We are very proud to help the men and women who serve our country with their
dream of homeownership year after year. Keeping with this standard, Gulf States Financial
is releasing a new VA Renovation Program effective today June 5, 2017 to better serve the unique needs of our clients.
For many veterans and their families purchasing a new home at great price that might not meet VA appraisal standards meant the seller had to agree to fix a potential problem or the veteran would have to forgo the deal and find another house to buy. For others, this has meant limiting a new home search to homes with pre-built ramps and accessibility features which can prove to be extremely difficult in a sellers market.
For veterans with existing VA loans this has meant having enough as-is equity for a cash-out refinance to make minor improvements with their home in an as-is condition. However with the release of this program scores of veterans and their families will have alternatives to these and other headaches with our new VA Renovation program.
Below are just a few major highlights to the program:
If you or a family member is eligible for a VA loan and want more information about this exciting new program, please feel free to email us or call us at 888-269-8335.
Get preapproved or apply online 24 hours a day
On average Alabama is home to over 52,000 public school
teachers and in Florida that number is greater than 180,000. If you or your spouse are a teacher or work
in public education and are looking for a mortgage you are in very good hands at Gulf States Financial. We have over 16 years of experience of
helping teachers and their families purchase and refinance homes using the most
cutting edge products the market has to offer just for teachers. Our company was started by two former
teachers so we are very familiar with the profession and mortgage scenarios
highly unique to teachers that other lenders simply can not anticipate nor fully understand.
For example, did you know as a teacher you can purchase a
home with a conventional loan with just 1% down? Did you know that you can put
as little as 3% down and not pay monthly mortgage insurance? Did you know it is possible to refinance your
home without an appraisal or borrow against the fully repaired value to update
your home? These are just a few examples
of actual scenarios we have helped teachers with in recent months.
While local banks and credit unions help teachers and do
offer competitive rates at low costs, these institutions offer a narrow range
of products from the broad spectrum that the market actually offers. So if you are looking to buy, build new
construction, renovate, or refinance your rate as a teacher it pays to know all your options first. We know education and mortgages.
Have a specific question or scenario, call us at 888-269-8335 or send us an email at email@example.com
Get pre-approved or apply online 24 hours a day
As of the 2010 Census, the State of Florida was home to
approximately 7.5 million occupied condo units of the nearly 9 million total
units. Behind California and Texas,
Florida has been in the top three for total number of units for decades now and
is also currently ranked first with over 5,000,000 of those being owner
occupied as a primary residence. If you
are one of those 5 million owners who call a condo your primary home we have some
important market updates that might help you.
In a previous blog post last year regarding condos, we gave some important information for people purchasing
and pitfalls related that prevent purchases directly related to full and limited reviews.
If you purchased last year or 20 years ago, today’s news is geared
towards existing condo owners who are looking to refinance and lower their rate and have been unable to do so. This information does not apply to cash-out
refinances on Florida condos.
As of yesterday April 26th, 2017 Fannie Mae has
announced that any of the 5,000,000 owner occupied condo units with mortgages owned by Fannie Mae
with loan-to-value ratios of 80% or lower can completely avoid and skip a condo
review. This is a huge development in
condo financing because all the common problems we mentioned that have typically
stopped you from previously purchasing or refinancing your condo even when your credit was
not the issue are eliminated. In many cases Fannie is allowing an appraisal waiver meaning that you might not need an appraisal so you may have 20% equity and not even know it.
To find out if Fannie Mae owns you’re the mortgage on your
condo, first visit Fannie's Lookup Tool
and see if your mortgage is eligible.
If your condo is eligible and you would like more
information about refinancing your Fannie Mae condo mortgage and skipping the
project review please email or call us today at 305-432-5171 or email us at firstname.lastname@example.org for a free quote.
Even if Fannie does not own your loan or you do not think you are eligible from an equity position but you would like to get more information about refinancing your condo we are happy to discuss your scenario 100% free of charge. Visit us online 24 hours a day and submit your scenario.
While no residential construction-to-permanent scenario is
ever the same, we have consumers contacting us many months deep into the
process of getting construction-to-permanent financing with a great deal of effort
and money involved often with little to no results. There will always be aspects of the process that
will be out of your control but below is our 2017 Top 10 Tips you can use to
better understand the overall process and help make your
construction-to-permanent financing for your project as smooth as possible. The list is chronological so not moving forward until you revisit and are done with the previous steps is your key to success no matter who you use.
