Do Lenders Still Offer Jumbo Loans?

by Isaac Benmergui, Esq on August 28, 2015

Do lenders still offer jumbo loansEven after all the over borrowing that lead up toe housing crisis, lenders are still eager to hand out jumbo loans. Jumbo loans are loans over $417,000, and they are more common than you might think.

Even as the housing market slowly crawls back to normal, luxury real estate has made a snappy comeback, with home prices increasing up to 25 percent in some markets. In this luxury markets, jumbo loans are common, relatively low-risk and high-return.

In order to qualify for a jumbo loan, you have to have better than average credit—a score of 700 or higher—and more savings and a larger down payment than you would need for a more traditional loan. Jumbo loans require a 20 percent down payment, although some lenders like Wells Fargo have dropped that number in order to make the deals more enticing to borrowers who are looking to trade up.

Acceptance rates are also on the rise, with only about 16 percent of applicants getting rejected in 2012. Compare that to 2008, when three out of ten were denied.

Do I Qualify?

Qualifying for a jumbo loan is the same process as a traditional loan. You’ll need paystubs showing the last 30 days of income and W2s for the past two years. If you’re self-employed, you’ll also need six month’s worth of mortgage payments in the bank.

Jumbo loans also have their own debt-to-income ratio requirement: It should not exceed 43 percent, and a credit score of 680 for most lenders to consider you.

Depending on your credit score, you may be qualified for a smaller down payment, in some cases as little as 10 percent. Most applicants should plan for somewhere between 20 and 30 percent, however.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Do Lenders Still Offer ARMs?

by Isaac Benmergui, Esq on August 27, 2015

Do lenders still offer ARMs in the post-housing crisis eraARM, or adjustable-rate mortgage, loans were part of the problem that led to the housing crisis. ARMs offer artificially low interest rates to homeowners that reset after a certain period, such as 5, 7 or 10 years. While this can be catastrophic in a housing market where it becomes difficult to sell, in a typical market they can help homeowners afford the home they want at a price they can afford.

But now, banks are using ARMs to lure homebuyers back into the market. Part of the stagnation in the market, some banks theorize, is that homebuyers who were planning to upgrade or downsize are staying put while they figure out what direction the market is going. ARMs offer great deals on interest rates, so availability would help get these homebuyers motivated to move.

Some new hybrid arms have been introduced recently include 15/15 ARMs that only reset once and at a fixed rate. It’s a great option for those who are interested in a 30-year loan but may need lower payments to start. There’s also no prepayment penalty if you pay off your home early.

Another option is the 5/5 ARM, which features a continuous rate for five years at a time, and then can go up by no more than 2 percent at a time and is capped at 5 percent for the life of the loan. These are good for homeowners who know they’ll be selling before the reset.

Most homebuyers stay in their home only five to seven years before moving, so banks say 30-year loans aren’t really necessary for most individuals.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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How are Millennials Affecting the Housing Market?

by Isaac Benmergui, Esq on August 26, 2015

How are millennials affecting the housing marketMillennials are a discussion point in just about every area of daily life, from politics to fashion to the real estate market. Where millennials are buying, how much they are paying and where they are working will shape the real estate market for investors for the next decade or so.

Here are some important ways the millennial generation is impacting the housing market:

  • Multigenerational households: According to a report by the National Association of Realtors, home purchases among multigenerational homebuyers are now up to 13 percent. That’s because many millennials are coming home before they strike out on their own, and that means mom and dad start looking for a bigger, better designed, or more suitable home for the two separate households now living under one roof.
  • City living: Among millennials who do buy on their own, being close to work is important, and being close to shops, restaurants, and nightlife is even more important. This generation is seeking New York-style city life, made popular on shows like Sex in the City and Girls not just in the large cities known for it, but even in smaller cities. That’s causing an increase in development of multi-use commercial properties and condos.
  • Expensive homes: Despite millennials largely having poor credit and more student loan debt than previous generations, they are buying more expensive homes. Luxury brokers have said they see more parents buying homes for kids than ever before. Another factor is the tech boom, which disproportionately employees younger workers.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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What Home Improvements Will Give me the Best Return?

by Isaac Benmergui, Esq on August 25, 2015

What home improvements will give me the best returnSome home renovations will get you more for your money than others. That’s not to say you shouldn’t make repairs that don’t have a high return on investment, especially if you are going to be in your home for a while longer. But if you’re getting ready to sell and want a list of quick hits that will boost your asking price while not requiring much investment on your part, here are five ideas.

Five ideas for high-return home improvements:

  1. Outdoor replacements. Who knew that replacing your garage door would give you a return of 72 percent? Outdoor replacements such as garage and front doors, new or upgraded windows, won’t cost you a ton but will add to your curb appeal. Can’t afford to replace? Opt for a new coat of paint in current hues.
  2. Kitchen improvements. There’s no need to tackle a huge remodel, like new cabinets or appliances. Start with fresh paint, consider new flooring if yours is vinyl, and add updated lighting and hardware for a bright new look at the fraction of the cost of a remodel.
  3. Add Curb Appeal. You don’t have to spend much money to fix up the outside of your home—you just need sweat equity. Add flowers, sweep off and clear off sidewalks and porches, keep the lawn neat and trim weeds. Get all the junk off your property. Add a wreath on the door and a bright pot of flowers to the entry, and instantly add ten percent to the value of your home.
  4. Add storage space. Most new homes have well-designed storage, but older homes often lack even the basics, like a pantry or linen closet. If your home is short on storage, come up with some creative solutions to accommodate the modern buyer.
  5. Bathrooms. New research on homebuyers shows that bathrooms are now more important than kitchens. Since the square footage is small, a bathroom overhaul can be quick and inexpensive. Think paint, new flooring and updated lighting at the very least.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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What is the Least Amount I Can Put Down for a Down Payment?

by Isaac Benmergui, Esq on August 24, 2015

What is the least amount I can put down on a houseOne of the biggest hurdles to home ownership can be the down payment. It’s hard to save up tens of thousands of dollars in addition to paying rent and putting money in retirement, an emergency fund, and your regular savings. Add in kids and college savings accounts and it gets even harder.

But there are a few loans that require little to no down payment. If you qualify for one of them, it can lift that big hurdle out of the way. Here are five loans that require little to no down payment.

  1. VA Loan – Qualified veterans can get a VA loan with no money down, but a funding fee is required. It can range from 2.15 percent to about 3 percent depending on what branch in the military the veteran served and whether the loan is their first. The VA guarantees the loan, so there’s no mortgage insurance requirement either.
  2. Navy Federal Credit Union – Navy Federal also offers 100-percent financed loans to military members, but also includes civilian employees of the military, Department of Defense members, and members of their families. The rate is also lower—just a 1.75 funding fee.
  3. USDA Rural Development Program – Rural development loans aren’t confined to farmland purchases. If you meet the geographical and income restrictions, you can get a 100-percent funded loan with just a 2 percent guarantee fee. Most of these loans go to first-time homebuyers, but there are some exceptions.
  4. FHA – The FHA is a home loan available to the public that requires just 3.5 percent down. There is an upfront premium of 1.75 percent of the mortgage amount, plus an annual premium of 1.25 percent, which only amounts to about $100 a month on a $125,000 loan.
  5. PMI – You don’t have to qualify for any special programs to put less than 20 percent down, but you will have to pay primate mortgage insurance. PMI can actually cost some borrowers less than the premium on an FHA loan, and you can cancel the mortgage insurance when you have more than 20 percent equity in your home.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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