All Blog Entries by Nicholas Ballard

Although never a mainstream lending program for residential properties, many of the larger national banks used to offer loans for foreign nationals. Amid the major setbacks experienced by the housing and financial sectors over the past few years, most of these loan programs were discontinued. Nowadays, even U.S. citizens living abroad have a tough time securing financing and most foreign nationals eligible for any level of financing will find themselves obligated to put down at least 50% of a property's purchase price. Fortunately, lining-up financing for overseas citizens has improved dramatically and qualified foreign nationals can now secure excellent financing (up to $5 million) with down payments as low as 10%.

With interest rates…

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In a welcome reversal to loan limit reductions of $625,500 that were imposed on FHA, high balance, and super conforming loans on October 1, 2011, the FHA increased its high balance limits in mid-November to the former threshold of $729,750. The increased FHA limit should be effective throughout 2012, however both Fannie Mae and Freddie Mac’s high balance and super conforming products currently remain fixed to the lower amount.

The FHA’s higher limit of $729,750 affords borrowers superb financing, especially long-term, fixed pricing with 30-year mortgages currently around 4.0%. In contrast, the conventional high balance and super conforming loans, which cap out at $625,500, have rates of .125% to .25% higher. And, as soon as…

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Beginning October 1, 2011, new limits will be implemented for conforming and FHA loan sizes. These changes will apply to single and multi-family properties (1 to 4-units) and will result in sizeable loan reductions for many counties. Loans above these limits are referred to as "non-conforming" and will still be widely available. Non-conforming loans, however, generally carry higher rates and are somewhat more demanding with respect to qualifying requirements.

The new maximum conforming limit, often referred to as "high balance" or "super" conforming, will be reduced from $729,750 to $625,500 for single family units in high cost areas. Eleven California counties qualify for this maximum conforming loan amount, including six of the Bay…

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You've most certainly heard the news. The recent savaging of equities amid increasing concern over the U.S. economy's tenuous recovery, along with the growing storm enveloping European financial markets, have all contributed to a flight to Treasuries and to some of the lowest mortgage rates in history. 30-year fixed conforming rates (supporting loans to $417,000) have broken below the 4% threshold and high balance conforming loans (currently from $417,000 to $729,750 in most Bay Area counties) are in the low 4% range. While these low rates improve the purchasing power for many buyers, the pending reduction of the high balance conforming limit to $625,500 will translate to higher payments for others. The limit reduction is set…

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I recently assisted clients of Erika Davito in purchasing their first home with financing secured through the FHA's Streamlined 203(k) Limited Repair "Rehab" Program. This loan program is a great resource for some buyers, blending together purchase and construction financing into one loan. But the process is definitely far more involved than with conventional or even regular FHA loans and there is greater potential for fall out. It's therefore important to be aware of potential pitfalls in order to improve the odds of a favorable outcome and I thought I'd share a few thoughts. (For a more general outline on the Streamlined 203(k) loan program, please refer to my earlier post.)

First, although the Streamlined 203(k) Limited…

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Originally developed to support self-employed borrowers earning more income than their tax returns otherwise suggested, stated income loans became the most popular (and widely abused) type of mortgage from roughly 2002 through 2007. Following the near collapse of the financial system in 2008, "no income verification" loans were exiled from the marketplace. While this correction was long overdue in the example of someone with earnings of $2500 per month stating income of $15,000, it has unfortunately blocked millions of would be borrowers whose income and overall financial status fully support their ability to repay a loan. Fortunately, there are now some excellent options for borrowers who fall into this category. And this includes…

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Until recently, borrowers with down payment money representing less than 5% of a property's purchase price were limited to FHA loans. While Fannie Mae and many lenders offered financing beyond 95%, the 5% down payment threshold was imposed by mortgage insurance providers that had scaled back their coverage in California. (Any mortgage exceeding 80% of a property's value requires mortgage insurance.) In a bid of confidence for California's housing market, several mortgage insurance providers have recently increased their coverage to 97% for conventional loans.

For the right borrowers, conventional financing to 97% offers certain advantages over FHA loans. Conventional financing allows for just 3% down versus the FHA's 3.5%…

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New pricing charges in the process of being implemented by Fannie Mae and Freddie Mac as part of the risk-based fee they factor into mortgage pricing will raise the cost of credit for most borrowers -even those with excellent credit scores. While these changes are slated to take effect April 1, most lenders have already levied new cost adjustments into their pricing to insure their loans are covered for eventual sale.

The litmus for what is considered excellent credit has been continually raised over the past few years, increasing from 700 to 720 and, over the past year or so, to 740. Although credit score ratings have long been used to balance out pricing and determine which loan options are available to a given borrower,…

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After the holiday season's frenzied pace and as we settle into 2011, I thought I would post some thoughts on interest rates. Many clients have voiced their belief that mortgage rates have shot up so significantly as to cloud prospects for future purchases or the benefit of a potential refinance. Although it is true that mortgage rates climbed significantly following the all-time record lows we saw in October and early November, 2010, they have since tempered a bit and we are currently in the range of the still historic lows that predominated most of last year.

Current rates are approximately ½ percent higher than the absolute lowest rates posted last year, when we saw 30-year mortgages up to the true conforming limit…

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Financing for floating homes is not within my usual bailiwick, however numerous inquiries pushed me to do some research and I thought I'd post some information on this topic for those in need.

Even in past years when home financing was far more liberal, credit for purchasing a floating home was difficult to find. In today's challenged lending environment, non-mainstream loans have largely vanished and I was able to find only one lender offering financing for floating homes in the Bay Area: Financial Benefits Credit Union (FBCU). With just one player in the market, loan offerings are understandably limited and borrowers are likely to find themselves relegated to either a 7-year fixed or a 7-year adjustable loan. Both loans are based…

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