Get a preapproval for your loan – As we have mentioned in previous posts putting 10-20% down for a construction loan
plus closing costs and more is a popular myth that banks and credit unions regularly
sell today. This is simply not a fact if you live in Florida or Alabama. We offer VA construction to permanent loans with 100% financing and FHA loans with 3.5% down required. Get qualified in minutes, get a quote on rates and
costs, and find more about available construction-to-permanent programs and
requirements by request a pre-approval.
Search for a builder – Builders are regional in
nature so ask people in your area for referrals to local builders. Read online reviews and do some
homework. In metropolitan areas, check
with the BBB or Chamber of Commerce. Narrow
your search to no more than 2-3 builders you think you want to use. Avoid contacting them until you have a strong
idea of what you want to build because time is money and you will spend a lot of both trying to make these basic decisions that you can make without a builder's input. When you do reach out, be direct. Ask how busy they are when you talk to them. A builder who is overloaded is commonplace today.
To be of some additional help to you in your search, we have a
contact list of regional contractors we have direct experience but no direct affiliation with.
Decide what you want to build – just as if you
were buying an existing home, know the bedroom and bathroom count you want. If you can’t answer this question, you aren’t
ready to move forward. Use the internet
as one resource in your search. There
are scores of entire websites with online house plans to browse.
Drive around and see what is being built in your area. Cost is largely a function of size and
customization. Narrow down a square
footage range keeping in mind a range of $80-$100/square foot for non-custom
work, $100-$130/square foot for semi-custom work, and $131-$200+/square foot
for fully custom work. Know what style
exterior and interior you are looking for and note that entire cities and/or
developments have restrictions on size, design, and structural requirements (i.e. 1800-2100 square foot
minimums). For fully custom work, you
need to start the process of having your plans drawn up first as custom
home designs can take 2-4 months all by themselves. For all other projects, contact your builders
to see what existing plans they have on file that have already recently
built. You can save thousands of dollars
and months of wait time if you can use a plan that already exists that you want
to maybe modify in only minor ways. If
your builder has already built a home very similar, you will probably save time,
money, and headache when compared to him/her starting entirely from scratch. Be realistic toward your total preapproval amount. Know where and in what part of the home you want your budget to be spent.
Get builder quotes – Only after you know what
you want to build and have supplied a basic floor plan and design (or used one
of their own), ask your builders to quote your project. The cheapest quote does not always translate to the best results. Do not put a deposit down with anyone until you are ready
to 1) choose your builder and 2) have a site on which to build the project. After seeing the quotes, you may have to go
back and make more changes to what you want to build.
Shop for land – Assuming availability is
plentiful, getting a piece of land under contract can happen in 24-48
hours. In areas were vacant land is not abundant you need to budget more time for this search. Choose a site that is appropriate
for what you want to build. Don’t build
a castle among cottages that won’t appraise and that you can never sell. The golden rule is don't put your land under contract until your plans are done and you are ready to decide who your builder will be. If for whatever reason you plan to delay your building plans for whatever reason and want to purchase a lot we do offer loans on vacant lots and land, including acreage.
Buying land for construction - If you want to
buy a lot/land and want to wrap the construction to permanent financing all
into a single closing, do not put the land under contract until you have a set
of plans to be completed, confirmed what builder you will use, and are 100%
sure of the cost to build including site preparation, septic/well costs, and the
cost to run power to the house. Do not
sign the land contract for less than 60 days.
You will need to shop for a survey after you get the land under
Existing owner of land - If you already own land
or have an existing parcel that will not be modified prior to construction you
will need to supply the existing recorded deed, a mortgage statement if you owe money on the land, and work toward getting a
survey. Surveys that are older than 10
years old typically need to be recertified if the original surveyor is still open for business.
If a parcel will be changed a new survey (which will ultimately
determine a new legal description) and a new deed (with a new legal
description) will need to be drawn as soon as possible. Modifying a parcel and completing this can take weeks because the deed has to be recorded with your local probate office.
Gift of land – Having land gifted to you from a
close relative or family member is acceptable and the process is no different
from above regarding an existing owner of land.
