5 Reasons to be Thankful in Real Estate

reasons to be thankful in real esttate2015 has has given many reasons to be thankful in the real estate industry for this Thanksgiving season. Here are the top 5 reasons to be thankful.

1) Low Mortgage Rates

Low mortgage rates mean higher purchasing power. With the low inventory for real estate in Michigan, low mortgage rates have increased buyer’s purchasing power allowing them to have a larger price range to search for homes.

2) New 3% Down Payment Mortgage Programs

Low down payment mortgage programs have expanded including the 97% mortgage. 2015 has granted new low down payment programs for first time home buyers. Fannie Mae and Freddie Mac have both released 3% down mortgage options for first time homebuyers allowing more young professionals and families to buy homes.

3) Fast USDA home loans

USDA home loans, the zero down mortgage program is quicker and easier to close. Michigan’s USDA has stayed up to date with their mortgage reviews allowing home buyers to close quickly on their no down payment mortgages. With Michigan being the #1 USDA mortgage state, the underwriting offices stay busy but have been able to quickly approve loans without weeks of delays as in previous years.

4) Low Gas Prices

Low gas prices have made driving to home showing appointments much cheaper. It isn’t just how much you make but how much you keep. Lower expenses equal more money in your pocket!

5) Low Unemployment Rates

Michigan’s booming job market has fueled home purchasing. Michigan’s economy has the lowest unemployment rate in years which helps allow families to have the stability to save and buy homes. With fewer people being laid off the chance that a buyer will lose their job a week before close is slim.

Did I miss any reasons to be thankful? Feel free to share reasons why you are thankful this year in real estate!

Mortgage Calculator Toolkit

Use our new suite of mortgage calculators with taxes, insurance and PMI to calculate mortgage payments for the most popular mortgage programs including FHA loans, VA loans, USDA loans and Conventional mortgages. Click here for our Mortgage Calculator Tools.

FHA Mortgage Calculator with Escrows

FHA mortgage calculator tool

FHA Mortgage calculator with taxes and insurance and PMI for computing your exact FHA mortgage payment. Enter your desired loan amount, down payment, interest rate and term and you will be given the FHA loan payment including escrows. Our FHA loan calculator will calculate the total loan amount and monthly PMI which changes based on down payment and loan term.

VA Mortgage Calculator with Escrows

va mortgage calculator

VA Mortgage calculator with taxes and insurance and VA guarantee fee for computing your exact VA mortgage payment. Enter your desired Loan amount, down payment, interest rate and term and you will be given the VA loan payment including escrows. The VA loan calculator will determine the total loan amount and VA fees for regular military veterans, Coast Guard, Reserves and Disabled Veterans.

USDA Rural Development Mortgage Calculator with Escrows


USDA mortgage calculator tool

USDA Mortgage calculator with taxes and insurance and guarantee fee for computing your USDA Rural Development mortgage payments. Enter your desired Loan amount, interest rate and term and you will be given the USDA loan payment including escrows. The USDA zero down mortgage is a perfect low payment option for first time home buyers.

Conventional Mortgage Calculator with Escrows

Conventional Mortgage Calculator TOol

Conventional mortgage calculator with taxes and insurance and PMI for calculating your total Conventional Mortgage Payment. Enter your desired loan amount, down payment, interest rate, and term and you will be given your total Conventional mortgage payment including escrows. This Conventional mortgage calculator tool calculates PMI based off from MGIC’s mortgage insurance charts. The PMI is adjusted based on your down payment and loan term.

Mortgage Amortization Calculator with Extra Payments

mortgage amortization calculator

Mortgage Amortization Calculator with Extra Payments is a simple tool that allows you to calculate early payoffs and interest savings by paying extra monthly payments. The extra payments are applied directly towards mortgage principal which allows borrowers to save interest and pay off loans more quickly. Use this tool to print simple mortgage amortization schedules with extra payments.

Riverbank Finance LLC is not part of any government entity. The information provided by our mortgage calculator tools are for illustrative purposes only. The default values are hypothetical and may not be applicable to your individual situation. The calculated results are estimates only and accuracy is not guaranteed. Speak with a licensed loan officer to review rate and terms that may be available for you.

