NJ 100% Home Financing

You’ve worked hard to maintain a good credit rating. Paying your bills on time and budgeting wisely, but the dream of home ownership is escaping you. You just have not been able to save the down payment.

You may be in luck. There is a home loan program that is specially designed to fit your needs and circumstances. The interest rates are very low and it covers about 90% of New Jersey’s suburban areas.

You may not have heard about this mortgage program before because there are limited people in the mortgage industry who will utilize this program for your benefit. A great majority of mortgage professionals do not even know this home financing option even exists.

It isn’t VA. You don’t have to be a veteran. It’s USDA!

Here are some of the benefits:

1) 100% Financing for a Single Family Home Purchase.

2) Low Fixed Interest Rates.

3) Loan is backed by a Government Guarantee.

4) No Prepayment Penalties.

5) Seller May Pay up to 6% of Your Closing Costs.

6) Closing Costs may be financed into the loan up to the Appraised Value.

This Loan Allows for True 100% Financing, Even the Closing Costs!

This loan is designed borrowers who have not been able to save the necessary down payment for a home purchase. This is often caused by rent interfering with the ability to save sufficient funds or just the everyday cost of living and raising a family.

It is also designed for low to moderate income borrowers. A borrower is considered to have moderate income if it does not exceed 115% of the area median income. The amount of people in your household is also considered in this calculation. You may make well over $100,000 and still qualify under certain circumstances.

This link will take you to our short form application:Quick and Easy Online Application. It takes less than 2 minutes to complete.

We will gladly answer any questions, or you may email us at: Mark@njfhapro.com for more information, or call 732-207-8434.

Here is a link to the areas in New Jersey that are covered by this program:New Jersey USDA Lending Areas.

You Deserve to be a Proud Homeowner!

*Visit the“Welcome” link for More Great News about NJ Home Mortgages!*

Mortgage Loans – Conventional Lending Pros and Cons

When seeking a home loan for a purchase or refinance, it seems like conventional financing is the most sought after option. This is not always because it is the best loan. It just has been assumed to be the best option in most lending circles. Understanding what a conventional loan is will help you make an informed choice.


A conventional home mortgage is any loan that follows Fannie Mae, Freddie Mac, or private label home loan lending criteria. This includes subprime, negative amortization ARM’s, jumbo, and interest only loans. Excluded loans are FHA, VA, USDA, business financing, and commercial loans.

Conventional mortgage loans offer definite advantages for some borrowers. One advantage is that there are no loan limit restrictions. This will not affect the average person, but if you are in the market for a home loan greater than roughly $800,000, this is your only real option.

Another advantage is the option of eliminating mortgage insurance and not having your taxes and insurance included in your mortgage payment. This option is available only if you have a 20% equity stake. These are not options with other types of home loans. Although you will not pay mortgage insurance for the duration of the loan, there will be an insurance cost. You will not be allowed to pay your taxes and insurance on your own. These payments must be escrowed and included in your monthly mortgage payment.

If your income is not easily verified, conventional lending has alternatives that allow for limited or no documentation of income. You will need excellent credit and either a large down payment or a lot of equity due to the inherent risk to this type of loan. The interest rates are also higher due to this risk. Limited income, no income, or stated income loans are largely for a self employed borrower who receives no pay stubs or W-2’s.

In today’s market, conventional home loans do carry some definite disadvantages. The major disadvantage is that the required equity stake is higher than on non-conventional loans. This means a purchaser will need to invest a greater down payment and someone looking to refinance will need a higher value vs. the loan amount requested. Credit underwriting is also stricter and current interest rates tend to be higher for those with average credit scores. The debt to income ratio is less flexible.


Understanding all of your options will help you choose the right mortgage for your needs and qualifications.

Visit the FHA Loans page for expert information about FHA, 100% USDA, and VA financing options.

FHA 203k (Rehab) Loan – From Start to Finish

An FHA 203k loan will allow a prospective buyer to compete with the “all cash” investor. An FHA 203K loan will allow for necessary repairs to a property that would not otherwise qualify for bank financing. This financing is also available for current homeowners to make property repairs or upgrades.


There are 2 types of 203K loans: Full “K” and Streamline “K.”

A full 203k is used for a property that needs structural repairs, or if the repairs will exceed $35,000. Normally a certified HUD plan consultant will be used for work cost estimates. A HUD reviewer makes the paperwork a lot easier because the average contractor will not be familiar with the documentation. The reviewer just allows for a smoother flow, but the HUD reviewer will not do the repairs.

A streamline 203K is the best loan if no structural repairs are necessary and if the scope of work is $35,000 or less. Up to $8,000 of energy efficient improvements may be added to a streamline 203K in excess of the $35,000 limit. The contractor usually prepares the estimate on this loan. The paperwork is less so it can easily be done with without a HUD plan consultant but the written estimate must be detailed.

A full FHA 203k and a Streamline 203K will allow for the use of multiple contractors if that is your desire. You may have a contractor that specializes in flooring, and another that is a licensed plumber. This is allowed, but written estimates must be obtained from each.

The normal process flow is as follows:

  • Get Pre-Approved by a Qualified Lender. This is a MUST. I am a Qualified FHA 203K Lender.
  • Find a home and make an offer.

  • If the offer is accepted, chose your contractors and get written work estimates. When a HUD plan consultant is used they will prepare the estimates and paperwork.
  • The contract, repair estimates, and necessary paperwork are delivered to a qualified 203k lending specialist. (We are qualified specialists.)

