The VA understands that some VA borrowers may have had some credit issues in the past. So the VA is fairly flexible and willing to work with veterans and active military when it comes to their credit scores and getting approved for VA financing.
Below is an overview of how the VA will evaluate certain derogatory issues on your credit:
- Credit score: Generally it helps to have at least a 600 middle credit score. You have one credit score from each of the three credit bureaus, VA lenders throw out the high and low scores and use your middle score to qualify. If you have below a 600 score, contact me and I can analyze your credit and possibly quickly raise your score.
- Past Bankruptcy: Bankruptcy 7 requires two years to have elapsed since discharge to be eligible for a VA Loan. Bankruptcy 13 requires 1 year since, on time payments and permission from the court. If you have major extenuating circumstances that can be documented, exceptions can be made.
- Foreclosures: Two years since foreclosure sale. Short sales are considered foreclosures and require two years.
- Collections: It is on a case-by-case basis with the VA underwriter whether you will have to pay these off before being approved. Generally medical collections will not have to be paid but you will need an explanation. Non medical collections over $5,000 may have to be paid.
- Judgments: Must be paid in full or a satisfactory payment plan in effect at time of application with no late payments.
That is just an example of some VA Loan requirements related to credit. VA streamline refinance IRRRL’s in many cases do not require a credit report.
If you have any questions about getting approved for a VA Loan and/or you would like to go over your credit report with me, please give me a call at 858-922-7899 or don’t hesitate to email me at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and VA Loan specialist)
858-922-7899
Many people would like to take advantage of the current low real estate prices and interest rates and rent out their current primary residence and buy a new primary residence. Especially with the $8,000 home buyer tax credit expected to be expanded Friday to include move up buyers. However the lenders have created some rules around allowing this that I will outline below. These rules apply to both FHA and conventional loans.
Basically, when you apply for a FHA loan or conventional loan and you want to rent out your current residence and buy a new primary residence, you must be able to qualify with both housing payments included in your debt-to-income ratio. There are two exceptions below that would allow you to count the rent if you are able to rent your current primary residence before you buy a new one:
1. Job relocations. If you are being relocated with a new employer or being transferred to a new employer you can use the rent from the house you are vacating to help qualify. But you must have a one year lease in place and evidence that a security deposit was paid to you.
2. Equity in property being vacated. If you have 25% or more equity in the residence you plan to vacate (determined by an appraisal or comparing the current loan balance to the original purchase price), again you can count the rental income towards qualifying for a FHA Loan or conventional loan on a new primary residence. But once again you need to have a one year lease in place and have collected a security deposit.
Now you might, ask what if you don’t fall into one of the above categories and you want to keep your current house as a rental and buy a new primary? Well, if you are able to move out into a rental property and get your current house rented for a number of months and have those rents show up on schedule E of your tax return, you have a good chance of being able to use the rents to qualify. But generally the rents have to show up on your returns.
Many times there are exceptions and further details around these rules as they are not set in stone. So please give me a call if you have questions about your particular scenario at 858-922-7899 or don’t hesitate to email me at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
No official announcement yet from the White House, but word is that that home buyer tax credit will be extended to April 30th 2010 and expanded to include some move-up home buyers. The tax credit is one of those “once in a generation” type of windfalls that is a huge financial benefit for those buying a house. In summary, once you close on a home and you qualify for the tax credit, in weeks you will get a check for up to $7,290 in a refund for federal taxes that you paid. That is an absolutely insane gift from the Government, and has never been seen before and may never again. So it is worth it to try and take advantage of this tax credit and purchase a home by April 10th 2010. And using a 100% financing VA loan to purchase the house is a wonderfuk way to do this.
Some main points of the new tax credit below:
Please give me a call at 858-922-7899 if you have any questions about applying for a VA Loan or don’t hesitate to email me at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and VA Loan specialist)
858-922-7899
The official announcement has not come, but word is that that home buyer tax credit will be extended to April 10th 2010 and expanded to include some move-up home buyers. The tax credit is one of those “once in a life time” type of windfalls that is an unparalelled benefit for those buying a house. In short, once you close on a house and you qualify, in weeks you will get a check for up to $7,290 in a refund for federal taxes that you paid. That is an absolutely insane gift, has never been seen before and may never again. So it is worth it to try and tax advantage of this tax credit and buy a home by April 10th 2010. And using a 3.5% down FHA loan to purchase the house is a great way to do this.
