Florida Mortgage Rehab and Renovation

Many of you have probably been wondering what is going on in the lending arena. If you watch the news, you would see even giants in the industry have taken their lumps. Some homeowners have had difficulty paying their mortgages. Avoiding this fate and the possibility of losing your home is a lesson I learned through so many years in the business.

 In the beginning, I was taught, like so many others, that you offer the buyer the deal that gets them into the house they want no matter what so that they can have their dream home! I never was comfortable with that approach and so I always believed, and still do, that sometimes, it is not a good time to buy or refinance because there are credit issues that can get clients into trouble. Now, do not get me wrong, there are mortgages for folks who have had credit issues and I have written about 5% of all my loans over the years to this group of people, but I do it conditionally;

Firstly, I look at the credit history like a doctor looks at blood test results; I look to see if there is a “pattern” to the late payments or non payments. Was the person going through a divorce, or were they in college? Did they sign a note for another person who defaulted and left them holding the bag? There could have been a loss of a loved one or a loss of a job or an illness resulting in less income on a temporary basis. These are all “good reasons” for bad credit and generally, they are all bunched into a credit profile in a specific time frame. These are normally good risks who will not repeat these patterns and so placing them in a temporary sub prime mortgage (higher rates, less attractive terms) is a good risk. On the other hand, if they can wait 12 months, generally their credit will improve, the rate structure will be better and we can help them with a better set of terms.

Foreclosures and bankruptcies can take 2-4 years before a regular mortgage can be applied for, but these also can be financed through the sub prime lending platform. Remember, it is never a good thing to have a subprime mortgage, but sometimes it is a temporary thing and given the few circumstances that I think are credible, I would place someone in this type of mortgage.

Remember, the lending industry is going through a reorganization and too many lenders gave too many loans of this type to too many folks who did not have the criteria I suggested above. The result is non performing loans (folks are not paying) and lenders closing or at least closing down their sub prime lending operations.

As a professional, I have a responsibility to tell you the truth, to make sure you understand the ramifications of what you are doing and to gently advise you if I think that you are making a mistake. You do, however have the right to a loan if it is at all possible and in the end, you call the shots.

Call me with any questions or to receive a free booklet on how to navigate through the mortgage products. My number is 561-578-0666 or e mail me at jomathisen@aol.com.

Gems from Jo is a feature of this website. Joanne Mathisen has been a mortgage professional since 1984, having owned and managed her own business. She now is a senior loan consultant with Advanced Mortgage Solutions of South Flirida, Inc., a mortage company based in Boca Raton but she writes loans all over the entire state. 

On a recent visit “home” to the New York Metropolitan Area, I enjoyed the family, my friends and the “accented English” spoken in the Big Apple!  But one thing happened to me that actually made me realize that making the move to Florida was one of the greatest decisions my husband and I have ever made.  Don’t get me wrong, I love New York, always have and always will, but I now know that just about anything you can get there, you can get here, except maybe veal cutlets!  All kidding aside, the winter spent here was the grandest winter I have ever spent.  I finally discarded the ice scraper, the can of de-freeze so the car door locks will not stick and some very scary hat that covers everything but my eyes, sort of early bank robber!  As the winter gave way to spring, we were at the beach more often, while my loved ones were enduring a never ending deluge of rain, sleet and genuinely lousy weekends!  We had a drought, but, as if on schedule, June 1st came and with it the much needed percipitation!  Now I know that the rainy season is June, July and August, we still have mostly perfect mornings, a few downpours for a short while and then back to normal.  Just enough to water the lawn and plants and not cause too much damage to plans for outdoor fun.  I realized that I have never worn a coat since I moved here.  I realized that you do not need to travel to the Caribbean or other exotic locales to find sand, surf and all things outdoor right here in Florida.  I used to enjoy the Jersey Shore on those weekends in the summer and look at the sailboats.  But, too many rainouts in the summer up north made me question why anyone would invest in boating there when they could boat here anytime in Flagler, or Volusia county or anywhere in the state.

