PITI is a popular term that lenders and mortgage brokers like to throw around. When I first heard the term I had no clue what it meant and most home owners don’t care to know mortagese terms. So in plain English “P.I.T.I” means Principal, Interest, Taxes and Insurance.

Every mortgage payment is made up of part principal and part interest. However some people like to include their property taxes and homeowners insurance into their payment. This way they can avoid having to save money on the side to pay for their property taxes and insurance.

When you include your taxes and insurance into your mortgage payment, this is called escrowing. When you “escrow” your taxes and insurance, the lender that collects your mortgage payments will set up an account for these payments to be placed into. And when your taxes are due they will release the funds and they are paid for you.

You don’t have to include your taxes and insurace if you don’t want to, but most home owners like it because it makes it easier for them to budget. If you are interested in buying a home in the Inland Empire and you want to learn about FHA loans call Preferred Financial at 800-748-6103 or visit us on line at www.preferredfinancialfunding.com

JP Lowry

President

Preferred Financial Funding, Inc

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Today we are going to review what documents are required for an employed borrower to get an FHA loan in San Bernardino, CA. This list will be the basic requirements and more documents maybe required later after we review your file.

• Most Recent Paystubs To Document One Months Income
• 2 Years Most recent W2′s
• Copy of Your Most Recent Mortgage Statement
• Copy of Your Homeowners Insurance Policy
• Copy of Your Social Security Card or Other Proof Of Citizenship
• Copy of Most Recent Credit Card Statements
• Signed Credit Authorizations (We provide this for you)

That’ it. It usually takes 15-20 minutes to find that small list of documents. Once we receive your documents and review your file you will be ready to close in 15-17 days. If you are interested in learning more about FHA Loans in San Bernardino call Preferred Financial at 800-748-6103 or contact us online at www.preferredfinancialfunding.com!

JP Lowry

President

Preferred Financial Funding, Inc

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Not at Preferred Financial Funding in Colton, California. Our average turn time from application to closing is 17 days. Thats 30 days faster than our competition.

We have over 23 years experience in working with FHA loans and we hold the highest level of approvals from The Department of Housing and Urban Development.

If you are looking to refinance your home or buy a new home in the Inland Empire call Preferred Financial Funding today at 1-800-748-6103 or apply on-line at www.preferredfinancialfunding.com

JP Lowry

President

Preferred Financial Funding, Inc

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Now these loan limits have been increased to $500,000 for both Riverside and San Bernardino Counties. This means that there will be more FHA loans in these areas than ever before. We have seen a huge jump in application for these types of mortgages since they have the most relaxed guidelines.

Prior to the increases home buyers were limited to purchasing homes of around $330,000 if they wanted an FHA loan. FHA purchase loans only require a 3.5% down payment compared to 20% down payments for most conventional mortgages.

Today you can buy a home for $450,000 and have only a down payment of $15,750 compared to a conventional down payment of $90,000. That’s over $84,000 in savings.

If you are interested in refinancing or purchasing a new with an FHA Insured Mortgage call Preferred Financial Funding, Inc at 800-748-6103 or apply on line www.preferredfinancialfunding.com.

JP Lowry

President Preferred Financial Funding, Inc

Many first time buyers ask, why do we need Title Insurance? What are the benefits? In California it is customary that the seller pays the Title Insurance and if the buyer has a loan, all the buyer has to do is to pay the Loan Tie-in fee’s portions. Here are ten very important reasons, why you need Title Insurance:

1. Title Insurance will protect you against a loss on your home or land due to a title defect.
2. A deed or mortgage in the chain of title may be a forgery.
3. Claims arise due to marital status and validity of divorces.
4. A deed or mortgage may have been made by an under-aged or incompetent person.
5. A deed or mortgage made under an expired power of attorney may be void.
6. A deed or mortgage may have been made by a person with the same name as the owner.
7. A child born after the execution of a will may have interest in the property.
8. Title transferred by an heir may be subject to a federal estate tax lien.
9. Title Insurance reimburses you for the amount of your covered loss.
10.  A title policy is paid in full by the first premium for as long as you own the property.

 Everybody has heard by now that new homebuyers can qualify for a generous tax credit if they purchase a home. However thanks to Congress writing the law in such a complicated manner it is really quite frustrating for alot of people to figure out if they can actually claim it! Well I am here to help. In this post I will review the basic eligibiltiy requirements to the claim the credit, the form you need to claim the credit, and line on your 1040 to place the credit.

