Tag: Mortgage

Lease to Own Instead of Renting


Renters and Home Owners are always working towards paying off a mortgage.  The difference?  Owners are paying their own mortgage and Renters are paying the Owner’s mortgage also.  Years ago, a friend of mine told me that paying rent was like throwing your money down a black hole.

If you are tired of throwing money down “that black hole”, we have a unique plan to turn renters to house owners.  Our Neighbors Healing Neighborhoods program works with Investors that want renters to experience the dream of home ownership for the first time or again if the victim of the past economy.

The program is fairly simple:wishing_stones_in_front_of_a_model_house

  1. Make an appointment to talk with one of our agents to discuss where you want to live, what type of house interests you and what your five year plan is to get your “Dream” Home.
  2. Next, our agents work with you to establish what you can afford now.
  3. This step requires a bit of time doing research with our agents. Drive the neighborhoods to look for the house that is affordable and comes closest to the features you would like in your house.
  4. Once the right house is found, our negotiators and Investors go to work to get the best price for the house. If everything meets our Investors parameters, they purchase the house and do the rehab.
  5. With a low down payment, the family can move into the house as renters.  The downpayment is kept in an account to be used as part of the down payment.
  6. Part of the monthly rental will also go into the account to be added to the down payment amount.
  7. The tenant will sign a purchase agreement for the house to be closed in 12 or 24 months, whichever works best for all parties.

This program has been designed with two goals in mind.  First we want to help displaced home owners and new buyers to experience the American dream of home ownership.  The second goal is to rebuild the neighborhoods in SW Florida.  It’s a win-win-win scenario for the future homeowner, the Investor and the neighborhood!


Mike Cathell,
Broker/Owner, Investment Property ConsultantJ
Real Estate Services of SWFL, LLC

Email:  InvestSWFL@gmail.com

Investing in Discounted Bank Notes Seminar – July 16, 2014



Time to Invest in Real Estate
Click picture for details!


Mortgage News for Military Veterans

Our VA and VA Elite Loans have…
Industry-Leading Rates
Quick Closings
Red Carpet Service
plus you get…
Exceptional Service from Your Local Mortgage Broker
Gary King   239-989-2288   (mobile any time)    NMLS #386955

This is not a commitment to lend. Not all borrowers will qualify for this program. 



Innovative Mortgage News

Our Elite FHA and VA Interest Rates
Lead The Industry !!
If Your Buyer Has a Minimum 720 FICO Score
She/he may qualify for Elite Pricing
* Loans from $175,000 to $417,000
* All fixed-term mortgages
*Primary SFR’s
Combined with fast closings often less than 30 days
We Can Submit & Lock A Loan Up ‘Til Midnight
and you also get…
Exceptional Service from a Local Mortgage Broker
Put these advantages in  

your tool kit to close more deals!
Gary King   239-989-2288   (mobile any time)    NMLS #386955

This is not a commitment to lend. Not all borrowers will qualify for this program.

Ready – Set – Close More Deals! Qualifying Your Buyer

As a real estate agent, how often have you put your buyer and a great property together at the right price, only to find out that they are having trouble qualifying for a mortgage? Well, here’s some information that may help.

The largest wholesale lender in the country has a product called “Pay Advantage” that will lend up to 95% LTV with no monthly mortgage insurance (commonly called M.I.). That’s a big deal, as a $190,000 FHA loan on a $200,000 purchase would require an extra $200+/mo for that M.I. – for the life of the loan! Not only would your buyer be paying an extra $2,500 a year, but they would not even qualify for an FHA loan, unless the property will be their primary residence. Second homes in Florida (or anywhere else) do not qualify for an FHA loan, but they do qualify for a Pay Advantage loan. Of course, that extra $200+/mo also adds some drag on the debt-to-income (DTI) ratio that cannot be exceeded for loan approval.

