AL and FL Mortgage News

Over the years we have seen thousands of credit reports from the best to the very worst-case scenarios and the most commonly asked question when discussing scores is something to the effect of, “How can I get my credit scores higher to buy a house, refinance, build, renovate, etc.?” No, this is not a sexy topic but what is sexy are the relatively fast results for people who dedicate a little effort to understanding a few basics and then start building, rebuilding, and maintaining their credit.  The good news is you don’t need to understand credit algorithms or what those words mean to achieve results.  Our intent here is not to answer all things credit nor is it to offer you credit counseling services* but we do want to shed light on some proven best practices, let you discover where you are in that path towards better credit, and ultimately act towards making credit the excellent resource it can be for your future.   

Get Added as an Authorized User
If you don’t know your credit scores you can get your scores from various online companies like but we frequently recommend going directly to the 3 major credit bureaus Equifax, Experian, Transunion who determine your credit scores.  Credit scores commonly report in a range around 450 to 820 with a higher number being "better" than lower.  If you find you don’t have a score for all three bureaus, maybe you have only one or two scores due to lack of credit or your middle of the 3 scores are below 640, one of the single fastest ways to re-establish and build new credit is to use someone’s else’s credit.  Yes this is legal if you have permission.  Yes this has risks involved you need to look into.  Do you have a parent, sibling, or significant other who has had a credit card that has been open for at least 12-24+ months, who keeps balance is kept below 50% of the limit, and always pays it on time religiously?  If the answer is yes and they agree to let you, the owner of that account can add you as authorized user with a quick phone call and as soon as the creditor reports that next month’s data it can dramatically and immediately impact your score inside of 30 days. 

Be careful if that person and anyone else on the account decides to take up gambling, rack up the bill at Christmas, or make a late payment because getting added as authorized user can cause just as much damage to your credit history and scores as it can good.  Also there are other implications regarding access to this person’s credit you need to research and discuss but this is why we recommend using family over a friend to do this.  Once you follow the steps below and have several (at least two if not three) of your own credit accounts that are in good standing, it would be a good idea to remove yourself as a user within a year or two to eliminate any potential bad data being reported.

Secured Lines of Credit -  The Stepping Stones
In the early stages of credit building or rebuilding, getting added as an authorized user might be your starting point or If you don’t have this luxury, there are alternatives.  We don’t want to tell you how to live your life but if you can stop eating out for a few weeks, pick-up a few extra hours at work, do Uber or Lyft, or curb your online shopping could you find a way to save $500?  With the first $500 you save you need to open at least one secured line of credit that reports to at least two major bureaus.  A secured credit card is secured because of the collateral you put forth to open it.  Regular unsecured credit is extended because of your good scores already established.

It is really important to know that many providers of secured lines claim to “report information about your account to the major bureaus” but frequently take many months to report, don’t ever report, only report to a single bureau, have high rates and/or high fees, and have poor customer service but also know the name of this game with secured lines is reporting to at least two bureaus quickly so do your research here. Credit Karma has just two cards with First Progress claim to report to all three.  NerdWallet has a similar pros and cons review but doesn’t make bureau reporting a focus.  Magnify Money’s review focuses on those with low annual fees.  Wallet Hub has a very detailed review that is also worth checking into.

After nearly 7 years of repeatedly recommending mutual customers and positive results, we have found PNC Bank (888-370-7344) offers a nearly hassle free $500 secured line of credit with competitive terms and fees.  You fill-out an application online or in a branch, deposit the $500, and then they report the usage data to two bureaus in 45 days or less. We have no affiliation with PNC Bank but we have seen customers open a $500 line of credit, pay it on time monthly, keep the balance below $100, and see 60+ point increases inside of a few short months people with little credit from just a single account which is massive.  Your personal results in a similar time frame may vary based on your credit profile.