I miss many things about New York, not the least of which is my family and real close, childhood friends but we seem to get together for more quality time now that we are here in this beautiful state than we did at “home.”  Now they come for a week or 10 days at a time.  Sometimes it would take 6 months before I would see friends 10 times!  It makes me happy to know that we can have beauty, fun, active lifestyle and lots of company here in God’s Paradise on Earth.  I hope that if you are reading this, you either live here or plan to do so in the near future.  Yes we have had a couple of hurricanes but that was rare for our part of paradise and prior to 2004, it was decades since the last hurricane.  California and the great Southwest have fires and earthquakes and unrelenting heat, the midwest is Tornado alley and the Northeast will freeze your nose til it is ready to fall off.  But this beautiful country of ours is still the greatest place on earth and I think Glen and I picked the most beautiful state in the union, Florida, a place I am happy to call home. 

Since 1984, Joanne has been a mortgage professional.  She has owned and managed her own firm and now is a Senior Loan Consultant for Advanced Mortgage Solutions of South Florida, Inc., a firm based in Boca Raton, but she writes loans all over the state of Florida.

Joanne Mathisen is the author of Gems from Jo.  To reach her for mortgage advice contact Joanne at jomathisen@aol.com or 561-578-0666.

Hi everyone!

Rehabbing America is a concept that I embrace, not just for investors, although, if you have been reading my blogs, we are all investors! There is a real good, hardly used program for rehab money that is insured by the Federal Government through HUD. This is the 203K loan. Fancy titles aside, this loan is for only owner occupied purchases. So, if you are buying in Volusia County, Flagler County or any county in Florida, and you intend to live in the home as your primary residence, you may be eligible for this wonderful mortgage. Here is how it works. There are some mortgage amount limits. This is according to the county where the home is located. Anyway, let us use the following example for this type of loan:

You buy a home for $150,000 and you need about $25,000 worth of repairs. The purchase price is still the same, but the mortgage is augmented by the amount of the repairs. Now, the repairs must be at least $5,000, and the money needs to be used for more than just cosmetics. In other words, not just for a pool unless there is a pool there that is not in working order. I know a case of one client who bought a home that needed a kitchen, not because there was no kitchen but because there were no cabinets in the kitchen and the refrig was in another pantry type room, so a new layout was proposed and the work approved.

What happens is that the current owner closes with you on the home, he or she gets their money and then the repairs begin. A consultant must view the home to make sure there are legitimate repairs and renovations, write and submit the estimate, the bank approves and the loan is processed and closed and the borrower gets the money on a draw basis when each step is completed. The lender writes the checks upon the consultant affirming that the work is done to avoid abuses in the program.

Here is the exciting news: this program is offered as one loan, 30 yrs fixed, and the rates are just about 1/2-1% higher than regular rates. As you may know, most renovation loans start at about 14% to 21% with 5-10 points, although we are the best priced of the bunch!!

Now, if you are going to live in the home, you can look at really low, low rates and lowest down payments!! Interested? Call me and I will customize a program for you with all the information you need and help you change the scream home to a dream home!  Almost any home can become a wonderful place to live. Some homes are currently in violation of their legal status because people build illegal rooms, extensions or convert garages to living space and then you cannot get a mortgage. Or maybe a home needs a roof and the current owner cannot afford to put a new roof on the property. The lender can deem that home not a good candidate for a mortgage, so this program becomes so important because you can use the loan to bring the home into compliance!

As a matter of fact, as long as there is a foundation, the loan can work for you. I will talk to you individually about the limits in each area when you find a property you like except to say that in Volusia County which encompasses Deltona, Daytona, and Ormand Beach, maximum mortgage limits with the rehab are $230,177 for a one family unit, and $259, 252 for a two family unit. Call me for three and four family limits. The closing costs and can be rolled into the loan.

One more thing: let us suppose the home cannot be lived in right away; in that case, you can even roll up to six months mortgage payments into the mortgage so that you do not have to pay for an apartment rental and a mortgage while waiting to move into your home. How awesome is that? year when they are either left the same or increased. I can tell you that as of this writing in Volusia County the maximum mortgage for a one family is $230, 177. That is the mortgage maximum not the purchase price limit. These are full documentation loans meaning you must supply either tax returns or pay stubs and w2’s. Since these are not credit score driven loans, there is wide flexibility in the approval process. There is so much to say about this loan that a mere “blog” cannot answer, so call me and leave a message at my message center and I will call you right back! My phone number is 561-578-0666. Or, feel free to e mail me at jomathisen@aol.com.  I have hundreds of products, one must fit your needs. 

Since 1984, Joanne has been an owner or mangager of mortgage companies.  She is now a Senior LOan Consultant with Advanced Mortgage Solutions of South Florida, Inc. based in Boca Raton, but she writes mortgages all over the state of Florida.