TRID has Arrived for Home Loans on October 3rd 2015

TRID has arrived for October 3rd 2015What is TRID for Home Loans?

The CFPB (Consumer Finance Protection Bureau) issued the TILA-RESPA Integrated Disclosure Rule (TRID) which will go into effect on 10/3/15.  The purpose of TRID is to help home loan clients understand mortgage transactions by simplifying important forms and disclosures. TRID will be followed by all banks and mortgage lenders nationwide and will affect all residential real estate transactions secured with a mortgage loan excluding HELOC’s, reverse mortgages, and mobile home loans not on real property.

Related Article: New Loan Estimate Form and Closing Form for 2015

How Does TRID work?

TRID will replace the current mortgage process, timelines, and forms under RESPA and TILA regulations. While clients may not notice a change in the home buying or refinance process, mortgage loans officers, real estate agents and title agents will be required to be familiar and operate under new TRID rules.

The Loan Estimate Form (LE)

The Loan Estimate Form (LE) will replace the forms currently known as the Good Faith Estimate (GFE) and Truth in Lending statement (TIL). The LE must be given to the applicant at least three business days from application and again seven business days before loan consummation (final loan closing).

TRID Loan Estimate Example Form:

Loan Estimate

Intent to Proceed Form

The intent to proceed is a form which confirms that the applicant has reviewed the Loan Estimate and intends to move forward with the mortgage application. The Intent to Proceed requires a signature from the borrower within ten business days from the LE disclosure date.  If it was not signed within ten business days a Changed Circumstance must be done and a Revised Loan Estimate (LE) must be provided to proceed. The Intent to Proceed Form must be signed before fees can be collected from the client.

The Closing Disclosure Form (CD)

The Closing Disclosure Form (CD) will replace the final Truth in Lending statement (TIL) and HUD-1 Settlement Statement (HUD). The CD must be given to the applicant at least three business days before loan consummation if given electronically or in person; if mailed, seven days before consummation.

TRID Closing Disclosure Example Form:

Closing Disclosure

What is considered a Business Day for TRID?

Disclosure waiting periods for TRID are by business days only which are defined by Monday through Saturday excluding legal public holidays. TRID business days may vary by institution if they are closed for business on additional days.

Will TRID hold up the appraisal ordering process?

According to CFPB guidance, companies may not impose any fee on a consumer in connection with their mortgage application until the consumer has received the Loan Estimate and signed their Intent to Proceed. This limitation includes imposing application fees or appraisal fees. If the appraisal fee is being charged to the client there may be a delay due to waiting periods. Collecting credit card information to charge after the form is signed is also prohibited under law.

Will TRID delay home loan closings?

With the new waiting periods for disclosure of the LE and the CD there is a potential for closing delays, however, if the lending institution plans ahead and provides these disclosures in advance, the loan process should not have any delays. Most lenders will be issuing the Closing Disclosure once all credit conditions are cleared before the underwriting clear to close. If the CD is provided at this time, the loan can close immediately after the loan is cleared for closing.

Closing delays due to TRID should not be an issue with most lenders.

Required re-disclosure of the Closing Disclosure would restart the waiting period. A new re-disclosed Closing Disclosure would be required only if the loan terms change from a fixed rate to an adjustable rate, if a pre-payment penalty is added or if the Annual Percentage Rate (APR) increases more than 1/8 of a percent for a fixed rate or 1/4 of a percent for an ARM. By the time the CD is issued, the fees should already be confirmed therefore re-disclosure requirements will not be a common problem.

Re-Disclosing the TRID Closing Disclosure will be required if:

  • The loan term changes from a fixed rate to an Adjustable Rate Mortgage (ARM)
  • A pre-payment penalty is added to the mortgage
  • The Annual Percentage Rate (APR) increases more than .125%

CFPB logo - New GFE Loan Estimate Changes for 2015For more information regarding the new TRID regulations starting October 3rd, 2015 visit the CFPB TRID guide, call a licensed loan officer at 800-555-2098 or request information below.