Multiple Secured Lines of Credit
Keeping in mind the potential gains of opening a single account, if you can open a second secured line with this same or a different provider do so as soon as possible.  If you can, consider a larger limit if possible because it looks more favorable when a human is making a credit decision in the future.  If you can’t afford it, a second for another $500 is fine.  The goal with respect to scores is to have more than one account reporting positive information so it is better to have two $500 secured lines reporting compared to say one single line of $1,000.   Secured lines are essential stepping stones for credit building and should be kept open for as long as possible.  Once you build a credit profile within say 24 months by opening other accounts like unsecured cards, installment loans, and other types of credit you may only then want to consider closing them.  

The Credit Union - Getting a Third “Major” Trade-line
Keeping all else equal, everything described so far can and usually does build/improve existing credit within a 6-month time frame for an investment of around $1,000. (We say investment because when you close the secured line and it is paid in full you can get your money back.)   Around this 6-month mark with one or two secured lines, make a credit goal to get a third “major” trade-line established.  Some would argue the figure to be higher but have a goal of at least $2,500.  You can open a third secured line as previously described but at this point you may want to purchase something using the credit you are building even if you have the cash to buy it outright.  Find out what is best for you.   

To take this next step we most frequently recommend checking first with a local credit union over any bank big or small on what they offer.  We aren’t bank haters but credit unions by design will lend to people with scores below 600 with a minimal down payment and in many cases, offer better terms to those with higher scores like 700-760. Regardless of who you choose, “major” credit accounts like auto loans are secured by the collateral (less risk) and are therefore typically easier to get approved for than say opening a credit card which is unsecured (greater risk).  We are not suggesting you have to go into debt to get better credit because you do not but having a third account/trade-line is a worthy benchmark in the credit world.  

So far we have talked about things that will increase your scores so we also need to talk about things to avoid.  It would be pointless to follow this or any similar path for credit building and let potential creditors hammer your credit with inquiries.  We see even people with "good" credit do this all the time.  As a rule moving forward from today only authorize a few potential creditors pull your credit per year.  Tell your friends and family this information.  You can increase your chances of obtaining new credit by using credit unions who have more flexible guidelines which will naturally lead to less inquires. Multiple inquires, which we will label six or more per year, very frequently causes damage to credit scores without consumers even knowing.  You can always pull your own credit as mentioned previously without an inquiry “counting” against you so before you authorize anyone at all, go online to a local credit union and see what the minimum score requirements are before ever applying and save yourself time.  Note that credit unions also typically publish this information openly while banks do not.  

Dealer Inquiries
Not all car dealerships are evil but NEVER let a car dealership of any kind pull your credit.  Hands down.  Know your score and get credit pre-approved to purchase a car or truck at your credit union or bank first and then go car shopping knowing what you can do.  This same concept applies to mortgages.

New vs. Old Gear
How you use your credit will affect what you can afford today and in the future so a quick discussion about new versus used is highly relevant.  New cars, boats, four-wheelers, Wave-Runners, and other similar personal recreational merchandise can be tons of fun and might impress others but the shine eventually fades.  Most importantly the new stuff also loses significant value rapidly and ultimately getting rid of this stuff to buy more new stuff will cost you more and may not be possible when you are ready if you find yourself in a negative equity position.  The value of pre-owned and certified cars, trucks, and the like is literally better than ever and can be a huge value to you because the other person who bought it first took the massive depreciation hit for you.  This most certainly holds true for gently used luxury items. 
If you can’t get a third tradeline as mentioned above you may need to wait for your score to heal with time or try some other methods below.  Another helpful tip that doesn’t impact your credit score but is a valuable tip is making sure you pay your rent via online bill-pay or use a check.  For mortgage credit, FHA will allow proof of 12 months canceled rent checks as a third tradeline.  In some cases, if you apply for a loan and have a 640 credit score, they will sometimes require 12 months proof of rent so if your score is lower than this point now form a paper trail now.  It is impossible to form said paper trail if you pay with cash.    

