The VA does an amazing job of keeping veterans in their homes.
Nearly three-quarters of the VA borrowers who defaulted in fiscal year 2009 avoided foreclosure thanks to the agency’s policies and procedures.
But the Department of Veterans Affairs also operates a unique program that helps veterans who are trying to sell their homes in a difficult real estate market.
Home values have fallen drastically in some parts of the country, leaving some service members with a significant chasm between what they can sell their home for and what they still owe on their mortgage loan.
The VA’s Compromise Sale program helps veterans who have seen their home values collapse recoup and rebound. Through this program, service members can receive a “compromise claim” from the VA that essentially covers that gap between the sale price and their outstanding loan balance.
There’s an array of conditions that need to be met for service members interested in a compromise sale. Among them:
Sellers must document financial hardship
No second liens can exist
There must be a purchase agreement in place before a compromise application is filed
The pending sale must be a better deal financially for the government than a foreclosure
Homeowners will need to furnish a current appraisal. They’ll also need to prepare for a reduced entitlement, at least until the VA is reimbursed for the sale.
Veterans can learn more about the Compromise Sale program by contacting the VA at 1-800-933-5499. The agency’s regional loan center in Houston also maintains a helpful page on Compromise Sales.
Contact The Mortgage Mark with any questions or for more Information.
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Wednesday, December 1, 2010
Friday, November 12, 2010
Internet Tips for Home Buyers
Save time and stress when using the Internet to find your next home.
The internet has made it much easier for people search for homes and Real Estate information than ever before however the sheer volume of information can make it difficult to use the internet effectively.
There are few free technologies and tips that can make can a big difference in your experience while researching Real Estate online.
First is Google’s email solution which is www.Gmail.com. Go and set up a new email account before you start your search and use this email to sign up for Real Estate sites and to have listings delivered to. This will keep all of your Real Estate information in one place and keep it from interrupting your business or personal email.
In addition to the free email Gmail also supplies you with a free telephone from within your account which allows you to make calls to anywhere in the United States and still keep your home and cellular phone number private.
There is also another free service that can help you in your Real Estate search which is Google Alerts. These are included in your Gmail account and can be set to deliver any keyword information you choose to your Gmail account on a daily basis such as “Levittown Homes For Sale".
If you are going to use the Google search engine to search for homes be sure to click the advanced search link to the right of the Google Search Bar which will allow you to pinpoint exactly what you are looking for in your searches and just as importantly what you are not.
It’s very important to know what your credit report looks like as you begin to look for Real Estate and unlike free credit report .com which is anything but free www.annualcreditreport.com is actually a free site created by the three major search engines where you can get copies of all three of your credit reports at no charge and with no credit card required once a year.
A final tip that can save you hours while searching online is when visiting popular Real Estate sites like www.realtor.com or www.zillow.com to review properties try right clicking on the property and then click open in new tab or window. This will allow you to look at multiple properties at the same time and keep your search results open so you don’t have to use the back arrow to try to find the list of properties you just pulled up.
Using these free technologies will help make your online Real Estate search much more productive and limit the time and stress associated with trying to negotiate the internet.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mark@themortgagemark.com
The internet has made it much easier for people search for homes and Real Estate information than ever before however the sheer volume of information can make it difficult to use the internet effectively.
There are few free technologies and tips that can make can a big difference in your experience while researching Real Estate online.
First is Google’s email solution which is www.Gmail.com. Go and set up a new email account before you start your search and use this email to sign up for Real Estate sites and to have listings delivered to. This will keep all of your Real Estate information in one place and keep it from interrupting your business or personal email.
In addition to the free email Gmail also supplies you with a free telephone from within your account which allows you to make calls to anywhere in the United States and still keep your home and cellular phone number private.
There is also another free service that can help you in your Real Estate search which is Google Alerts. These are included in your Gmail account and can be set to deliver any keyword information you choose to your Gmail account on a daily basis such as “Levittown Homes For Sale".
If you are going to use the Google search engine to search for homes be sure to click the advanced search link to the right of the Google Search Bar which will allow you to pinpoint exactly what you are looking for in your searches and just as importantly what you are not.
It’s very important to know what your credit report looks like as you begin to look for Real Estate and unlike free credit report .com which is anything but free www.annualcreditreport.com is actually a free site created by the three major search engines where you can get copies of all three of your credit reports at no charge and with no credit card required once a year.
A final tip that can save you hours while searching online is when visiting popular Real Estate sites like www.realtor.com or www.zillow.com to review properties try right clicking on the property and then click open in new tab or window. This will allow you to look at multiple properties at the same time and keep your search results open so you don’t have to use the back arrow to try to find the list of properties you just pulled up.
Using these free technologies will help make your online Real Estate search much more productive and limit the time and stress associated with trying to negotiate the internet.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mark@themortgagemark.com
Friday, November 5, 2010
7 Requirements of Mortgage Verification and Validation
Verification and Validation – how it can affect your loan.
