Sandy's Blog about Mortgages in the Charlottesville Area

There is a JUMBO loan option for our Veterans and it is truly amazing.

The standard VA loan program offers 100% financing up to $417,000. However, a Veteran can go above $417,000 with a down payment! 

I recently pre-qualified a veteran for a purchase price of $584,000 with a rate of 3.875%!  SunTrust gave the client back $7,300 as a lender credit to reduce closing costs, WOW.

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

Breathtaking Panoramic Blue Ridge Views!! Property offers total serenity with mountain views that are unparalleled, just the right distance away for a Perfect Perspective. The well is in & 4 bed perk approved. Come enjoy the Madison countryside. Minutes away from Rt.29 and very convenient to Charlottesville or NVA. If you are looking to build your Dream Home, you will want this Dream Location!

CLICK PHOTO

Mortgage Rates:

Weaker than expected economic data and increased concerns about Europe helped mortgage rates improve this week.  Investors knew that US economic growth was slower than originally expected in the first half of the year due to European troubles, the Japan earthquakes and rising gas prices, but Friday’s report of Gross Domestic Product (GDP) was a shocker.  Second quarter GDP increased by 1.3% which was well below the consensus expectation 1.8%.  The add to the shock, the first quarter GDP was revised downward to just 0.4% from the originally announced 1.9%.  Fortunately, the consensus outlook is for faster economic growth during the second half of the year.

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 & MLO-7436VA

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

SunTrust is committed to assist in providing homeownership for individuals in all segments of our community.  The SunTrust Portfolio Affordable Housing program was developed to address the home financing needs in certain low-to-moderate income areas and the needs of low-to-moderate income individuals and families.  The program is for owner-occupied properties only and has liberal income limits for properties located in a middle-to-upper income census tracks but does not have income limits for properties located in a low-to-moderate income census track.  Much of our local market qualifies for the program.  Below are some highlights of the program.

1.    Single family detached, townhomes and warrantable condos

2.    Borrower cannot own other real estate at the time of closing, however they can sell a current home the same day or prior to closing.

3.    97% Maximum LTV.

4.    Seller contributions allowed:  6% with LTV =/<90%, 4% with LTV >90%.

5.    Down payment can come from gifts, grants, 401K loans, unsecured loans or seller contributions.

6.    Borrower must have a minimum of $500.00 of their own money into the transaction.

7.    Generally a minimum 620 credit score is required.

8.    The loan is not subject to mortgage insurance.

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

Mortgage Rates:

With few economic reports released during the week, news of progress in talks to provide aid to trouble European countries and our own debates to increase the U.S. debt ceiling had the most influence on rates.  As the perceived risk of default in Europe decreased, investor retreated from the safety of U.S. bonds which pushed rates slightly higher.  The proposed deficit reduction in our own debt ceiling was favorable to mortgage rates helping to balance the reversal of investor’s interest in U.S. bonds

 European Union officials released a significant plan for providing aid to EU countries with debt problems.  Thursday’s announcement of a new aid package for Greece and an overhaul of the region’s rescue fund reduced investors concerns that the debt problem will spread.  In particular, the European Financial Stability Facility (EFSF) will have the ability to make loans to European nations at lower rates than the nations could get on their own, easing the threat of default.  Investor reaction was to reverse some of the flight to quality and return to riskier assets.  

What about our own debt ceiling?  With mortgage rates remaining low as well as Treasury yields, it is apparent that investors believe the debt ceiling will be raised.  The major concern is how far lawmakers will go in addressing the budget deficit.  Simply lifting the debt ceiling without addressing the deficit in a major way would likely disappoint investors and be bad for mortgage rates.  A serious movement to bring the deficit under control now, not years down the road, would likely bring Treasury yields and mortgage interest rates even lower.  The debates continue with the heat rising, but folks this one is important!

