How to calculate Debt-to-Income (DTI) Ratio For My California Mortgage?

Debt-to-Income (DTI) Ratio is one of the many new mortgage related terms many First-Time Home Buyers in California will get used to hearing. DTI is a component of the mortgage approval process that measures a borrower's Gross Monthly Income compared to their credit payments and other monthly liabilities. Debt-to-Income Ratios are designed to give guidance on acceptable levels of debt allowed by particular lenders or programs. There are actually two different Debt-to-Income Ratios that underwriters will review in order to determine if a borrower's monthly income is sufficient to cover the responsibility of…continue reading →

Is Mortgage Insurance (MI) Tax Deductible and other FAQs about MI

Is Mortgage Insurance (MI, also called Private Mortgage Insurance PMI) tax deductible in California? We will address this question and some other FAQs about Mortgage insurance in this post? Q. What is mortgage insurance (MI) tax deductibility and how does it work? A. The law provides for an itemized deduction on federal tax returns for the cost of private mortgage insurance paid by eligible borrowers. Prior to 2007, borrowers could not deduct the cost of their mortgage insurance payments. Now the law has been extended through 2011. (Update - Jan 2nd, 2013 -…continue reading →

2011 FHA maximum Loan Limits announced for Bay Area Mortgages

The maximum FHA loan limits for most Bay Area counties (the ceiling) by property size for fiscal year 2011 are as follows: One-Unit $ 729,750 Two-Unit $ 934,200 Three-Unit $ 1,129,250 Four-Unit $ 1,403,400 Properties located in the counties of Santa Clara, San Mateo, Alameda, San Mateo, Contra Costa, San Francisco, San Benito and Santa Cruz are eligible for these maximum loan amounts. Most Single Family homes, Townhomes and Condominiums are considered 1 unit properties. These limits are in effect from January 1, 2011 through September 30, 2011. These limits apply to mortgages…continue reading →

Common Documents Required For A Mortgage Pre-Approval

Even though many mortgage lenders are still quoting quick 10 minute pre-qualification over the phone or online, a true mortgage approval that holds any weight is one that has been issued by an underwriter who has had an opportunity to review all of the necessary documents. With a constant stream of new lending guidelines, volatile mortgage rates and tightening regulation from Washington, very few real estate agents will show new homes to a First-time-buyer without at least a pre-qualification letter. A Pre-Approval Letter will help you in three ways: It lets you know…continue reading →

Home Buyer Seminar for First Time Buyers, Trade up Buyers and Investors in San Jose, CA

Home Buyer Seminar for First Time Home Buyers, Trade up Buyers and Investors in San Jose, CA. As part of Home Ownership Workshop (HOW) series, Arcus Lending is presenting a live *free* seminar for Home Buyers in San Jose. With the drop in home prices over the last few years, and record low interest rates, 2/3 of Bay Area residents can now afford to buy the median priced home. This creates a unique opportunity for: First time home buyers - Low down payment loans, Record low interest rates and discounted property prices create…continue reading →

Lets get the San Jose FHA Loan Pre-Approval done again

If you are pre-approved for a San Jose FHA loan, I have news for you. That pre-approval is not good anymore. I will tell you why! Starting today, FHA is making changes to the mortgage insurance premium. If you do not know it already, FHA has both Upfront and Monthly mortgage insurance for (almost) all loans. For loans originated till Oct 1st, it was 2.25% for upfront mortgage insurance premium and .55% for most 30 year fixed loans with 3.5% down payment. For FHA loans originated starting today, the good news is upfront…continue reading →

FHA reduces upfront Mortgage Insurance for San Jose First Time Home Buyers

FHA today announced reduction in upfront Mortgage Insurance Premium (UFMIP) for San Jose First Time Home Buyers and FHA Streamline Refinance on San Jose homes. A change that has been prompted by passage of H.R. 5981 in the congress, will reduce the upfront mortgage insurance premium to 1% from the current 2.25%. At the same time, the annual mortgage insurance premium currently at .55% for the minimum downpayment of 3.5% will go up to .90%. For downpayments at 5% or more the annual mortgage insurance may go up to .85% from the current…continue reading →

Looking for a reason to Refinance – How about the lowest rates in 40 years!!

CNBC and Bankrate.com just reported that home loan rates are at their all time lows. Yes, all time lows! This is great news for anyone who has yet to refinance to take advantage of the lowest rates ever recorded, or to purchase that new home or investment property more affordably than ever before. Both 30 Year and 15 Year Fixed Rates clipped down to their lowest levels. All this is incredible as just months ago, many experts had anticipated that rates would be well above 5% this summer and on their way to…continue reading →

Fannie & Freddie make it difficult to qualify for ARM and Interest only loans

Fannie Mae and Freddie Mac are making the following changes to interest-only and 3/1 and 5/1 ARM Loan Programs. These changes go into effect immediately. Interest Only Product Changes Interest only transactions are no longer available for Cash-out refinances, Investment properties and 2 to 4 unit properties. Interest only loans are still eligible on following transactions: - unit purchase and rate/term transactions - Primary residences or second homes with a: - Maximum LTV and CLTV of 70% - Minimum credit score of 720 - The borrower must have minimum reserves of 24 months…continue reading →