Ramping Up Scores – Debt-to-Limit
How you use credit is what really determines your score.  Aside from making on-time monthly payments, a factor largely unknown to the public is something called a debt-to-limit ratio which is expressed in a percentage.  Do you have a credit card or other revolving account where your balance is 50%, 75%, 90% or more of your limit?  If your answer is yes, work on reducing the balances on the account(s) with the highest debt-to-limit ratio immediately.  This sounds backwards because you may be paying more interest on a card with a higher balance but addressing debt-to-limit issues with your credit is more relevant to credit scores versus the cost of the debt.  

Limit Increases
If you have “good” credit (say 680-700+), have any single account that has been opened for 6-12 months with a balance less than 50% of the limit? Most creditors will allow you to increase your limit on these types of account just by clicking a button.  Most of the times it does not result in a harmful credit inquiry and the results are almost always automated.  If granted this results in an immediate reduction of your debt-to-limit ratio for that account and effortless credit score building on your part.  In most cases if you have paid the bill by the due date each month out of the last 12 they will allow it.  If you are denied you have not lost anything and try again in a few months of satisfactory usage.

Balance Transfers
If you have established credit with more than 3 or 4 credit cards you need to research information about balance transfers to decrease higher interest cards and to continue to hammer down your debt-to-limit percentages.  Know that most unsecured credit card offers with balance transfer incentives have a threshold of 700+.  For example some credit card providers offer 0% interest on transfers with credit above 720+ for 12 months or might give you 18 months if your score is above 740.

Low and Bad Credit
We have talked about several ways to add positive credit, skills to better manage it, and easy tips to boost credit but we haven’t talked about dealing with existing negative information impacting your credit today.  This is no better way to say WAKE-UP.  Realize the past is the past, take ownership of your credit, and stop hiding.  Contact any open accounts that you have any late payments still owed on and establish a dialog as quickly as possible to bring any late payments current.  Explain your circumstances and ask if they will work out an agreement to help you do this.  Even if they decline, have terrible customer service or were somehow rude to you at any point you not living up to your part of the agreement is not their fault. Their job is to collect money for their company so the bottom line is be ready to clean up your mess.  If you are still pointing fingers, you are not ready.

Old vs. New Collections
If you have a late account(s) that was not paid after 120 days many creditors “charge-off” the bad debt and sell your debt to a third party collector to get it off their balance sheet.  Yes, collections can be tough to deal with but if you have any collections added to your credit within the last 12 months these are what the credit world considers as “newer” collections and you should try to pay them off in full as quickly as possible.  Having these kinds of collections reporting has already harmed your credit but is likely still being reported in recent activity.  

Newer collections have less side effects on credit when compared to “older” collections that have been on your credit for a year and beyond and/or haven’t updated reporting for many months.  Many people avoid paying off old, higher balance collections because the balance is so high they still don’t have the money to pay them back or ignore the small, old accounts but they all matter.  For credit rebuilding old collections need to be resolved just as the new but it is important to know that resolving old collections will unfortunately harm your credit more in the short term when you pay them off or settle for less than what you owe.  

Third party debt consolidation is a multi-billion dollar industry that you should probably avoid getting involved yes even if you owe thousands in old collections.  These companies contact your creditors, negotiate a settlement balance and corresponding payment plan and charge you a monthly fee for this service meaning it will take you longer to actually pay off the debt compared to doing it yourself.  What the masses don’t know you can do this yourself if you want to and skip the fees but a payment plan is not the best idea for credit score improvement.  Think of a payment plan on collections like a long/drawn-out breakup or slowly ripping off a Band-Aid on a wound that might not be that bad to begin with. 

As a payment plan alternative, a settlement and single lump sum payment will improve your credit quicker especially if you are building new credit simultaneously and you should be.  As scary as a settlement sounds most people don’t know that collectors are most always pre-authorized to settle their accounts for about 10%-50% of the final charge off balance if you simply call and negotiate it.  Note that if you settle with either method your credit report will most likely be marked accordingly.  Also know that your collectors will typically require the settlement payment within 10-30 days so don't call them to negotiate if you aren't ready to do something.  You will need to demand the terms of the settlement in writing and make sure it indicates that whatever you end up settling for will "satisfy" and "close" the account.  If they say they can’t give it to you in writing or they will mail it to you, tell them you can’t pay until they actually do.

