Mortgages - What you need to know!

Mortgage pricing is a complicated process.The first step for any borrower looking to obtain the best possible price is to learn how the pricing process works.  Each Mortgage Type Is Priced Separately A 30-year fixed-rate mortgage carries a different price than a 15-year fixed-rate, and the same is true of each type of adjustable rate mortgage (ARM). Loans carrying special options, such as prepayment penalty or interest-only, are also priced separately.  Prices Are Multi-Dimensional Unlike most other products and services, the price of a mortgage has 2 or more dimensions: the interest rate which is paid over the life of the loan, and upfront fees paid at closing. Fees are of two types: those expressed as a percent of the loan, called “points”, and those expressed as a fixed dollar amount. In addition, if the borrower’s equity or down payment is less than 20%, mortgage insurance (MI) is required. The complete price of an FRM, for example, might be 4%, 2 points, $500 and $80 a

When buying a home, there are a lot of factors to consider, one that is important to remember is the difference between cost and price. As a buyer, you must be concerned not about price but instead about the ‘long term cost’ of the home. Last month, the Mortgage Bankers Association(MBA), the National Association of Realtors, Fannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about one full percentage over the next twelve months. We also know that many experts are calling for home prices to also increase over the next year. What Does This Mean to a Buyer? Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 even if home prices don’t increase: Buying A Home: The cost of waiting

The Dodd-Frank Wall Street Reform was signed in 2010, and we’re still trying to figure out what the heck it means. New mortgage rules go into effect January 10, 2014, and there is still a lot of confusion surrounding the updated provisions. While the industry waits for the dust to settle, we wanted to provide you with the certainties of what’s happening, and how consumers can be prepared. After the housing bubble popped in 2008, the government started scrambling for how to prevent such an economic collapse from happening again. The  Consumer Financial Protection Bureau (CFPB)  put together a set of standards of “qualified mortgages.” These  Qualified Residential Mortgages (QRMs)  protect lenders from distressed borrowers. So as a potential home-buyer, don’t expect a loan if you can’t meet the new requirements set by the CFPB. Could a lender give you a loan anyway? Sure, but then they would have no safety net from the government and they could lose thousands if you turn out to be a

So it’s time to sell your home and you’re wondering what is the best way to sell your home fast and for top value. After all, most home Sellers indeed want the highest price for their home and to get it sold in the fastest way possible. As a homeowner, do you have that ability? What have you had to do to become a homeowner? I’m sure you have worked very hard having saved money to purchase your home, perhaps even foregoing other things in order to pursue homeownership.  With this in mind, you wouldn’t want to treat the selling of your home casually trying to undertake the job of selling a home when you are not a licensed Real Estate Professional. Believe me in that I’m certainly not saying that ALL Real Estate Agents should be treated as Professionals because, just like any Professional you’ll want to check their accomplishments in selling homes.  A Professional possesses specific qualifications; someone who is up to speed with their work. Just like you consider a Doctor

This first time home buyer flowchart helps to demystify the home buying process.  From establishing affordability, to credit scores, down payment information, and the proper documents you need.  You might notice this is from another lender, but the information is the same for all lenders and for soon to be home buyers.If you have any questions at all give me a call.

With home prices on the rise and for-sale homes in short supply in some markets, it's no wonder home buyers are looking for an edge. Some think that making an offer through the seller's agent, rather than their own buyer's agent, will save them money and provide an advantage amongst multiple offers. The answer isn't exactly clear since there are both pros and cons to purchasing a home through the seller's agent. Reduced commission? Maybe. Some listing agents will indeed give the seller a break on their commission if there is no buyer's agent, but that's not automatic. Rather, it's solely up to the agent to decide. Some listing agents -- not all, but some -- will offer a discount to the seller if they find their own buyer. In that case, a seller might say, 'I have these (two offers) and one is from my listing agent and one is from a buyer's agent, so instantly, I save maybe 1 percent. That does happen. Sometimes, not all the time. Most agents unde

Mortgage underwriting is the process of evaluating a borrower's financial capacity to repay a loan. If you are a borrower, then the lender verifies your income, employment status, assets, credit standing etc and then determines whether or not you are creditworthy and are capable of paying off the mortgage loan. The work of an underwriter also involves an appraisal of the property value. Generally, lenders appoint underwriters to verify the information provided in your loan application and other related documents. They may also contact your employer to verify your role in the work area and your income at that position. Based on the evaluation, the underwriter decides whether the mortgage application should be approved or rejected. The mortgage loan underwriter also predicts the rate and term of the loan that are suitable for providing a certain loan amount. Usually lenders look into three areas before approving a loan amount. These include... Financial strength: Lenders take into

This infographic illustrates the closing costs associated with borrowing a loan. Closing costs include the origination fee, application fee, appraisal fee, transfer tax, title insurance, discount points and other miscellaneous fees. Closing costs on average are equivalent to 3% of the total home price. Infographic: Closing Costs

