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ice5146
116 Posts |
 Posted - 05/01/2008 : 12:32:56 PM
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| Borrower is paying off 1st and 2nd taken out together. I've been told the max LTV is 97%, not 97.75% which just killed my deal. Is this something new or is it a TBW rule?? |
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MoneyLenderP
1686 Posts |
Posted - 05/01/2008 : 12:41:40 PM
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| I think it depends on state and county. |
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mhundt
202 Posts |
Posted - 05/01/2008 : 12:44:38 PM
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| It has to be a high cost state to use the extra .75 |
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jpar994
885 Posts |
Posted - 05/01/2008 : 12:57:24 PM
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Is the second purchase money or seasoned for longer than 12 months!
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nowbroker
1485 Posts |
Posted - 05/01/2008 : 1:02:47 PM
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The rule is 97.15% in an average closing cost state, 97.75% in a high closing cost state:
1-11: MORTGAGE AMOUNTS ON REFINANCES (10/03)
A. "No Cash-Out" Refinances with Appraisals (Credit Qualifying). The maximum mortgage is the lower of the loan-to-value or the existing debt calculation described below, and may never exceed the statutory limit except by the amount of any new up-front MIP:
1. LTV Ratio Applied to Appraised Value: Multiply the appraised value of the property by the appropriate factor, as shown in the chart below, for the property's value and the state where it is located. (A list of states and their closing costs averages may be found in Appendix II.) Any appraisal requirements, including repairs, must be complied with before the mortgage is eligible for insurance endorsement.
Maximum Loan-to-Value Percentages
States with Average Closings Costs At or Below 2.1 Percent of Sales Price
• 98.75 percent: For properties with appraised values equal to or less than $50,000.
• 97.65 percent: For properties with appraised values in excess of $50,000 up to $125,000
• 97.15 percent: For properties with appraised values in excess of $125,000.
States with Average Closings Costs Above 2.1 Percent of Sales Price
• 98.75 percent: For properties with appraised values equal to or less than $50,000.
• 97.75 percent: For properties with appraised values in excess of $50,000.
2. Existing Debt. Add together the amount of the existing first lien, any purchase money second mortgage, any junior liens over 12 months old, closing costs, prepaid expenses, borrower paid repairs required by the appraisal, discount points, and other fees as determined acceptable by the appropriate HOC and then subtract any refund of UFMIP. (If any portion of the funds of an equity line of credit in excess of $1000 was advanced within the past twelve months and was for purposes other than repairs and rehabilitation of the property, the line of credit is not eligible for inclusion in the new mortgage.)
The amount of the existing first mortgage may include the interest charged by the servicing lender when the payoff will not likely be received on the first day of the month (as is typically assessed on FHA-insured mortgages). The amount also may include any prepayment penalties assessed on a conventional mortgage or FHA Title I loan. The amount of the existing first mortgage may not include delinquent interest, late charges, or escrow shortages. Prepaid expenses may include the per diem interest to the end of the month on the new loan, hazard insurance premium deposits, mortgage insurance premium, and any real estate tax deposits needed to establish the escrow account.
Subordinate liens, including credit lines, regardless of when taken, may remain outstanding, provided the FHA-insured mortgage meets our eligibility criteria for mortgages with secondary financing as described in Section 5 of this chapter.
If the purpose of the new loan is to refinance an existing mortgage to buy out an ex-spouse's or other co-borrower's equity, the specified equity to be paid is considered property-related indebtedness and is eligible for inclusion in calculating the new mortgage. The divorce decree, settlement agreement, or other bona fide equity agreement must be provided to document the equity awarded to the ex-spouse or co-borrower.
If the property was acquired less than one year before the loan application and is not already FHA-insured, in addition to the calculations described above, the original sales price of the property also must be considered in determining the maximum mortgage. With conclusive documentation, expenditures for repairs and rehabilitation incurred after the purchase of the property may be added to the original sales price in calculating the mortgage amount.
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ice5146
116 Posts |
Posted - 05/01/2008 : 1:22:51 PM
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| State is PA so I believe 97.75 is it.. thank you for the memo! |
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