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One Time Close VA Construction Loan

va-construction-loanRiverbank Finance LLC now offers Construction to Permanent loans for new stick built homes, manufactured and modular homes. Our one time close home loan provides land purchase, construction finance and the permanent loan into one closing.

With a VA construction loan you are able to get your loan underwritten, approved and close before the construction begins. With a one-time close construction loan there is no chance of a low appraisal after the house is built. There is also no chance that you will no longer qualify for financing with a loan following the build; One-time means once you close you are fully approved and simply need to move in once it is built.

VA Construction Loan Benefits

  • 100% Financing – Zero Down Construction Loan
  • Reduction in total costs for only one closing versus the standard construction loan and end loan
  • Reduced Interest Rates for VA Loans vs Conventional
  • No Payments due from borrower during construction
  • Borrower’s first payment begins once construction is complete
  • No credit, document or appraisal expiration once the loan closes
  • No Re-Qualification of borrower once construction is complete
  • Builder/Retailer is allowed staged funding draws during construction based on line-item completion

Loan Requirements

  • 620 Minimum Credit Score
  • $417,000 Maximum Loan Amount (or per state max)
  • Owner Occupied Only
  • 1 unit properties only
  • No single wide mobile homes

Term Options

  • 15 Year Fixed Rate
  • 30 Year Fixed Rate
  • (No Adjustable Rate Mortgages)

If you are a US military veteran and you are interested in building a home then the One Time Close VA Construction loan is the loan for you. We will help to request your Certificate of Eligibility form the Veterans Administration on your behalf and pre-approval you for your next home.

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Need some extra money? Consider cash-out refinancing.


Considering home renovations, debt consolidation or just need to get some cash in hand? A Cashout Refinance Mortgage may be the right fit for you. You can actually refinance your home mortgage for more than you owe and cash out the difference. It may seem like an easy way to get extra cash, but here’s what you need to know to decide whether cash-out refinancing is the best option for you.

Reasons for cash-out refinancing

Cash-out refinancing could help you save a lot of money. It’s always wise to calculate the potential savings with your goals in mind. Are you refinancing for a short-term or long-term reason? Here are some good reasons for cash-out refinancing:

  • Get Cash Back: Do you need to get cash for a special project, vacation, business, college or even vacation? Cashout refinance may allow you to access cash in the equity of your home to make it happen.
  • Home renovations: Cash-out refinancing would allow you to improve your home, and that would increase its value.  For example, if you do a $20,000 cash-out refinance on a $100,000 home, you could potentially increase its value to $150,000 — for just a $20,000 cash out.
  • Debt repayment: If your student loans, second mortgage, or credit cards are high, you could do a cash-out refinance and pay off your debts with a lower interest rate. Plus, your credit will improve since you’re paying them off (even though you’re just transferring the debt to your home).

With that said, here’s why you can’t afford to miss out on cash-out refinancing:

1. Mortgage rates are at historic lows. If you bought your house in the 1990s, your mortgage rate may be as high as 7 to 10 percent. But now, mortgage rates have been hovering between 3-5% for many loan options. Now is the time, not only to refinance, but to cash-out. You’ll not only be able to keep your mortgage payments unchanged, but you’ll also be able to cash out at closing.

2. Home prices are increasing. If you choose cash-out refinancing, you still have equity in your home. The risk is not having enough mortgage paid off if home prices begin to dip in the future. That’s when you risk losing equity in your home, along with having a higher total mortgage to pay off. So, right now is a great time to opt for cash-out refinancing, as long as you can pay back the money you cash out in a reasonable timeframe.

3. Home equity can help remove PMI. If you originally put down less than 20% on your home when you first bought it, you’ve been paying private mortgage insurance to ensure the lender against default. Since home prices are increasing, your home equity may have increased. So even if you opt for cash-out refinancing, if your home equity is at 20%, you can drop your PMI payments.

When you decide cash-out refinancing is the right option for you, call Riverbank Finance at (800) 555-2098, and one of our licensed loan officers can help you get the process started. Whatever the reason for the cash out, we’re here to help you get what you need.