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

Mortgage Rates:

During a week filled with economic data, Europe and the Federal Reserve once again took center stage influencing mortgage rates.  Uncertainty about the economy created a return of the ‘flight to quality' as the interest in the safety of the U.S. bond market increased.  European economic concerns increased when Italy made headlines as the next country mired in debt concerns.  At mid-week, Fed Chairman Bernanke indicated additional stimulus might be needed for the economy. 

The see-saw of good news followed by bad news continued this week.  In June, stronger than expected economic data caused investors to raise their economic outlook which pushed mortgage rates up.  Last week's disappointing jobs report removed much of the optimism and increased the levels of economic concern.  Italy's addition to the European debt concern and the lack of progress regarding our own debt limit talks added to the investor caution.  The desire for a safer investment (flight to quality) was evident by an increase in both domestic and foreign interest during this week's Treasury Auctions.  Mortgage Backed Securities compete with the Treasury market for investors.  When the interest in U.S. Treasuries increase, the yield slides downward allowing mortgage rates to slide as well.

For the week, mortgage rates improved by about an 1/8^th.   

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

Loans in Charlottesville for NGIC and DIA Employees

If you are a National Ground Intelligence Center or Department of Intelligence Agency employee, you have chosen to dedicate your career to keeping our nation safe for all our citizens.

The work you do is paramount to the freedoms we are able to enjoy everyday. America's lending institutions recognize how important it is to support your stable presence in the community. They have created specialty financing programs for defense employees which can help get you into a great home at a great rate quickly.

Sandra Madison has worked with many relocating NGIC and DIA employees. We know that your priorities are to efficiently move yourself and your family, if you have one, into a great place to live, close to your future workplace.

We know the best relocation professionals in the business and we can find you a specialty loan product that will ensure that you can enjoy the benefits of the community from which you'll be serving our nation.

VA Home Loans

A VA Home Loan is a mortgage loan issued by certified lending institutions and guaranteed by the Department of Veterans Affairs (VA). These loans allow qualified borrowers to purchase homes in designated areas without making a down significant down payment. VA loans include both traditional conforming loans and nonconforming Jumbo Loans, for those looking to purchase higher-end homes.

Who is eligible for VA Home Loan?

• Veterans
• Active duty personnel
• Reservist & National Guard Members
• Surviving spouses who have not remarried

Advantages of VA Home Loan

• 100% Financing
• No down payment
• Typically there are no closing costs
• Includes Jumbo Loans

VA Fixed Rate Specifics

If you're a veteran, you may be eligible for a mortgage loan, guaranteed by the Department of Veterans Affairs (VA). This special program for veterans makes it is easier to finance the purchase of a new home.

• 100% financing means no down payment needed
• Home seller can pay closing costs and discount points (in some cases without limit)
• Home seller can pay prepaids, funding fee and temporary buydown funds up to a maximum of 4%
• No cash reserves required for loans up to $417,000 (two months cash reserves are required for loans greater than this amount)
• Lenient income, debt, and credit qualifications
• SunTrust underwrites our own VA loans (a SunTrust Advantage)
• May be assumed by a qualified purchaser if home is resold
• Available for purchases of primary residences only; however, investment properties are permitted on Interest Rate Reduction Refinancing Loans (IRRRLs)
• No penalty for prepaying your loan

VA Adjustable Rate Mortgage Specifics

As a benefit to veterans, the Department of Veterans Affairs guarantees repayment of loans made to veterans with no down payment, in most cases, and liberal qualifying guidelines. This special program helps veteran finance their homes.

• 5/1 ARMS qualify at the note rate
• 100% financing means no down payment needed
• Home seller can pay closing costs and discount points (in some cases without limit)
• Home seller can pay prepaids, funding fee and temporary buydown funds up to a maximum of 4%
• No cash reserves required for loans up to $417,000 (two months cash reserves are required for loans greater than this amount)
• Lenient income, debt, and credit qualifications
• May be assumed by a qualified purchaser if home is resold
• Available for purchases of primary residences only; however, investment properties are permitted on Interest Rate Reduction Refinancing Loans (IRRRLs)
• No penalty for prepaying your loan

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 & MLO-7436VA

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison

Mortgage Rates:

The main focus this past week was the June Employment report.  Expectations during the week were for a strong report with the expectations pushing rates higher.  When released, the data was far below expectations allowing rates to improve significantly.  The strong rate improvement allow rates to recover the run up during the week and close about an 1/8 better than last week. 

