Sparta Mortgage News

You still have time to take advantage of the low rates before it's too late!  Interest rates are enticing more buyers to upgrade their current home and also to jump into the real estate market. 

Call us today at 973-601-2122!

Posted by Mary Ann Munro on July 6th, 2017 3:37 PM
At the end of 2016, rates were slowly increasing. After the election, they stabilizes and have actually dropped a bit. According to "The Mortgage Reports"...

Between November and December, rates skyrocketed more than 75 basis points (0.75%) to two-year highs.

A $250,000 mortgage now costs $110 more per month than it did in early November.

The good news, though, is that mortgage rates may already be at their 2017 peak.

Now is a great time to start that new home search or refinance that old mortgage into something new with lower rates.
Posted in:Mortgage Rates
Posted by Mary Ann Munro on February 1st, 2017 4:45 PM

Are you buying a Multifamily house?

If the answer is "Yes" then keep reading... FHA recently changed some of their guidelines and one that you need to be aware of is the tighter qualifying regulations. Multifamily houses (2 to 4 unit properties) need to be self sufficient which means that the house must "pay for itself" with the projected rental income including the projected rental income for the owner occupied unit.

The Self Sufficiency Test prior to the guideline changes was calculated by taking market rent for all the units and multiplying that figure by 85% which gives you the maximum PITI payment for that house.  Now instead of taking 85% they reduced it to 75%.  This may not seem like a lot but it is deal making or breaking!

Example: Unit 1 $1,000 in rental Unit 2 $1200 and the owners unit would market rent for $1200 = $3400 x 75% = 2550 this means that the total mortgage payment, principle, interest, taxes and insurances (PITI) cannot exceed $2550.  In states like NJ the taxes can send this number soaring!

So if you are looking for a two to four unit property BE AWARE OF SELF SUFFICIENCY!

Mary Ann Munro

Loan Officer

NMLS# 280470

Posted in:FHA and tagged: House Self Sufficiency
Posted by Mary Ann Munro on January 29th, 2016 11:23 AM

This time of year family will give you cash gifts, which is wonderful, but if you're buying a house it can cause an issue.  If you are under contract or shopping for a house then it's important that you are aware of how to handle gift monies.

Cash is not a viable source of deposit so anytime you receive cash and deposit it into your bank account it will be under scrutiny.  An underwriter cannot use cash deposits as an asset for you and can exclude this amount from your available balance when he/she is calculating your assets.

If you receive a gift in the form of a check or money order then make sure you photocopy the check and make a copy of the deposit slip you use to make the deposit.  Keep in mind that you will need to show the corresponding bank statement and check, so keep this record handy!  You may also need that family member to complete a "Gift Letter" for FHA Loans this is a specific form.

I hope this is helpful!

Posted in:General
Posted by Mary Ann Munro on December 1st, 2015 1:41 PM

I can't stress enough how important it is for anyone who is currently renting.  Many times landlords will ask that you pay them in cash because this is more beneficial to the landlord, however, it doesn't help you provide a stable rental history.  In many cases of first time home buyers it becomes necessary to provide what we call a "housing history".  This let's the underwriter know that you prioritize your bills and are responsible with timely payments for your home.

If the landlord will not accept a check then the 2nd best option is to use a money order which will show your name and will be date stamped.  You will need to keep a record of each money order because unlike a checking account, that will be the only record of the transaction.  Money orders are as good as cash for any landlord.

I hope this tip was helpful!

Posted in:Renting
Posted by Mary Ann Munro on November 11th, 2015 4:12 PM