Santiago Financial Quick Application- A Quick Guide

July 30, 2019

 

 

 

 

 

 

 

 

 

 

Are you shopping for a manufactured home and need to be pre-approved? Do you want to know how much you qualify for? If you answered yes to either of these questions, you’ve come to the right place. Santiago Financial can help you!

In order to answer these questions, let’s get acquainted with our new, Quick Application. It requires less time and information to complete, so we can tell you if you are pre-approved quickly!

To start, Santiago Financial needs some simple information:

  • Please provide your personal information including your name, email address and phone number.
  • If you are working with a real estate agent or have been referred by an agent, please provide us with their contact information.
  • You will need to provide the city or mobile home park where you plan to move, the approximate space rent range, the price range, and your desired down payment cash funds available-the minimum is 5% with good credit. (This step is not optional. We need as much information as possible to help pre-approve you.)

Speaking of credit, how is yours? Do you have good, bad or no credit? What are your total monthly obligations? And lastly, what is your gross income per month.

If you have a specific home you are interested in or you are ready to buy now, please complete a full credit application on our website, over the phone, or by email or fax! You pick your preference!

This quick application will expedite your pre-approval process and its easily accessible on our website  https://www.santiagofinancial.com/printableforms.html Just fill out the form and fax or email it to our office. If you have any questions about the quick application you can give us a call at 1-800-232-3908.

Be sure to follow us on all of our social media for videos, helpful guides, and information on all of our financing programs.

Debt and Housing Ratios- How Do They Affect Your Loan?

October 15, 2018

Debt-to-Income Ratio (Overall Debt Ratios)

Just as important as the Housing or front-end ratio is the debt-to-income ratio or DTI. This is the amount of your gross monthly income that goes toward paying all debts considered in a loan. Lenders consider 42-48% the golden range for DTI. Lenders will want to see lower DTI’s, but by using disposable income we can sometimes stretch these ratios over the 48%.

DTI can be calculated using the three factors from above and the addition of a fourth:

  • Monthly home payment
  • Monthly space rent
  • Monthly debt payments (car payments, mortgage payments, revolving credit, etc.)
  • Gross monthly income

Your monthly debt payments are all added into one number and used in a similar equation. Let’s use the same numbers as before and make your monthly debt payment $350.  Again, all you need to do is add, then divide to get your DTI. The equation looks like this:

DTI (43%) = ($720 + $800 + $350) ÷ $4,350

Again, you can use the same equation in the diagram above to see how much income or debt you would need qualify for the range of DTI ratios.

Why are debt & housing ratios considered?

As previously mentioned, housing and debt ratios are considered important to lenders because it shows how likely the borrower can make a loan payment. Borrowers with high DTI and housing ratios are more likely to be denied by lenders because of the possibility of the borrower defaulting on payments.

Calculating the ratios  using the equations above can give you a good idea in advance if you qualify.  We do have our disposable income program which may allow for higher overall debt and housing ratios

To find out more about our loan programs and to see if you qualify for a manufactured home loan, contact our office at 714-731-8080. You can also reach out to us via email at info@santiagofinancial.com

 

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Debt and Housing Ratios- How Do They Affect Your Loan?

August 23, 2018

Debt and housing ratios are two important factors taken into account when qualifying for a loan. In part one, we will explore housing ratios:

Housing Ratios (Front-End Ratios)

The housing ratio is used to assess how much income is needed in order to adequately repay your loan. Lenders will look at the housing ratio as a measure of risk. The higher the housing ratio is, the higher the risk that a buyer may default on payments on their loan. Typically, we try and keep the housing ratio in a range of 32-35%.

For manufactured homes, the housing ratio can be calculated using three different figures.

  • Monthly home payment (This includes: P&I, TAX IMPOUNDS  and INSURANCE IMPOUNDS.)
  • Monthly space rent (This amount will vary depending on the Mobile Home Park
  • Gross monthly income (How much you make per month before taxes)

With these three components, we can calculate what percentage of housing ratio you will have.