However if the family member is deeding you a portion of land from a
larger existing parcel, having a survey and new deed signed needs to be handled as quickly as possible. The process is just like the scenario above with a modified parcel however since additional parties are involved (donor) it always takes more time in practice.
Confirm who your builder will be – once you are
ready to put your land under contractor (or deed for existing owners or gift
situations), you have a price to build your home on that land, and your plans
completed as you want to build you need to choose your contractor before
putting the land under contract. Ask and
follow-up with their references, inspect their work, and make sure they are
easy to deal with in the beginning. Please know that a
contractor who refuses to provide information to your lender is an automatic
red flag for us and it should be for you. The same thing applies to builders who are slow to provide documentation. All lenders have some form of
contractor approval process so he/she will need to be willing to complete this
process, in addition to completing a cost breakdown and various other
Put the land under contract - With all else considered put the land under contract with a
minimum of 45 days as a closing date with 60 days as the ideal time from moving
forward. Line up a surveyor, get survey quotes, and be ready
to place your order for a land survey within 1 week, typically after loan
approval. If your building site is bigger than a few acres, expect the cost of the survey to increase significantly.
Sign Loan Application – In
today’s lender environment of strict compliance no lender can proceed on your
loan without a concrete figure from your builder because accuracy is key and re-disclosing a loan several times for small changes eats up significant time. So with your builder picked and your site under
contract (or existing land deed ready) a project calculation sheet will be
provided within 24-48 hours after you give your lender the cost to build. You will use this document to sign and complete a contract
with your builder to include construction interest and soft costs. Your builder contract and calculation sheet will
be the basis of your full loan application and disclosures. Your builder may want a deposit on the
project which is fine but do not sign his/her contract until a project
calculation sheet can be drawn. Your appraisal can’t be ordered until the
plans and specs are completed turned in. At this stage you are approximately 45-50 days away from closing.
Loan approval/final conditions – with your
contract to build and loan application signed you will turn in a list of
required documents just as you would for any mortgage loan. Loan approval typically takes 2-3 days on
average. Despite contrary information, getting approved for a construction to permanent loan is almost identical
to any conventional, FHA, or VA loan.
The average consumer is not aware and typically avoids the many potential
equity benefits of these products as a result.
3 Pieces to Get to Closing – from processing to closing, your
constriction to permanent loan has 3 main parts.
Credit approval is just like any other loan. Your builder will need to supply a small
amount of information for builder approval which takes just a few days to clear
up after his information is turned in.
The third and final piece to your loan is project approval. At application you will sign several
disclosures, some which will also be signed by your builder thereafter, stating
who is responsible for what and that is the limitation of your involvement on
the project side. Your builder will complete and turn in most of the items
specifics of the project such as a specification of materials, cost breakdown,
and other items. The key to finishing
the 3 parts is to focus on getting all the items for credit approval and making
sure the builder is turning in the items for builder and project approval. Once these 3 parts are complete, your closing
can be scheduled.
Closing a construction to permanent loan is no different
than any other loan with the exception that your builder or authorized
representative must be present to sign a few documents. The only major difference in time is that a closing
package typically takes 2-5 days to be drawn in advance prior to closing
depending on the time of year.
If you would like to email us about your scenario or have
further questions, please feel free to email or call us at 888-269-8335.
With the demand for licensed home builders and contractors at an all time high, we feel it would be helpful to the public to provide a list of professionals we and/or our customers have done business with over the years and were pleased with their work*. This list is for non-tract home custom to semi-custom builders and contractors who have done everything from small scale renovations to full custom home projects.
Greater Birmingham Area
Bibb County (Montevallo/Centreville)
Lake Martin / Dadeville Area
*Disclaimer: All companies and/or persons herein are not affiliated with Gulf States Financial in any way.
These are professionals listed by geographic region you might inquire with for your residential construction or renovation project.
Being listed within does not imply an endorsement in any way shape or form.
It is your responsibility as the consumer to verify that the professional you choose is licensed, insured, bonded and complies with all laws.
This information is subject to change at any time without notice of any kind.
GULF STATES FINANCIAL
Lot Loans / Vacant Land Loans Now Available
It is GREAT NEWS to report that for the first time in nearly 10 years we are seeing a resurgence in demand for new construction homes more specifically one time close construction to permanent loans. For that same reason, we are starting to see increased market availability for loans on vacant land and lot loans. To help get the word out to the consumer we want to explain what this means to you the end consumer and how this market change could benefit you. We will limit our discussion of land and/or lots to be land that is typically 20 acres or less and address those above 20 acres to a future discussion.
