Happy Friday. I feel I would be remiss to not mention our very sad anniversary today. Many of us watched in complete disbelief to events that occurred on September 11th. While our family was not affected personally, I know many were. Our thoughts go out to you, and I thank those of you who have assisted in some capacity since that day. As we look to brighter days, I will get to business at hand. Very good questions this week.
- We are purchasing a new home. I have student loans that are in deferment. Payments will not begin for at least two years, why do have to provide a letter from the student loan company with estimated payments for FHA? As of September 14th, FHA requires minimum payments on deferred debts be included in a borrower's debt ratio. If your payment option is income-based, and the minimum payment is 0.00, then no additional payment needs to be considered. If this cannot be clarified, 2% of the balance has to be used for qualifying purposes.
- I want to purchase a new home, and I am getting married. We want to include my spouses income. I have VA eligibility, and we want to purchase using a VA loan. How does this work? First, congratulations! With this information, are you closing after you get married? If you are and depending upon the length of time between contract ratification and closing, we could look at two options. We could initially prequalify you unmarried with a different program and then convert the paperwork to a VA loan after marriage. Or, the easiest course of action would be to apply for a VA loan subject to getting married. This way everything is in place.
- We would like to build a new home. We have owned a lot for about four years. We are ready to finally build on it and are very excited. Please explain to m how a construction loan works. Construction lending is actually fairly simple. When you have owned the land for more than 12 months, you would use the appraised value of the land plus the cost to build. 80% of this number would be your construction loan. Depending upon the equity in the land, you may end up not needing any additional money in the project. If you have owned the land less than 12 months, you would use the cost of the land plus the cost of construction, 80% of this number is your construction loan amount. The first draw on a construction loan is to pay off the lot, this combines the property with the to be built structure.
Please remember, September 14th, is our TRID/CFPB continuing education class in Virginia Beach. Please let me know if you would like to attend, we still have some space available.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients. Please remember, I am licensed in Virginia, North Carolina and Florida.