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HECM is the commonly used acronym for a Home Equity Conversion Mortgage, which is a reverse mortgage insured by and regulated by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUE).

FHA collects a Mortgage Insurance Premium (MIP) at closing based on the amount of funds withdrawn during the initial year.  As long as you don't take more than 60 percent of the available funds in the first year, you will be charged an upfront MIP of .50 percent of the appraised value of the home.  If, however, you take more than 60 percent, the upfront MIP will be 2.50 percent.

A HECM is not a government loan.  It is a loan issued by a private lender that is insured by the FHA.  The borrower pays an insurance fee upfront at loan origination and each year the borrower is charged an annual insurance fee of 1.25% of the outstanding loan balance.  Your loan balance thus increases by the amount of this fee.  The insurance purchased by this fee protects the borrower (1.) if and when the lender is not able to make a payment; and (2) if the value of the home upon selling is not enough to cover the loan balance.  In the latter case, the FHA will pay off the remaining balance.  Currently, HECMs make up the vast majority of reverse mortgages offered in America.  HECMs come with rules and regulations that include a requirement that the borrower receive third-party counseling.

HECM For Purchase

While retirees typically use a HECM to cover living expenses, supplement income, eliminate debts, or pay for health care, a growing segment of the senior population is using HECMs to purchase a new home that better suit their needs.  The advantage of using a HECM for Purchase is that the new home is purchased outright, using funds from the sale of the old home, which are then combined with the reverse mortgage proceeds.  This home buying process leaves you with no monthly mortgage payments.  While study after study reveals that an overwhelming percentage of seniors want to continue living in their current home for as long as possible, for some people that isn't the best, or safest option.  HECM for Purchase offers a solution for downsizing into a place that's more easily navigable, possibly more energy efficient, and lower maintenance costs, or which is closer to friends and family.

To obtain a reverse mortgage on a home, that home must be your primary residence, which means you must reside there 183 day or more per year.  Your responsibilities include paying property taxes on time, maintaining insurance and maintaining your home in good condition

Posted in:General
Posted by Joyce Colaluca on June 21st, 2016 11:43 AM

      Our Renovation Loan allows borrowers to combine the purchase or refinance of a home with the costs to renovate or extensively remodel the property.  At closing all funds for renovation will be escrowed in an interest earning account.  After all renovation work is complete, any remaining funds in the renovation escrow account will be used to pay down the principal balance of the mortgage.  Soft costs such as architectural services, engineering and permit fees may be financed.  Full builder third-party contracts only.

     Eligible renovations include those in which the "footprint" of the home is changed and/or there is an additional structure to the home that is being added (i.e. pool, deck, garage, outbuilding etc...)

     The loan amount is based on LTV derived from the lesser of:
      1.    The "as-is" purchase price, renovation costs, contingency costs (if financed), eligible soft costs and interest reserve.
       2.    The "as-completed" value of the home.
     The minimum loan amount is $50,000.00 and the maximum loan amount for Rhode Island is $426,650.00 for a single family owner occupied home and $546,200.00 for a two unit owner occupied home. Fixed rate terms of 30 or 15 years are available.

     Property types: 1 or 2 Unit site-built homes
                               Modular homes, PUD
                               Condominium (Fannie Mae-warrantable)

     Credit Score requirements depend on the total LTV and are:
     700 for 95% LTV Single Family Owner Occupied Home
     680 for 80%  LTV Single Family Own Occupied Home
     680 for 75% LTV Two Unit Owner Occupied Home
     680 for 80% LTV One Unit Second Home
     720 for 75% LTV One Unit Investment Property for Salaried Borrower
     740 for 75%  LTV One Unit Investment Property for Self Employed Borrower

  Construction is to be completed within six months from the loan closing date.
   Terms and conditions are not all inclusive and are subject to change.

    Please call for more information: Joyce R. Colaluca, NMLS # 17349


Posted by Joyce Colaluca on June 15th, 2016 3:39 PM
HI !  Welcome to my BLOG.
   The subject today is OWNER OCCUPANCY.
    Loans for the purchase of  OWNER OCCUPIED homes may require lower down payments, less reserve funds and have lower interest rates than investment properties.  For these reasons, the determination that a home IS owner occupied is very desirable when purchasing.

