In many home purchase transactions where the subject property is in need moderate repairs, borrowers, and their Realtors, find themselves in a Catch-22 situation – banks won’t lend money to buy the house without the repairs being made, and the repairs can’t be made until the home has been purchased.

Enter HUD’s 203 (k) Streamline Program. This loan will enable the borrower, with a down payment as low as 3.5%, to obtain financing that will cover the acquisition cost, plus the costs of making necessary repairs and improvements. The repair work will need to be performed by a licensed contractor, and the plans need to be prepared and approved by the lender during the initial underwriting process. The borrower can obtain up to $35,000 for these repairs, and draw funds from an escrow account established by the lender at the close of the transaction to pay the contractor at the completion of the repairs. This loan affords the borrower up to 6-months to complete the work, and the final disbursement will only be made after a HUD-approved inspector verifies that the repairs stipulated in the contract have been completed. These repairs must meet HUD’s Minimum Property Standards, and all necessary permits must be obtained to meet all applicable building codes.

An FHA 203k Streamline loan is a great way for borrowers to obtain financing to complete non-structural repairs to a property they own or are purchasing. The Streamline program has the same underwriting criteria as a standard FHA loan. If used appropriately, especially with the high number of REOs on the market that need repairs and are priced accordingly, this loan will enable borrowers to get into a house with as little as a 3.5% down-payment, develop equity, and improve their neighborhoods, one house at a time.

Eligible repairs under the 203 (k) program include, but are not limited to the following:
• Repair/Replacement of roofs, gutters and downspouts
• Repair/Replacement/upgrade of existing HVAC systems
• Repair/Replacement/upgrade of plumbing and electrical systems
• Repair/Replacement of flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Painting, both exterior and interior
• Weatherization, including storm windows and doors, insulation, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
• Accessibility improvements for persons with disabilities
• Lead-based paint stabilization or abatement of lead-based paint hazards
• Repair/replace/add exterior decks, patios, porches
• Basement finishing and remodeling, which does not involve structural repairs
• Basement waterproofing
• Window and door replacements and exterior wall re-siding
• Septic system and/or well repair or replacement

Under the right circumstances, these loans can be a real benefit to borrowers who are unable to cash flow needed repairs. The final loan amount is based upon the After-Improved Value of the property.

A recent 203 (K) transaction that we had been involved in demonstrated the overall value of the program, and enabled the borrower to gain instant equity in the house. The house was bank-owned, had been vacant for at least a year, but was in a good neighborhood. The borrower liked the property and saw opportunities to repair the house; but, he would not have been able to cash-flow the repairs or devote the time necessary to complete the repairs himself.

As the transaction unfolded, the borrower’s instincts were right on target. The repairs that were done included the installation of new appliances, a new HVAC system, a new tankless water heater, new carpeting, new windows, and a new garage door.

The home inspection did not identify any issues not addressed by the planned repairs, and the appraisal determined that the after-improved value of the house will provide the borrower with more than 10% equity in the property. This loan really can provide home buyers with the ability to find a deal on a house and finance necessary repairs and improvements to gain equity, without too much of their own sweat.

Sure, the loan does require some additional work for the loan originator and real estate agent, and may require 30-35 days to close, but under the right circumstances it is a very good product.

Please feel free to contact us with any questions regarding the FHA 203(K) Streamline program.

In many home purchase transactions where the subject property is in need moderate repairs, borrowers, and their Realtors, find themselves in a Catch-22 situation – banks won’t lend money to buy the house without the repairs being made, and the repairs can’t be made until the home has been purchased. Enter HUD’s 203 (k) Streamline […]

The mortgage business is extremely competitive, and as you search for mortgage programs and rates, you will encounter a variety of lenders, each of which may present a compelling reason to place your mortgage with them. Because your home is likely your biggest financial investment, it is worthwhile to take a look at what lurks behind the radio ads, TV commercials, and fancy downtown buildings that many have come to equate with the mortgage industry, at large.

During the mortgage process, your initial and primary contact will be your loan officer and the processing staff. As with any occupation, these positions are filled with men and women who have varying levels of proficiency, education, work ethic, commitment to get you the best deal, and ability get your loan closed on time. These professionals also have different roles within their employing companies. At First Indiana Mortgage, what you see is what you get — the company is owned by its employees, and we have a direct interest in ensuring that your loan closes on time, at the rate you select, without too much hassle . We have been the business for many years, and obviously have a vested interest in the outcome of each loan, and the goodwill and reputation that comes along with doing what we say that we will.

We have lost business to mortgage people with less education, training and commitment, simply because they work for a national bank, even if their rates and other terms of the loan that they offered were worse. Borrowers sometimes transfer a perception of credibility, based upon the name recognition of a lender like Chase or Bank of America, to the loan originator. If my memory serves me correctly, these familiar big banks have recently suffered huge losses, had to be bailed out with taxpayer dollars, and have paid enormous fines for their shoddy lending practices; yet we, as a small company, constantly find ourselves pitted against them in typical David versus Goliath fashion.