In general you may be eligible for the credit if you purchased a home between April 8, 2008 and December 1, 2009. However you cannot have owned a home for last 3 years (if you are married this includes your spouse).

The amount of the credit is trick to say the least. If you bought your home during 2008 the credit is generally $7,500 and if you are married and you file your taxes seperate from your spouse you only get half that amount. This is interest free loan that is suppose to be paid back over 15 years.

2009 home purchases receive $8,000 credit but again the rules apply for married people filing seperatley again and you could be limited to $4,000. But the good news is YOU DONT HAVE TO REPAY THIS CREDIT so long as your new home remains your primary home for 36 months from the date of purchase.

Income, is another area which determines if you can benefit from these special credits. You may be eligible for the full amount of the credit if your adjusted gross income, with certain modifications, is $75,000 or less — or $150,000 or less if married and filing jointly.

The IRS form you need to actually claim your credit is form 5405. You can download one right here! For those of you who prepare your own returns to claim the credit on your 1040 you need to go to line 69. If you have already filed your 2008 taxes you can still ammend them to get your tax credit. Just file a 1040x with your f5405 to ammend your old filing.

JP Lowry — Preferred Financial Funding — www.preferredfinancialfunding.com –

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New homes sales jumped 4.7% in February from January and it could be a sign that the housing market is finally bottoming out. “We have been looking for a bottom to form sometime in the first half of the year and it looks like things have firmed up a little bit,” said Scott Anderson, senior economist at Wells Fargo & Co. The U.S. Census Bureau reported that sales of new single-family homes rose from a seasonally adjusted annual rate of 322,000 in January to 337,000 in February. The bureau revised the January sales number upward from 309,000. The new home sales report combined with the 4.4% jump in sales of previously owned homes is “very encouraging at this point,” Mr. Anderson said. But he wants to see a couple more months of good reports before calling a bottom. “Now that the Federal Reserve is trying to push down mortgages, we are seeing a refi boom and it seems like it is helping to give some confidence to buyers to go ahead with a purchase.”

JP Lowry — Preferred Financial Funding — www.preferredfinancialfunding.com –

http://activerain.com/jlowry

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Despite all the problems with the economy and falling home prices there is a some good news coming out this. According to a recent article in National Mortgage News the gap between the sale value of homes that sell as REO and the rest of all sales is widening. That means that bank owned homes are even more depressed in value than others.

In fact in Riverside, CA homes prices fell 28% comapred to sells in 2007 but REO sale value fell an average 34%. This is good for new buyers who have been sidelined since 2004 who simply priced out the market.

Interest rates are at historical lows, thanks to the action taken by the Federal Reserve Bank to buy billions of dollars worth of Mortgage Backed Securities. Couple this with cheaper housing and you have an opportunity to pick up a nice house for less than it is actually worth. Not to mention the tax credits that are now available for first time home buyers of up to $8,000 just from the Federal Government and some States now have their own buyer incentives.

We just closed on a purchase of a Bank Owned Detached Condo in Ladera Ranch, CA. This is a nice newer community with homes ranging from $700k to over $1m and town homes/condos from $300k to over $700k. Our clients appraisal came in at $345k and sell amount agreed to buy the bank was $340k. In fact we chopped the value of the house down…it could have appraised for as high as $367k but we took a conservative approach. Whats better, the bank actually provided a 10k for closing cost built in the price of the unit. Needless to say our client made out like a bandit.

Thanks to him buying an REO home he has walked into $27k in equity and he will receive TAX CREDITS OF $18,000 on his 2009 taxes. Not to mention the benefits of home ownership he will get to deduct as well.

If you are looking to get huge tax credits and get instant equity in home with low payments get out there and do it. Nobody is going to make you buy a house and build wealth, YOU HAVE TO DO IT YOURSELF.

JP Lowry — Preferred Financial Funding — www.preferredfinancialfunding.com –

http://activerain.com/jlowry

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This is a little known program that can benefit a lot  of people. HUD has a program called the Good Neighbor Next Door Program that allows people with certain jobs to purchase a HUD REO for half of the listing price. You are not seeing things, thats 50% percent off.

But wait what is the catch? Well there are requirements for the buyer, the home has to be approved for the Good Neighbor Program and there is a minimum occupancy time.

