Here’s an oversize ranch that’s Eligible for up to 100% USDA Financing! It features 4 bedrooms and a large Family Room overlooking a private back yard. Quiet residential area yet close to the town center.
Ideal for Millennial Home Buyers with a growing family.
Private mortgage insurance (PMI) is required by lenders when a homebuyer makes a down payment on their home of less than 20%. If the borrower is unable to, then lenders will typically look at the loan as a riskier investment and will require the borrower to take out PMI.
It is a type of insurance policy that protects the lender, not you, from losing any money if your home ends up in foreclosure. PMI is also required if you decide to refinance your home with less than 20% equity. How do I pay for PMI?
There are several different ways to pay for PMI. Some lenders may offer more than one option, while other lenders do not. Before agreeing to a mortgage, ask lenders what choices they offer.
The PMI payment is usually paid monthly as part of the overall mortgage payment to the lender. Once the borrower has paid enough towards the principal amount of the loan (the equivalent of that 20% down payment), he or she can contact their lender and ask that the PMI payment be removed. Borrower-paid PMI (BPMI) is when you have monthly PMI payments, you are required to continue paying PMI until your loan balance reaches 78% of the original value of your home. If you would like to cancel your PMI, you must obtain approval from your lender in doing so and your home must reach 20% of the purchase price or appraised value. It is also required to have adequate equity as well as a good payment history. Single-premium PMI means that the premium is paid upfront in a single lump sum. This does not require any monthly payments and can be paid at full at closing or financed into the loan. Lender-paid PMI (LPMI) is a permanent part of your loan. The cost of the PMI is included into the mortgage interest rate and allows for lower monthly mortgage payments. However, with this type, you will end up paying more interest in the life of the loan.
PMI payments on conventional loans are usually cancellable when the loan balance is 78% of the original appraised value of the property.
Payments for PMI can be avoided entirely if you originally make a down payment of 20% of the purchase price of your home. FHA LOANS
There are two types of mortgage insurance to pay on FHA loans
Mortgage insurance is required when borrowers put down less than 20 percent. It insures the mortgage for the lender in case the borrower defaults. When the Loan-to-Value is less than 20%, All FHA loans require the borrower to pay two mortgage insurance premiums. ♠ Upfront premium (UFMIP): 1.75 percent of the loan amount, paid when the borrower gets the loan. The premium can be rolled into the financed loan amount.
Annual premium (MIP): 0.45 percent to 1.05 percent, depending on the loan term (15 years vs. 30 years), the loan amount and the initial loan-to-value ratio, or LTV. This premium amount is divided by 12 and paid monthly. ♠ Monthly Mortgage Insurance Premiums (MIP) are not cancellable. The must be paid for the life of the loan regardless of LTV. USDA LOANS USDA Mortgage Insurance is mandatory on all USDA Loans regardless of your down payment amount. USDA mortgage insurance is made up of two parts; the Funding Fee (or Guarantee Fee) and a monthly Mortgage Insurance Premium (MIP), The Guarantee Fee is added to the amount financed and the Monthly MIP becomes part
Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my Jump Start Mortgage Pre-Approval service.
I am committed to helping your family live comfortably and financially secure in your new home with the Right Mortgage and the Right Rate!
Astute home buyers in select Connecticut communities are very interested in the USDA Guaranteed Rural Housing Development Loan.
They find this mortgage particularly attractive because they:
• Have the ability to finance 100% of the home’s appraised value – No Down Payment is required
• Don’t have to fear risking all their earned savings in a new home
• Can take advantage of today’s low-interest rates
• Afford a more expensive home and still enjoy low monthly payments
OVERVIEW The USDA Guaranteed Rural Housing Development Loan offers many benefits to qualified buyers:
• Up to 100% Financing of the home’s Appraised Value – No Down Payment is required
• Ability to finance Closing Costs when the Appraised Value is higher than the sales price
• One 30 year fixed rate mortgage at low-interest rates
• Buyers with <20% down payment can afford higher priced listings because Monthly MI is cheaper than premiums associated with conventional and FHA mortgages
• No Pre-Payment Penalty. No Re-Capture Tax.
• No limit on Seller Contributions. No limit on Gift Funds » No Cash Contribution required from buyer
• Credit Scores down to 620.
CAVEATS The USDA Guaranteed Rural Housing Development Loan does have a few restrictions:
• The home must be in a USDA “designated rural area”
• Adjusted household income can not exceed established income limits
• Single-family Property only. Must be buyer’s’ primary residence
My expertise with the USDA Guaranteed Rural Housing Loan expands my ability to provide you with the “Right” home financing solution.