Lump sum settlements on old collections are more harmful to your credit in the short term but are better in the long term when compared to a settlement with monthly payments over 12-60 months that debt consolidation companies prefer.  A payment plan omay be the only alternative for you and would be preferable to doing nothing.

Despite what is portrayed online and via TV, Chapter 13 and 7 personal bankruptcy are not the end of the world for your credit.  In fact many people are probably good candidates and don't take use of these tools which offer protection and a much-needed fresh start when they can’t possibly settle a large amount of derogatory accounts with respect to available income or assets.  If you have a discharged bankruptcy within the last few years or as soon as the last few months, you need a request a copy of discharge paperwork from your attorney, keep it on file for at least 7 years and pull a copy of your credit report.  You can your scores from companies like but once again we recommend going directly to the bureaus Equifax, Experian,  Transunion so you can question/request their report directly from them as well as submit corrections online.   

With your bankruptcy discharge paperwork and credit report in hand, make sure all debts that were discharged in the bankruptcy show a $0 balance and/or are marked as discharged by the bankruptcy.  By law the bureaus have 30 days to respond to your request to any corrections and you can supply the discharge directly to the bureau if needed.  In many cases most people do not take this final step after the bankruptcy ultimately find their credit scores suppressed for no reason other than lack of understanding and due diligence.  For those who are on the ball, it is common to see 700 credit scores in just a few months after bankruptcy.


If you are facing foreclosure, attempting to negotiate a short sale with your lender or attempting a deed-in-lieu by surrendering the title to the home is better (with respect to mortgage credit guidelines) with regards to a regular full foreclosure.  If you are facing foreclosure, it might be wise to contact a licensed attorney to discuss including the option of including foreclosure inside of the bankruptcy because this has less wait times with respect to future home buying/financing in some cases.

If you have had a foreclosure and or bankruptcy in the past both are termed recent “derogatory events” with respect to credit.  In 2017 the general trend is that you can establish new credit using methods described here and even get mortgage financing literally within days after these kinds of events rather than 4-7 year wait times required by FHA and conventional loans. To qualify on mortgages after a derogatory even you will typically need 10-20% down to qualify.

Credit disputes in light of credit scores are largely intended to be used to resolve false/incorrect information or fraud within a relatively short window of time.  Typically, any bad data on a disputed account keeps that data from impacting the score while the account is in a dispute status but by no means is opening a dispute any kind of long term solution for improving your credit score nor settling a debt.  Many creditors will require you to take any and all accounts out of disputed status in order to extend new credit.  If you are worried about fraud and someone stealing your identity you might want to look into products like LifeLock or

Liens and judgments can sometimes be settled if the other party agrees to a settlement but are not as easily handled like a collection because the government is involved requiring payment before new credit can be established.  Liens and judgements in the credit world do impact credit and are a higher priority than collections of any kind so they too should be dealt with as soon as possible.  If you have one or more of these you may want to inquire with a secured card provider to see if these will cause an issue.   

Building and maintaining credit is cyclical rather than linear path.  Good credit can be a reality if you first take responsibility and take steps like those mentioned here in establishing new credit, make timely regular payments, keep revolving balances low, pay-off/settle collections and charge-offs quickly, and monitor your credit annually.

If you want to inquire about guidelines regarding various types of mortgages and credit requirements you can check our other blog posts, email, or call us at 888-269-8335 during normal business hours.  As always you can apply online 24 hours a day.

*The viewpoint of the post is the solely the opinion and experience of the author and not Gulf States Financial, LLC.  Gulf States Financial nor the author is in any way a licensed credit counselor or bankruptcy attorneys and your scenario might warrant a consultation with a licensed professional.  We do not offer this information for any form of direct compensation, so do your research and verify what we are saying and what might be best for you.  This information is subject to change at any time.


