As the mortgage market continues to shift, new changes are now in effect for all Sonoma County Loan Programs. Following have occurred:

• Sonoma County Loan Programs– each program now has a requirement for the borrower’s credit report should be no more than 60 days old at the time the new mortgage note is being drawn for closing on the new mortgage loan. In other words their credit report, at the time of closing cannot be more than 60 days old. A new credit report will need to be pulled in such instances.
• VA Loan Programs– change include the following:

√Converting a primary residence to a second home? Then three months of mortgage payments will be required as reserves for closing on the new loan.

√Converting a primary residence to a rental property and rental income is not being used to offset the mortgage payment? Then three months of mortgage payments will be required as reserves.

√Is your current primary residence pending sale and likely won’t sell before closing escrow? Then you’ll need three months or mortgage payments saved for reserves.

√ Fees that can no longer be charged to the veteran securing a VA home loan include notary fees, and commitment fees. For securing VA loan financing in the mortgage lender charging a lender fee of $1400.

√Converting a primary residence to an investment property? If yes, you know longer have to have 30% equity in order to count the rental income to offset the mortgage payment, thus allowing you to purchase a new home with fair market rents offsetting the house payment on the other property. In order to complete such a scenario for your mortgage loan, you’ll need and execute lease agreement for one year signed by all the parties as well as evidence that the security deposit from the tenant has been paid to the borrower and no additional reserves in such a scenario are required. * note positive cash flow in this instance cannot be used for income qualifying purposes on the new loan.

• USDA Loans: include the ability to finance the closing costs so long as the appraised value comes in above the purchase price. For example purchase price of the home is $250,000, appraised value is $275,000, you can literally finance the closing costs a $6000 so the new loan amount would be $256,000 plus USDA’s 2% guarantee fee.

Other helpful posts related to changes for Sonoma County Loan Programs

No Cost Mortgages will soon be a required option for all mortgage lenders to provide consumers

Mortgage insurance premiums rise on government loans

HUD reduces some provisions for loans taken out in 2009 or before

HARP 2: Refi Program- floodgates open for refinancing upside down mortgages

Read the rest of our mortgage loan updates on the Sonoma County mortgages Blog today!