Quick Tips On The Mortgage World

Wednesday, November 20, 2013

Don’t Do This When You Buy A House…

Be careful about what your Realtor puts in the earnest money contract.

Keep in mind the buyers mortgage underwriter will scrutinize the contract.

…and, sometimes what’s written in the contract can get you in trouble with the underwriter.

Here’s a true example…

On a purchase contract I saw recently the Realtor made the mistake of mentioning that the buyer was getting a home inspection in the earnest money contract. …she wrote it in the special provisions section.

Typically the home inspector will go out of his way to let the buyer know about every little light bulb and air register that has any type of imperfection in them. His goal is just to let the buyer know about them, and to cover his own bases if something were to happen to these items in the future.

The home inspection is typically a private report meant only for the buyer’s eyes.

Once the word “inspection report” shows up in the contract the underwriter can ask to see a copy of it.

Sure enough, the underwriter asked to see the inspection report. …and, the underwriter wanted every little item listed on the report to be fixed prior to closing.

This of course caused the need for renegotiation on the repairs, and very well could have killed this deal.

Fortunately the seller was willing to cooperate with the buyer on the repairs.

The lesson here is don’t mention the inspection report in the contract – unless you don’t mind showing it to the underwriter.

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Monday, November 18, 2013

Tip For Renters…

If you are a renter how do you pay your rent?

Would you like to purchase a home someday?

If so, please keep this in mind… How you pay your rent is IMPORTANT!

When you apply for a mortgage the underwriter will most likely want you to be able to prove you paid the rent.

If you rent from an apartment complex it’s a bit easier to do. We can just get them to fill out a verification of rent form.

However, if you rent from an individual – you must PROVE you paid the rent.

That means we will need cancelled rent checks. …If you pay your rent with cash – DON’T!

Start writing checks for rent!

If you pay with money orders then put your paycheck in a bank account, then every month draw out the money for the money order – and keep the money order receipts!

…but the best is to write checks for rent!

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Wednesday, November 13, 2013

A Few Quick Tips For You Today…

Did you know we can do Non Owner Occupied Investor loans up to 85% loan to value ratio now? …Sure can!

We can also finance up to 10 financed properties for Investors!

Did you know you can use a non occupying co-borrower with FHA loans? This means you can use a mom, dad, brother, sister, etc. to go on the loan with you if you don’t have enough income on your own.

However, you can’t you a non occupying co-borrower with USDA loans.

Did you know we don’t have overlay guidelines for Conventional loans? That’s right! …If we get an automated approval we can do your loan!

Mortgage backed securities look like they are up this morning, which means rates should be a bit lower. If you are considering refinancing it’s a good time to do it. Contact me and let’s see how much money we can save you!

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Monday, November 11, 2013

A Way To Get Rid Of Your FHA Mortgage Insurance…

Note: This only applies to FHA mortgages that pre-date June 3, 2013, MIP goes away when the following conditions are met:

30-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value and annual MIP has been paid for at least 60 months.

15-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value. There is no requirement for MIP to be paid for at least 60 months.

One important thing to keep in mind is that LTV calculations are based on the FHA’s last known value of the home — not its current appraised value.

For many people, the “last known value” is the value of the home at the date of purchase.

A 30-year FHA mortgage with 3.5 percent downpayment will reach 78% LTV in roughly 11 years.

A 15-year fixed with 3.5 percent down would reach 78% LTV in just over two years.

However, it’s possible to end your MIP sooner. …who wants to wait 11 years!

With home values generally rising – you can always refinance out of FHA and into a Conventional product.

With as little as 5% equity, you can refinance into a conventional loan from Fannie Mae or Freddie Mac.

Mortgage insurance rates are lower via Fannie and Freddie, and insurance payment cancel once the home gets 20% equity. (or you can do lender paid MI)

The math gets even better as your home equity levels increase.

With an FHA loan, MIP rates are flat.

With Fannie Mae or Freddie Mac, rates decrease along with your LTV!

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Friday, November 8, 2013

New Change In HARP Program May Help You…

I wanted to drop you a quick note this morning.

There is a change in the HARP loan program going into effect November 16th, 2013.

For those of you who just missed a HARP refinance – there’s new hope!

Previously HARP was only available to homeowners whose mortgages were sold and securitized on, or before, May 31, 2009.

Now loans are HARP eligible if their start date (the date on the mortgage note) was on or before May 31, 2009.

If you aren’t sure if your loan qualifies – contact me and I’ll check it out for you.

Here are a few of the highlights of the HARP program…

1) No minimum credit score required!

2) No max LTV on fixed rate loans!

3) 1 to 4 units (owner occupied, or NON OWNER OCCUPIED)!

4) No maximum LTV!

5) Subordination of eligible junior liens without a max combined LTV – for all occupancy types!

6) No limit on the number of financed properties!

7) Available on manufactured homes!

So, if you have a Fannie Mae loan, and are currently upside down on your home – give me a call or shoot me an email! …I just might be able to help you out!

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Wednesday, November 6, 2013

Little Known Way To Get The Seller To Pay Your Mortgage Insurance…

You have several options for Mortgage Insurance on conventional loans.

Knowing some of these options could be the difference between a decline and approval in some cases.

Currently there are four ways to pay mortgage insurance…

1) Standard borrower paid monthly.

2) Lender paid MI.

3) Split MI.

4) Financed MI.

Discussing all of these in one post would create a long post!

So, for the purposes of this post I’m going to discuss the Financed option.

…and, I’m going to show you how to get the seller to pay it!

Here are some little known facts about financed MI on conventional loans…

1) The premium is a single premium paid at closing.

2) The Financed MI premium may be financed into the loan or paid at closing.

3) Financed MI premium may be paid with seller contributions!

4) There are refundable options.

Did ‘ya see number 3? …That’s right you can negotiate for the seller to pay your MI in a single premium at closing.

Here’s an example of how this can help you…

Program	Loan Amount	Interest Rate	P&I Payment	Monthly MI	P&I + MI

Monthly paid MI	$200,000.00	4.88%	$1,059.00	$93.33	$1,152.00

Financed MI paid by seller	$200,000.00	4.88%	$1,059.00	$0.00	$1,059.00

Financed MI rolled into loan	$202,900.00	4.875	$1,074.00	$0.00	$1,074.00

That’s a savings of $4,680 over 5 years, and if the seller pays the MI premium that is almost $5,600 over 5 years!

That’s it for today!

Have a good day today! …and thanks for reading.

Brett