Now let’s consider the source of your buyer’s down payment for that 95% LTV. In most cases, all down payment and closing costs must be sourced from the borrower’s own funds. Believe me, the underwriters will pursue documentation that verifies those sources – bank accounts, investment accounts and the like. Underwriters will International Home Buyersquestion the source of any major deposits made in the last 60 days and will require a “paper trail” that accounts for any such deposits.

Well, this same lender has a 100% Gift Program that permits the borrower to use a “gift” of funds for the entire down payment, as well as closing costs! That means parents or other friends and relatives can “gift” the money to cover those costs, allowing your buyer to get a mortgage with virtually no out-of-pocket cash. I’m really beginning to like this lender!

Now add in closing times of 23 days, on average, in order to meet or beat your contract dates.

When you put all these advantages together, that can mean more closed deals, higher commissions and faster closings! Want to know more? Just give me a call.

Gary King

Innovative Mortgager, LLC

239-989-2288   mobile   (anytime)

Legislation Affecting Real Estate

From National Association of Realtors November, 2013 Newsletter:

Senate 3% Cap Bill Introduced
On October 28, 2013, Senators Joe Manchin (D-WV), Mike Johanns (R-NE), Carl Levin (D-MI), Pat Toomey (R-PA), Debbie Stabenow (D-MI) and Mark Kirk (R-IL) introduced S. 1577: The Mortgage Choice Act. The legislation is identical to H.R. 3211 in the House. It would make adjustments to the Truth in Lending Act’s (TILA) definition of fees and points to ensure greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule. S. 1577 endeavors to restore a competitive market among lenders by clarifying and rationalizing the definition of fees and points to reduce this discrimination. By doing so, S. 1577 will ensure that consumers have greater access to mortgage credit and also more choices in credit providers. Without S. 1577, both choice and access will be severely reduced, affecting countless consumers and those who serve them. NAR is asking both the Senate and House to ensure the legislation is enacted before the QM rule takes effect in Jan. 2014.

Flood Insurance Affordability Bill Introduced
On October 29, 2013, Senators Robert Menendez (D-NJ) and Johnny Isakson (R-GA) introduced the NAR-supported “Homeowner Flood Insurance Affordability Act” (S. 1610), to delay unintended rate increases under the Biggert-Waters law and its implementation. Representatives Michael Grimm (R-NY) and Maxine Waters (D-CA) have introduced an identical bill in the House (H.R. 3370). The bipartisan measure essentially calls for a 4-year “time out” on further implementation of the rate structure until FEMA completes the affordability study required by Biggert-Waters and also proposes a regulatory solution to issues found in the study. The bill’s delay would apply to any property that is grandfathered or purchased after July 2012, including second homes and commercial properties. The other property owners will still see any rate increases capped at 20-25% a year. The bill would also create a Flood Insurance Advocate within FEMA to investigate and assist property owners with verifying the accuracy of flood insurance rate quotes. The bill was introduced with an impressive list of 15 Senate and 65 House original sponsors. NAR will continue pressing for additional co-sponsorship and urging its immediate consideration by Congress.

New Mortgage Rules – Keep an Eye on this!

By Tim Grant / Pittsburgh Post-Gazette

Federal housing authorities want to make it easier for people who lost their homes due to bankruptcy or foreclosure as a result of the economic downturn five years ago to qualify for a new mortgage — sooner rather than later.

The Department of Housing and Urban Development last month changed its rule requiring a three-year waiting period for people who have lost a home due to foreclosure or bankruptcy, opening the door for them to buy another home in only one year as long as they have fixed whatever financial problem caused them to lose the previous home.

“Three years can be a long time for a family to wait for a loan, and putting money into a rental instead of an investment can result in a loss,” said Don Frommeyer, president of the National Association of Mortgage Brokers in Plano, Texas.

“This is an effort to help boost the housing industry, which is a major part of jump-starting the economy.”images (19)

At a time when interest rates are ticking up and new mortgage applications are on the decline, the rule change could make more people eligible for mortgage loans, even if their credit was ruined during the Great Recession.

But the Achilles’ heel of the rule change is that banks and other mortgage lenders are not required to abide by it.

