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Andrew Martinez's Blog

By - Andrew Martinez - | Mortgage Broker
or Lender in Sacramento, CA
  • Most common home mortgage myths busted

    Posted Under: Home Buying in California, Financing in California, Credit Score in California  |  August 10, 2013 1:34 PM  |  229 views  |  1 comment

    With increasing home values more homeowners are becoming eligible to refinance their home mortgage. However, before you jump into refinancing your home, make sure you educate yourself on some of the most common mortgage  myths.

    Mortgage Myth # 1 – You can find an accurate total cost of your mortgage by using the interest rate true of false

    The best way to find the cost of your mortgage is through the annual percentage rate. The APR includes your points, interest rate, and other fees. Just about every applicable fee falls under the umbrella of an APR except your homeowner’s insurance policy. Many lenders advertise based on an interest rate, which is misleading because it’s the APR that better represents what you’ll be paying, not your interest rate. When you are comparing different mortgages, make sure to study the APR.

    Mortgage Myth # 2 – Mortgage rates are revealed and made official once a day

    Mortgage interest rates can fluctuate throughout the day, much like a stock or bond does. A mortgage is a security sometimes there is large movements in the markets that will cause changes to mortgage rates. It is recommended to get multiple loan quotes because frequent changes in the lender’s supply as well as market rates can turn a great deal into a bad one.

    Mortgage Myth # 3 – The law requires all lenders to charge the same fees for quoting services

    Simply put, there is no regulation or law that standardizes the fees lenders charge. This isn’t necessarily a bad thing: Lenders often waive fees to gain a leg up on their competitors. When looking at your Good Faith Estimate review the Lenders or Mortgage Brokers origination charges. This will be found in Box A of your GFE, and include all fees being charged to the borrower. Part of smart shopping includes comparing these types of fees.

    Mortgage Myth # 4 – Whoever pre-approves me must also provide my mortgage

    You don’t have to get a mortgage with the company that pre-approves you. It is only a handshake agreement that states how large of a home loan can be covered by the lender. It is recommended to get multiple loan quotes before going on to the next step.

    Mortgage Myth # 5 – Having a checking account with the bank ensures the most favorable rates

    Sure, it’s possible to receive a discount or a “customer-appreciative” rate on your mortgage if you bank with the lender. Banks are in it to make money too, so it’s very unlikely. If you’re concerned about getting the best possible rates, seek multiple quotes, and choose the best deal you are offered.

    Mortgage Myth # 6 – Lenders will consider yours and your spouse’s credit scores equally when determining an interest rate

    Better hope your spouse has good credit: Banks will consider multiple credit reports from both borrowers, choose the median score for each, and then take the lower score of the two. Ultimately, whoever has the weaker credit score on average will affect the interest rates more.

    Mortgage Myth # 7 – Your down payment must be higher than 5 percent to secure a home loan

    You can actually secure a home loan with as little as a 3.5 percent down payment. The Federal Housing Administration provides assistance to those who need help securing a home loan. So do not get discouraged!

    Mortgage Myth #8 – Short sales or foreclosures require you to wait at least 7 years before securing another home loan

    If you buy a home after a short sale, depending on the down payment and loan type you choose, you’ll need to wait about 2 to four years. A foreclosure requires you to wait 3 to 7 years before being able to secure another home loan. It takes a while to rebuild your credit score to a level that allows lenders to loan you money.

    Mortgage Myth # 9 – If you can’t keep up with your current home loan, you cannot refinance

    Millions of homeowners who are having trouble with their current mortgage can refinance using a special government program. The FHA Streamline Refinance has been changed to help homeowners with loans that are insured by the Federal Housing Administration. The Home Affordable Refinance Program is available to assist homeowners with loans supported by Fannie Mae or Freddie Mac. Each program helps homeowners refinance into a lower interest rate, thus lowering mortgage payments without putting additional stress on the homeowner. There are some useful tips for homeowners who fall behind on their mortgage.

    First off, don’t ignore the problem. The higher the expenses that pile up the harder it is to get help with your loan, unnecessarily increasing the chances that you lose your house.

