Category: Mortgage

8 Sep 2010

Is FHA’s 203k Streamline Loan For Me?

Listen up buyers! The FHA has an underutilized program that could be a good option for many of you.  I am sure that when you are looking at houses to purchase you find some that would be perfect if only the outdated kitchen was updated or maybe it would be great if only it had a deck off the back of the house.  Other times you look at properties that may be short sales or foreclosures that need some basic sprucing up such as painting, carpeting, new appliances etc.

There was a time not so long ago that you would have just closed and gotten a home equity line of credit  at the same time, which would allow you to take care of improvements or repairs.  With Home Equity lines requiring much more equity in the property, those buyers with limited down payments may think they have limited choices.

26 Aug 2010

Move Up Buyers and the Mortgage Process

If you ask many loan officers, although dealing with first time homebuyers is challenging, it is easier to set the right expectations on the mortgage process as they have not been through it before. Today’s first-time homebuyer never experienced the easy mortgage process prevalent in the late 1990’s to 2007.

The most difficult group to set expectations with are move up buyers or refinance customers.  Most of them bought homes during the 1990’s to 2007 and in many cases did not have to provide anything in terms of documentation.  At the most they provided paystubs and bank statements and usually just the first page of their bank statement.   They did not have to write explanations for recent inquiries or address old credit issues.   As for the requirement for all loans to have tax transcripts pulled( what is called a form 4506), this entails the lender getting confirmation back from the IRS that the tax returns given were indeed filed and are accurate.

17 Aug 2010

Why use a Licensed Loan Originator?

July 31st 2010 was a very important date for all Mortgage Bankers and Mortgage Brokers.  This date was the last day for Loan Originators to register with the new National Mortgage Licensing System(NMLS), take 20 hours of Continuing Education,  go through a background checks, fingerprinting and pass both the National Mortgage Exam, as well as any State exams where they lend in.

This is a new requirement set forth by the S.A.F.E. Act, to ensure that the standards of mortgage lenders remain increased and consistent.  What you need to know about this is that this does not apply to Loan Originators who work at Banks, they were exempted from this law.

6 Aug 2010

Shopping for the Best Home Loan for You

Comparison shopping can be tedious and time consuming, which means that consumers often put it at the end of their to-do list (I’m as guilty as the next person). When it comes to Mortgage Financing however, comparison shopping needs to be at the top of the list. We all know it is a daunting process once you get started, but for the largest purchase of any consumer’s life, there are many people who contact just one lender.

A recent article in Origination News stated:

“A survey for Zillow Mortgage Marketplace conducted by Harris Interactive found that consumers spend on average just five hours researching their home loan. The same finding was determined in a 2008 survey that Zillow conducted.

15 Jul 2010

What Can a 15 Year Fixed Mortgage Rate Do For You?

Recently rates reached record lows that have not been seen since the 1950’s. Many people may think that they either have taken advantage of refinancing or that it may not make sense for them at this time.  If you belong to the latter half of this group, consider this: if you have a 30 year fixed rate in the high 6 percent range now is a great time to refinance into a 15 year fixed.   Depending on your equity in the property and your credit score, you may find that you can refinance into a 15 year fixed with a payment that is not much more than what you are paying now.

The advantages to this are simple, paying a 15 year fixed rate mortgage builds your equity much more quickly and allows you to pay off your home much sooner…

1 Jul 2010

Interest Rates Hit Lowest Mark Since 1950’s!

This past week, HSH Associates, who tracks interest rates reported that mortgage interest rates are the lowest they have been since the 1950’s.  Rates are in the low 4% range for 30 and 15 year fixed mortgage loans.  This means there are additional reasons to consider purchasing now, even when the Tax Credit has expired.

In the mid 1980’s, rates were 11-12% for fixed rate loans and ARM loans had just started to be introduced at rates of 8% for a 1 year arm.  Amazingly there was still a strong market for new mortgage loans.  It was a continual reduction of rates from that time until now, with the occasional uptick.  Many buyers now cannot imagine interest rates above 7%. As shown in the chart below, we have been floating in that range for a few years:

23 Jun 2010

You DO Have Options for Downpayments

So you want to begin a search for a new home. Great! You have everything ready when you realize that you have not saved enough money for a 10% or larger downpayment. What now? What are your options?

A few years ago there were options for everyone, including those with no money down.  Unfortunately, these options have become more limited with the tightening of programs over the past 2 years. Today, most programs want buyers to put down at least 5%, with all of this being the borrowers own savings.

So, what are your options?

The best one still out there is FHA financing, which is available with as little as a 3.5% downpayment and is now used over 50% of the time.  In cases where a buyer may have issues with coming up with that 3.5%, he or she can use a gift from a family member as the downpayment.  What many home owners don’t realize is that, FHA financing allows the entire 3.5% to be a gift.

21 Jun 2010

Why is Now the Time to Buy?

If you are in the market for a home or are thinking about purchasing a home…let me tell you now is the time to buy.  Interest rates are at a 25-year low and the inventory of homes available is high, which means the advantage lies with the buyer. So there is a perception that buying a home in today’s market can be an easy decision if you have a steady job, good credit and don’t have a home to sell.

Let’s take a closer look at that statement.

Historically, we could win on both sides of the transaction because America’s housing values were appreciating.  Within the past three year’s however, we have seen depreciation creep in, especially where acute price increases were enjoyed.  Like the stock market, we are recalculating our market values to reflect the new norm.

12 Jun 2010

What Really Affects Mortgage Interest Rates?

Many of you have questions about what really affects Mortgage Interest Rates.  I don’t have a crystal ball that can answer your questions but what I do have is information about some of the underlying fundamental indicators that determine the general direction of mortgage interest rates.

Many people are surprised to learn that what the Fed does with the prime rate has less of an effect on Mortgage interest rates. Contrary to popular belief, the prime rate sets the tone for rates on business borrowings and consumer accounts.   More often than not, Mortgage rates have anticipated what the Fed will do and have already factored in a corresponding move, be it up or down.  Only if the market is wrong in their estimate will rates change with a Fed move.

So what would affect mortgage rates?

4 Jun 2010

Why Do Lenders Ask So Many Questions?

The past 2 years have seen tremendous changes in the Mortgage process, especially when it comes to documentation. Just when we think we have seen the last of possible changes in Mortgage underwriting, new ones come along.  The underlying reason for this is that during the past few years, loans were made with little or no documentation.  This led to the many delinquencies and foreclosures which has given us the housing market issues we see today.

The new requirements are the same for all borrowers, whether it is your first or 7th home purchase. Every borrower is subject to a thorough examination of income, assets and credit.  Recently, lenders have placed more focus on whether or not home-owners can prove that the property they intend to purchase will be used as their primary residence.

Let’s say you are in a situation where you have purchased a new home, be it in the same market or not, before selling the home you are currently occupying. Whether you leave the current property vacant or make it available to renters, your lender will undoubtedly ask several questions as to why you are buying a new primary residence.  In order to avoid the montage of questions, write a letter outlining why this new property will be your primary residence and including it upfront with your application.


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