Living in Contra Costa County

Many borrowers are finding that the record-low mortgage rates advertised recently are out of reach. So how can borrowers snag these best rates — which for the 30-year fixed-rate mortgage alone has been under 4 percent recently? Basically, they need to prove to lenders they are less risk: Lenders offer the best rates to those who they perceive as low-risk borrowers.

Here are ways for consumers to show lenders that they are low-risk borrowers, according to a recent article at The New York Times:

Credit score: According to one mortgage broker, ideal borrowers nowadays have a FICO score of 740 or higher to qualify for the best pricing.

Property types: Buyers of a duplex, four-unit building, or condo may have a rate premium added. Also, lenders will charge borrowers more if they plan to rent out the property rather than live there.

Down payment: Borrowers who put down at least 25 percent will most likely attract the best pricing, lenders say. “Lenders offer different breaks on rates if equity is higher, so you should ask what is available,” The New York Times article notes.

Also, borrowers who are able to get a low rate now may want to lock it in if they are heading to closing soon. “Lenders typically agree not to change an offered interest rate for 60 days, but borrowers confident of a quick closing may be willing to accept a 45-day rate guarantee, or even a 30-day lock, in exchange for a small discount, because the transaction’s speed helps the lender reduce its risk,” The New York Times article notes.

Gevon Polgar
REALTOR / CDPE / CHS

Klemm Real Estate, Inc
408-203-3596
www.GevonPolgar.com
Gevon@GevonPolgar.com

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Understanding the mortgage process is a constant frustration for consumers. One can search the web and find all kinds of long articles breaking the mortgage loan process into anywhere between 6 and 9 individual steps. Upon reading these, a consumer gets even more confused since each individual step is confusing in and of itself. Unfortunately, the wrong question is likely getting answered in these articles. Most mortgage clients don’t want to become experts on the minutia of processing and underwriting, they just want to know where to start and have an accurate context for why everything happens as it does. The answer for each of these questions lies in the same place.

The mortgage process begins and ends in the same place, with the mortgage loan application. It is filled out and signed at the beginning and updated for signature at the closing. But here’s the key point; every step of the mortgage process is dedicated to verifying a fact or validating an assumption on that was disclosed on the initial loan application. The loan application is broken in to 10 straightforward sections:

1) Mortgage type and terms requested

2) Property information and loan purpose

3) Borrower information

4) Employment information

5) Monthly income and housing expenses

6) Assets and liabilities

7) A summary of the credits (i.e. earnest money and the mortgage) and the costs (i.e. purchase price and closing costs) of the transaction

8) Miscellaneous affidavit section (this covers intent to occupy the property, citizenship and other items)

9) The agreement section (this is the fine print legalese and where the loan application is signed)

10) Information for government monitoring (this covers race, ethnicity and gender)

Nearly all documents a borrower is asked for or asked to sign will directly or indirectly relate to this document. Nearly all of the 3^rd party reports and vendor services used in the loan process will directly or indirectly relate to this document. Throughout the process, as new or updated information is obtained by the lender, the application is updated and re-reconciled with underwriting guidelines. In short, almost all of the mortgage loan process is a collection of acts designed around verifying facts or validating assumptions in this document; the loan application.

Knowing this, what should a prospective borrower seek to do?

If asked to fill out an online application, a paper application or do one face to face with a loan officer. . . be thorough when the initial loan application is filled out. For instance, if there is approximately 11 thousand dollars in a savings account, don’t put 11 thousand dollars on the application if the real figure is 10,771.41. Use 10,771.41 as the figure for the application. If the income is approximately 4000 a month but in reality its 4166.67, make sure the figure on the initial application is 4166.67. Also, insist that your loan officer be accurate on the initial loan application. If you see errors, however small, make sure that he or she corrects them immediately. Don’t tolerate sloppiness.

This may seem like a tedious way to start the mortgage loan process but it has down line consequences. Benefits of an accurate initial loan application include better loan recommendations, faster processing, faster underwriting, a more predictable transaction but most of all . . . fewer if any surprises.

Sure the loan process has a lot of confusing moving parts but if you want to keep it simple, just know that it’s almost all about the accuracy of the loan application and you’ll be way ahead of the game!

Charles Dailey - iLoan - NMLS ID# 79048 - CA DOC, MN DOC & WI DFI - 612.234.7283

 

The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, Inc. works cooperatively with other real estate agents across the United States in attempting to find ready, willing and able buyers for homes listed for sale. The role of the Preferred Loan Officer is to assist in determining a comfortable home price range for Home Buyers Marketing II, Inc. (HBM II) to use when it is searching for property listings within the buyer's search criteria.

 

Often I am asked which is a better loan for a homebuyer, A HomePath Mortgage or a FHA Loan?  It is actually not a clean cut answer for everyone.  So I wanted to take the time to go over the benefits of each.  And what you need to think about when making a decision between a HomePath or FHA mortgage.  Keep in mind this is only in regards to buying a Fannie Mae Foreclosure. 