    Be pro-active and get in touch with your lender as soon as you find yourself with problems paying the mortgage. They don’t want to take your house any more than you want to lose it; they provide options to assist mortgage holders through tough times.

    Make sure you’re aware of your rights. Gather all documents related to your loan and go over them. Make sure that any actions your lender makes are within the terms of service agreed upon with the mortgage.

    Other than obvious changes like limited spending or liquidating assets, the last thing you need to know is to avoid “foreclosure prevention institutions.” You don’t need to waste money for foreclosure prevention advice (which will be things like “spend less”). Some companies may contact you saying they can negotiate a better deal with your lender. Even if it’s legitimate, it doesn’t mean there isn’t some large fee involved.

    Mortgage Myth # 10 – Homeowners can refinance  once a year

    If one has a conforming loan backed by Freddie Mac or Fannie Mae, they can refinance as many times as they would like providing that they do not take any equity out. As long as the homeowner is refinancing to lower the interest rate or length of their mortgage, they can refinance as many times as frequently as they like. The best thing to do is waiting until the difference between the current interest rate and the interest rate you’ll receive through refinancing is enough that it would save the homeowner money each month to cover the cost of refinancing in three years. The length of time that a homeowner plans on living in the home should be taken under consideration. The benefits of refinancing grow the longer the homeowner owns the home. The best way to measure all these calculations is with a refinance calculator. Using a refinance calculator can help you decide when you should refinance, and how long it would take to break even given the rates provided. The real estate market is starting to show signs of improvement. It’s a great idea to re-acquaint you with the ins and outs of mortgages!

    We are here to educate and set home mortgage borrowers straight. Know the common  mortgage myths , use refinance calculator and know when to refinance. Should you have questions, please give us a call or visit www.loancityhomeloans.com

  • Homepath Renovation

    Posted Under: Home Buying, Financing, Foreclosure  |  November 9, 2011 2:28 PM  |  509 views  |  2 comments

    Homepath Renovation: Step by Step 

    Only available on properties acquired from Fannie Mae that require moderate renovation and designated by Fannie Mae on the www.homepath.com website as eligible for HomePath Renovation financing. Lender must document the file with appropriate pages printed from www.homepath.com showing that the property was eligible for HomePath financing. 

    Borrower must be an individual, US citizen, permanent resident alien or non-permanent resident alien. 

    1-4 unit properties only. Manufactured homes, condos and co-ops are not eligible 

    1-unit owner-occupied 97% max loan to value 2-4 units 75% max loan to value 

    The LTV is calculated from the LESSER of the purchase contract plus the total renovation costs (which includes renovation costs and required contingency) or the “as- completed” appraised value. 

    Full “as-completed” appraisal required. 

    The renovations must be completed within six (6) months after the closing date. 

    Total Cost: The total renovation costs, including contingency, may not exceed the LESSER of 20% of the “as completed” appraised value or $35,000. No work can be started prior to closing. Rehab solely for foundation work is not permitted. Any foundation repairs may require a licensed foundation contractor. 

    Borrower may use more than one contractor; however, additional doc prep charges may apply. Each contractor must submit a Contractor Questionnaire, be accepted by the lender for the program and provide a W-9. Do-it-yourself projects are not eligible. 

    Do-it-yourself Projects. “Do-it-yourself” borrower projects are not allowed. 

    Renovation Escrow Account. Funds for renovation will be placed in an insured, interest-bearing account. 

    Minimum Credit score required is a 660 

    Max Debt to Income allowed is 45% (may allow up to 50% with strong compensating factors) 

    Mortgage Insurance is not required; however loans with LTV’s over 80% are subject to applicable loan-level pricing adjustments. 

    Loan Terms are 30 year fully amortized fixed rates ONLY (No balloons; ARMs; Interest-only) 

    Escrow deposits for taxes and insurance will be established at closing. Borrower must provide paid-up first year’s homeowner insurance policy as a requirement of loan closing. 