    Does your home meet Owner Occupancy guidelines?

    Among the criteria that banks consider in evaluating whether a property is a principal residence are the following:

    Is it occupied by the owner for the major portion of the year?
    Is it in a location relatively convenient to the owner's principal place of employment?
    Is it the address of record for such activities as federal income tax reporting, voter registration, occupational licensing and similar functions?
    Does it possess the physical characteristics to accommodate the owner's immediate dependent family?
    Did the borrower state an intention to occupy the property as a primary residence?

    For Fannie Mae transactions, some banks consider a residence to be a principal residence even though the borrower will not be occupying the property.

    Example one: Parents wanting to provide housing for their physically handicapped or developmentally disabled adult child.
    If the child is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the parent is considered the owner/occupant.

    Example two:  Children wanting to provide housing for elderly parents.
    If the parent is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the child is considered the owner/occupant.  Parents must take title to the property being purchased.  You must provide 1 year Tax Return for parents to support on fixed income and unable to qualify for housing.

    All banks, at their own discretion, may determine that a property is not a primary residence.  As a mortgage professional, I am qualified to help you apply for the loan that best suits your needs.

Joyce R. Colaluca
NMLS# 17349
Posted in:General
Posted by Joyce Colaluca on November 7th, 2014 12:58 PM
    The 2014 conventional loan limits for the continental United States have been posted by Fannie Mae. They are as follows:

    For single family homes the maximum original principal balance is $417,000.00.

    For two unit properties you may borrow up to $533,850.00.

    Mortgage loans for three unit properties can go as high as $645,300.00.

    The maximum loan amount for four unit properties is $801,950.00.

    This is not to say that you are unable to borrow more money under a different program. It refers to the maximum amount that you may borrow for a conventional fixed rate loan in Rhode Island.

    One example of a loan with a larger maximum principal balance is a Jumbo Loan. There are other programs available as well.

Joyce R. Colaluca
NMLS # 17349

Posted in:General
Posted by Joyce Colaluca on October 21st, 2014 3:51 PM

    The 30 year fixed rate conventional loan is awesome for so many reasons.

    The payments are monthly and include principal and interest. It allows you to know exactly how much the principal and interest payment will be each month for the next 30 years.

    I cannot think of another item in a household budget that will not change for the next 30 years. Food, clothing, education, electricity, gasoline and health care will all likely go up. 
    Your home is your largest expense and you can lock-in the rate on a 30 year fixed rate conventional loan! Interest rates on conventional 30 year fixed rate loans are very low. Our rates are posted on this site.

    Taxes and insurance can be included in the payment.  Establishing an escrow account is an easy and convenient way to pay the additional expenses.

    You can apply for the 30 year fixed rate purchase loan with as little as 5% down.

    There is no pre-payment penalty.  This mortgage can be paid off in full at any time and any additional payments to principal will shorten the term of your loan.

    You may have a tax saving.(A tax professional can tell you how much).

    The 30 year fixed rate conventional loan is our most popular product and my favorite.

Joyce R. Colaluca
NMLS # 17349
Posted in:General
Posted by Joyce Colaluca on October 20th, 2014 5:50 PM
    When you apply for a mortgage loan you will be given a Patriot Act Information Disclosure. The disclosure states:

    "To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
        What this means to you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you.  We may also ask to see your driver's license or other identifying documents."

    One of the most common mistakes that people make when they apply for a mortgage is using a name that they are known by instead of their full legal name.

    An example of this would be a person applying as Jimmy Buyer when his name is James B Buyer Jr. or Ben Franklin instead of Benjamin Franklin.  You should take care to look at your identification and make sure that the name is correct and that you have used your full name on the application.

    Also check the address on your identification and the expiration date of the document.  We will need to have an unexpired document with your correct address.  If you have a different address on your identification you will need to write a letter of explanation concerning the discrepancy.  The explanation will be reviewed for acceptability.

    Acceptable forms of identification include:

        Driver's license
        Government ID
        Green Card
        Immigration Card
        Military ID
        State ID

Joyce R. Colaluca
NMLS # 17349
Posted in:General
Posted by Joyce Colaluca on October 10th, 2014 12:05 PM

Borrower(s) Age

    The borrower must have reached the age at which the mortgage note can be legally enforced in the jurisdiction in which the property is located.