First Indiana Mortgage has survived because we are committed to providing outstanding service, while offering the most competitive rates that we can. We don’t have huge overhead and advertising expenses, which enables us to offer lower rates. What we do have is experience, and the ability to offer practical solutions to your mortgage problems, with the care and compassion of a neighbor or friend.

Just because your banker has “a guy” and your Realtor has “a guy” doesn’t mean that that “guy” is the right person for the job. Ask around at work, talk to your friends, seek a recommendation from your tax preparer or financial advisor to find a lender that has done a good job in the past, and has shown a willingness to take the necessary steps to ensure that the loan process goes the way that it had been explained at the beginning of the mortgage process.

First Indiana Mortgage is a mortgage broker that offers residential mortgages in the states of Indiana. Please access our website at www.firstindianamortgage.com

The mortgage business is extremely competitive, and as you search for mortgage programs and rates, you will encounter a variety of lenders, each of which may present a compelling reason to place your mortgage with them. Because your home is likely your biggest financial investment, it is worthwhile to take a look at what lurks […]

Increasingly, people in the market for purchase or refinance mortgages are initiating their searches online. There are several advantages to shopping online for mortgage services; the primary ones are listed below:

Greater understanding of loan terms and costs. The internet is a great source to learn the nuts and bolts of the mortgage process, and to gain an understanding of the typical rates,costs and fees associated with obtaining a loan. It is important to understand the difference in mortgage loan types, terms and conditions, and there are several objective sources available on the net.

Websites like bankrate.com enable borrowers to enter their loan information and receive instantaneous rate quotes from multiple mortgage lenders, without the hassle of responding to a barrage of emails and phone calls from overzealous loan officers. A typical search will enable borrowers to do side-by-side comparisons of multiple loan scenarios and rate quotes.

Studies have shown that potential borrowers with incomes of more than $50,000 are more likely to obtain an online rate quote at the outset of the loan process than borrowers with lower incomes, and that, in general, online shopping leads to more competitive rates.

It is important to understand the mortgage process and employ available resources to get the loan that fits your needs best.

Visit us a www.kertinmortgage.com to obtain free real time rate quotes or obtain additional information about the loan process. Kertin Mortgage Group is licensed to originate residential mortgages in Indiana and California.

Increasingly, people in the market for purchase or refinance mortgages are initiating their searches online. There are several advantages to shopping online for mortgage services; the primary ones are listed below: Greater understanding of loan terms and costs. The internet is a great source to learn the nuts and bolts of the mortgage process, and […]

At First Indiana Mortgage, we strive to provide value and confidence to our customers by providing personalized service and low rates. The company brokers mortgages in Indiana, and has been in business since 2000.
Acting as a mortgage broker enables us to offer the full array of mortgage products to our customers, and allows us to be able to direct our clients’ loans to the lender that offers the best loan terms for their particular circumstances.
Federal regulations implemented recently have restructure the way that mortgage loan officers are compensated for the loans that they originate. These laws require mortgage brokers to establish fixed compensation amounts, calculated as a percentage of the loan amount, for each loan. In accordance with these regulations, mortgage brokers must assess their business overhead costs, and other expenses, and set a compensation schedule that will enable them to make a profit. It follows that larger entities, with more overhead and higher fixed costs, have set their compensation percentages higher than ours. We understand that the mortgage business is competitive, and we encourage our clients to compare the rates and services that we can offer, with those offered by our competitors. We recommend that potential clients research available rates through online search engines like www.bankrate.com or www.lendingtree.com.
Because we are in a service industry, we understand the importance of prompt and professional service to our customers. If you call us, you will speak to a licensed loan originator who is also an owner of the company.
We encourage you to visit our website at www.firstindianamortgage.com and to obtain a free rate quote. Together, we can work to make the mortgage process a smooth one.

At First Indiana Mortgage, we strive to provide value and confidence to our customers by providing personalized service and low rates. The company brokers mortgages in Indiana, and has been in business since 2000. Acting as a mortgage broker enables us to offer the full array of mortgage products to our customers, and allows us […]

Applying for a mortgage can be a daunting task, that involves supplying substantial amounts of information regarding your credit history, employment and income. It is best to review your credit report in advance of applying for a loan, so that you can address any inaccuracies and identify steps that you can take to improve your credit score.

In today’s market, the credit score plays a significant role in your ability to obtain a loan at a favorable rate, so it will serve you well to review your credit report and address the items that tend to lower your overall score. Your credit score is a numerical evaluation of your credit risk, and is derived from many factors, as discussed below. The two primary factors that influence your credit score are the amount of credit that you have outstanding in comparison to your maximum credit limits, and whether you pay your bills on time. Before applying for a loan, you should pay down your credit cards and other debts, and limit your use of credit. By doing so, your credit score will increase due to the fact that your balance-to-limit ratio will be improving. As with all liabilities, it is important to pay all of your bills on time – even a single missed payment will impact your score negatively, and it may take months for your score to recover.

