Home Buyer Q & A

  • So much has changed over the last five years - does anyone still allow seller held seconds?  Amazingly enough.  Yes.  Conventional financing will allow for seller held seconds.  You may go as high as 95% CLTV or an 80% first mortgage with a 15% seller held second.  There are, of course, particular guidelines for the seconds.  They may not charge a rate that is less than 2% of the market rate.  The note must be recorded and there must actually be a debt instrument that must be reviewed by underwriting.   
  • I am a first-time homebuyer.  I want to put 5% down, someone mentioned the VHDA (Virginia Housing and Development Authority) has a no mortgage insurance program - is this true?  Not exactly.  Any program that allows over 80% financing will carry some type of mortgage insurance with the exception of VA lending.  The mortgage insurance may be lender paid, meaning it is built into the rate.  Subsequently, you then pay a higher interest rate.  Some people feel this is very advantageous because of the additional deduction of interest; however when the mortgage insurance would normally be removed from the loan, the borrower is still paying the higher rate.  Be aware of all terms when you are seeking over 80% financing.

  • We are purchasing a home with a VA loan.  The mortgage company we are workling with is taking forever to get a decision back to us, so we'd like you to do the loan.  What do we do about the appraisal (it has already been done) and how fast can you close?  A loaded question.  First, if your appraisal is VA or FHA, the appraisal has to be transferred through the VA or FHA portal, the appraisal is good for 90 days.  Second question - length of time to closing...it is nearly impossible anymore to close a loan in a week with the current disclosure process.  Most purchases can be accomplished in 21-30 days.  Less time is possible depending on whether the appraisal has been received and documentation complete at application.  But before you move your loan, make sure you have a very honest answer from the person you are working with on where they are in the process.

- Jennifer Kennan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding, 757-366-8690