  • A mortgage application is prepared.
  • The work estimates are given to the appraiser. The appraiser will prepare an  appraisal with a value “subject to” completion of the work.
  • The loan is underwritten and approved.
  • The seller is paid. You are the new homeowner.
  • Work begins.

The contractors will have up to 6 month to complete the necessary repairs. Of course the repairs can be completed sooner. It will depend on the amount of work requested or required. They will be paid in increments as the work is done and inspected.


If there is a lot of required work, a full 203k has a provision where you may remain in your current home with no mortgage payments due while work is ongoing.

If you have more questions or need additional assistance on a New Jersey FHA 203k loan:

Contact me at 732-207-8434, or email mark@njfhapro.com.


I am a New Jersey FHA 203K Lending Specialist!

Pre-Qualification vs. Pre-Approval?

Pre-qualification and Pre-approval are terms that you will hear when you are house hunting. Yes, they do sound similar, and sometimes they are used in a similar fashion, but they are absolutely not the same.

A pre-qualification is an informal review of your qualifications. You may receive one without providing any income or asset documentation. Usually a credit report is ordered, but that is not true in all cases.

If you make an offer on a home with only a pre-qualification the offer may be rejected by an experienced agent. If your offer is accepted then there is a limited guarantee that your loan will be approved.

A pre-approval is a much more formal review of your qualifications. Proof of income, assets, and credit worthiness must be provided. The documentation is carefully reviewed and the customary mortgage debt to income ratio is calculated. More in depth questions are asked to make sure underwriting questions are addressed.

An offer with a pre-approval attached is much stronger than an offer with only a pre-qualification. The pre-approved offer has a much higher likelihood of closing in a timely fashion.


When you have a choice between a pre-qualification or a pre-approval Always Choose to be Pre-Approved!

New Jersey FHA County Loan Size Limits for 2014

County Name One-Family Two-Family Three-Family Four-Family
ATLANTIC $316,250 $404,350 $489,350 $608,150
BERGEN $625,500 $800,775 $967,950 $1,202,925
BURLINGTON $379,500 $485,800 $587,250 $729,800
CAMDEN $379,500 $485,800 $587,250 $729,800
CAPE MAY $414,000 $530,000 $640,650 $796,150
CUMBERLAND $271,050 $347,000 $419,425 $521,250
ESSEX $625,500 $800,775 $967,950 $1,202,925
GLOUCESTER $379,500 $485,800 $587,250 $729,800
HUDSON $625,500 $800,775 $967,950 $1,202,925
HUNTERDON $625,500 $800,775 $967,950 $1,202,925
MERCER $345,000 $441,650 $533,850 $663,450
MIDDLESEX $625,500 $800,775 $967,950 $1,202,925
MONMOUTH $625,500 $800,775 $967,950 $1,202,925
MORRIS $625,500 $800,775 $967,950 $1,202,925
OCEAN $625,500 $800,775 $967,950 $1,202,925
PASSAIC $625,500 $800,775 $967,950 $1,202,925
SALEM $379,500 $485,800 $587,250 $729,800
SOMERSET $625,500 $800,775 $967,950 $1,202,925
SUSSEX $625,500 $800,775 $967,950 $1,202,925
UNION $625,500 $800,775 $967,950 $1,202,925
WARREN $372,600 $477,000 $576,550 $716,550

Improving Your Credit Score

If you have good overall credit but your credit score seems too low, take a careful look at the amount of money you owe on your revolving debt. If your credit cards at or above the maximum limit may harm your credit score.

It may not be necessary to pay off your credit cards. Paying down the balance or increasing the maximum limit may result in an improved credit score.

One common mistake is closing a paid credit card. Leave the credit card open. The relationship to your maximum credit and balance owed will raise your score.

If you close the account, the above effect will be negated. This may actually result in a lower credit score.

 

Click Here for my Free Credit Repair & Credit Score Improvement Handbook. 4 Easy Steps for Fast Results (7 pages).

Real Estate Marketing

If you need additional mortgage or credit related help, contact me. My assistance is without charge (free).

Call me at 732-207-8434 or email mark@njfhapro.com


Sincerely,

Mark Robinson

NMLS License #198843

Licensed by the New Jersey Dept. of Banking


 

Calculating FHA Mortgage Insurance

 

 

 

 

 

As of January 26th, 2015, FHA’s monthly mortgage insurance is .85% for loans with 5% or less down, and .80% with more than 5% down.

If a 15 year mortgage if chosen the mortgage insurance is .70% with 10% or less down and .45% with more than 10% down.

What does this mean for you?

For every $100,000 borrowed, an additional $70.83 will be added to your monthly payment with a down payment less than or equal to 5% (100,000 x .85% /12 = $70.83).

Under the new mortgage insurance rules (06/03/2013), the monthly mortgage insurance will last the life of the loan if the down payment is less than 10%. The mortgage insurance will cancel in 11 years if the down payment is greater than 10%.

There is also a 1.75% up front mortgage insurance (UFMIP) which is allowed to be financed in the loan. What this means to you is an additional $1,750 will be added to your loan for every $100,000 borrowed.

FHA loans are still one of your best financing alternatives. The minimum down payment is low (3.5%) and the rates are excellent!

*Calculations are based upon a 30 year amortization and loan to values >95%. Mortgage insurance will be lower on shorter terms and lower loan to values. Loans  over $625,500, 15 year mortgages, and certain Streamline refinances have different mortgage insurance calculations.