Your employment status and history are also important factors that lenders will analyze to determine your credit worthiness. Generally, you would want to be able to document a two year stable work history, with no unexplained gaps in employment, before applying for a loan. Commissioned and self-employed applicants generally will have to provide their tax returns for the prior two years to document their incomes, and document to the lender that there are no undisclosed liabilities or expenses that would impact their creditworthiness.

Finally, applicants need to determine how much they can use as a down payment, and how mush they can afford to pay on a monthly basis for housing expenses, which include principal, interest, taxes and insurance on the new home. Lenders will want to see a minimum down payment of 20% of the purchase price, otherwise, you will be required to obtain and pay for private mortgage insurance.

By keeping up on your credit report and having your finances in order prior to shopping for a home, you can eliminate much of the stress of applying for a new loan. If you are searching for a loan in the state of Indiana, First Indiana Mortgage can help you to obtain a mortgage. Please visit www.firstindianamortgage.com to obtain a rate quote, and to initiate the loan process.

Applying for a mortgage can be a daunting task, that involves supplying substantial amounts of information regarding your credit history, employment and income. It is best to review your credit report in advance of applying for a loan, so that you can address any inaccuracies and identify steps that you can take to improve your […]

When seeking a mortgage, there are many factors to consider, and having a trusted loan originator can help you to choose a loan program that is suited to your needs. Let’s take a look at some of the primary considerations.

1. The type of loan. It is my opinion that fixed rate loans are best loan choice for most borrowers. With today’s historically low interest rates, you can obtain a loan now, and be confident that the monthly principal and interest payments will never change. While adjustable rate mortgages are currently available at attractive start rates, it is likely that the rates will adjust upward in the coming years and you may be facing increased payments. I would only recommend adjustable rate loan programs to borrowers that do not intend to live in their current residence beyond the initial fixed-rate period of the adjustable rate loan.

2. The term of the loan. The most common loans have repayment terms ranging from 15- to 30-years. Certain loan programs do offer longer terms, but I would steer clear of those because the monthly savings versus a shorter term loan are offset by the increased interest expense that you will incur over the life of the loan. In a refinance situation, it is advisable to limit the term of the new loan to the remaining term of the loan being refinanced, again to reduce the overall interest expense incurred during the life of the loan.

3. The costs associated with the loan. Borrowers are responsible for paying certain closing costs when they obtain a new loan; these include underwriting and lender fees, title insurance and closing fees, appraisal fees, and loan originator fees. A good measure of whether a new loan would make sense in your own situation is to evaluate the monthly savings, and project how long it would take you to recover your out of packet expenses through the reduced payments. If the closing costs on your loan ar $2,500 and you save $250 per month, your loan will have paid for itself after only 10 months.

It is always my recommendation to try to structure your loan so that you can obtain the lowest rates with minimal out-of-pocket costs at a term that you are comfortable with. Loan originators are compensated by lenders based upon the loan amount, and you can often negotiate reduced fee loans, and no fee loans with your broker. In today’s competitive marketplace, it pays to shop around and compare loan options offered by two or three reputable lending resources.

I am passionate about customer service and obtaining the best loan for my clients, and I have many clients that have been referred to me by others because of the fair and comptent services that I provide.

Through my affiliation with Kertin Mortgage group, I have access to dozens of lenders in multiple states, and I can help you through the maze of obtaining a loan. Please feel free to contact me with any comments or questions. I can be reached at 888/627-2002 or at kristi@kertinmortgage.com

When seeking a mortgage, there are many factors to consider, and having a trusted loan originator can help you to choose a loan program that is suited to your needs. Let’s take a look at some of the primary considerations. 1. The type of loan. It is my opinion that fixed rate loans are best […]

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As we all know, protecting our personal financial information is important, and identity thieves are always on the lookout for names, social security numbers, bank account numbers and the like. Because of the increasing complexity of firewalls and other data protection software at banks, insurance companies, and other traditional repositories of financial information, identity thieves are increasingly turning the hacking efforts to other less-secure spots, like restaurants, retail outlets and social networking sites.

You just can’t be too cautious in your handling of your financial information, and we should all be vigilant about not divulging that information to others over the phone, through emails, or in other communications. One way to ensure that your information is safe is to place a credit freeze on your account through the three credit repositories, and/or to obtain and review your credit report on a regular basis. The website www.annualcreditreport.com will allow you to obtain a free credit report from each Equifax, TransUnion and Experian every twelve months. If you stagger your requests so that you request a report from one of the bureaus every four months, you will have up-to-date information all year long. If there are any discrepancies on your report, address them immediately.