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How to Refinance a Home Loan


Want to save money on your mortgage? Refinancing might be the best way to take advantage of the historically low rates. Depending on your goal, make make great financial sense to refinance your mortgage. Here’s what you need to know to make the best decision.

Benefits of Refinancing your Home Loan

Before you refinance your home loan, it is important to determine your financial goals. Do you want a lower interest rate? Do you want to change your adjustable rate mortgage to a fixed-rate mortgage? Do you want to pay off your loan in 15 years instead of 30? Do you want to lower your monthly payments? Did you know you can also refinance to consolidate a first and second mortgage? You can also extend your current loan to cash out if you want to start a business, help a family member in financial crisis, or go on an expensive vacation.

Do the math.

Ask your loan officer to help you figure out how much refinancing will cost you, and how much you’ll save over the long term. If refinancing will save you $200 per month, but you have to pay $2,000 in closing costs, you’ll break even in 10 months. How much longer do you plan to stay in the home? If you plan to stay there for more than 10 months, refinancing may be a good idea. If you’d like to move out sooner, the costs associated with refinancing may not be worth it. Also, if you lower your interest rate but extend your loan from a 15-year to a 30-year, you’ll lower your monthly payments but end up paying more interest over the life of the loan.

Talk to a loan officer to review your mortgage refinancing options.

If you decide refinancing is right for you, start by calling loan officer. He or she may be able to save you on closing costs and other fees by recommending a loan program specifically for your situation. Before you start the process it is important to do your research to find the best loan option to meet your goals. Do not just settle for what your current bank offers just because you have a car loan or checking account there; let your lender know that you’re shopping for mortgages so you can make an informed decision and perhaps he or she will find a way to offer a better deal.

Know your refinancing options.

Find out if you are eligible for any special refinance programs that may benefit you over the standard refinance mortgage. For example, if you currently have an FHA loan, you may qualify for an FHA streamline refinance, which would allow you to refinance with no appraisal, no income, and little to no closing costs. If you currently have a conventional mortgage, you may qualify for the Home Affordable Refinance Program (HARP), which may allow you to refinance, regardless of your home’s value, with no out-of-pocket costs.

Expect to gather documentation and paperwork.

Refinancing your home loan is a process that usually comes with a significant amount of paperwork to document your income assets and passed credit. Do not be overwhelmed by the request for documents with the current laws and underwriting guidelines. Even those with perfect credit have to provide the same documentation to get a home loan or mortgage refinance.

When you work out the details of your refinance mortgage, your loan officer will help you navigate the steps from initial loan consultation to closing. Be prepared to provide documentation, including driver’s license, social security card, one month of paystubs, two months of bank statements, past two years of W-2 statements, and your current mortgage statement.

Once you sign your application and send in the documentation, your loan officer will send in your file for underwriting, which may require additional documentation. You may also be required to complete a home appraisal. When you’re finally approved in underwriting, you’ll be cleared to close. Your loan officer will review the final figures, you’ll have to pay closing fees and documents, and then the process is complete.

Steps to Refinancing your Home Loan

1) Initial Mortgage Consultation
2) Sign application
3) Send required documents – (drivers license, social security card, 1 month paystubs, 2 months bank statements, past 2 years w2 statements, current mortgage statement)
4) Underwriting Process
5) Complete the Appraisal (if required)
6) Clear to Close – (once fully approved in underwriting your loan will be “Cleared to Close” and scheduled for closing)
7) Meet for the Home Loan Closing

For more information about what Riverbank Finance offers for refinancing, schedule an appointment with one of our loan officers by calling 800-555-2098 or fill out our online refinance application or by completing the form below.

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Freddie Mac 97 Home Loan Offers Alternative to FHA Loan

Buy a Home with only a 3% down payment with Freddie Mac’s 97% Home Loan!

Freddie Mac Offers Alternative to FHA loan
If you are a first-time home buyer or struggle to come up with a conventional down payment for a house, the FHA Loan is no longer your only option. Freddie Mac’s new Home Possible Advantage program is a conventional loan option that adds another possibility to the low down-payment offerings.

