[Dawn]

It sounds like Alex Carlucci successfully navigated a challenging situation with a manual underwriting process for an FHA loan. Here are some key takeaways from this scenario:

Key Points:

Manual Underwriting:

Manual underwriting allows lenders to assess borrowers who may not meet standard automated criteria, which is especially useful for those with unique circumstances.

Extenuating Circumstances:

Extenuating circumstances can include job loss, medical emergencies, or other significant life events that impact the borrower’s ability to make timely payments. Lenders often consider these situations when determining eligibility.

Late Payments:

While late payments can typically hinder loan approval, manual underwriting provides flexibility. Lenders may look for patterns in the borrower’s payment history and overall financial stability.

Documentation:

Borrowers in similar situations must provide thorough documentation explaining late payments and demonstrating their current financial stability.

Importance of Communication:

Clear communication between the borrower and lender is crucial in these cases. Borrowers should be proactive in explaining their circumstances and providing any necessary documentation.

This case highlights the importance of manual underwriting in accommodating borrowers with unique challenges. It emphasizes the need for lenders to assess each application holistically, considering both the borrower’s current situation and past difficulties. If you’re experiencing similar cases, maintaining open lines of communication and thorough documentation will be key to navigating the underwriting process successfully.

If you have further questions or need more specific insights, please ask!

[Dawn]

Buying a house in South Dakota can be invigorating! There are some important aspects you want to consider:

Look Into The Market

Key Locations: Investigate investment in places such as Sioux Falls, Rapid City, and Pierre, as each has its marketplace.

Market Analysis: Look for relevant information on active listings, median home prices, and prevailing interest rates.

Your Purchase Focused On Your Home

Formats Of Mortgages: Options such as fixed, adjustable, and nandVA loans are afforded and offered to you.

Approval In Advance: Getting a mortgage endorsement will help you with your budget and strengthen your offers.

How To Go About A Real Estate Agent

Have you hired A Local Real Estate Agent? Hire a South Dakota real estate agent for hire who is well-suited for the state.

Negotiation Skills: Competence in realtors enables one to get the investment at better prices and the most beneficial agreements.

Inspecting The House

Need For Inspections: Always have a house inspection before you close the deal, for there may be problems that are not visible to the naked eye.

Handling Repairs: Use the inspection as leverage to push for price cuts and take advantage of the opportunity to have other repairs done.

After Signing The Paper Work

Cost Associated At The End: Overhead costs are always present, so know the ones before time, such as loan acquisition, title, or assessment cost.

Checking Everything: Checking that all had transpired as envisaged before paying is recommended so that there are no subsequent discrepancies.

Post Purchase Considerations

Home Insurance – Safeguard your asset with a valid homeowner’s cover.

Repairs: Ensure you set aside money for repairs and other house maintenance.

Resources

Government Programs: Check for assistance programs for first-time purchasers with the South Dakota Housing Development Authority.

Property—Many websites, such as Zillow and Realtor, will assist you in finding available properties.

If you are interested or have more queries relevant to the specific region of South Dakota, I will be happy to provide any information that you might require.

[Dawn]

Primary residence mortgage loans require lower down payment such as 0% on VA and USDA loans, 3% to 5% on conventional loans, and 3.5% on FHA loans. Mortgage rates are lower on primary homes. Investment properties require a 15% to 30% down payment and rates are higher than primary homes.

[Dawn]

In addition, for some homeowners located in fire zones in California, it has been a problem. State Farm, Allstate, and other insurance companies have started retreating. Insurance companies retreating from certain markets or states implies that people are being dropped in places like San Bernardino. There is simply no coverage from most of these insurance firms. The only choice for most Americans now is this California FAIR Plan, which is quite a final resort and is almost always way higher than what people should pay. The California FAIR Plan is priced quite high compared to other insurance plans. This is an average of about $3,200 a year compared to about $2,200, which most home buyers used to pay in the areas where fire zones are found. That extra $1,000 does help a lot, especially since it is the cheapest package for most people in very fiery areas. Also, with the FAIR Plan, which typically comes up short, you must increase and include more liability coverage, making it more complicated and straightforward.