Maintaining a strong credit profile will enable you to obtain the best rates for mortgages, car loans, and other financial products.

If you need help refinancing your mortgage, please feel free to contact me at 888/627-2002 at any time.

Protect Your Financial Information Leave a reply inShare As we all know, protecting our personal financial information is important, and identity thieves are always on the lookout for names, social security numbers, bank account numbers and the like. Because of the increasing complexity of firewalls and other data protection software at banks, insurance companies, and […]

An FHA 203k Streamline loan is a great way for borrowers to obtain financing to complete non-structural repairs to a property they own or are purchasing. The Streamline program has the same underwriting criteria as a standard FHA loan, and will allow a borrower to finance up to $35,000 for the repairs. If used appropriately, especially with the high number of REOs on the market that need repairs and are priced accordingly, this loan will enable borrowers to get into a house with as little as a 3.5% down-payment, develop equity, and improve their neighborhoods, one house at a time.

The 203k Streamline requires that the repairs be completed by a licensed contractor, and the final disbursement of the repair funds will not be issued until the property is inspected to ensure that the repairs have been completed according the plans, in a workmanlike manner. With all of its moving parts, the 203k Streamline requires detailed planning and oversight, but with a system and team concept in place, the transaction can go smoothly.

Borrowers, Realtors, loan originators and contractors need to work together to ensure that the bids and plans are submitted in a timely manner, and that all underwriting conditions and requests for additional information are addressed promptly. The team should set realistic expectations about the timelines necessary to close the deal, and plan for potential delays in underwriting because the lender needs to evaluate the borrower, the contractor, and whether the added value of the improvments will exceed the cost of the repairs.

In today’s market, the 203k Streamline is a great tool to get “the wrong house in the right neighborhood” sold.

Please feel free to contact me at 888/627-2002 to discuss the 203k program, or any other financing issues.

An FHA 203k Streamline loan is a great way for borrowers to obtain financing to complete non-structural repairs to a property they own or are purchasing. The Streamline program has the same underwriting criteria as a standard FHA loan, and will allow a borrower to finance up to $35,000 for the repairs. If used appropriately, […]

I have recently been introduced to the FHA 203K Streamline loan for a purchase transaction that I am working on. The house was bank-owned, had been vacant for at least a year, but was in a good neighborhood. The borrower liked the property and saw opportunities to repair the house; but, would not be able to cash-flow the repairs or devote the time necessary to complete the repairs himself. The 203K loan will enable him to finance the necessary repairs into the purchase loan, for a down-payment as little as 3.5%.

As the transaction has unfolded, the borrowers instinct appears to have been on target. The repairs that will be done include the installation of new applicances, a new HVAC system, a new tankless water heater, new carpeting, new windows, and a new garage door. Under the terms of the loan, the repairs need to be completed by a licensed contractor within six-months of the close.

The home inspection did not identify any issues not addressed by the planned repairs, and the appraisal determined that the after-improved value of the house will provide the borrower with more than 10% equity in the property. This loan really can provide home buyers with the ability to find a deal on a house and finance necessary repairs and improvements to gain equity, without too much of their own sweat.

Sure, the loan does require some additional work for the loan originator and real estate agent, and may require 30-45 days to close, but under the right circumstances it is a very good product.

I have recently been introduced to the FHA 203K Streamline loan for a purchase transaction that I am working on. The house was bank-owned, had been vacant for at least a year, but was in a good neighborhood. The borrower liked the property and saw opportunities to repair the house; but, would not be able […]

New IRS regulations set to be implemented in 2014 will provide some relief to rental property owners. Until now, rental property owners have had to differentiate the way that they report repairs and improvements to a property, and consequently, break those activities into tax deductions (in the case of repairs) or depreciable events (in the case of improvements).

The new rules will simplify the tax reporting of overall property improvements that do not exceed the lesser of $10,000 or 2% of the property’s basis. Using an example of a rental property owner who has completed $5,000 in repairs, including a $4,000 new roof, to a house that has a basis of $300,000, the owner could deduct the entire $5,000 in the tax year that they are incurred. Before the new rule, the $1,000 in basic repairs could be deducted, while the $4,000 roof installation would have had to have been depreciated over a period of 27.5 years.

The new tax regulation is a welcomed relief to rental property owners that will encourage them to make necessary improvements to their properties, and which will ease their tax-reporting burden.

First Indiana Mortgage offers mortgage programs for primary residence and rental/investment properties. Visit our website at www.firstindianamortgage.com to view available programs and rates.

New IRS regulations set to be implemented in 2014 will provide some relief to rental property owners. Until now, rental property owners have had to differentiate the way that they report repairs and improvements to a property, and consequently, break those activities into tax deductions (in the case of repairs) or depreciable events (in the […]