    Rhode Island Law (15-2-1) -

    (a) Notwithstanding any general or public law or provision of the common law to the contrary, all persons who have attained the age of eighteen (18) years shall be deemed to be persons of full legal age.

    (b)  These persons shall have all the duties and obligations, rights and privileges imposed or granted by law upon those persons who have previously attained the age of twenty-one (21) years.

    There is no maximum age limit for a borrower.

    There is also no limit to the choice of term.  For example, a person who is now seventy years old may apply for a loan with a thirty year term.

    All applicants are evaluated on their ability to meet our underwriting guidelines.

Joyce R. Colaluca
NMLS # 17349
Posted in:General
Posted by Joyce Colaluca on October 9th, 2014 11:24 AM

    Thank you for choosing me as a Five Star Mortgage Professional for 2013 and 2014.  I appreciate all of your kind words and recommendations. I am just as thrilled as I was three years ago.
Please see Many, Many Thanks.

    This company is named Franklin Mortgage Corp. in honor of Benjamin Franklin, a man who lived a very interesting life.

    Benjamin Franklin had quite a few Nicknames and Pseudonyms:

        Water American
        Poor Richard or Richard Saunders
        The First American
        Silence Dogwood
        The Newton of Electricity
        The Prophet of Tolerance
        The Patron Saint of Advertising
        Mr. Anthony Afterwit
        Polly Baker
        Alice Addertongue
        Celia Shortface and Martha Careful
        Busy Body

    I did not choose any of those names for my business; although I have imagined myself a "Busy Body" when asking for information required on the loan application and I have imagined myself as a "Martha Careful" when presenting a loan scenario to an underwriter for approval.

    If you think of yourself as "Poor Richard" or "Richie Rich" you should give me a call.

    One of my favorite Benjamin Franklin sayings is:

    "Those that won't be counseled can't be helped."

  Water is served with every application for a loan or pre-qualification. "Water American" ?

Joyce Colaluca

Posted in:General
Posted by Joyce Colaluca on October 2nd, 2014 3:00 PM


    I have received a letter from Robin Erickson, Director of Marketing and Sales Promotion at Rhode Island Monthly Magazine. Here is a quote...

  " Congratulations! You have been named a Five Star Mortgage Professional in the September edition of Rhode Island Monthly."

    This is a select group of less than 3% of mortgage professionals in Rhode Island who are selected by Five Star Professional after surveying more than 7,000 Rhode Island home owners.

    The list is screened against state governing bodies to verify that licenses are current, and no disciplinary actions are pending. The lists are reviewed by a panel of industry experts before they are finalized.

    Mortgage professionals do not pay a fee to be included in the research or on the final lists.

    I am thrilled to have been chosen. Thank you to everyone who recommended me to the Five Star Professional survey team.

    There's more to Robin's letter. She is inviting me to mingle with other top home professionals at a Cocktail Reception with live music, gift bags, hors d'oeurves and photo opportunities for the magazine. Oh Yes..I'll be there.

    Thank you to my clients who kindly made it possible for me to receive this honor. YOU ARE THE VERY BEST of RHODE ISLAND !!!

Joyce Colaluca



Posted in:General
Posted by Joyce Colaluca on August 30th, 2012 12:01 PM

The world we live in is constantly presenting us with opportunities for growth and change. Everyone needs to know their options so that they can make the financial decisions that are right for them.

Joyce Colaluca is a Rhode Island Licensed Mortgage Originator and President of Franklin Mortgage Corp. Day and evening appointments are available to meet with her to discuss residential and investment property purchasing and refinancing.  There is no charge for the meeting and she will be happy to tell you how to save money. Home purchase pre-approvals are also available.    A Good Faith Estimate will be provided at the time of the meeting.

Joyce has closed over 3,000 residential mortgages in Rhode Island and the chances are pretty good that she has helped one of your friends, neighbors or coworkers.  Many clients are word of mouth referrals.

Franklin Mortgage Corp opened in 1993 and would like to offer you the opportunity to save.  Our rates are excellent and our closing costs are low.


Is knocking......

Please call Joyce at 401-886-4261

Posted in:General
Posted by Joyce Colaluca on April 8th, 2011 3:51 PM
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