Q: What is the maximum amount for a FHA loan?
A: The amount varies by county and state. Please refer to the US Housing and Urban Development website to determine FHA Mortgage Limits for your particular county.
Q: What is a FICO score?
A: A FICO score is a credit score computed using proprietary formulas of the FICO Corporation. It predicts the likelihood of becoming at least 90 days delinquent on any credit obligation within the next two years. Most lenders will use the FICO score but many will also include additional criteria (application data) in their credit decision.
Q: How long do I need to wait to buy a home if I have filed bankruptcy?
A: The minimum time frame is two years after bankruptcy filing to be considered for FHA or VA financing. Conventional loan requirements look for a longer time frame, usually four years or more. The best advice is to speak with an Allen Tate Mortgage Consultant about your personal situation, as the circumstances, time since filing and credit history since filing all impact what financing options are available to you.
Q: How is a FICO score computed?
A: The FICO score is computed from a proprietary formula based on five different categories of information:
- Payment history – 35 percent
- Amounts owned – 30 percent
- Length of credit history – 15 percent
- New credit – 10 percent
- Types of credit in use (“healthy mix”) – 10 percent
Q: Why are there three different FICO scores?
A: FICO adjusts its FICO score formula for each of three national credit reporting agencies – Experian, Equifax and TransUnion – to take advantage of their unique data strengths. In addition, not all credit information is reported to all three credit bureaus, and there can be errors in a person’s credit record, such as information on accounts of other people due to similar names, addresses or Social Security numbers.
Q: What types of programs do you offer for first-time home buyers?
A: There are numerous programs available for first-time buyers. They vary depending on the amount of funds you have available for a down payment, your income level and your credit score. The best way to determine the best options for your particular situation is to meet with an Allen Tate Mortgage Consultant.
HARP 2.0 Refinance Loans
Q: How can I determine if I am eligible for a HARP 2.0 refinance?
Q: Will being late on my mortgage affect my ability to refinance under HARP 2.0?
A: You must be current on your mortgage to refinance under HARP 2.0 – no late payments in the past 6 months. You may, however, have 1 late payment in months 7 through 12.
If you are currently late on your mortgage, you can wait until you meet these criteria and refinance at that time. Your refinance must close by Dec.31, 2013.
Q: Do I need to be employed in order to refinance my home?
A: Yes, we will need to verify your income and employment for a refinance under HARP 2.0.
Q: What if I have a 2nd mortgage?
A: Assuming you qualify under HARP 2.0 guidelines, you can refinance if you have a second mortgage.
There is no cap on the Combined Loan-To-Value (CLTV). However, the bank that holds the second mortgage will have to agree to subordinate the second mortgage. Some lenders will charge a fee to subordinate your loan. Check with your lender.
Q: Will I need to have an appraisal done on my home?
A: It depends. The loan will be processed through Fannie Mae and Freddie Mac’s underwriting system and they will determine if you need an appraisal or not. Many HARP 2.0 refinance loans will not require an appraisal.