rate.

 

7. How does credit score affect my interest rate?

This is an important question to get specific answers on, especially if there have been any recent changes to your credit scenario.

There are a few key factors that can influence a slight fluctuation in your credit score, so be sure to fill your loan officer in on anything you can think of that may have been tied to your credit.

 

8. How much will I need for closing?

*The 2010 Good Faith Estimate will essentially only reflect what the maximum fees are, but will not tell you how much you need to bring to closing.

Ask your Loan Officer to estimate how much money you should budget for so that you are prepared at the time of closing.

Your earnest money deposit, appraisal fees and seller contributions may factor into this final number as well, so it helps to have a clear picture to avoid any last-minute panic attacks.

…………

Now that you have the background to these eight important questions, you should feel more confident about finding a mortgage company that can serve your personal needs and unique scenario.

 

Remember, the more you understand about the entire loan process, the better your experience will be.

 

Most frustration that is experienced during the home buying and approval process is largely due to unclear expectations.

 

You can never ask too many questions…

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