Freddie Mac Home Possible is available to all first-time home buyers and those with moderate to low income levels. The type of Home Possible loan you choose depends on your property.

What is the Freddie Mac Home Possible Loan Program?

Home Possible, available December 2014, requires a 5% down payment for those buying a 1-to-4 unit primary residence, condo, PUD (planned unit development), or manufactured home.

Home Possible Advantage, available March 2015, requires a 3% down payment and is only available to those buying a 1-unit primary residence, condo, or PUD.

Mortgage options also vary for the two Home Possible programs:

  1. Home Possible includes fixed-rate mortgages, Adjustable Rate Mortgages for 1 or 2-unit primary residences that are not manufactured homes, and renovation mortgages.
  2. Home Possible Advantage includes fixed-rate mortgages, and renovation mortgages.

To qualify for Home Possible Advantage, you must have a credit score of at least 660. If you are a first-time home buyer, you also must participate in a home borrower education program, such as Freddie Mac’s CreditSmart.

Benefits to the Freddie Mac 97 Home Loan

The largest benefit to the Freddie Mac 97% home loan is the flexibility in down payment options. While a 5% down payment may offer slightly better loan terms, a low down payment mortgage may be a good fit for many homebuyers.

Other Benefits Include:

  • Low Total Mortgage Payments
  • The down payment may be 100% gifted from a family member
  • Lower PMI payments for high credit score borrowers
  • PMI can be removed with sufficient home equity whereas FHA mortgage insurance is permanent
  • Less property condition restrictions compared to FHA requirements
  • Quicker Loan Closings

Which program should I choose for my home purchase?

What’s the difference between Home Possible, Fannie Mae’s 3% down program, and the FHA loan, and which one is right for you? It depends on your financial situation, the property you want to purchase, the requirements of each institution, and your lender’s preferences.

With an FHA loan, you have to put down at least 3.5% of the total home value. Fannie Mae requires a 3% down payment, and Freddie Mac’s Home Possible requires 3% or 5%, depending on the type of property you’re buying.

Whichever option you choose, you’ll have to pay private mortgage insurance (PMI). Anytime you offer a low down payment of less than 20% of the home’s value, you have to pay to insure the lender against default.

For the FHA loan, you’ll have to pay an upfront PMI fee and a monthly fee, which never goes away. If you choose a Freddie Mac or Fannie Mae loan, you can choose between paying an upfront fee with a slightly higher interest rate or a monthly fee, which goes away once you pay 20% of your total loan value.

The Freddie Mac and Fannie Mae 3% down programs are similar but have slightly different regulations, so check with your lender to see which one might be a better fit for your circumstances.

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For more information on Freddie Mac Home Possible, visit http://www.freddiemac.com/homepossible/hp.html.


FHA Lowers Mortgage Insurance Premiums for 2015

FHA Lowers Mortgage Insurance Premiums for FHA Loans in 2015

The Federal Housing Administration has announced that they will be reducing the mortgage insurance premiums (sometimes called PMI or MIP) charged on all FHA loans. The rate reduction will be nearly half the current costs cutting the insurance premiums down from 1.35% to .85% annually. This is great news for new home buyers and those that currently have FHA mortgage loans.

The History of the Federal Housing Administration (FHA)

The FHA program has been in place since 1934 when it was created to help spur home ownership in the United States. At the time, banks required very large down payments and strict mortgage terms which allowed very few to qualify to become homeowners. Since then it has insured mortgage loans for over 34 million home owners and remains a major loan program to consider.

What are the benefits of FHA Loans versus Conventional Loans?

FHA loan options typically have lower down payment requirements and more flexible guidelines than conventional financing. Many clients choose FHA financing for home purchases for benefits that can include as low as a 3.5% down payment, higher debt-to-income (DTI) ratios, home renovation options, lower mortgage rates and lower minimum credit standards as compared to conventional loans.

What do Lower Mortgage Insurance Premiums mean for New Home Buyers?

With the lower mortgage insurance premiums, home buyers will be able to save on their monthly payments. This monthly savings may allow them to qualify more easily or even qualify for a more expensive house for the same mortgage payment (FHA loan example).