The amendments seek to increase businesses’ appetite to offer coverage in wildfire zones by allowing better use of technology in evaluating risks and bringing in more players. But it will take a little while for that to bear fruit. There is still some concern about whether this will help people or allow the insurance companies to increase their prices. It’s not all doom and gloom, but witnessing that wildfires have become rampant, it is evident that the system needs to be overhauled so that homeowners do not have to shoulder unreasonably high mortgage insurance in the various fire zone states.

I appreciate the situation about the present insurance coverage being provided to property owners in the fire zones of California. This information presented brings several concerns to the table:

Insurance Company Pullback:

The biggest names in the game, State Farm and Allstate, are reducing their coverage coverage against catastrophes in very vulnerable areas.

Many homeowners in places like San Bernardino need this insurance, among other insurance-related products.

California FAIR Plan:

• Many often are the only remaining option for many in fire hazard zones.
• Disproportionately higher with an average of $3,200 as against the previous $2,200.
• In terms of Shelters, this is a huge amount.
• This is especially true for homeowners who reside within the zone.

It usually comes with extra liability insurance, which increases expenses more.

Cost Implications:

• The additional annual cost of $1,000 for the premiums can weigh heavily on homeowners’ pockets.
• This additional charge is difficult because it is usually a must for people living in risk-prone areas.

State Intervention:

• The issue is also being tackled in California by giving insurers the power to use more efficient technology for risk assessment.
• There is a concern that this will lead some insurance companies to provide coverage in wildfire-prone areas.

Concerns and Uncertainties:

• Whether these measures will favor the average public member one day remains.
• Or make the premiums more expensive again.
• With time, whether these changes will achieve their intended purpose remains to be evaluated.

Ongoing Challenge:

• As the threat of wildfires grows, the landscape of fire insurance is also changing.
• The objective is to ensure that homeowners avoid paying exorbitant property insurance premiums.
• This situation demystifies the complexities that California homeowners in fire-risk areas face.
• Insurers are likely to consider both aspects by providing adequate insurance cover while ensuring that costs remain within reasonable limits.
• The present situation of high costs and low options is untenable to most citizens.

For aspersing prospective home buyers or home-occupants in these areas, it is still important to:

Remember that insurance premiums will generally be much higher than budgeted. This should be incorporated into the home expenses.

Be aware of the evolution of the respective companies’ insurance policies and the state’s related legal policies.

Think about making a case to the authorities for greater regulation in insurance.

Employ all the available means of fire risk mitigation so that the insurance cost can be lowered.

This evolving matter is expected to remain fluid as the state, insurance companies, and proprietors contend with the increasing risks and costs of wildfires in California.

[Dawn]

Yes, houses can be sold after doing a cash-out VA refinance, though there are things that you should consider.

No Waiting Period to Sell the House:

The VA places no restrictions on the period within which the homeowner may sell the home after a cash-out refinance. You don’t have to wait for ‘x’ periods before selling the house or at any future unspecified period.

Costs and Possible Effects on Cash Flow:

Closing Costs: To implement a cash-out refinance, borrowers usually incur closing costs. Closing costs include origination and appraisal fees. Refinance and then sale. Usually, carryover will be the general trend, and selling will be done. Recently, borrowers have had a problem in that collection agencies may pursue them. Because, at that time, borrowers would still be bidding out other loans. Thus, selling the collateral results in repealing that law, a reasonable addition to payoff investors.

Loan Payoff: Once the home is sold, this amount will be credited to the mortgage balance. The cash-out part of the refinance is. Therefore, it is regarded as the total amount to be paid for the home purchase.