Traditionally borrowing money on vacant land or a lot without “improvements” in a generic sense means that the land doesn’t have a permanent, existing, residential home located on the land as is. While digging a world class bass pond, building a barn, carving/paving roads, or running power onto your land are great tangible benefits without a permanent dwelling the land is still considered to be “vacant” or “unimproved”.
This is important because this classification in the lending world eliminates you from getting Conventional, FHA, VA and USDA financing for the land/lot as is. For decades now if you wanted to buy or refinance vacant land or a lot you were forced to go to a community bank, credit union, or land bank which has at least a branch located in the county and/or adjacent county that the subject property is located. This arrangement is still true to this day and will not likely but the best news is that we now offer options statewide in Florida and Alabama regardless of what county you are in.
What has not changed
All lot loan lenders will require between 20-25% down because of the risk involved, no exceptions. While this sounds like substantial down payment, finding a builder, developer, or seller with excess inventory and well priced lots in the $40,000-$85,000 range is common in many areas in both Florida and Alabama. In most cases the equity you have in the lot can be used towards down payment requirements on FHA and Conventional one time close loans. Please note that this LTV (loan-to-value) threshold/restriction is typically the same no matter what the price and loan amount is.
Also because of this risk involved in case of default, all lenders will typically offer note rates that at a minimum 1.0% to 8.0% higher than prevailing conventional and government rates depending on your credit score, down payment, loan amount, and term requested.
The biggest difference between the local credit union, community bank and other lenders in the marketplace is the 1) the rate associated with a given term and 2) other special features the loan has based on your scenario. As a result probably the biggest mistake a consumer can make on land/lot loans is to call around asking what note rates, asking about closing costs, and stopping there.
The biggest pitfall that many local banks and community lenders add to lot/land loans is a demand or balloon feature because they want their money back sooner than the term they are giving you. For example, the bank gives you a 6.0% rate, 10 year amortization, and a 5 year balloon. This can create a huge problem if you don’t pay it off before 5 years because while most of these same lenders will allow you to buy the land with their money, MOST do not allow you to refinance that note because they don’t have to. In real life situations, this balloon means the consumer must magically come up with the cash and payoff the balloon with 5 years or more left on the note, build a home a wrap the existing land note into a new note via construction or construction-to-permanent loan, or sell.
Next to being sure if your lot loan has a balloon feature, a fourth good question you should ask should be about maximum terms with potential long term, worst case affordability in mind. Most lenders, specifically your local community bank or credit union, will offer a 5 and 10 year term automatically when you borrower up to $100,000. The most common I have seen in my 14 years of experience is a maximum 10 year amortization with a balloon due in 5 years.
What has changed
The good news for you is that we are now offering loans for vacant land and lots for as little as $35,000 and in cases over $75,000 terms as high as 15 and 20 years with acceptable credit in all 67 counties of Alabama and all 67 counties of Florida moving forward. Also we are offering these loans without a balloon option in most cases so if you want to buy and hold or build tomorrow we have more flexibility that may not be available in your county or region. Our maximum lot loan limit is $500,000.
While we would be glad to discuss any scenario, and don’t imply any kind of offer within this post, we are happy to announce (with the property equity and acceptable credit) that we can also refinance lot and vacant land loans which is really great news for borrowers facing a fast approaching balloon date.
You can always Apply Online 24 hours a day and a we can put you in touch with one of our loan officers who specializes in your area. You can also call us at 888-269-8335 or email us with questions at email@example.com
Gulf States Financial is an equal housing lender licensed in Florida and Alabama only.