With today’s low inventory of homes for sale, this may allow home buyers to expand their searches to find the home they have been waiting to purchase. Additionally, the lower mortgage insurance premiums may allow them to consider renovating a property or including upgrades into their financing through programs such as the FHA 203k renovation loan. The FHA 203k Streamline Renovation Mortgage may allow a home buyer to finance up to $35,000 in repairs for things such as new appliances, carpeting, flooring, paint, electrical fixtures and other upgrades to make a home their dream home.

What does Lower FHA Mortgage Insurance Mean for People that Have Recently Gotten a FHA Loan?

Those that have recently purchased a home with FHA financing or refinanced to a FHA loan, may be eligible to take advantage of the reduced insurance costs by refinancing their mortgage. Now is a great time to refinance due to the lowest rates in nearly 2 years as well as the lowered insurances costs.

If you have paid at least 6 mortgage payments on your FHA loan you may qualify for a FHA Streamline Refinance. This FHA refinance program allows a homeowner to refinance their FHA loan to a new FHA loan with a lower rate. The FHA Streamline Refinance Mortgage typically has no costs, no application fees, no appraisal and no income documentation.

How Do I Qualify for a FHA Streamline Refinance Mortgage?

Qualifying for a FHA streamline refinance is as easy as paying your mortgage payments on time. Once you have paid a minimum of 6 mortgage payments on your FHA loan and you can save at least 5% off your mortgage payments you may be eligible for a FHA Streamline refinance loan.

How much will the Lower Mortgage Insurance Costs Really Save on a FHA loan?

To show the savings on the FHA mortgage insurance it may be best to take a look at an example FHA loan scenario. Let us make the following assumptions:

Loan Purpose: Home Purchase
Loan Type: FHA 30 Year Fixed
Purchase Price: $250,000
Down Payment: 3.5% ($8,750)
Interest Rate: 3.50%
Base Loan Amount: $241,250
Annual Property Taxes: $2,400
Annual Home Insurance: $900

Before 1/26/2015After 1/26/2015
Principal & Interest$1,102.28$1,102.28
Property Taxes$200.00$200.00
Home Insurance$75.00$75.00
Mortgage Insurance$271.41$170.89
Total Mortgage Payment$1,648.69$1,548.17

In the above illustration of reduced FHA PMI, the home buyer would save $100.52 per month on their mortgage payments. Over the life of their loan that would give them a total savings up to $36,187.20 (if they kept their loan for the full term). This is a savings of over 6% which would be the equivalent of $15,000 more purchasing power for the same payment or a home purchase price of $265,000 vs $250,000.

When do the lower FHA Mortgage Insurance Premiums start?

FHA case numbers starting Monday January 26th, 2015

The FHA will begin issuing new FHA case numbers starting Monday January 26th, 2015. From that date forward any new FHA loans started will be allowed to take advantage of the lower mortgage insurance costs.

2015 FHA Mortgage Insurance Premiums Chart

FHA MIP Chart for 2015

What if I am currently in the process of getting a FHA loan? Can I still get the lower rates?

Yes. You may be able to get the reduced MIP if you have not yet closed and funded your loan. Speak with your loan officer about requesting a cancellation of your current FHA case number and ask them to request a new FHA case number on or after January 26th, 2015.

What is the Minimum Credit Score for FHA Loan Financing?

Each bank and lender sets their minimum required credit score for FHA financing. While most banks and lenders set the minimum credit score at 640 and up, some lender allow for credit scores much lower. For example as of 1/26/2015 Riverbank Finance LLC will allow credit scores as low as 560 with a 10% down payment and 580 with only a 3.5% down payment for FHA loans in Michigan.

How Do I Apply for a FHA Mortgage Loan?

The Federal Housing Administration does not directly lend money. They insurance banks and lenders against losses which allow them to lend with eased guidelines. Applying for a FHA loan can be done by speaking with a licensed loan officer at 800-555-2098 or click here to apply for a FHA Loan.

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Where can I Find More Information the Reduced FHA MIP?