The new rule, published Aug. 15, gives financial institutions the option of reducing the waiting time to one year for troubled borrowers. But many are likely to stick to the old three-year waiting period.

“The reality of the new HUD rule is it won’t change anything,” said Tom Hosack, president and CEO of Northwood Realty in Franklin Park. “The lenders actually have more stringent internal requirements than HUD does anyway. Lenders still do not feel comfortable lending to people one year out of bankruptcy and are still requiring them to wait longer.”

He said at the height of the housing boom lenders were more impressed with the value of the collateral than the creditworthiness of the borrower. Institutions had the idea that even if the borrower defaulted, the bank could always get its money back from the sale of the property, which at that time seemed headed nowhere but up.

Now with memories of the housing crash still fresh, lenders have gone back to closely scrutinizing the credit history of borrowers to determine their likelihood of repaying loans.

“Banks are being a little too overcautious,” Mr. Hosack said. “But it is the byproduct of them being too liberal for too long. … People who had a bankruptcy or foreclosure are more likely to have a second one, and banks want to make sure people have their act together before making a loan to them.”

Mike Blehar, principal at Green Tree-based financial services company Fort Pitt Capital Group, said he often works with clients who are either buying a new home or refinancing an existing one, which means he deals with several banks.

Even for affluent clients, buying and refinancing real estate is not always a smooth process.

“Every so often, it is a real struggle for some of them to qualify for a refinance,” he said, adding that one case seemed particularly puzzling.

The client, who is an executive for a major corporation in Pittsburgh, was refinancing his home and had to provide a mountain of documentation to show he was a qualified borrower.

What was striking about the case, Mr. Blehar said, is that on the day of the closing, the mortgage company called his client’s office to verify he was still employed even though they had already checked two weeks earlier.

“These mortgage companies are so worried about getting burned again by making bad loans they will go to extremes to make sure they have a qualified borrower,” he said.

An improving economy could bring more people back into the real estate market although, for now, it seems rising interest rates have caused a slowdown.

The Mortgage Bankers Association reported that mortgage applications fell last week 13.5 percent compared to the previous week, marking the eighth drop in 10 weeks. Since the first week of May, the average rate on a 30-year fixed mortgage has jumped from 3.35 percent to around 4.6 percent.

The decline in applications has led several major banks such as JPMorgan, Bank of America and Citigroup to scale back on their mortgage operations, causing thousands of employees to be laid off.

Wells Fargo & Co., the largest U.S. mortgage lender, announced it expects to make 30 percent fewer home loans this quarter due to rising interest rates.

Meanwhile, the Federal Housing Administration will green-light mortgage applications for people who lost their jobs, filed bankruptcy or saw their income reduced by 20 percent or more for a period of at least six months, as along as they can show that it occurred as a result of the recent recession.

The problem must be fixed, and the borrower must show a record of making at least 12 months of on-time payments on all their credit accounts.

They also will need to complete a housing counseling course and meet all other HUD requirements.

Mr. Frommeyer said every lender maintains what is known as an “overlay,” which is its own lending requirement, used in coordination with FHA’s requirements. For example, he said, FHA actually has no minimum credit score requirements for borrowers, while each financial institution has its own minimum score ranging from 680 to 580.

“This is an effort to lower the standards for mortgage loans, but there is no guarantee banks will participate,” Mr. Frommeyer said.

“Let’s face it. The economy is not where it really needs to be yet. This is a way to try to help borrowers who couldn’t make payments. But it’s not an easy fix.”

Tim Grant: tgrant@post-gazette.com or 412-263-1591.
First Published September 16, 2013 12:00 am

Read more: http://www.post-gazette.com/stories/business/legal/new-hud-rule-could-make-more-eligible-for-mortgages-703516/#ixzz2f4sj2IE5


Mike Cathell,
Broker/Owner, Investment Property Consultant
Real Estate Solutions of SWFL, LLC

Cell:  (239) 770-6250   Fax:  (239) 220-5508
Email:  InvestSWFL@gmail.com