So who can buy? Well any Police Officer, Fire Fighter, Pre-Kindergarten through 12th grade teacher or an emergency medical technician is eligible for this program.

What homes are eligible? You will need to check with HUD M&M Contractor in your state (some states have multiple) but the for starters the home must be located in a REVITALIZATION AREA.

What is this minimum occupancy requirement? The buyer cannot own or be on title to any other real estate and must agree to live in the home for 3 years. Believe me don’t try to be smart and con the government. A couple of years ago there were a few people who bought a HUD REO using the 50% program and later on moved out and rented the house. The FBI went looking for them.

How does this work? Well they do only have to pay half of the listing price, but HUD requires that you sign a second mortgage note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three year occupancy requirement.

Words of caution:

1. HUD REOs are completley different then standard Bank REOsales. You should only work with a lender and realtorwho are experienced in this special transaction as they will be more familiar with the quirks.

2. You have to be pre-approved before you can bid on a HUD REO.

3. All HUD Escrows are 45 days to close. If you don’t close in 45 days you can run the risk of losing your good faith deposit unless an extension is approved which will cost you an additional fee.

FOR MORE INFORMATION YOU CAN VISIT HUD’S WEBSITE HERE.

TO FIND HUD HOMES IN YOUR STATE YOU CAN CLICK HERE.

I hope you all find this helpful and good luck out there.

Jay-Paul Lowry–Preferred Financial Funding–www.preferredfinancialfunding.com

http://activerain.com/jlowry

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Ginnie Mae (the Government Agency that guarantees payment to investors of federally guaranteed loans) has seen its business sky rocketed over the last two years. 2008 for instance, saw well over $200billion dollars worth of FHA loans were funded then issued through Ginnie Mae Mortgage Backed Securities, compared to only $86.9billion in 2005 and $83.3billion in 2006.

As a result of this new found love for FHA loans (mainly because it is the most relaxed lending product available) there has been a rush for companies to claim they are “FHA Experts”, when in fact they are new to the arena or they had to bring their FHA lending manuals out of the closet and dust them off. As a matter of fact there are so many applications from lenders to become FHA approved there is a major back log at HUD.

According to an article released today in American Banker written by Jason R. Marx it is not uncommon for companies to wait up to three months or more for their FHA approval. Whats more concerning is that these lenders are so new to FHA that they don’t even complete the application correctly and this delays their approval even more.

For homeowners looking for a reputable, knowledgeable FHA lender its hard to be sure who is a veteran FHA lender and who is a rookie. Well one way to check is to go www.allmortgagedetail.comand see their HMDA filing report. This shows the breakdown of conventional (non FHA loans) versus FHA, VA fundings for the last three or four years. If you notice that a company you are considering of working with has more non FHA loans or no FHA loans recorded you are most likely working with a company with little experience in this special product.

Experience in FHA is everything. The more FHA loans a company has closed and the longer they have been approved by HUD to be an FHA lender the better. For instance, HUD will conduct random on site audits of lenders who are FHA approved. These audits make sure a lender plays by the rules and is competitive on their fees. If the audit does not go well they can have their approvals pulled by HUD. A company that has been FHA approved for more than 10 years has probably been through a couple of these, where as a new company has not.

There are also different levels of approval that HUD will grant. These are most commonly known as Mini-Eagle and Full-Eagle approvals. The difference between the two can be important. Mini Eagle lenders do not have the ability to underwrite their own loans, this means they must be sponsored by a Full Eagle lender who will underwrite their loans for them. This means they have no authority to approve loans. Full Eagle lenders on the other hand can originate, underwrite, fund, service and own FHA loans.

Remember, experience and business reputation are the two most important things when you choose an FHA lender. If you are unsure about the quality of a lender you can check their Better Business Bureau report or can check this link http://www.hud.gov/ll/code/llslcrit.cfm at HUD to verify if your lender is approved and how long they have been approved. Think of it this way, if you were going in for heart surgery and you had a choice between a new hot shot doctor straight out of med school with no surgeries completed or a gray haired veteran with thousands of completed surgeries who would you choose?

For an experienced FHA Lender can you call Preferred Financial Funding at 1-800-748-6103 or visit our website at www.preferredfinancialfunding.com. We have been FHA approved since 1986 and have an “A” rating from the Better Business Bureau.

JP Lowry — Preferred Financial Funding — www.preferredfinancialfunding.com –

http://activerain.com/jlowry

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