HomePath Mortgage

The HomePath Mortgage Program is a GREAT program if you are looking to only purchase a  Fannie Mae foreclosure.  The benefits are:

• No mortgage insurance- this allows you to buy more home and/or have a lower mortgage payment.  To offset the lack of mortgage insurance the interest rate will be much higher than FHA loans
• No Appraisal- this saves the buyer the cost of an appraisal($400+).  More importantly it allows the buyer to buy a home that may need some minor work/repairs.  Fannie Mae wants to sell these homes and by not requiring an appraisal it allows the home to get financed without having to fix any issues
• Down Payment is as little 3%
• Seller contribution is allowed to go up to 6%, or 9% with a 25% down payment
• Real Estate Investors qualify for just a 15% DOWN PAYMENT, this is great since investment property loans now require a 20-25% down payment. 

Please keep in mind you must qualify for a conventional loan to qualify for a HomePath mortgage and have a minimum fico of 660 for the lower down payment options and min 620 score for 20%+ down payment.  Most MLS listings mention if the home qualifies for the HomePath program, but if you would like to check to see if a property qualifies you can go to www.homepath.com. 

FHA Loan

The mortgage rate on a FHA loans are generally lower than market rates, while down payment requirements are lower than for conventional loans.

Some of the other benefits of FHA financing:

• Only a 3.5% down payment is required.
• Closing costs can be paid by the seller. Up to 6%
• More flexible underwriting criteria than HomePath loans, such as allowing lower credit scores,  allows high debt to income ratios, etc

Conclusion

Only compare these two options if you plan on buying a Fannie Mae Foreclosure.  The HomePath loan is great if the home needs repairs or work, since there is no appraisal needed.  And without an appraisal the lender will not know or be concerned with the condition of the home. While a FHA loan would obviously require some repairs to be done, if they are major, etc.  And now let’s compare them directly to each other.  If you are buying a home of $250k and are putting a down payment of 5%, a HomePath Mortgage would give you a lower payment by $70.  This example is using an interest rate of 3.75%(30 year) on a FHA loan and 4.875%(30 year) on a HomePath loan. 

Everyone’s needs and financial goals are different, so before making a decision for yourself contact a knowledgeable mortgage professional.   And ask that Lender for mortgage estimates for both loans.  And if you live in Texas, contact Dave Your Mortgage Guy.  This is just another great example of it being in your best interest to know all your mortgage options!!

 

 

 

 

David Krichmar 

Mortgage Banker/Broker

AmericaHomeKey, Inc

Blogger For Realtor Magazine, Houston Agent Magazine

Approved MCE Instructor

Office:832-689-6012

David.Krichmar@gmail.com

www.DaveYourMortgageGuy.com

For More Mortgage Info and Social Media Tips For Realtors Follow me at  Dave's Blog

DaveYourMortgageGuy.com is Voted the #1 Mortgage Company in Houston, Texas.  2011

If you are looking for a FHA, VA, USDA, Homepath, Conventional, Jumbo, Construction, FHA 203k mortgage in Fort Bend County, Sugar Land, Houston, Katy, Harris County, Brazoria County, Pearland, The Woodlands, Kingwood, Tomball, Spring, Conroe, Montgomery County or anywhere in Texas I am your GUY!  

              

 

 

 

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this is really funny! Unfortunately it is a story that does happen....Read my blog post from yesterday http://activerain.com/blogsview/2675329/i-hate-dealing-with-big-banks. We have all had delayed closings and the bigger the bank the more likely the delay... I hope you enjoyed this song as much as I did. This loan finally closed on December 18, 2011. I hope these creative people enjoy their new home. Enjoy!

  Debbie Holmes

Gold Key Real Estate    

(208)761-2551 Email: d5holmes@msn.com

To search Boise Homes visit my website

 

I was just approached by a potential buyer,  enquiring about a Los Angeles home for sale.

My first question to her was whether she had spoken to a lender.  Her answer was no.  I told her that she needed to do that before starting the process of buying a Los Angeles home.  Her answer:  "I just don't want to talk to a lender and not find a home. So I figure I could just work backwards."

We do not work backwards when buying a Los Angeles house. We look and work forward.  The very idea of working backwards is a negative one.  The only thing that will happen is you will trip and fall.

No good Realtor® worth his or her salt is going to work with you if you are not pre-approved/qualified by a lender and you do want to be represented by a good Realtor® who is going to look after your best interests.

Why do you need to be pre-approved/qualified before buying a Los Angeles house? 

In the best of times you need to find out how much home you qualify for.  And especially in today's lending environment.  Unless you are an all cash buyer you are going to have to jump through several hoops before a lender is going to give you that all-important mortgage.  What you consider credit-worthiness and what the bank considers credit-worthiness are two totally different things.

I am sure you will find a Realtor® who will work with you, but why would you waste  your time looking at homes which you cannot afford?  Wouldn't you rather spend your time making your search a realistic one.  If you start looking at homes above your price range and fall in love with one, unless you come up with the difference in cash you are not going to get it.  And then you will be disappointed when you start looking in a lower price range.

