VA and FHA details for sellers

This is a newsletter that I receive from Randy on a regular basis and it warrants a close look.

Today I want to revisit the different closing cost fee’s that are charged to a home seller for a V.A. or FHA buyer.
As you may already know if you have a listing and a Veteran buyer wishes to purchase this home using his V.A. eligibility,
Your seller will be on the hook for some additional closing costs.
By simply accepting an offer from a V.A buyer a seller will be responsible for paying the – Underwriting fee, the Document Preparation fee, the entire Escrow fee (Both sides), and the Tax service fee.
The seller will also be responsible for a termite inspection – the Veteran cannot pay for any of these fees.
Now these fees will vary from company to company but you should expect them to add up to some where in the neighborhood of $700 to $1000.
The Veteran still has his or her own closing costs such as Appraisal fee, Origination fee, Title Insurance, etc.
And I am certain you remember that the eligible V.A. buyer does not need a down payment and they will not have PMI in their monthly payment.
This is really THE only zero down loan we still have available – you just need to have served your country for 4 years in order to qualify for this loan.
Considering most of our buyers do not have any money, it usually ends up that the seller will pay all closing costs anyway.

FHA has changed over the years – it used to be an FHA buyer was not allowed to pay for several fees but this has changed and now the FHA buyer is responsible for all of their closing costs, and the seller who accepts an FHA buyer does not inherit any of their fees.
This is still a moot point most of the time since again, our buyers have very little money and they will be asking the seller to pay these costs for them.

I hope this clarifies the additional fees on both FHA and V.A charged to your sellers.
If you have any questions I would be happy to answer them.

Have a great day!

Randy Milani
Vice President
Consumers Mortgage Corporation
1953 Englewood Ave.
Akron, Oh. 44312
Office: 330-798-4677
Fax: 330-798-4678
Cell: 330-603-7400
Email: rmilani@consumersmortgage.com

From the Desk of Randy Milani

( Just as an introduction, Randy is one of the finance officers I use for my buyers and this is one of his weekly e-mails.)

It occurred to me I have not sent out any new rates for nearly a week now, also I wanted to inform you of the latest changes in the mortgage industry regarding FHA loans.

Interest rates have been inching upward for the better part of 2 weeks but they are still excellent.

A conventional 30 year fixed rate today would be 6.25% on loan amounts over $100,000.
FHA is still excellent at 6% for a 30 year fixed rate on loan amounts over $100,000.

In all, rates are holding but if your buyers plan on “waiting until they go back down” – well they just may be in for a long wait.
A better idea would be to lock in now before the rates climb any higher.

Now onto FHA – there are now minimum credit scores required for FHA loans – this is not coming from HUD but the lenders who purchase these loans.
We work with nearly 15 lenders across the country, very large lenders like U.S. Bank, Citimortgage, Huntington, Wells Fargo etc.
These are lenders who purchase government and conventional loans from Consumers Mortgage.
All of these lenders have set a minimum credit score of 580 on FHA loans - in other words, they will not purchase any FHA loan with a credit score below 580.
Actually they are saying they will not purchase any manually underwritten loans below a 580 score.
If your buyer has a 579 credit score and their loan gets approved through the automated underwriting system then that is o.k.
Chances are if the score is below 580 it will not be approved in the automated system anyway.

I know what you are thinking - what in the hell is he talking about?
This all means we will be unable to get loans approved any longer with borrowers who have low credit scores.

I have a solution! I have always in the past and will continue to counsel these buyers until their scores are above 580.
They need to contact me and be willing to sit down and work on a solution to clean up their credit, I will help them in any way I can.
These buyers – once they have their credit fixed – are usually they most appreciative buyers you will ever work with.
Tell your buyers to call me and we will get started. I don’t know about you but I am willing to put the time and effort in to turn these renters into home owners.

Have a great day!

Randy





Randy Milani
Vice President
Consumers Mortgage Corporation
1953 Englewood Ave.
Akron, Oh. 44312
Office: 330-798-4677
Fax: 330-798-4678
Cell: 330-603-7400
Email: rmilani@consumersmortgage.com

Buyer's agent ???

What is a Buyer's agent and why do I need one ???
Unless you are well versed in the aspects of buying Real Estate, you do need someone totally commited to your goals and looking out for your best interests.
Quite frequently, I hear potential buyers say, "I was just driving around and calling the name on the Real Estate sign in the front yard."
I wence every time I hear this, reason being; regarding that property, it is legally impossible for the agent named on that sign to hold your best interests at the forefront of all their actions.
Why ?
Because they have a written contract with the seller to hold the seller's interests as a priority and at the forefront of all actions.These commitments are know as Fiduciary responsibilities.
They are very similiar to the responsibilities that any good Physicain has to you and your health.
Therefore, doesn't it make good sense to secure the services of an experienced Realtor, especially since it costs you NOTHING ?

Primarily, I work with buyers, especially first time buyers. Taking the time to ask questions and explain each step in the home buying process is the best way to reach your goals.