Leslie's Loans.net: Conventional Home Loans Index

CONVENTIONAL HOME LOANS

Fixed Rate
Conforming
Jumbo
Adjustable Rates
3/1 5/1 7/1 10/1 ARM'S
4 Payment Option
Interest Only
Sub Prime/Alt A
Refinance
Investment
Units
Condos/Town Homes
Balloon

Let's make contact and see what may best serve "your" needs. By getting started today you will be ready to be taken seriously by your Real Estate Agent as well as the Seller and their Agent.

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Definitions:
Conventional Loans
Private Mortgage Insurance (PMI)
PMI Cancellation Policies

Although there are a variety of Conventional Home Loans available, only a few senarios may fit your needs.

I can get to the bottom line with just a few questions and save you the misery of trying to figure out which one fits and the feeling that you may be missing out on a certain program...remember advertising is designed by the lenders to generate volume for them not necessarly provide you with the loan that "you" want.

For Sale By Owner
Considering selling your home without an agent and need some help with the paper work?

Are you considering carrying paper for the new buyer or perhaps a 2nd Trust Deed or Lease Option? Here are some things you may want to consider....

Check out our "For Sale By Owner" Service page.

CONVENTIONAL:

Conventional Loans are not guaranteed or insured by the government. Mortgage Bankers, Banks, Credit Unions and Savings and Loans provide funds for Conventional Loans. They are traditionally originated to conform to FNMA(Fannie Mae)or FHLMC(Freddie Mac) guidelines. Although, Conventional Loans by definition have no boundaries as far as requirements, they normally meet the following standards.

LTV: Up to 100% " loan to value". FULL documentation, STATED Income AND ASSET Loans are available with LTV's set lower depending on type of documentation and credit (FICO) Scores.

CREDIT: Conventional loans require a higher standard of credit management, however FICO Scoring can go as low as 500 and in some cases lower. These loans will require 1-4 years to have passed after a bankruptcy before granting credit approval for a new loan.

EMPLOYMENT: Must have verifiable 2 years of continuous employment. There are circumstances that may be acceptable in brief breaks in employment that are explained and verified.

ASSETS: Remaining assets (cash reserve) can help in obtaining a Conventional Loan and in some circumstances is required. 100% of the funds for down payment and closing costs may be gift funds however if the "loan to value" is above 80% the borrower may have to provide at least 5% of his own funds into the transaction.

PROPERTY VALUE: The appraisal of the property plays an important part in the securing a Conventional loan. The appraiser must licensed by the State Of California(or appropriate to that of other state regulations)and the appraisal must meet certain investor guidelines that are generic to the industry as a whole. Minimum HUD required Health and Safety Standards apply.

Private mortgage insurance (PMI):

This is required on most conventional loans when the loan-to-value is in excess of 80% (less than 20% down). Programs can vary as to the need for coverage and amount of coverage required. *0?20 % combos are looked at in order to avoid this insurance. ** Looking at all options is wise as the future potiental of dropping PMI may out way the alternative.

There are some "self insuring" loans available, however the interest rate is higher giving the lender a higher yield for not applying PMI to the loan and the self insuring loan does not give you the benefit of dropping off the PMI in 2 years or when the "loan to value" ratio drops to 80%.

**There are programs that avoid this insurance but remember the higher the risk to the lenders the reqirement for PMI is applied and sometimes the alternative is not he desirable.

Give Amber Financial a call (909 338-3001) or (866 628-8882 to go over thes options

PRIVATE MORTGAGE INSURANCE CANCELLATION POLICIES

Law went into effect on July 28, 1999 Applies to single family residential loans originated on or after July 29, 1999
Borrower Disclosures Required:
* Originating lender must provide to the borrowers at closing a disclosure regarding the right to cancel private PMI (mortgage insurance)
* The servicer (lender sending mortgage coupons and servicing loan) must provide an annual disclosure to borrowers regarding their right to cancel PMI, either:
On the escrow statement
Or on the IRS> Disclosure of Interest Payments Statement
For those loans originated before July 29, 1999, servicers are required to give annual notice
that the possibility of cancellation exists
Cancellation at 80% LTV:
* Borrower is allowed to cancel PMI when the loan amortizes to 80% LTV based on the initial amortization schedule
* Borrower must make written request to the lender(servicer)
* Borrower must provide evidence (as determined by lender/servicer) that property value has not depreciated below the original value at puchase
* Pay history is good (current and no 30 day lates in the last 12 months and no 60 day lates in the last 24 months)
Automatic Cancellation at 78% LTV:
* Servicer(lender) must cancel PMI (based on the initial amoritazation schedule) when the LTV reaches 78% if the borrower is current on his mortgage payment. If the borrower is not current , the coverage then is terminated when the borrower becomes current.
Exceptions to Automatic Cancellation:
* Cancellation of PMI on a high-risk conforming loan (as defined by the agencies) at the mid-point of the amortization period provided the borrower is current
* Cancellation of PMI on a high-risk non-conforming loan (as defined by the investor) at 77% LTV provided the borrower is current
Refunds of PMI Premium:
* Refunds of unearned premium must be transferred to the borrower within 45 days
* Mortgage insurer(PMI) has no longer than 30 days to transfer premium to servicer