Market Environment: Depending on the market situation, average selling prices for homes are subject to change in a year or two. If home prices drop based on your home equity, you may get into negative equity. Where the mortgage (cash-out refinance) is higher than the house value, leading to a risk of short selling or loss.

Consider the Impact of the VA Funding Fee:

In a cash-out refinance mortgage, you pay a VA funding fee, which is usually the case except when one is exempted. Funding fees can, therefore, take a huge chunk of the loan amount and usually go up to 3.6% of the loan amount. You acquire a brand new loan and refinance a current one. Still, very soon after the two transactions, you will have enough time to amortize the funding fee over time.

No Prepayment Penalties:

There is one very advantageous point in a VA loan – there are no penalties for repaying the loan before the end of the term. This factor allows you to repay your mortgage earlier (including terminating mortgaged properties) without incurring punitive costs.

Consider Your Long-Term Goals:

If the one reason you decided to do cash-out refinances is to withdraw some equity for home renovation or repayment of other long-term purposes, that sort of plan for selling off the home in that instance is likely to eliminate the advantages you gained from refinancing the home.

Alternatively, your situation has changed, and you need to sell the house through some means. In that case, you can do so immediately after the refinance.

No legal barriers can stop you from selling your home after doing a cash-out VA refinance. However, one has to keep in mind moon pricing, which includes necessary expenses at closing, the VA funding fee, and the market conditions in general. Suppose you wish to sell your home after refinancing. In that case, you may not be able to realize most of the cash-out benefits available. This is often difficult to do as you must calculate the costs before concluding that selling the home is necessary.

[Dawn]

Establishing business credit can be done in stages, and you are already doing it correctly. In terms of your questions raised, let us take them in the order you have asked them:

Do You Need To Get Net 30 Accounts, or Do You Move On?

Net 30 accounts are usually recommended for new businesses as they are easy to qualify for and assist in building some initial credit history. However, because your company has already been established for four years with three charge accounts that are on the verge of reporting (with a possibility of adding two more), there isn’t much that you would need to put yourself heavily on Net 30 accounts if the charge accounts that you already have are up to the task.

Recommendation: You should not have gone back to adding Net 30 accounts if your charge accounts will be ventilated to business credit bureaus such as Dun & Bradstreet (D & B), Experian, or Equifax Business. The case for net 30 accounts is sound. However, at this stage, they may not be needed even though, at some point, they will be.

How Many Tradelines Should Show On Credit Report?

To commence the observation of the business credit scores and the Paydex scores:

Generally, Dun & Bradstreet needs at least three tradelines to report for a payday score to be issued.

No, for Experian and Equifax to issue a score, less than an average of two accounts must be reported, but a higher number of accounts will ensure a fuller credit profile.

Recommendation: Make sure you have at least 3 to 5 tradelines reporting every month. Having already three charge accounts and likely the ability to obtain two more, you are progressing well towards getting adequate grabbing credit for reporting agencies to commence scoring your business.

How Long Does It Take To Get Business Credit Scores Once Setup?

With most accounts reporting, if this is the case, Dun & Bradstreet, Experian, and Equifax score report for about 30 days to 90 days from when all the necessary accounts are opened. The timing of this may be influenced by How quickly your creditors report your activity. The repayment behavior that you have created in the past.

As for Paydex (the scoring provided by Dun & Bradstreet):

The Paydex score comes only after at least three payment experiences (tradelines) on record over a specified period. D&B has mostly sought payment behaviors over the past few months. Paying out all your invoices before or on the due date will go a long way in helping you get a strong score.

Scores are also likely to be updated by Experian and Equifax more regularly and may begin reporting scores once they have just one tradeline reporting after 30 days.

Next Steps: Continue Building with Existing Tradelines:

Of charge accounts reported to the major business credit bureaus, business owners targeted by their Net 30 accounts do not necessarily look for additional accounts unless they wish to extend their supplier bases.