Some highlights of the tax credit below:
And remember, FHA loans are not just for first time homebuyers. They are available to ANYONE who buys a primary residence. So “move-up” buyers who want to take advantage of the tax credit can also use a FHA loan to finance their new home.
Please give me a call at 858-922-7899 if you have any questions about applying for a FHA loan or don’t hesitate to email me at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA loan specialist)
858-922-7899
For the lucky active military members and veterans that are eligible, VA Loans are best loans available today period. If you have VA eligibility and you are looking to buy or refinance your home, it is really worth getting pre-approved to get a VA loan today.
Here are some of the many highlights of the VA Loan:
- No down payment – 100% financing. There is no other mainstream loan that offers 100% other than VA homeloans today.
- No monthly mortgage insurance. Every other loan today with less than 20% down requires monthly mortgage insurance which creates a higher monthly payment.
- No reserve requirement. Many other types of loans require the borrower to have a certain amount of cash in reserves after closing, VA does not.
- 30 year VA interest rates are still in their lowest ranges in 50 years
- VA loans are not credit score driven. If you think you have bad credit, you may still be able to qualify for a VA loan.
- VA loan requirements are flexible. VA has more flexibility with income ratios and credit than all other loans today.
- VA loans are fully assumable. If you take advantage of today’s low interest rates and get a VA loan today. Down the road when interest rates may be higher and you want to sell, you will have an extremely attractive option to buyers able to assume your loan 30 year fixed loan.
- VA loans offer cash-out refinances to high loan-to-values
- VA loans offer interest rate reduction streamline refinances with easy qualification
- VA loans available to reservists as well
So that is a review of just some of the highlights of the VA loan. VA loans are truly an amazing benefit to those that have served in the U.S. military.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and VA Loan specialist)
858-922-7899
With the current unemployment rates across the U.S. it is common for many people to be receiving some kind of unemployment compensation. There are some cases where you can use unemployment income as income when getting approved for a FHA home loan to buy a house.
Generally, to use unemployment income, you must have been receiving it for the last two years. We will ask for copies of your last two years tax returns to show that you have been receiving it. The borrowers that are generally able to unemployment income to qualify are seasonal workers who are laid off at specific times every year. For example someone who works in the fishing industry for six months and then is laid off for six months, would have a excellent chance at being able to use unemployment income to help qualify.
The FHA loan is the best loan today to buy a house with a small amount down. Here is a review of some of the highlights:
- FHA loans are not credit score driven, even if you think you have bad credit you may qualify
- Only 3.5% down required and that can be a gift from a relative
- The seller is allowed to pay all your closing costs
- Flexible underwriting standards
- 3.5% down also on duplex, triplex and fourplex properties
- Loan amounts up to $729,000 in many areas
Please give me a call at 858-922-7899 if you have any questions or don’t hesitate to email me at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
Many people throughout their lives have some rough patches with their credit. If you apply for a VA Loan and are having difficulties because of you credit score, there is a way to raise your credit scores very fast with something called a credit “Rapid Rescore”. This is something I can assist your with as a FHA approved loan officer.
Here’s how the rescoring process works. First I will check your credit, analyze it and discuss it with you. If your credit score is too low to be approved for a VA Loan, or if you would like to get a better interest rate as a result of having a higher score, we can discuss the Rapid Rescore opportunities with your credit. I have access to a software tool that allows me to perform a “what if” analysis on your credit. This “what if” tool allows me to alter items on your credit, and project how many points your score would rise “if” we were able to update and/or correct certain items.
With the Rapid Rescore, we will first find items on your credit that we can improve, then you will take the actions needed and send me the documentation and I will perform the rescore directly with all three credit bureaus. The rescore allows us to make the updates to your credit and have the scores updated within 2-5 days. Whereas it can take 45-60 days for changes you make on your own to report to the credit bureaus. With the Rapid Rescore we work directly with the credit bureaus to update the information quickly and get immediate feedback.
Some common items we might change to improve your credit score to qualify for a VA Loan are; paying down revolving balances to <30% of your credit limit, redistributing those balances to different accounts, or having derogatory items deleted off your credit that are mistakes or that you can work out with creditors. But there is much more we can counsel and assist you to do after analysis of your credit.