The announcement was made on January 9th, 2015 from the FHA Mortgage Letter 2015-01.  For more information on FHA loans visit www.hud.gov or speak with a HUD approved counseling agency in your area.

Disclaimer: Riverbank Finance LLC is neither a government organization nor part of FHA or HUD. Rates, terms, fees, and programs given above are examples for illustration purposes only. This is not a commitment to lend. Not all will qualify.

Updates for Fannie Mae Conventional 97% Mortgage Loans

Fannie Mae Logo


A Conventional 97% mortgage loan is a Fannie Mae home loan that allows homeowners to purchase a home with only a 3% down payment. It is a great misconception that all conventional mortgage loans require a 20% down payment however many options for alternative financing do exist with low down payments or even no down payments.

The Conventional 97% Mortgage is Back!

The 3% down Conventional mortgage is now back through Fannie Mae’s My Community Mortgage® as well as for standard conventional loans. This program is designed for first time homebuyers that may not have the resources for a large down payment. At least one of the borrowers on the loan must be a first time home buyer in a purchase transaction. The  My Community Mortgage® program is only available for low to moderate income families and may require home buyer education prior to loan closings. The standard conventional mortgage is also designed for first time home buyers but does not have income restrictions.

97% refinance loans will also be made available for those who do not qualify for a HARP refinance but have loans owned by Fannie Mae (see Fannie Mae Loan Lookup tool to confirm eligibility). This high LTV refinance program will be available only as a limited cash-out option which allows a borrower to simply change their interest rate or mortgage term.

Update on the Conventional 97% Mortgage from Fannie Mae Announcement

Announced on December 8th, 2014 Fannie Mae will reinstate the 3% down mortgage program. Fannie Mae’ Executive Vice President Andrew Bon Salle explains,  “This option alone will not solve all the challenges around access to credit.  Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage.  We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”

Read: Fannie Mae’s Announcement on 97 Percent LTV Option for First-Time Homebuyers

Alternatives to Conventional 97% Mortgage Financing

If a borrower does not meet the eligibility requirements for a Conventional 97% Mortgage, homebuyers may need alternatives for low down payment home loans. One great options is the FHA mortgage program which still only requires a 3.5% down payment.

FHA Mortgages have been very popular over the past several years as they are more flexible on credit and qualifying after bankruptcies and foreclosures. FHA loans also may allow for family members or close friends to gift the down payment.

That’s right, a borrower can buy a home with none of their own money out of pocket which may be limited on 97% Conventional financing. Closing costs may also be paid by the seller with a limit of 6% of the home’s purchase price while Conventional loans limit seller paid closing costs (Seller concessions) at 3%.

Conventional 97 Mortgage Alternatives: USDA Rural Development Loan

Another low down payment mortgage alternative may be the USDA Rural Development Loan which is a no down payment mortgage with 100% financing. While the USDA option may be great to consider, there are downsides.  Currently many USDA field offices are caught up on loan application and are approving Rural Development loans very quickly however at times they do get several weeks behind before reviewing applications.

One major factor of this loan option is that the home must be in a rural area. The USDA guarantee this home loan type to help grow rural communities therefore the location of the home cannot be in a largely urban area (see the USDA’s eligibility website for more information).

USDA Rural Development Loan Benefits:

  • Zero Down Mortgage
  • Lower Mortgage Insurance Premiums (PMI)
  • Government Guaranteed Mortgage Loan
  • Easier to Qualify for than the Conventional 97 Mortgage
  • Lower Mortgage Interest Rates

Conventional 97 Mortgage Alternatives: Conventional 95 Mortgage Loans

Lastly, the Conventional 95% mortgage loan is another great alternative to the Conventional 97% mortgage loan. Not everyone will qualify for the 3% down payment mortgage including those that are not first time home buyers or make too much money for the My Community Mortgage®. With a couple of quick yard sales and postings on craigslist you may be able to come up with the extra cash for a 5% down payment which may offer better financing terms. While only 3% down sounds great, you will be much happier with the lower interest rates and Mortgage Insurance Premiums (PMI) that just a bit more cash will bring.