Posted by Devin Murray on October 24th, 2017 10:34 AM
The principal and interest payment on a $200,000 30-year Fixed Rate Loan at 4.25% and 95% loan-to-value (LTV) is $998.57 with 0 points due at closing.  The Annual Percentage Rate (APR) is 4.535%.  The principal and interest payment does not include taxes and home insurance premiums which will result in a higher actual monthly payment.  Rates Current as of 10/3/2017.  Gulf States Financial, LLC NMLS # 835698.  Equal Opportunity Housing Lender.

Posted in:General
Posted by Devin Murray on October 5th, 2017 11:57 AM

Depending on what county you are financing in Florida or Alabama if you want to borrow more than $424,100 to purchase, renovate, refinance, take cash-out or build the type of mortgage you are likely* inquiring about is often called a “jumbo loan” or in some cases “high balance” because you are borrowing more than your Conventional county loan limit allows.  Click here to verify your county limit if you are unsure for your area or you can see the general limits for 2-4 unit dwellings on the main page click here.  

If you think you need a jumbo loan it is important that you understand that even if you easily qualify for a jumbo loan with an 820 credit score, high income/low debt and plenty of assets having this designation has very different restrictions that few lenders ever mention and very few consumers understand.  The information herein omits discussion of how to qualify for jumbo loans over a general discussion of what the jumbo market is offering for single unit residential properties.  This information is subject to change and most likely will at any time.

Credit Score and Loan-to-Value (LTV)
While several exceptions exist, most jumbo lenders offer the greatest flexibility/rates/pricing/costs for loans with a 760 or greater score and most all if not all stop lending below a 660 score.  Inside of this big range you can typically borrow up to 90% on a primary purchase or rate/term refi with as little as a 680 score or 80% between 679-660 including cash out refinances.  Second home LTVs are capped at 80% with as little as a 680 score while investment jumbo loans are capped at 70% at 680.  Many lenders set a benchmark of either 720 or 700 for jumbo loans and adjust heavily to the rates/pricing/costs and will decrease flexibility for anything below this range.
Two notable exceptions to this are VA and non-QM loans.  On VA loans you can typically borrow up to 100% of the VA max guarantee allowable with just a 660 score.  Non-QM jumbo loans are loans that fall outside of traditional jumbo requirements where LTVs typically start at a peak of 80% with a 660 score and the LTV is reduced accordingly.  It is possible to borrow to jumbo money with scores down into the middle 500s with a Non-QM loan.

Maximum Loan Amounts
For jumbo loans most lenders have a benchmark up to 90% up to $1 million but have higher score and asset requirements and/or tighter LTV requirements above this dollar mark.  It is common that many jumbo lenders and banks will cap jumbo loan amounts up to $2.5 million but that does not mean finding a loan higher than this amount is difficult.  There a quite a few nationwide lenders who specialize loans above $2.5 million but again the requirements and limitations described here are typically a bit more strict.

Debt Ratios
With the VA as the exception which can allow up to a 60% back end debt-to-income ratio at times (which is extremely high by comparison), most traditional jumbo loans have a limit as high as 43% depending on the scenario.  It is most common that on any jumbo loan above an 80% LTV that this ratio is reduced to 38% and even sometimes to 36%. Exceptions are sometimes made if the borrower has double or triple the asset requirements, higher credit score, or possibly other compensating factors.

It is noteworthy to mention that stated income loans, Jumbo or otherwise, for the most part no longer exist due to various regulations passed regarding ATR which is the requirement of the lender to verify a borrower has the “Ability to Repay”.  This is regulation that is good for our industry.  On the flip side some non-QM lenders have 12 to 24 month bank statement programs as an alternative.  On VA loans some IRRL loans are more basically loan modifications that do not require re-verification of income.  Also for non-jumbo conventional loans there are reduced income documentation requirements for non-self employed borrowers.

Asset Requirements
Over and above cash required to close, jumbo underwriters typically want to a see few to several months of  “reserves” remaining in the bank after closing.  Reserves are calculated in months of equivalent proposed PITIA (principal, interest, taxes, insurance, and HOA fees) payment on the subject property.  In many cases this is as low as 3 months and can be as high as 9 months for primary residences and investment properties.  It is important to note that for second homes the range can be anywhere from 6 to 12 months. 