    Contractor: Contractors must be licensed and/or registered as required by individual 
    State and/or local guidelines. All contractors must meet credit and reference guidelines as established from time to time by Construction Loan Committee and in accordance with FNMA HomeStyle guidelines. A Contractor Questionnaire must be filled out and signed by the business principal and include vendor and homeowner references related to the proposed project(s). 

    Contractor Questionnaire: Contractor(s) must be designated for the construction project. The contractor(s) must complete a Contractor Questionnaire. Include a complete Questionnaire and send to the Construction Lending Department. Contractors must be registered or licensed in accordance with applicable state laws. 

    Multiple contractors may be allowed on a case-by-case basis. All contractors must provide a completed Contractor Questionnaire and W-9 tax information. 

    Agreed Contract: Borrower must enter into a written contract with each contractor who will be performing some or all of the work. Each contract must include (1) the total amount to be paid to the contractor for the work, (2) a description and itemization of the work, (3) the timeframe needed to complete the work and (4) agreement by the contractor that the work will be completed within three (3) months of the closing of the loan 

    Appraisal: Appraisal to be subject to completion of improvements. Appraiser must reference the existing condition of the property and specify the work to be done in detail. The appraiser must be provided contracts as described above indicating a description and itemization of the work. 

    NO Cash-out: Borrower’s closing statement cannot show any cash to Borrower. 

    Draws: Draws will be sent by Lender to Contractor. Draw requests must be signed by both Borrower and Contractor before submitting to Lender. 

    Completion: All improvements must be completed in 3 months from closing. A 30 day extension fee of $750 will be charged to Borrower for non-completion. An additional $750 will be charged for each additional 30 days. 

  • Down Payment Assistance

    Posted Under: Home Buying in California, Financing in California, Property Q&A in California  |  November 8, 2011 11:51 AM  |  548 views  |  1 comment

    California Down Payment Assistance!

    The CHF Platinum Program is designed to assist low-to-moderate income homebuyers with the purchase of a home, by providing down payment and/or closing cost assistance (currently in the form of a Grant). Many times this means families and individuals can purchase a home much sooner than they thought possible.

    This program is available for the purchase of an owner occupied single-family residence, agency-approved condominium or planned unit development (PUD) located in the state of California. It is not limited to first-time homebuyers.

    The Grant, currently made possible through the program, is sized at 3% of the Mortgage Loan amount. The Grant funds can be used towards the homebuyer’s down payment and/or eligible closing costs on a 30-year fixed-rate full amortization FHA, VA or USDA Mortgage Loan. It is available for purchases of both new and existing homes, as long as the home will be the primary residence of the homebuyer.

    Program Highlights

    Down Payment and/or Closing Cost Assistance (Currently in the Form of a Grant)Not Limited to First-Time Homebuyers

    Purchase of Primary Residences Only

    The CHF Platinum Program is designed to assist low-to-moderate income homebuyers with the purchase of a home, by providing down payment and/or closing cost assistance (currently in the form of a Grant). Many times this means families and individuals can purchase a home much sooner than they thought possible.

    This program is available for the purchase of an owner occupied single-family residence, agency-approved condominium or planned unit development (PUD) located in the state of California. The Grant, currently made possible through the program, is sized at 3% of the Mortgage Loan amount.

    The Grant funds can be used towards the homebuyer’s down payment and/or eligible closing costs on a 30-year fixed-rate full amortization FHA, VA or USDA Mortgage Loan.

    It is available for purchases of both new and existing homes, as long as the home will be the primary residence of the homebuyer.

    Qualified lenders will provide you with complete program guidelines and eligibility information, quote current interest rates and applicable APRs, supply loan applications and guide you through the home buying process.