Call Meat 860.945.9284 to discuss your mortgage options and to take advantage of myFREE Jump StartMortgage Pre-Approval service. You just might be able to move into your new home in select areas of CT with little or no out-of-pocket money and low affordable monthly payments.
“When You Work With a Professional, You Get Professional Results”
Rick Cignoli is a seasoned Mortgage Professional who brings 40 years of banking, credit union and financial planning expertise to the home buying experience. He is committed to helping his clients live comfortably and financially secure in their home with the Right Mortgage at the Best Rate.
Understanding his clients’ needs with a focus on providing honest answers to their concerns has earned Rick a reputation as a Mortgage Officer you can trust.
Rick particularly likes drawing on his teaching background to educate First Home Buyers on the complicated mortgage process. He can solve your puzzle with his expertise in:
♦ Conventional Mortgages
♦ FHA and the FHA 203K “Fixer Upper Rehab Loan
♦ USDA Guaranteed Rural Housing Development Loan
♦ Hone Possible Loans for Millennial Buyers
♦ FNMA Home Style Rehabilitation Loan
♦ Jumbo Mortgages
♦ And Much More!
Rick is a licensed Connecticut Mortgage Loan Officer and registered with the National Mortgage Licensing Service #76681.
He attended the University of Connecticut and is an alumnus of the Stonier Graduate School of Banking at the University of Delaware.
Rick’s experience and broad knowledge of the financial markets enables him to help his clients with Courtesy, Competency and Concern with the right mortgage at the right rate.
To be sure you have all the right information to make the right financial decision for your family contact Rick at:
I live in a small CT town with a population of about 23,000 persons. According to CityData.com, we have 8,300 houses in town. According toZillow.com & Realtor.com there are currently about 225 properties for sale in town including SF homes, condos, a few multi-families and some land lots. Every Sunday, the local paper lists recent sales in area towns. For the past 5-6 weeks no sales have been reported for our little town. Last Sunday, the paper reported that 24 properties were sold; 30% of which were sold to the bank for a $1. I did a quick check of neighboring towns with lower populations, similar demographics and higher housing density and their figures seemed to be comparable.
Then I read a blog by CTNewsJunkie that cites a report by the state Labor Department and Economic Development Department that seems to blame the housing market for the pain we suffer. The report contends that “if the slowdown in housing, which began in the summer of 2013, continues, job growth will slow this year and again in 2015. They forecast job growth in CT will “slow to fewer than 20,000 new jobs from YE 2013 to late 2015.” Now that’s new jobs statistics and doesn’t consider a contraction of the total work force due to job losses particularly in the Financial Services and Goods Producing sectors.
It has been my contention for the past few months that the Spring Home Buying Season in CT is a Bust. Homes aren’t selling and Buyers aren’t buying because:
o Mortgage interest rates have risen.
o Investor demand for good deals pushed home prices up
o Home values are optimistic in relationship to inventory and demand
o Job security has turned would be buyers and sellers into “Fence Sitters”
o Job growth in CT has been hampered by a lack of any government initiatives to promote a business climate that would create jobs
Now I’m glad I have an extensive network of referral sources to keep me busy! But I am interested in your take on all this. Are you a First Home Buyer, a Mover Upper, a Down Sizer? Or why are you a Fence Sitter? Is this the banner year you expected? Is it a Buyer’s or a Seller’s market? Is the CT housing market out of the woods yet? I am interested in your feedback and welcome your comments.
I don’t have a lot of savings! My credit scores aren’t great! Can I still get a mortgage? The answer is YES! Let’s talk about your situation.
If you think having financial problems will stop you from buying a home, think again! Believe it or not, it may not be as difficult as one may think to purchase a home with less than perfect credit. Here are some common financial problems – and some smart solutions that may help you purchase your new home this spring!
General Tip – Work With a Professional Mortgage Broker Getting a mortgage is an expensive proposition. – and without guidance from a qualified professional you could pay substantially more than necessary. If you’ve got financial issues, going to a regular bank might not be the right solution for you. You may be a square peg that doesn’t “fit” into their square boxes of credit guidelines. Instead, you should work with a Mortgage Broker who has established direct relationships with numerous lenders who offer a a wide range of mortgage options. Why? Well, if you work with them directly, mortgage brokers might be able to direct you to a lender who will make exceptions to the standard underwriting guidelines. For example, I’m working with lenders who consider a borrower with a DTI higher than 43%; and a lender who will accept applications from borrowers with a 580 credit score.