For example, lets say your monthly home payment is $720 per month, your space rent is $800 per month. We’ll use $4,350 as your income. To find your housing ratio, all you need to do is add, then divide.

Housing Ratio (35%)=  ($720+$800)  ÷ $4,350

By looking at the diagram below, we can see how much income is needed to qualify at a 35% housing ratio.

If you want to find out how much of a monthly payment you can afford, simply take your income and multiply it by 35%.

Lenders may allow for a higher ratio based on disposable income. For more information on disposable income, find out more about our loan programs and to see if you qualify for a manufactured home loan, contact our office at 714-731-8080. You can also reach out to us via email at info@santiagofinancial.com

 

 

 

Santiago Financial Insurance Services

April 3, 2018

Did you know that Santiago Financial can help you insure your manufactured home? If you are currently financing your home, you are likely already required to insure your manufactured home and reviewing your policy for coverages and rates annually is always a good idea.  In addition, if you own your home outright, it is wise to continue your insurance coverage so you will be able to repair or rebuild in the event of a loss.  Conveniently, Santiago Financial Insurance Services offers competitive rates with top rated insurance companies.  If you finance your manufactured home with Santiago Financial, we can provide you with a quote and you can finance the first year’s premium.

Being that your manufactured home is likely one of the largest investments you will make, insuring your home and belongings is crucial. One natural disaster or accident could potentially jeopardize your home and most of your possessions, so why risk it? With our simple, free online application, there is no reason not to take the first step in insuring your new manufactured home.

Santiago Financial Insurance Services prides itself on partnering with leading insurance companies to offer comprehensive manufactured home insurance at an affordable rate. Policy coverage protects your manufactured home against sudden disasters, liability, in addition to financial loss and damage. Earthquake is also offered as optional coverage.

For your convenience, we offer free insurance quotes on our simple online application. If you should have any questions regarding insurance or applying for your free quote, please contact Lisa at lrassmy@santiagofinancial.com or (800) 232-3908 ext 112. We look forward to helping you insure your manufactured home!

What Can I Afford?

January 5, 2018

You’re interested in buying a manufactured home but as a buyer, you want to know exactly what you qualify for.

How much down do I need?

If the home was built on or before June 13, 1976, you will need 20% down and the loan term will be 15 years. If the home was built after 1976, minimum down payments start at 5 to 10 percent down with a loan term between 20 and 23 years. This example will help you calculate your down payment, loan amount, and estimated monthly payments.

As an example, you find a home for $80,000 and it was built in 2002.

Sales Price: $80,000
Down Payment %: 10%
Now we will calculate the down payment: take the sales price and multiply that by the down payment percentage in this sample that’s $8,000 down.

$80,000 x 10% = $8,000 as the down payment amount

Now subtract the down payment from your initial sales price and that will equal the total loan amount you’ll apply for with Santiago Financial.

$80,000 – $8,000 = $72,000 as the total loan amount

To calculate your estimated monthly payment, multiply the Total Loan Amount by 1%. In this case, it’s $720 a month. This is a rough estimate and that includes taxes and insurance.

$72,000 x 0.01 = $720

Let’s say your space rent is $800. Add your monthly space rent, your estimated monthly payment, and your total housing which would come out to about $1,520 per month.

$800 + $720 = $1,520 in Total Monthly Housing Costs

You need to make at least 2.5 to 3 times the housing expense to qualify.

$1,520 ÷ 35% = $4,342.86 as the Approximate Gross Income Needed

To calculate your total debt ratio, add your monthly payments for any car loans, credit card payments, other debts etc. Let’s say they total $400 for this scenario.
($1,520 + $400) ÷ 45% = $4,266.67 as the Approximate Gross Income Needed

So now we have your estimated income range needed to qualify for this example.

Estimated income range $4,342.86 – $4,266.67

Important Tips if your income is not within the estimated income range:
● Make sure you used gross income, not net income
● Look into paying off outgoing obligations
● Find a park with a lower space rent
● Increase down payment amount
● Add a co-applicant if they are to live in the home with you

The next step is to call Santiago Financial to complete your credit application and begin your approval process.