Let’s rehab Florida now!  Look for more “Gems from Jo” on all things real estate at FunCoastLife.com

• What exactly does the score mean?
• What contributes to your score?
• How to raise the credit score
• How to re-establish credit after a bankruptcy or foreclosure

• What if I have no credit at all?

Do you know we all have a credit score? Let me clarify that a little. Some of us who have no credit at all still have a score. It is a 999 score, meaning that no credit has been tracked because no credit has been obtained. As soon as you have your first credit card, mortgage, student loan or car loan, you have a credit score. There are three agencies that collect all your credit data. This means that your department stores, visa and master card purchases and car loans and leases are all “reported” on a monthly basis to the three principal reporting agencies, namely, Experian, Transunion, and Equifax. These three agencies provide a “score” and lenders use these scores to determine risk. Before they lend you money, the lender looks at these scores and decides if and how much money you can borrow for your home purchase.

The amount of times you are late with your payments, the amount of outstanding credit you carry and the total amount of credit lines you have all go into a mix that creates your score. Most credit cards have a limit. You may have a $1500.00 limit on your Visa Card. If you are up near the top of the limit, or even one dollar over the limit, your score will suffer. If you do not have at least 3 credit lines, you will have a lower score, if you default on a debt, your score will suffer. So, the three agencies scan all your information and each one will place a score of between 350-850. The higher the better.

Your score can be raised if you follow some simple steps. Pay your bills on time, distribute your purchases over two or three different cards so that you do not approach the top of the credit limits on any one card and always, no matter what, pay your mortgage on time. Since points on your score are reduced each time you are late, the on time payments are important, but none more so than your mortgage. Being late on your mortgage even once in the last 12 months will reduce your score dramatically even if you are not late on anything else! And, some lenders will not grant a mortgage to anyone who is late in the last 12 months, no matter what the reason! This does not mean that you cannot get a mortgage. It just means that you will not get prime rates and terms when you borrow.

There are times that bankruptcies or foreclosures occur. Does this shut you out forever from borrowing? Absolutely not! Some types of loans through alternative lenders are available the day after a bankruptcy or foreclosure. Beware, this type of loan is not priced well, requires a tremendous down payment, and is becoming less available. However, after as little as two years, and with re-established credit, there are programs available for bankruptcy through different lenders. For foreclosure, it may take 3 years or longer with a re-establishment of credit before you can borrow again. And I will tell you that although these are guidelines, there are circumstances that can alter some of the information which is why you must work with a true professional mortgage officer who is both experienced and knowledgeable about the lenders and their programs.

It is quite easy to get new credit after the bankruptcy or foreclosure. We have sources for secured credit cards, that is a card that is backed up by placing some money in escrow and allowing you to charge up to that limit. There are also credit cards that can be unsecured and provide the new and established credit you need. After a bankruptcy or foreclosure, it is smart to re-establish credit immediately whether by secured or unsecured cards. This is because lenders want to see how you handle credit after credit problems. So, since you normally will wait 24 months after a bankruptcy before you secure a mortgage, you will also be able to show a credit rating that is sufficient to obtain a prime interest rate.

Almost worse than having bad credit, is having no credit at all. This is because the lender sees no history of being able to pay things monthly and on a timely basis. You may think it is good to pay cash for everything, but it is actually a detriment when trying to obtain a mortgage. In certain cases, of course, there are mortgages for people with no credit. You must at least show alternative credit, that is telephone bills, rent checks, and any other utility that you can show for 12 months so that the lender is not guessing about your credit worthiness.

If you have any problems or perceived problems with credit, I am ready, willing and able to assist you. I will send to you free of charge, my report entitled Demystifying Credit. All you need to do is to leave me a message with your name, address and phone number.

Call me for a free booklet on credit or to ask me for advice!  I am happy to help!  561-578-0666 or e mail your questions to jomathisen@aol.com.

Look for my posts on various subjects. I have authored many different reports on topics from commercial loans to remodeling, investor loans, and all types of residential loans including adjustable and those low, teaser rate loans. I will send you reports on any or all of the topics you see here and I will post some information on lending from A-D credit profiles!

Look for more “Gems from Jo” on all things real estate at FunCoastLife.com 

Check again for more ‘Gems from Jo’ providing the best Florida and Central Florida real estate investment opportunities.