Monitor Reporting:

Ensure washout lines fill out Dun & Bradstreet, Experian, and Equifax and report them accordingly. Some companies only report to one or two bureaus. So, ask your creditors where they report.

Add More Accounts if Needed: If the existing accounts are found not reporting to certain bureaus or if a diversity of credit reporting profiles is required, more Net 30 accounts or other credit lines could be added as they are still part of the business credit mix.

Investigate Your Business Credit Reports:

After 30 days, verify the business credit reports with your loan and tradelines to check for reporting accuracy and credit score verification.

You’re already halfway there with three charge accounts, and it would be a good idea to have about two more to fortify your credit profile. At least 3 to 5 new tradelines are sought after this period. Most clients will notice an increase in their Paydex and business credit scores within 30 to 90 days. If the Net 30 accounts are needed based on the current requirements, then it is not compulsory if your charge accounts already suffice.

https://lendingnetwork.org/business-credit/

lendingnetwork.org

How To Build Business Credit

It is very important for self-employed and commission wage earners to create an LLC to start building business credit under the name of your LLC.

[Dawn]

Good evening Gustan. To be honest, I have been on this loan qualification journey for quite some months and have a lender who has documented my loan for a conventional loan with a DTI at 50%. I know all my qualification number by heart, been working on it for many many months. However, lenders don’t want to qualify loans based on Prop. 19 tax basis and that is true of my lender as well. They tell their clients that the adjustment to the property tax will be made after the loan closes, however, for qualification they take 1.25% for property taxes, which makes my monthly payment higher than what it actually will be. This lender who has been working with me is a local lender here in my town which is my preference. I would only use a lender out of State if they would qualify me based on Prop. 19 property taxes, therefore, I ask this question. Otherwise, I do not wish to start my loan qualification process again, because the end result is the same. I have a simple financial situation, having retired already, with a clean thin file credit, but home prices are high in my area, higher than what I have been qualified for. Unfortunately, I don’t think it will work. I was hoping to hear from you that you had already done many loans with Prop. 19. That would make me feel more confident. You see, I am retired, have a great townhome with a low interest mortgage of 2.875%, however, I want to sell because I find dealing with HOA a big nightmare. I just hate HOA. The way the housing market is here in California, it is extremely risky to sell your home, unless there is a 500% surety that I will get a great perfect loan. I wouldn’t feel good doing a loan if a lender I unsure of the prop. 19 situation. I already have a great lender locally, however, they wouldn’t qualify based on prop. 19 property tax. Property tax is very high in my area, and is the reason why loans are not working out for most people. I am sorry, therefore, I don’t feel I should pursue this any further. I appreciate your response. Thanks, have a great weekend.

• This reply was modified 6 months ago by  Dawn.

[Dawn]

What is a Profit and Loss Statement?

A profit and loss statement (P&L), also known as an income statement, is a financial report that shows a company’s revenues, costs, and expenses over a specific period, usually one fiscal quarter or year.

Income Statement vs Profit & Loss Statement:

Both are used interchangeably since they reflect how well the business has performed financially.

Only P&L Statement Mortgage Loans:

These loans cater to self-employed individuals who don’t have traditional documents to prove their income. Instead of tax returns, lenders base their incomes on P&L statements, which should ideally show stable earnings over time and are typically prepared by CPAs.

[Dawn]

Eligibility for a USDA Loan:

Unlike other mortgage loan programs, USDA loans have a maximum household income limit as part of the USDA Rural Development Eligibility Requirements. The maximum household income limit is based on the number of people.

Variations in maximum household earnings: Usually, this is between $91,900 and $136,600 for a family of four. However, it can be higher in areas with high costs. To find out the exact figure for where you live, use USDA’s income eligibility checker.

Maximum Debt-to-Income (DTI) Ratio:

• Ordinarily, this ratio should be 29% (front-end) and 41% (back-end).
• However, if there are considerable compensating factors, exceptions may be allowed.

It is advisable to confirm these details with any particular USDA lender.