What if there is a home on which you want to make an offer at the same time as others want to make an offer.  They are pre-approved and you are not.  Who do you think is going to get the home?  Not to mention that  even if you are the only one making the offer it will not be accepted without a pre-approval letter from your lender.

If you are serious about buying a Los Angeles home you are going to have to talk to a lender one way or another, so why not do it in the right order.  First.  That is the only way the process will work.

Buying or Selling Los Angeles Real Estate

Buying or selling a Los Angeles home can be a daunting process in a city this size, especially if you're new to L.A. Town. You'll need a resident expert to show you around and help you narrow down the areas where you might like to live. I will help you find the perfect home in the right area to fit your lifestyle, budget and needs! When I list and sell Los Angeles homes for my clients I strive to make the experience a pleasant one. My mission is to provide outstanding service while utilizing the best practices and systems available. If you are an absentee owner, you'll need someone to handle all the details that you can't handle remotely. That's where I come in - I'm there when you can't be. I also specialize in lease property in Los Angeles. Westside Los Angeles Real Estate, including, but not limited to:

• Westwood Real Estate - Westwood single family homes, Westwood condominiums, Wilshire Corridor condominiums, Century City condominiums
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• Santa Monica Real Estate - Santa Monica single family homes, Santa Monica condominiums
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• Culver City Real Estate - Culver City homes
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For more information on how I can best serve your Los Angeles real estate needs, don't hesitate to fill out the contact form or give me a call at 310-473-6919.

Jane Peters, connecting you to the L.A. real estate scene

Buying or selling real estate in Los Angeles can be an overwhelming process.  Contact Jane Peters, Los Angeles realtor specializing in absentee owners, out of town buyers, and those who need that extra attention, in order to make the transaction a smooth, trouble-free, and fun experience.

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Three years from now don't look back at these interest rates with regret. First time buyers, move up buyers, and those who are considering a refinance; Do it Now !

Many years ago I make a second mortgage loan to a big name celebrity. The celebrity had perfect credit, tons of equity on a beautiful home and more income per year than I will ever make in my lifetime..I made the celebrity - who by the way paid it off in 18 months and paid it better than the agreed terms-- I made the celebrity a $1,000,000 second mortgage at 18% interest. At that time those were the rates and my loan for this was the only loan in town.

18% is 1.5% per month.For $1,000,000 that is $15,000 per month in interest. Over many years rates go high and they go low. We have a generation of buyers who cannot conceive of this. We have people sitting on the fence when it comes to deciding to lock in at 4.25% or wait until the rate is 4.0%.

I remember in the mid 1980's when the interest rates started to fall. They started the year (I don't remember the year) but I remember they started the year around 14% and started to fall. I kept thinking we had bottomed out each time the rate went down a full percent. I was amazed when the rates left double digits for the single digit mark.

There are SOME people who know where rates will be. But the list is a lot shorter than experts want to pretend. Within months the rates will start to climb. I feel they will then again "settle" in the low 6% range. But the monthly interest between 6.25% and 4.25% on $400,000 is $667 each month or $8,000 a year. That is a NICE Hawaii vacation for a family of four!

If you lock at 4.75% and the rates go down you can again consider a refinance or you can simply bask in the glory of knowing you have one of the best interest rates of all time.

Doug Jones
Mortgage Magic
NMLS 286668
(408) 975-2400 X 110

Two often confused terms in the home buying process are a mortgage loan pre-qualification and a home loan pre-approval. Even some loan officers and real estate agents will use the terms incorrectly, so here’s what you really need to know about each one.

Pre-Qualification

A mortgage loan pre-qualification is simply an estimate of how much house you can afford and how much money a lender would be willing to loan you. The best time to get a pre-qualification is right at the beginning of your home buying process, before you even start looking at houses. This involves either sitting down with a lender or talking with one on the phone, and providing information on your income, assets, debts, and a potential down payment amount. The lender would then provide you with a ballpark figure in writing of how much he thinks you could afford to pay for a monthly mortgage. There is no cost involved and there is no commitment on either side. This estimate is just helpful in helping you figure out if buying a home is a viable option, and if so, what your price range would probably be.

Pre-Approval

Getting pre-approved means that you have a tentative commitment from a specific lender for mortgage funding. In this case, you provide a home loan lender with actual documentation of your income, assets, and debts. Once you are approved, the lender will give you a letter of commitment, stating how much money their specific investor/bank is willing to loan you for a home purchase. With a pre-approval in hand, you can start your shopping.  Real estate agents and sellers will take you much more seriously when they see you have your mortgage funding in place.

It is important to understand, however, that even a pre-approval is not a guarantee that you will be approved for a mortgage loan. The funding will only be given when the property appraisal, title search, and other verifications check out on the home you have chosen to buy. Neither is the pre-approval binding; you can still obtain a mortgage from a different lender. If you do stick with the same company that pre-approved you though, the application process will be much shorter once you find the right house.

Contact Aaron Ginn to get your home loan pre approval started today.