Against a consensus forecast of 125,000, the economy added only 18,000 jobs in June.  The growth was the lowest since September 2010 and the numbers from the two previous months were revised lower by 44,000.  The Unemployment Rate increased to 9.2% from 9.1% in May (highest since December 2010).  Average Hourly Earnings, a measure for wage growth, were unchanged from May which was below the expected increase of 0.2%. 

Following a series of stronger than expected economic reports in recent weeks, this week's Employment report was certainly a surprise.  The question for investors is how much weight to give to this report in determining a true economic outlook.  Does this mean the economic recovery is slower than previously thought?  Or is it that the jobs data operates with a small lag?  There is little doubt the economy slowed during the first half of the year in a reaction to rising oil prices and the Japanese earthquakes of which the impact was expected to be temporary and supported by recent reports.  The Employment report will certainly make investors more cautious about the pace of future economic growth, but they will not overlook the many other reports suggesting growth is accelerating.  

A retracting economy is normally positive for mortgage rates, however with rates currently at such low levels, solid evidence of sustain economic deterioration will be required before we see a significant improvement in the rate market.     

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 & MLO-7436VA

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison 

SunTrust Mortgage

Since 2003 the FHA would not guarantee a loan if the seller had owned the property for 90 days or less.  In an effort to stimulate the housing market, the FHA waived their rule regarding property flipping on purchase contracts on or after February 1^st of 2010.  Currently the FHA will guarantee a loan regardless of how long the seller has owned the property with the following conditions.

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

• For cases in which the sales price of the property is 20% or more over and above the seller's acquisition cost, the lender must justify the increased value with supporting documentation and/or a second appraisal which verifies sufficient legitimate renovation, repair and renovation.  Where no such work is performed, the appraiser must provide an appropriate explanation of the increase in property value.  The lender must order a property inspection and provide it to the buyer prior to closing.  The cost of the inspection can be charged to the buyer. 

While length of ownership does not prevent FHA financing for your buyers and sellers, it is important to know that additional costs could be involved including a home inspection & 2^nd appraisal.

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 & MLO-7436VA

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison 

SunTrust Mortgage

682 Berkmar Circle

Charlottesville, VA  22901

We have all experienced the stricter underwriting requirements due to heightened scrutiny from Fannie.  We thought it might be helpful to provide some items that Fannie view as ‘Red Flags'.  These ‘Red Flags' do not mean a loan isn't possible, rather that additional questions must be answered and possibly additional documentation.  By knowing these alerts, we can better prepare our clients up-front to answer the questions and provide accompanying documentation before they are asked.  Others provide evidence of why a buyer should engage the services of a real estate professional.  Hope those can help you.  Below are some ‘Red Flags' listed by Fannie Mae.

•1.    Non-Arms length transaction: seller is a realtor, relative, employer, etc.

•2.    Seller is not currently on title.

•3.    Purchaser(s) are added to/deleted from the sales contract.

•4.    Purchaser is moving down in home value.

•5.    Earnest money deposit equals the full down payment or is an ‘odd' amount.

•6.    Multiple earnest money checks have been used (additional alerts when the checks are written on different dates).

•7.    Address on the earnest money check varies from that of the borrower's address on the contract and/or loan application.

•8.    No real estate agent is involved.

•9.    Purchase contract is ‘boiler plate' with limited fill-in-the-blanks not reflective of the true negotiation (buyer not represented by a real estate agent).

Sandra S. Madison

Senior Mortgage Loan Originator

NMLS # 43902 & MLO-7436VA

(434) 566-2420 direct line

www.suntrustmortgage.com/smadison 

SunTrust Mortgage

682 Berkmar Circle

Charlottesville, VA  22901