Problem #1 – High Debt-To-Income Ratio (DTI)
If you’ve looked into getting a mortgage, you may have heard the term “DTI.” Just what is DTI and how does it impact your ability to get a loan?
DTI is your debt-to-income ratio – a percentage calculated by dividing all your current debt payments plus what the new mortgage will cost you every month by your gross monthly income. Thenew “ability to repay” rules mandated by the CFPB in January 2014 limit the borrowers to a maximum 43% DTI. The higher the DTI, the higher the risk of non-payment and the harder it is to qualify for a mortgage. If it exceeds 43%, traditional banks will probably decline the request. Solution: You have to reduce your monthly payments.A good place to start is your car. I’m working with borrowers now who pay $600 per month in car payments. What’s done is done, but instead of financing those fancy new car a few years back, they might have considered buying a good used with substantially lower monthly payments. The cars are in good shape,have low mileage, so I suggested that they apply at their credit union for a loan to refinance their car loans for 24-36 months to lower their payments. I could argue that it’s best financial decision, and of course they could still make the former payments, but their DTI ratio would improve to a point where they could obtain a mortgage.
Problem #2 – Low Credit Score A borrower’s credit score is the single most important snapshot of your credit risk by reporting the payment history on all your credit accounts. Lenders perceive a low credit score as a high credit risk and this could negatively impact your odds of being approved for a loan. And if you still qualify for a loan, a low credit score could still cost you. The lower the credit score, the higher the perceived risk and the higher the interest rate to compensate for that risk. Solution: Get copies of your credit report. Go to www.annualcreditreport.com. theOnly Website Authorized By Law to Provide a Free Annual Credit Report. Then discuss your findings with your mortgage broker ask him which areas need improvement. Work with someone you feel is honest, helpful, and has your best interests in mind. In addition to reviewing your overall credit situation, be sure to continue to make all payments on time; pay your credit card balances below your 50 percent of your approved credit line. These steps alone will help show the credit agencies that you’re a better credit risk and help improve your scores. Caution: Do not clear up active collections against you without discussing the ramifications with your mortgage broker.
Problem #3 – Low Down Payment A major factor deterring home buyers today is saving the cash for the down payment on a home, the closing costs, and still having a few dollars left over in reserves. This is where your mortgage broker and your Realtor, working in tandem, can help. Solution: Depending on your situation, you might be able to find a way to buy a home with a low down payment and still preserve your hard earned savings. There are a number of strategies and loan programs that help you get closer to your home ownership dreams. • Conventional Loan: If you have a fairly good credit score, you might be able to qualify for a mortgage with a down payment as low as 5 percent. The lower the score the minimum down payment may increase to 10%. • FHA Loan: TheFederal Housing Administration (FHA) loan option might be the right choice if you have a low credit score limited cash. With an FHA loan, the minimum down payment is 3.5% even if you credit score is in the 620 range. Some lenders will work with a borrower with credit scores down to 580 with overlays to compensate for the perceived risk of default. It doesn’t hurt to talk to your mortgage broker about both these options. • USDA Loan: In my opinion, the USDA Guaranteed Rural Housing Development Loanprogram is the best deal in town for those with limited savings. It offers 100% financing for eligible properties in USDA approved communities. Closing costs can be rolled into the loan amount when the appraised value exceeds the contract sales price. There is no limit on gift funds or seller concessions
• VA Loan: The Veterans Affairs (VA) loan has similar criteria as the FHA loan. But it’s targeted to serve toward past or present military personnel. Veterans may also be able to purchase a home with no down payment through a VA loan. • Seller Concessions: In certain negotiations, the property owner may be willing to entice eligible buyers to purchase their home by offering to contribute up to 3-6% of the contract price toward the buyers closing costs. It’s important to talk to your mortgage broker and your real estate agent about this option. It’s also important for the buyer to understand that they “can’t have their cake and eat it too.” Buyers can’t expect to offer less than the listing price and still ask for concessions. You may have to pay full price and then hope the seller will take less for the property. • Gift Funds: Funds for the down payment and/or closing costs can be gifted to the borrower from a close family member. It is important to discuss this possibility with your mortgage broker as different loan programs have different limitations on how much the borrower must contribute to the transaction and how much can be gifted. Sourcing the receipt of gift funds, especially wedding gifts, has been a problem for 15 years. DO NOT deposit gift funds into any account without talking to your mortgage broker. • State-Sponsored Down Payment Assistance: Another option for borrowers are down payment assistance programs sponsored by certain states, municipalities, and non-profit organizations. They may be offer to teachers, police and firemen who plan to live in their city and/or earn below a certain income level. These programs may be limited to first-time homebuyers. Check with a broker who specializes in these types of programs.