Conventional 95 Loan Benefits:

  • Low Down Payment Mortgage with only a 5% Down Payment Requirement
  • Lower Mortgage Insurance Premiums (PMI)
  • Government Guaranteed Mortgage Loan
  • Easier to Qualify than the Convention 97 Mortgage
  • Lower Mortgage Interest Rates
  • More Lenders participate in Conventional 95 Financing

Apply for Low Down Payment home loans like Conventional 97% Mortgage Financing

Riverbank Finance would be more than happy to help you review your low down payment home loan options. Apply now for a Conventional 97% mortgage or My Community Mortgage® for first time homebuyers and buy a home with only a 3% down. Call us today at 800-555-2098 or submit a request below for additional information.

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New Loan Estimate Form and Closing Form for 2015

CFPB logo - New GFE Loan Estimate Changes for 2015November 20th the Consumer Financial Protection Bureau (CFPB) released a nearly 2,000 page document relating to RESPA disclosures and Real Estate Closings (If you have a month of free time click here to read). These forms are known as the “Know Before You Owe” mortgage disclosures. This final rule applies to all clients applying for and closing on residential mortgage loans.

The new rule mandates the use of a new three page “Loan Estimate” which replaces the Good Faith Estimate (GFE) and the Truth in Lending (TIL) Disclosure. There is also a new replacement for the HUD-1 Settlement Statement which is a five page document called the “Closing Disclosure“.

What is the new Loan Estimate form?

The new loan estimate form is a three page disclosure triggered when an application is made to a mortgage company. The Loan Estimate provides a summary of loan terms, loan costs, and other closing costs.

When does a client get the New Loan Estimate Form?

The mortgage company must provide the Loan Estimate within three business days of the client’s application. The new form must be given to the client at  least three business days before the loan closing (3 additional days if mailed) which is similar to the current regulations for mortgage disclosures.

Re-Disclosure of a revised Loan Estimate May Create Loan Closing Delays

In circumstances where the lender may need to provide a revised Loan Estimate, it cannot be provided on or after the date of the Closing Disclosure. The lender must provide the Loan Estimate at least three business days before closing of the loan (they may close on the fourth business day). Remember, this ONLY applies if a revised Loan Estimate needs to be provided.

What is the New Closing Disclosure Form for Real Estate Closings?

The new Closing Disclosure is a five page form that replaces the HUD-1 Settlement Statement and the final Truth in Lending Disclosure which provides a summary of the actual loan terms, loan costs, and all other closing costs.

New Closing Disclosure Waiting Period for a Real Estate Closing

The lender must provide the Closing Disclosure to the consumer at least three business days before the loan closing. If there are changes to the Closing Disclosure between when it is given to the client and the loan closing, another three business day wait period must be met before closing. Remember this rule is already in place for the Truth in Lending Disclosure so it is not a new wait period.

The numbers on the Closing Disclosure form must be as accurate as possible, however, the final Closing Disclosure must be updated with the actual numbers at close.

What changes would require Re-Disclosure of the Closing Disclosure Form?

There are three changes that would require a new Closing Disclosure be presented to the client.

  1. Changes to the loan’s APR greater than 1/8 percent (or ¼ percent for ARM loans),
  2. Changes to loan product (example FHA to conventional),
  3. The addition of a pre-payment penalty.

Does the Final Rule apply to All Mortgage Loans?

No. The final rule does not apply for home-equity loans, reverse mortgages, mobile home loans or creditors that make five or fewer mortgages per year. For additional information on the new forms and closing disclosures you are welcome to call a Riverbank Finance Loan officer at 800-555-2098 to review how it may affect your real estate closings.

Other Helpful Links

Compare Current GFE and HUD-1 Settlement Statement with the new Loan Estimate Disclosure and Loan Closing Disclosure (Before and After)

NOTE: Riverbank Finance LLC is not a government organization nor associated with or acting on the behalf of the a government entity. Information in the article should be used for illustration purposes only and not taken as legal advice. It is recommended that you speak with a competent attorney to review how the applicable laws will affect you.