Property Specific Limitations
  • Acreage - Many jumbo lenders will restrict land size up to 10 acres and stop at 20 acres but options for jumbo mortgages on land of this size do exist.  With most jumbo loans restrictions on land-to-house value are common above 10 acres (i.e. a lender might state that land value can’t exceed 35% for an 15 acre property).
  • Condos - Warrantable condos types R&S in AL, type S only in FL.  If you are unsure if a condo is warrantable, you can read more about this here or you should speak to a loan officer about what a full project review for warrantability entails.  The Florida condo market has similar restrictions for even non jumbo.
  • Miscellaneous Property Types - As a rule one unit properties typically have the least restrictions with Jumbo loans, followed closely by two unit properties. It is important to mention that 3 and 4 unit properties do have significant reductions to LTV, increased score and asset requirements which is too much information to list here.  Condotels, Log-homes, co-ops, mixed-use, and unique properties are typically ineligible for jumbo and conventional financing alike.

Some lenders can and do require two appraisals on loans typically above $1.5 million.  Appraisal waivers common on conventional loans do not apply to Jumbo loans.  On LTVs less than 50% in some instances lenders will use the tax assessed value in place of an appraisal but this is strictly on a case by case basis and occurs mostly at the local lender level.

Loan Terms offered are typically 30 or 15 Year Fixed Rate and 5/1, 7/1, and 10/1 Libor ARMS.  While it is not a practice we advertise or endorse in any way, it is very common for lenders to offer very attractive ARM rates and incentives for jumbo loans.  ARMs are typically less risky for lenders but riskier for borrowers.

Jumbo Construction and Renovation Loans
Construction-to-Permanent and Renovation Loans for Conventional, FHA, VA and jumbo-sized VA loans do exist and are readily available now.  Unfortunately, this is not the case for Jumbo loans but there are alternatives.  Unless you use your own cash or have significant equity in the property in its as in condition that you can take cash-out from to cover renovations, you will likely be getting what resembles a standard construction product with a 6-12 month term that you will have to refinance out of.  This product is the same for new construction.  With sufficient assets and higher credit scores (above 700 or 720) you can typically borrow up to 90% on traditional construction products for jumbo loans and refinance out into a regular end loan after the project is finished.

If you want to get pre-approved or discuss how to qualify for a Jumbo mortgage you can call us at 888-269-8835 or apply online 24 hours a day.

*It is important to note that if you are borrowing more than your county limit, there are ways to avoid having to go with a jumbo product if needed. 

Posted by Devin Murray on October 3rd, 2017 12:48 PM

Recently we highlighted some benefits of renovation loans (a.k.a. rehabilitation or rehab loans) to owner occupied borrowers but without mentioning how this specifically applies to real estate investors.  If you are a first-time real estate investor or a seasoned veteran with a large portfolio in multiple markets, you should be familiar with how a renovation loan differs from regular mortgages and as well as the recent guideline improvements which could make you more competitive on new acquisitions, drastically maximize your property values, increase rental cash flow and/or improve overall profitability on both a buy and hold situation or a quick flip.   

Updates for "Regular" Conventional Loans 
As of August 15, 2017 conventional investment purchase or rate and term refinance mortgage guidelines require a 15% down payment or equity position on one unit properties and this grows to 25% for 2-4 unit properties for credit scores 620 and above.  This is no doubt a big improvement over the 20%-30% restrictions put in place after 2009 but the assumption is that no repairs are needed or wanted because in either case financing repairs or improvements is not allowed.

When it comes to repairs and knowing if a renovation loan could help, ask yourself two questions:   Does the property in question need any kind of repairs or improvements in order be to eligible for traditional mortgage financing in its as is condition?  If the property is eligible, could the property produce significantly more rental income and/or command a higher sale price at sale time with some level of improvement(s)?  If your answer is yes or you are unsure to either question, keep reading.  