Comparable Sales

September 8, 2017

Comparable sales reports are a valuable tool in determining the value of a manufactured home in a park to sell or refinance. These reports also help appraisers to determine the value of the home that they are appraising. Lenders use comparable sales reports to confirm home values.

Sample

(Click to zoom)COMP REPORT

Order Your Report Today

Santiago Financial, Inc. provides two different options for receiving comparable sales reports– Individual Reports and Membership.

For a limited time, we are offering a FREE report to new customers. This limited offer is good until September 25, 2017. Click to order now. Individual reports are usually $25.00.

Membership for online access to the California comparable sales reports and title information reports is a quarterly paid service that allows you to receive comparable sales reports and title information reports on manufactured homes in California online. We offer membership packages for retailers, realtors, appraisers, brokers, and lenders starting at $300.

Appraisal

July 15, 2017

What It Is

Manufactured home appraisals or property valuations are the process of determining the market value of a manufactured home. Appraisal reports are used in manufactured home loans. Appraisals are most frequently used in purchases and sales of manufactured homes but are also commonly used in refinances.

Sample

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Why We Need It

Appraisal reports are used in mortgage loans, settling estates, establishing a sale price, and taxation. The amount the manufactured home is estimated to be worth by an appraiser’s physical inspection of the home. This value affects the loan amount our underwriters approve the buyer(s) for. An appraisal also gives the homeowner a good estimation of the value of their home. In the case of purchases and sales, the appraisal is used to determine that the home’s contract price is correct given the location, condition, and features. For refinance cases, the appraisal assures the lender that the amount being loaned is not greater than the home’s value.

What We Look At

An appraisal review checks that the personal information and home information is correct on the documents as well as basic items about comparable sales. Appraisal value is calculated using comparable sales from the last six months in the park or community and takes into account physical aspects of the home. An appraiser will evaluate all aspects of the home and considers the age, location, quality, square footage, number of rooms, etc. of the home and creates an appraisal value from this information. Anything added to the home such as carpets, porches, awnings, air conditioning, etc. are all taken into account in the appraisal report.

Considerations

May 1, 2017

During the mortgage loan process, there are many considerations to be made regarding home price, down payment amount, income level, and monthly payment amounts. These issues can be confusing and can lead to miscommunication between the buyer, the agent, and the broker. Calculations specifically are often difficult for customers to grasp, so clear this up, some of the most commonly used calculations for manufactured home mortgage loans are explained below.

Total Debt to Income Ratio (DTI)
For the broker and lender to accurately calculate what price point of home a buyer can afford according to their income, they must calculate the Debt-to-Income Ratio or DTI. It is used to determine what percentage of a buyer’s income each month goes to paying debts. To calculate the DTI, total up every monthly debt the buyer has, including estimated monthly payment and space rent amount. This includes credit card bills, student loans, any other loans, alimony and child support, car payments, and any other monthly expense. Now that you have your total monthly debts, divide that number by the buyer’s total monthly income. Then, multiply by 100 to get the DTI. It will fall between 0-100 and is a percentage.

 

Here’s an example:

Monthly Income: $5,000

Debts:

Estimated Monthly Payment$750
Space Rent$500
Car$150
Credit Card$25
Student Loans$100
Private Loan$75
TOTAL$1,600

 

Next, take the monthly debts ($1,600) and divide it by the monthly income ($5,000).

$1,600 ÷ $5,000 = 0.32

Now, multiply by 100 to get the DTI.

0.32 × 100 = 32%

Therefore, this customer’s debt-to-income ratio is 32%.

Housing Ratio

The housing ratio is similar to the debt-to-income ratio in many ways. It is calculated using the same steps (different numbers, however), and is also used by the broker and lender to determine what sales price a buyer can afford with their monthly income. It is calculated using the estimated monthly payment and space rent amounts divided by the monthly income amount.

 

Here’s an example:
Using the figures from the last example, this is how to calculate housing ratio.

Monthly Income: $5,000

Housing Debts:

Estimated Monthly Payment$750
Space Rent$500
TOTAL$1,250

 

Next, take the monthly housing debts ($1,250) and divide it by the monthly income ($5,000).