Mortgage Loan Process The loan application that you have submitted goes through a process of review before the lender gives his or her approval. The lender appoints a person, who is known as underwriter, to judge your creditworthiness. The mortgage underwriter verifies your loan application and gives green or red signal to the lender. After the lender approves the mortgage, he/she decides upon the date of closing. The closing involves the signing of legal documents including a mortgage note which obligates you to repay the loan on time. At closing, the lender requires you to pay the costs of originating and processing the loan. You will also have to deposit property taxes and insurance premiums into an escrow account which ensures that these payments will be paid on time. The remaining part of the taxes and insurances are paid along with the monthly mortgage payments in order to protect the lender from tax liens and uninsured losses. To sum up, mortgage loan helps you in fulfilli

This infographic illustrates credit scores and their affect on obtaining your preferred mortgage loan. The credit score is divided in to payment history, amount owed, credit history, new credit and the types of credit. Before applying for a loan , be sure to check your credit 60 days ahead of time.

For potential homeowners, especially first-time buyers, deciding what loan to choose can make all the difference in securing a mortgage. This page describes two of the most popular loan types: conventional mortgage loans and FHA mortgage loans. To determine which loan best suits your circumstances, take some time to consider the pros and cons of each and make an educated decision. The Differences between FHA vs. Conventional The differences between an FHA loan and a Conventional loan are many, but the differences in value are subjective. FHA home loans are for those with low credit scores and in need of down payment assistance Conventional home loans are for those with a credit score over 720 and over 20% for down payment FHA Loan Advantages Low Down Payments (3.5% minimum) Low minimum Credit Score (500) New High Loan Limit ($729,750, but determined by county limit) Easy Streamline Refinancing Available Easier Qualification Guidelines Government Provided Down P

When you purchase a new home, there are costs associated with buying that go beyond just the down payment. These costs can be similar for refinances and they are commonly referred to as closing costs. The term closing costs generally refers to all the costs associated with closing a home purchase or refinance. A more accurate term to reflect these costs is settlement costs. Settlement costs include 4 categories; lender fees, third party fees, prepaid items and taxes/government fees. Let's discuss each of these categories separately. Lender Fees  (fees charged directly by the lender) Origination Fee In order to process a mortgage application, lenders may charge a flat upfront fee, or a percentage of the mortgage loan. This is referred to as the Origination Fee. Some lenders may not charge an origination fee. Origination fees are paid at the time of closing. Points In order to lower your interest rate, you might want to consider paying points. One point is equal to 1% of the

As with everything else about real estate, sales contracts or purchase agreements vary from state to state -- and even by real estate company in some places. Variations in regulations place even greater emphasis on working with professionals with local knowledge. While the terms used may change from place to place, there are seven common terms that are particularly important for you to understand. 1. Buyer cost sheet.  Technically, this sheet is not part of the purchase contract, but it's still important. A property purchase agreement can range from a few pages to a dozen or more, depending on your location and the complexity of the transaction. Buyers need to focus closely on the buyer cost sheet, sometimes called "cash to close." The buyer cost sheet -- typically generated by your lender but sometimes given to you by a Realtor -- should include everything you will be responsible for paying when you buy a home. Items included on a buyer cost sheet may include: Insp

Home buying basics Buying a home is probably the biggest investment you’ll ever make in your lifetime. Here are some basic tips to get you started as you plan for your purchase. Once you've decided to take the plunge and switch from renter to homeowner, your first step should be to research your financing options so that you can decide which loan term best suits your need. The Mortgage Bankers Association reported that 85 percent of purchase home loans in June 2012 were 30-year fixed-rate mortgages, popular among both first-time and repeat homebuyers. But before you jump on the 30-year bandwagon, you should understand all the loan-term options available to ensure you're getting the best home loan to suit both your lifestyle and financial needs. Fixed-rate home loans Fixed-rate home loans are available in a variety of terms, including 30, 20 and 15 years. Some lenders even offer less-popular 7, 10, 17 or 25-year loan terms. Thirty-year fixed-rate mortgages are really the d

How long does it take to close on a purchase?  Lately, the number of days is shrinking.  As mortgage rates climbed this summer, refinance mortgage demand waned, freeing up lenders to close on purchase home loans more quickly. Data from mortgage software firm Ellie Mae shows that lenders needed 42 days, on average, to close an August purchase.  It's a noteworthy reading for today's home buyers. Rate locks of 45 days or fewer  incur fewer costs than locks of even one day more. How To Get Your Purchase Approved More Quickly For buyers wanting to close quickly, some of the loan factors will be beyond your control. For example, you cannot control how fast an appraisal is performed because the appraisal requires the cooperation of the seller; or how fast a title search is performed by a title company. However, there are steps you can take to make sure your loan gets approved as fast as humanly possible. Step one is to be prepared. Know Your Paperwork Requirements.