Please don’t hesitate to send me out an email at homeloan8@gmail.com or call me at 858-922-7899 with questions. Warm Regards, Rob Chomentowski Sr. Loan Officer (and VA specialist) 858-922-7899 homeloan8@gmail.com
Many people throughout their lives acquire bumps and bruises on their credit. If you apply for a FHA Loan and are having difficulties because of you credit score, there is a way to improve your score incredibly quickly with something called a credit “Rapid Rescore”. This is something I can assist your with as a FHA approved loan officer.
Here’s how a Rapid Rescore works. First I will check your credit, analyze it and go over it with you. If your score is too low to get a FHA Loan or if you would like to get a better interest rate that having a higher score can get for you, we can discuss the Rapid Rescore possibilities with your credit. I have a software tool that allows me to perform a “what if” analysis on your credit. This “what if” tool allows me to change items on your credit and project how many points your score would change “if” we were able to update and correct certain items.
With the Rapid Rescore, we will identify items on your credit that we can improve, then you will take the actions needed and send me with the documentation and I will perform the rescore. The rescore allows us to make the corrections to your credit and have the scores updated within 2-5 days. Whereas it can take 45-60 days for changes you make to your credit to naturally report to the credit bureaus. With the Rapid Rescore we work directly with the credit bureaus to update the information quickly.
Some common items we might change to improve your credit score are paying down revolving balances to <30% of your credit limit or redistributing those balances to different accounts, or having derogatory items deleted off your credit that are mistakes or that you can work out with creditors. But there is much more we can counsel you to do after analysis of your credit.
Please give me a call at 858-922-7899 if you have any questions or shoot me off an email at homeloan8@gmail.com.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
Right now there is a little over a month left until the expiration of the $8,000 tax credit for home buyers and of course home buyers getting VA Loans to qualify. And keep in mind that you must close by Nov 31st to get the tax credit. That means you probably have to be in contract to buy probably in roughly two weeks to make sure you qualify.
Here’s a Q&A review for you VA loan buyers to see if you qualify for the tax credit:
Q: Who is eligible to claim the $8,000 tax credit?
A: First Time Home Buyers of any purchasing any kind of home- new or resale.
Q: What is the definition of a FTHB?
A: The law defines “first-time homebuyer” as a buyer whom has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law test homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past 3 years but your spouse has owned a principal residence, neither you nor your spouse qualified for the first time home buyer tax credit.
Q: Are there income limits to determine who is eligible to take the tax credit?
A: Yes. Homebuyers who file their taxes as single or head-of-household taxpayers can claim the credit if their modified adjusted gross income (MAGI) is less than $75,000. For married taxpayers filing a joint return, the MAGI limit is $150,000. The limit is based on the buyer’s modified adjusted gross income for the year that the house is purchased, except for certain purchases in 2009. Read below for other selling advantages on this one. For the definition of MAGI see the IRS.Gov website.
Q: I heard that the tax credit is refundable. What does that mean?
A: The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for the portion or even the entire amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax LIABILITY of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the tax payer qualified for the $8,000 home buyer tax credit. As a result, the tax payer would receive a check for $7,000. ($8,000 minus the $1,000 owed.)
Q: What is the difference between a tax credit and a tax deduction?
A: A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means a taxpayer whom owes $7,500 in income taxes ands who receives a $8,000 tax credit would owe nothing to the IRS.
Q: For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on which year my credit amount is the largest?
A: YES. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit. So, the borrower can amend 2008 returns if already filed, and receive the credit now!
Don’t hesitate to give me a call if you have any questions or need to get approved for a VA Loan.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and VA Loan specialist)
858-922-7899
In the past if you obtained a FHA loan on a condo it wasn’t required for you to have an individual homeowner’s insurance policy (as it is on single family homes). But this has changed and FHA lenders are now requiring borrowers to obtain a 12 mos “walls-in” insurance coverage policy equal to at least 20% of the subject properties appraised value. If the master or blanket insurance policy held by the condo HOA covers fixtures and equipment inside each unit, you will not need to obtain a “walls-in” policy. But most condo project master policies do not include this.
FHA lenders at this time are not adding the cost of this insurance into a borrowers qualifying housing payment for a condo purchase. But with conventional loans, lenders are starting to add this into the qualifying housing payment. The yearly homeowners insurance policy divided by 12 is included in the borrowers housing payment for qualification.
So when you are getting approved for a FHA loan for a condo purchase, keep in mind that you will probably need “walls-in” insurance coverage before the lender will fund your loan. You will need to pay for a full year policy up front, so that will be a cost added to your total closing costs.
Warm Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899