Search your local MLS, Zillow, Trulia, etc. and you will find that there are LOTS of condos on the market in both Alabama and Florida. If you are interested in capitalizing on this opportunity of purchasing a condominium, there are MANY questions to ask your realtor before considering a potential property and we always strongly encourage finding a realtor who specializes in condos first and foremost. If you need financing for your condo, below is the current recent breakdown of conventional minimum down payment requirements for Eligible attached condos in Alabama and Florida based upon occupancy. Please note all of this information is subject to change at any time. Maximum LTVs in Alabama Primary - 95%Secondary - 95%Investment - 80%Maximum LTVs in FloridaPrimary - 95%Secondary - 90%Investment - 80%By far the biggest puzzle in obtaining financing for buyers and buyer's agents alike is finding a condo project that is actually Eligible for financing. Below are a few links anyone can access with Fannie Mae (and also with HUD if you are willing to consider FHA financing). While finding an Eligible condo does not automatically qualify you for the loan or a given down payment, this is a great start to searching for condos in your area if you are interested.Fannie Mae PERS Look-Up - Updated WeeklyHUD/FHA HRAP Look-upIf you are not finding approved condos by searching your area, especially for those of you searching in Southeast Florida, this is not the end of the road for you. This is true mainly because a condo can be Eligible even though it is not listed as already approved with Fannie (or HUD). Even if you or your realtor go through the trouble to calling a long list of condo associations or association management companies in the area, paying fees for them to fill-out questionnaires @ $100+ each, most will have no idea if they ARE or ARE NOT eligible or even what that even means if you ask. As a buyer, we do not recommend searching for eligible condos this way.While explaining condo eligibility guidelines is complicated and not something we have room to attempt to explain here, if you are willing to put a little more money down Fannie Mae may allow a limited review approval for financing without requiring a full eligibility review. The only way to know if you can get the loan with a limited review is to apply for the loan and have your loan officer get an automated approval through Fannie Mae's system. Limited Review Thresholds Alabama Primary - 90%Secondary - 80%Investment - not allowedLimited Review Thresholds FloridaPrimary - 75%Secondary - 70%Investment - not allowedIf you can get a limited review status on your automated approval, your lender will contact the association after you apply and send them a limited review questionnaire that is typically 10-15 questions long. For you this typically means a much more streamlined eligibility process performed directly by the underwriter and more importantly the benefit of getting low conforming rates and APRs. Again a limited review status doesn't guarantee eligibility or full loan approval.In the case of a full review the list of requirements by your lender will grow to somewhere around 20-30 more detailed questions and additional documentation compared to those on the limited review. Also the complexity of a full review typically warrants this detailed documentation being gathered by a third person, like a condo review desk, and not the underwriter assigned to your loan. The end result is typically increased turn times on the review and a potential for decreased likelihood of eligibility.Ultimately in the case of a both a limited review and full review here is a list of reasons, ranked by frequency that I have seen since 2004, that a condo project is usually be marked as NOT Eligible. This is in no way a complete list but gives you an idea of what will stop you from obtaining conforming financing on your condo even when your credit, income, and assets qualify.
Common Review Problems for Condos Project Financing
Excessive Investor Ownership: 50% of the total number of condo units can not be owned by investors. Second home, vacation home, and owner occupants are not categorized as investors. Single Entity Ownership: No person or other entity, including the developer, can own more than 10% of the number of condo unitsDeveloper Control: The project needs to have been turned over to the homeowners and 90% of the total units must be sold and closed."New" Attached Projects: Are not eligible for a limited review. Restrictions apply with a full review. Timeshares: Not allowedShort-term Rentals: If the HOA advertises, participates and/or facilitates short term rentals the project is ineligible. If the project operates like a resort/hotel/condotel/ with an on-site check-in rental desk, offers food, and/or cleaning services the project will likely be ineligible.Commercial/Non-residential Units: These units cannot exceed 25% of the total number of unitsDeliquent HOA dues: No more than 15% of the total number of units can be delinquent on their dues. ReSale/Title Restrictions: Legal documents in force within the project that restrict sales and transfer of clear title will typically require further review.Litigation/Arbitration: The project needs to be cleared of any pending litigation. Common areas/Recreation Facilities: Unit owners, through the HOA, should have sole ownership interest/rights to use all facilities and common areas. These facilities (new construction) must be completed at the time of application.To find out if a condo you want to buy is eligible before you submit an offer or to get pre-approved to purchase or refinance a condo, please email
Lines A1-A3 Origination Charges Lines C4 through C9 Various Title ChargesLine C6 - Lenders Title InsuranceLine H6 - Owner's Title Insurance Line E1 - Recording FeesLine E2 - Transfer TaxesLine F3 - Prepaid Interest - should already be included on your 1098-TPlease note: You can not deduct for costs/items paid by the seller on your behalf so be sure you are not claiming a deduction for something you did not pay for.