    Down Payment and/or Closing Cost Assistance (Currently in the Form of a Grant)

    Available in Conjunction with 30-year Fixed-rate FHA, VA and USDA Mortgage Loans

    New or Existing Homes are Eligible

    Available throughout California

  • Homepath Mortgage

    Posted Under: Home Buying in Sacramento County, Financing in Sacramento County, Property Q&A in Sacramento County  |  November 4, 2010 9:10 PM  |  2,025 views  |  35 comments
    Fannie Mae Homepath Mortgage

    Fannie Mae has developed a great program to help sell off some of their inventory of foreclosures. An investor can purchase a HomePath designated Fannie Mae Foreclosure* with only 10% down; if you are looking to purchase as a primary residence, only a 3% down payment is needed. A list of the complete inventory is available at www.homepath.com

    Eligible Fannie properties require NO PMI, and currently have very low interest rates! Go to HomePath.com to get a list of homes.

    Highlights for available financing include:

    • 97% financing for Primary Residences
    • 97% Single Family Homes
    • 90% financing for Second Homes and Investment Properties
    • 80% financing for 2-4 Unit Properties
    • No appraisal required
    • Gift Funds from a relative is allowed
    • No mortgage insurance (MI) is required – although Fannie Mae price adjusters will apply
    • Flexible mortgage terms – including fixed-rate, ARMs or the Interest-Only payment feature*
    • Min 620 score for 80% or lower Loan to Value
    • Min 660 score for 80.01% and above Loan to Value
    • Max Debt to Income allowed to qualfy is 45%
    • Minimum Loan Amount is $50,000
    • FNMA Desktop Originator/Underwriter® Approve/Eligible Required**
    • Condos are eligable as long as project has sufficient Fidelity, Master Hazard, and Flood (if applicable). HO6 “Walls in” Coverage also required

    * The property must be designated on HomePath.com as eligible for HomePath financing. Programs available only to qualified borrowers. Programs subject to change without notice. Underwriting terms and conditions apply. Some restrictions may apply. 

    Contact me for more information and underwritting guidelines

    Andrew Martinez 
  • Fannie Mae First Look Program Draws in Thousands of REO Buyers

    Posted Under: Home Buying, Home Selling, Financing  |  September 29, 2010 10:08 AM  |  530 views  |  No comments

    Fannie Mae First Look Program Draws in Thousands of REO Buyers
    Fannie Mae announced that its First LookTM program has moved more than 29,000 homes out of its owned real estate portfolio in the last year, selling the properties acquired by the government sponsored enterprise (GSE) through foreclosure to owner occupants

    First Look is designed to promote owner occupancy and community involvement in housing.  Individuals and public entities are given a period of time, typically 15 days, after a property is listed on the GSE's HomePath.com real estate marketplace, to inspect the property and submit an offer to purchase before the property is made available to investors.  In addition to selling to individual owner-occupying buyers, Fannie has worked with almost 800 public entities which finance the purchase using Neighborhood Stabilization Program funds.  These entities have purchased 5,000 properties through First Look.

    "While investors play an important role in the REO market, homebuyers who intend to occupy a home make an immediate and lasting commitment to the community and therefore merit priority consideration in the REO sales process," said Jay Ryan, Vice President for Alternative REO Dispositions at Fannie Mae. "Public entities under the Neighborhood Stabilization Program also benefit from inspecting eligible properties and making offers to purchase without pressure from open market competition. These entities are making considerable investments in rehabilitation and stabilization."

    The Wall Street Journal recently said that, at the end of June over 191,000 homes were in the REO inventories of Fannie Mae and Freddie Mac.

    Buyers can indentify First Look offerings as well as other homes for sale by Fannie Mae by visiting the HomePath website at http://www.HomePath.com.  First Look programs are identified with a logo and a countdown clock which indicates how many days remain in the initial offering period.

    For more information on Homepath Mortgage visit www.ccflender.com

  • Fannie Mae Homepath

    Posted Under: Home Buying  |  July 15, 2010 10:58 AM  |  532 views  |  2 comments

    The Fannie Mae HomePath® Mortgage Program.


    Many homebuyers are currently trying to take advantage of the numerous bank owned (REO) properties that are currently for sale.  Although there are many financing options available, some are better and tailored specifically to meet the needs of these REO’s.  One such loan program is known as the Fannie Mae HomePath® Mortgage. 