Existing Properties: For investors who want to repair/improve an investment property they currently own, you are limited on a traditional cash-out refinance to 75% of the current value on fixed rate loans, 65% on ARMs with a 5% reduction to both scenarios for  2-4 units. For some that equity position might be reasonable if you have owned the property for 10+ years, your original equity position was 50% or lower, and/or the value has increased significantly in recent years.  For many investors however this is not so and leads to issues like avoiding repairs, quick but repeated repairs, code violation, borrowing money at double digit interest rates to do repairs correctly and/or depleting much needed cash reserves.  It is important to note that cash-out mortgages for the purpose of home improvement do not in any way factor-in planned repairs because the value is based on how the home sits currently.

New Properties:  Aside from repairing/improving properties you already own, a large issue when acquiring the next property is the house not being eligible for financing in its “as is condition”.  If you use a traditional mortgage you are not allowed to finance repairs so you typically lose bargaining power if the seller is required and possibly unwilling to fix the issue(s) prior to.  Otherwise you have to find and utilize additional capital to do the improvements on top of the down payment and closing costs required at the time of purchase but even if you have those funds repairs have to be done prior to closing and you should never repair something on a property you do not own.  For new and small portfolio investors, this is a huge (if not the single largest) barrier to entry in not being able to “afford” that “best deal” on a property solely because it needed work or it needed “too much” work.  The end result is most investors who are not as fluid simply can't compete with those who are.       

The good news for all investors is that the power of a renovation loans can help level the playing field and is available to you today.  Unlike any time in recent years investors can use a rehab loan to finance 85% of the improved future value of a new property they wish to buy which means you get to finance 85% of the purchase price plus all renovation costs.  For existing properties investors are eligible for 75% of the future value so it is imperative to note that the renovation loan is 10% more powerful at the time of purchase, not after.  In either case with renovation loans you can tap into future equity that only a construction loan or hard money loans can access but you get better interest rates that are locked before closing and you don't have to refinance out of a renovation loan which translates to much lower overall closing costs and zero rate uncertainty.  

If you are interested in learning more about how future value works or how a renovation product might be helpful for an investment property you have in mind you can call us at 888-269-8335, email us at or apply online 24 hours a day.

We are licensed in Florida and Alabama

NMLS # 835698


Posted by Devin Murray on August 15th, 2017 7:00 PM

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: 

  • Minor remodeling and non-structural repairs
  • Accessibility upgrades included (ramps, rails)
  • Up to $35,000 in renovation costs with no minimum requirement
  • No consultant necessary (saves time and $500-$900 depending on your location) 
  • 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

    NMLS #835698


    Posted by Devin Murray on June 5th, 2017 1:22 PM


    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

    Get pre-approved or apply online 24 hours a day


    NMLS #835698


    Posted by Devin Murray on May 9th, 2017 9:37 AM

    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 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.

    Posted by Devin Murray on April 27th, 2017 1:00 PM

    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.

    1. 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.


    2. 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.  


    3. 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.       


    4. 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.



    5. 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. 

      1. 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 contract.

      2. 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.

      3. 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.

    6. 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 disclosures. 


    7. 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.


    8. 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. 


    9. 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. 


    10. 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.

    Posted by Devin Murray on April 10th, 2017 12:32 PM

    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



    Auburn/Opelika Area

    Bibb County (Montevallo/Centreville)

    Chilton County

    • Jeff Farris Homes – Jeff Farris – 205-217-0127 (Clanton)
    • McRae Construction, LLC – Kyle McRae (Thorsby)

    Lake Martin / Dadeville Area

    • Gaston Construction - 256-245-5014
    • M.J. Brooks & Son Construction - 256-249-3734
    • Reams Custom Homes, Inc - 256-249-3653



    Spanish Fort
    Fairhope/ Daphne/ Point Clear

    *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.

    Posted by Devin Murray on January 23rd, 2017 5:37 PM


    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

    Gulf States Financial is an equal housing lender licensed in Florida and Alabama only.

    Posted by Devin Murray on January 20th, 2017 2:51 PM

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