 

$1,250 ÷ $5,000 = 0.25

 

Now, multiply by 100 to get the DTI.

 

0.25 × 100 = 25%

 

Therefore, this customer’s housing ratio is 25%.

 

Space Rent

Space rent is an important consideration to make when choosing your manufactured home. It does matter how much the space rent of a home is because it is factored into both your total debt-to-income ratio as well as your housing ratio. If after calculating your total debt-to-income ratio and it is too high, try considering a home in a park with a lower space rent. This can help to reduce the DTI and can bring your ratios (both DTI and housing) into the acceptable ranges to be approved by the lender.

 

Homeowners’ Association Dues (HOA)

Sometimes a mobile home park will have what is called Homeowners’ Association dues. These dues pay for pools, spas, communal areas (clubhouse, meeting rooms, etc), and landscaping within the community. That being said, HOA is something to consider when choosing your park, because it is a monthly bill that you must be able to afford with your monthly income. Not all mobile home parks have an HOA, so if that is something you do not want, it is easily avoidable.

 

Broker Fee

The broker’s fee is the fee you pay us, the broker. The percentage of the sales price that is paid to the broker is dependent on the terms of your loan.

Insurance

One year insurance showing year, make, model, size and complete serial number of home is required. The insurance binder needs lender to show as loss payee. Santiago Financial, Inc. has manufactured home insurance in-house for competitive rates. However, the buyer is not required to obtain insurance through Santiago Financial, Inc. but is required by law to obtain a one year policy on the home purchased. If the buyer chooses to proceed with the insurance Santiago Financial, Inc. offers, they have the option to finance the first year’s premium (depending on lender approval). Triad and CU will not finance closing costs normally.

Approval Documents

March 31, 2017
  • Estimated closing statement from escrow

Provided by escrow, outlines all cost for the buyer and seller. Determines the total cash to close for the buyer.

  • One year insurance showing year, make, model, size and complete serial number of home. Also need lender to show as loss payee

Santiago Financial, Inc. has manufactured home insurance in-house for competitive rates. However, the buyer is not required to obtain insurance through Santiago Financial, Inc. but is required by law to obtain a one year policy on the home purchased. If the buyer chooses to proceed with the insurance Santiago Financial, Inc. offers, they have the option to finance the first year’s premium (depending on lender approval). Triad and CU will not finance closing costs normally.

  • Signed and Completed Santiago Credit App

Using the information provided from your initial Credit Application, Santiago Financial will generate a Uniform Residential Loan Application, also known as the 1003, for you to initial and sign.

  • Copy of Driver License
  • Copy of Social Security Card
  • Mortgage Loan Origination Agreement

Agreement of the mortgage loan origination and written acknowledgment that Santiago Financial, Inc. is the broker. The borrower(s) complete the bottom section acknowledging this information.

  • Purchase Agreement (signed by buyer & seller – no digital signatures)

Used to finalize the interest of both buyer and seller in the sale of the manufactured home.

  • Copy of Listing Agreement (only if home is listed by a mobile home dealer)

A contract between the broker and the owner of the manufactured home (mobile home dealer) granting the broker the authority to act as the owner’s agent in the sale of the property

  • Verification of Income – 2 most recent year to date paycheck stubs

The broker and lender need to verify the buyer(s) income amount(s) to be able to approve of a loan. This is because we must verify that the buyer(s) can pay the loan back.

  • Last two years W-2s

Used to determine a 2 year average. If there is a decrease in annual income, then the buyer will be required to provide a Letter of Explanation to clarify the reason for the decrease.

  • Verification of Employment – Santiago Financial to obtain

Santiago Financial must verify that the buyer(s) work at their stated jobs to clear income. They must also obtain verifications from all locations that the buyer(s) have been employed for the last 2 years. Borrower Signature Authorization Form is required to obtain any verifications.