    Fannie Mae created a custom loan program specifically for Fannie Mae HomePath Properties.  This financing is only available for foreclosed properties owned by Fannie Mae that have been designated as HomePath® properties.  The complete list can be found at www.HomePath.com.  Fannie Mae lists these properties with local REO agents that typically have experience in selling foreclosed homes. 


    There are numerous benefits to using HomePath Mortgage financing over your traditional loan programs when purchasing a HomePath® Mortgage.  The benefits of the program are blogged all over this website so I won’t get into the specifics, but it’s important to note that an average HomePath® loan should fund in about 21 days (assuming the borrower is providing the conditions in a timely manner), try getting that done with an FHA loan! What I want to talk about is improper qualifying for HomePath® listed Properties.   


    I wanted to clarify the confusion I am seeing surrounding HomePath® financing versus FHA. I have seen time and time again FHA offers being put in on HomePath® listings and typically at the recommendation of banks or the mortgage loan officers. The dirty little secret is the bank or loan officer typically benefits more than the buyer or they are simply unable to offer HomePath financing.


    Let’s run the numbers.


    John Homebuyer is purchasing a HomePath property for $200,000 and wanting to put 5% down.



    Rate 4.250% (average premium being paid to the originator at this rate is 2.00%)

    30 Year Amortization

    FHA Upfront MIP 1.00% (yes, FHA requires upfront mortgage insurance)

    Annual Premium .85% or $139.50 per month added to your monthly P&I payment


    Total payment with FHA loan & Monthly MIP payment $1,108.38


    HomePath loan

    Rate 4.750% (Par to Broker)

    30 Year Amortization

    No MIP

    No Annual Premium

    Total payment with HomePath financing $1,017.21


    Now let’s talk collateral.  It is a well known fact that foreclosed properties are rarely well maintained and often times are in need of a little TLC, or at least some fixtures or appliances.  Fannie Mae HomePath Mortgage DOES NOT REQUIRE AN APPRAISAL!! FHA has strict guidelines on the condition of the property and also additional underwriting guidelines that HomePath® Mortgage does not. FHA loans will require an appraisal to be done which is an additional cost to the borrower (an average of $425).


    Real Estate Agents, when working with you clients, make sure their loan is the best loan for the property they are purchasing!  A HomePath listing should always be financed with a HomePath Mortgage. Ask the broker or bank why the borrower is being qualified for an FHA loan and not HomePath.

    For a Homepath Buyers Guide visit www.ccflender.com

  • Inmates get $9 million in homebuyer tax credits

    Posted Under: Financing  |  June 23, 2010 1:43 PM  |  391 views  |  1 comment

    Inmates get $9 million in homebuyer tax credits

    More than 14,000 people wrongly benefited from the government's incentive.

    Posted by Elizabeth Strott on Wednesday, June 23, 2010 11:23 AM

    The government's homebuyer tax credit was a boon . . . to about 1,300 prison inmates.

    A report by the Treasury Department showed that 1,295 inmates filed fraudulent claims totaling $9.1 million, The Associated Press reported. More than 200 of the inmates were serving life sentences.

    All told, more than 14,100 taxpayers wrongly received tax credits. The report estimates that at least $26.7 million in tax credits went to people who did not qualify.

    Congress initiated the first-time-homebuyer tax credit in 2008 to help boost the slumping housing market. It expired on April 30, 2010.

    Some buyers got the credit for homes they purchased before the tax break went into effect, while others used a single home to claim more than one credit. One home was used by 67 taxpayers to claim credits, according to the report.

    "This is very troubling," J. Russell George, the Treasury Department's inspector general for tax administration, told AP. "Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers."

    The Treasury's report comes as new-home sales tumbled to a record low because of the tax credit's expiration.

    The Internal Revenue Service said it's taking steps to fix the snafu. "A very small number of payments were made to prisoners incorrectly, which the IRS is now taking all steps to recapture and to prevent going forward," the IRS said in a statement. "The IRS will follow up on every instance of an improper prisoner payment and take swift and appropriate enforcement actions."

    The credit has helped more than 2.6 million first-time homebuyers, according to the IRS.

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