The home of your dreams could be in need of some costly renovations before a lender will provide the financing to purchase it. The professional loan officers at Mortgage Depot have a solution with our home repair escrow programs. We work with a variety of lenders to find the loan that suits your needs and budget.

FHA 203k loans

Traditional mortgage financing provides borrowers with the funds needed for the balance of the price of a home based upon its appraised valuation. The property being purchased must be in livable condition for it to be capable of being appraised.

The FHA 203k program provides funding for the acquisition of a property that is in less than pristine condition. The key feature of the loan program is the availability of funds to complete the purchase of a home based upon its appraised value after completion of repairs required to make it livable. Program features include:

• Buyers may borrow the funds needed to complete repairs and make the purchase.
• Borrowed funds may be used to finance temporary housing while repairs are completed.
• Repairs and renovations must be completed within six months.

Part of the application process for an FHA 203k loan includes preparation of a list of repairs that must be completed to increase the value of the property to an amount required to satisfy underwriting guidelines. The money to fund those repairs is placed in escrow after the closing on the purchase of the home and disbursed as the work is completed.

Alternative programs to FHA 203k

Some of our lenders offer alternatives to FHA 203k loans for homes that do not require extensive renovations. Features of these alternative loans include:

• Funding to acquire the property.
• Up to $5,000 in escrow to pay for repairs.
• Up to 15 days to complete the work.
• Repair requirements based upon estimate from a licensed contractor.

Home repair escrow loans are available on FHA, VA and other types of loan products.

Contact us today

Learn more about our financing options by contacting Mortgage Depot. A loan officer is available by calling us. 

To contact us by phone call 800-535-0270 or email us by clicking here.

New York increases transfer and mansion taxes

Owners, buyers and developers of high-end luxury properties will be helping state officials in New York balance the budget for 2019-2020. A substantial increase in the state tax on real estate transfers takes effect on July 1, 2019. Property owners in New York City and other cities throughout the state with populations of at least one million people got more bad news with the announcement of an increase in the so-called “mansion” tax on transfers of properties valued at $1 million or more, which also goes into effect on July 1.

New York State transfer tax

The state transfer tax has been in place in New York for decades. It is a tax levied on the sale of real property located within the state. The tax rate before the most recent action by the state legislature was 0.4% calculated on the amount paid by a buyer or grantee as consideration for the conveyance. Responsibility for payment of the transfer tax falls on the grantor or seller.

Under the new law, the 0.4% tax rate remains for residential properties, including single-family homes, condominiums and cooperative apartments, sold for up to $3 million. The tax rate increases to 0.65% for residential properties sold for $3 million or more.

Sellers of commercial properties will also be subject to an increase in the state transfer tax. The current tax rate of 0.4% increases as of July 1, 2019 to 0.65% on commercial properties sold for $2 million or more.

Mansion tax increase

The conveyance of residential property in cities in New York with populations of one million or more, such as New York City, for consideration of $1 million or more has been subject to a transfer tax equivalent to 1% of the amount paid. The new transfer tax law imposes a higher tax based upon a progressive scale that gradually increases the tax rate from 1% on transfers for at least $1 million but less than $2 million. Rate goes up to 3.9% on conveyances for $25 million or more.

Other points to keep about mind about the new transfer taxes

The effective date of July 1 for the new tax rates can be misleading. Transfer taxes are paid at the time of the conveyance of the property, which would normally be the date of closing of title. The new law grants sellers some relief if they signed a contract to sell their property on or before April 1, 2019.

Another aspect of the new law is that both the buyer and seller are jointly and severally liable for payment of the mansion tax. Learn more about how transfer taxes could affect your real estate transaction by calling us at Mortgage Depot.

Contact us today at 800-535-0270 for more information or email us here.

I’d describe my official role here at MortgageDepot as a loan officer’s assistant that also focuses on compliance issues. These are reports that are required to be completed daily, weekly, quarterly and of course annually. Before joining the staff three years ago here at MD, I spent eight years managing key retail accounts in Kiev, the capital of Ukraine as an account coordinator.

My typical workday consists of verifying the lender’s pipelines, lots of research and miscellaneous administrative tasks related to almost any and everything in the company. I also enjoy problem-solving that result in a solution. Excellent customer service is when after closing, our client’s return to us for assistance with their mortgage needs.

Since I’ve started working in the industry, some of the changes that I’m aware of have been the creation of new programs; lenders now have the ability to E-sign, and now brokers are allowed to E-sign also. If there were one change I’d like to see in this industry; it would be more transparency in the mortgage process.

Good news. Now you can purchase a two-unit home with our low down payment option. With as little as 5% down, buyers can live in one unit and generate some additional income by renting out the second unit. They may even be able to use projected rental income to qualify. Keep in mind — mortgage insurance will be required, which increases the cost of the loan and will increase buyers’ monthly payments. We’ll explain the options available, so you can choose what works for you.

This option may be right for the buyers who have identified two-unit properties that they wish to purchase but were waiting for the right financing plan.

Contact us for more information about this 5% down payment for a 2 family home.

To contact us by phone call 800-535-0270 or email us by clicking here.

This program is designed to provide mortgage credit to well qualified self-employed borrowers earning monthly income that is more clearly documented through alternative income documentation. As a result, the Ability-to-Repay income and employment factors are met through the review of bank statement cash flows over 24 months (to verify borrower income) and the review of at least 2 years of employment history and business existence (to verify employment).

This program is based on evaluating the income available to the borrower as generated by the borrower’s business cash flows. As such, the program contemplates a business owner who has established a separate bank account for his or her business operations (“Business Bank Statement”) and also maintains a separate bank account for distributions and personal expenses (“Personal Bank Statement”). Note, comingled accounts (i.e. Borrower runs a business out of personal account) will be handled on an exception basis.

Qualifying Income for the program may be based on either Personal Bank Statements or Business Bank Statements. The program has been developed based on the rationale that owners of simple businesses may be qualified through Business Bank Statements, however, as businesses grow to be larger, more complex operations, business owners often distribute excess income to personal bank accounts on a regular basis.

As a result, the program incorporates a waterfall approach to determine the appropriate qualifying income methodology.

For more information about this NON-QM mortgage program, contact our office and one of our loan specialists can discuss it with you.

Contact us today at 800-535-0270 for more information or email us here.