Summary: Low credit scores and/or lack of funds may be just a bump in the road to owning your own home. Talk to your mortgage broker about what it takes to get Pre-Approved for a Mortgage and how to get over these hurdles.
Still Have Questions or Concerns? Call Meat 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Mortgage Pre-Approvalservice. Then you can call your agent to schedule a showing and be ready to make an offer.
With today’s attractive rates, and my direct relationships with trusted lenders who offer a wide range of affordable mortgage programs, you just might be able to move in with a minimal down payment and low closing costs
Like many other businesses, the mortgage industry faced many challenges in 2013. Already, the rules of the game have changed the playing field for 2014.
But I’m, still in the game! Clients,like you, will need my support more than ever. So I ask … Do you want to join me on the field?
Purchase or Refinance … I’m here to help you make 2014 the Best Year Ever!
When I first meet with a client, I always ask, “How comfortable do you feel paying a monthly housing obligation … including a mortgage payment, home insurance and mortgage insurance?” This is a different approach to the mortgage process and gets them talking in real numbers about their family finances. Typically, we wind up “backing” into the size of a house they can buy and the amount of a mortgage they can afford. I can’t remember when I’ve ever had an issue with a buyer’s “Ability to Pay.”
For everyone else, the Dodd-Frank Act created the Consumer Finance Protection Bureauwhich in turn created the proposed Qualified Mortgage. The CFPB’s QM regulations are meant to assure residential borrowers that their mortgage loan is right for them. Included in the regulations is the provision that the highest debt to income ratio on all mortgages is 43%. The 43% would be the total of the proposed housing expense, plus any, installment, credit card debts, alimony and/or child obligations as a percentage of the borrowers’ gross monthly income. Sounds like a good idea? … Right!
Now I am giving you a very simplistic overview here as there are many factors that affect a impact a families ability to pay. But, presently I am getting Conventional mortgages approved up to 45%: FHA and the USDA are insuring some loans with 49% to 55% ratios. These are very rough numbers, but you get the idea. What all this means is that many families will not be able to become homeowners or refinance when these regulations go into effect on January 14, 2014.
From everything I keep reading, there will be new players coming into the market to fill in the gap. This will be the new “Subprime Mortgage Market.” I can assure you, when private investors enter the market and cannot sell their loans through normal channels; it will cost the consumer much more money.
The Dodd-Frank Bill has created more jobs in Washington than any other government body to put these regulations together. I’m just not sure that it should be called the Consumer Financial Protection Bureau.
Mortgage Interest Rates are down this week to a new 4 month low, Conventional pricing is about 4.125% for buyers with good credit, a 20% down payment and the ability to pay all closing costs. FHA and USDA rates are around 3.750% with USDA being the market choice with its significantly lower mortgage insurance costs.
On the flip side, Housing prices are stable compared to their rapid appreciation earlier this year. The housing market continues to favor investors and other buyers paying in cash for distressed properties that appear to be appreciating in value.
Sellers have been waiting to cash in and the good properties will go quickly. I’ve already had 2 First Home Buyers this month who lost out in bidding wars for nice homes. Both had great credit and 20% down; they just couldn’t close as quickly as the competition because they weren’t Pre-Approved for a mortgage.
There’s still time to move into a new home by the holidays and take advantage of potential tax benefits this year. Now’s the Time to Buy!
FHA says they should have done less business in the past and (to pay for their sins) they should do less business in the future. To help that process along, they drastically increased the Up Front Mortgage Insurance Premium (UFMIP), doubled the cost of the Monthly Insurance Premium (MIP), and will require the MIP to be paid for the life of the loan.
Guess what? Their wish is coming true! The Government Agency created in 1934 to “assist in providing housing opportunities” for American families saw their application volume drop by 50% in June. At a time when mortgage rates were near all time lows, FHA priced them self out of the market. Great help they are!
Many features of a FHA Mortgage make it an attractive mortgage option for First Home Buyers. However, the cost of the mortgage insurance makes the monthly obligation too expensive. I’m working on two transactions now. Each has challenges that could have been addressed with a FHA loan in the past. One will be done as a conventional mortgage with a higher rate but lower MI for a savings of $60/month; the other, luckily, as a USDA Loan with a similar rate and MI that is 1/3 the cost of FHA premiums.
I don’t think I’ll recommend a FHA Insured Mortgage to my clients unless that’s the only way to get them in a new home.