  • Two Years Tax Return – Federal only – all Schedules

Used to clear income is a buyer is self-employed or receives a 1099

  • Source of Down Payment – 3 months complete bank statements showing entire down payment in customer`s account

Buyer(s) must prove that the entire balance of the down payment in their account for 90 days prior to the closing of the loan. If the down payment is a gift, the gifter must provide these documents, as well as a gift letter. All large deposits must be sourced.

  • Proof home sold and mortgage paid in full (if applicable)
  • Park Approval/Lease showing manager signature, space rent, and park phone number

Document that shows that the buyers are permitted to live in the mobile home park, verifies space rent amount, and is signed by the park manager.

  • Invoices (New Home)

Copies of the manufacturer’s invoices are used to determine the value of the home and final loan amount.

  • Appraisal

The amount the home is estimated to be worth by an appraiser’s physical inspection of the home. It is calculated using comparable sales for the last six months in the park or community and takes into account physical aspects of the home. This value affects the loan amount our lenders approve the buyer(s) for.

  • Copy of Title – Title Search – MCO

A document Escrow requests from the state to obtain all home information and to verify if their are any current liens against the property

  • Person to Person Seller Interview

Form to be completed with the sellers information in case of title transfer issues. Two different phone numbers are required.

  • Retailer Disclosure Form

Form to be completed by dealer selling a New home.

  • Escrow Instructions
  • Borrower Signature Form

The borrower(s) completes this form giving us authority to obtain employment information. The form includes a release of the buyer(s) signatures and  the buyer and co-buyer’s signatures.

  • Verification of Rent (if applicable)

Cancelled for the requested number of months or a letter from the landlord

  • Signed and Completed 4506 Form

The lender can request an electronic transcript of the buyers tax returns directly from the IRS to verify income. Borrower must complete entire top portion, sign, and date.

  • Auto Draft (Voided Check)
  • Loan Estimate

This document lists basic information about the estimated terms of the mortgage loan. Please note, the terms found on the Loan Estimate are only estimates.

  • Signed Broker Disclosure

A written explanation, to be signed by the buyer(s), explaining to the buyer the role that the broker plays in the transaction. Also states the fee that Santiago Financial is charging for their services.

  • Signed Appraisal Acknowledgment

This form will be sent to the buyer along with a copy of the appraisal report acknowledging the borrower(s) were provided a copy of the appraisal.

  • Tax & Insurance impounds required

An account managed by a third-party, typically a loan servicer, to collect and disburse funds on behalf of the homeowner and lender.

Manufactured Home Advantages

March 1, 2017

Cost

The cost of manufactured homes on average is less than traditional homes. Often times, the mortgage and space rent for a manufactured home is even less than renting an apartment or condominium in California. According to Zillow, the median (traditional) home value in California is $487,700. Manufactured homes cost a fraction of this price for just as much space as a traditional home and much more space than an apartment or condominium.

Customization

Many manufacturers allow customization on the layout and design of a new manufactured home. Because manufactured homes are modular (have multiple pieces that are manufactured at a factory and brought to the space), a customer has more freedom to customize than if they were to buy a traditional home that was built on-site.

Community

Manufactured homes in mobile home parks can provide a great sense of community. Afterall, a mobile home park is a community of residents that often share common facilities (pool, club house, etc). This type of neighborhood relationship is unique to private communities and manufactured homes make this type of community much more affordable and attainable.

Improvements

Many manufactured homes found for sale in parks have renovated living spaces and kitchens. These improvements are comparable to that of the comforts of a traditional home.

Location

A manufactured home can be placed just about anywhere (given the proper legal and safety constraints), whether in a park or on owned land, giving the customer full freedom to choose where they want to live. There are mobile home parks throughout California and a customer can find the location that is perfect for their budget and lifestyle.

Ownership

Manufactured homes make homeownership affordable and accessible. For residents who have previously only been able to rent apartments and condominiums, this means that the monthly amount spent on housing will now go toward owning your own home. Homeownership has never been more in reach!

Space

A manufactured home is much larger than an apartment or condominium with the same monthly payment on average. A single wide manufactured home is generally around 1,000 square feet, while a double wide can be as large as 2,300 square feet for the same or a fraction of the monthly payment on an apartment or condominium.

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