Today’s economic crisis has taught mortgage lenders one huge lesson they are all living by - verify and validate every loan file. Documentation – sounds like an easy task, but simply turn the clock back just a few years to the days of stated income loans, no income loans and even no income, no assets, no doc loans (just give me a high credit score) and you have the reason we now live in a Full Documentationworld. Did these loans make sense? Opinions vary, but eliminating as product that was intended for self employed borrowers has restricted business owners from tapping needed equity to stay operational. Ask any business owner you know what they think the chances are of qualifying for a loan would be today.
Below are 7 items that must be verified and validated these days when applying for mortgage financing:
Employment – Even after a loan has been cleared to close, telephone confirmation of employment is now routine just before a loan is scheduled to fund. In other words, don’t quit your job!
Income – 30 days worth of pay stubs. Previous two years W 2’s. If you show any kind of business income or loss, last two years tax returns (business and personal). Signed 4506-T forms at loan application allow lenders to order tax transcripts from the IRS to match up to your income… And they all order them. If you show a loss on your tax returns tell your loan officer upfront and save yourself frustration. This is not always a deal killer but will affect your debt ratio.
Assets – When a loan is run through automated underwriting it takes into account the assets that are stated. If you show money in checking, savings, 401k or any other investment, you will want to validate it by providing statements. Many times the final page or pages of the statements are blank. Include ALL pages of your statements regardless if they are blank. Note – if you are printing these documents from the internet, as a security measure, institutions do not include name or account number. This would not be acceptable documentation.
Deductions – Provide supporting documentation for payroll deductions such as child support, alimony, garnishments, 401k loans. Anything that affects your debt ratio must be documented which would include providing divorce and separation agreements and terms of of 401k loans.
Appraisals – This verification is done behind the scenes, but rest assured, even with all the new HVCC appraisal regulations, lenders validate appraisal figures through automated valuation models (AVM’s). The days of stretching home values in order to close a deal are long gone.
Gift Funds – Lenders want to see gift money comes from an acceptable gift source. And they way to show this is a paper trail… A bank statement from the gift source showing funds were available and a copy of the transaction transferring monies from the gift account to the borrower if deposited into borrowers account.
Earnest Money Deposit – Also referred to as the EMD. Many times this single item goes undocumented and causes a delay in clearing a loan to close. Sure we need a copy of the front of the check, but lenders want to see that the money was deposited before crediting it to the transaction.
These are just a few examples of documentation to gather when applying for a mortgage. This is just a guideline to use and lender requirements can and will vary, but providing the above documentation to your loan officer, you will greatly reduce the chances of frustration and delays in your loan closing. The mortgage process can be stressful enough these days. Supplying the required documentation the first time a loan is submitted to underwriting will increase the chances of a stress free closing.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Today’s economic crisis has taught mortgage lenders one huge lesson they are all living by - verify and validate every loan file. Documentation – sounds like an easy task, but simply turn the clock back just a few years to the days of stated income loans, no income loans and even no income, no assets, no doc loans (just give me a high credit score) and you have the reason we now live in a Full Documentationworld. Did these loans make sense? Opinions vary, but eliminating as product that was intended for self employed borrowers has restricted business owners from tapping needed equity to stay operational. Ask any business owner you know what they think the chances are of qualifying for a loan would be today.
Below are 7 items that must be verified and validated these days when applying for mortgage financing:
Employment – Even after a loan has been cleared to close, telephone confirmation of employment is now routine just before a loan is scheduled to fund. In other words, don’t quit your job!
Income – 30 days worth of pay stubs. Previous two years W 2’s. If you show any kind of business income or loss, last two years tax returns (business and personal). Signed 4506-T forms at loan application allow lenders to order tax transcripts from the IRS to match up to your income… And they all order them. If you show a loss on your tax returns tell your loan officer upfront and save yourself frustration. This is not always a deal killer but will affect your debt ratio.
Assets – When a loan is run through automated underwriting it takes into account the assets that are stated. If you show money in checking, savings, 401k or any other investment, you will want to validate it by providing statements. Many times the final page or pages of the statements are blank. Include ALL pages of your statements regardless if they are blank. Note – if you are printing these documents from the internet, as a security measure, institutions do not include name or account number. This would not be acceptable documentation.
Deductions – Provide supporting documentation for payroll deductions such as child support, alimony, garnishments, 401k loans. Anything that affects your debt ratio must be documented which would include providing divorce and separation agreements and terms of of 401k loans.
Appraisals – This verification is done behind the scenes, but rest assured, even with all the new HVCC appraisal regulations, lenders validate appraisal figures through automated valuation models (AVM’s). The days of stretching home values in order to close a deal are long gone.
Gift Funds – Lenders want to see gift money comes from an acceptable gift source. And they way to show this is a paper trail… A bank statement from the gift source showing funds were available and a copy of the transaction transferring monies from the gift account to the borrower if deposited into borrowers account.
Earnest Money Deposit – Also referred to as the EMD. Many times this single item goes undocumented and causes a delay in clearing a loan to close. Sure we need a copy of the front of the check, but lenders want to see that the money was deposited before crediting it to the transaction.
These are just a few examples of documentation to gather when applying for a mortgage. This is just a guideline to use and lender requirements can and will vary, but providing the above documentation to your loan officer, you will greatly reduce the chances of frustration and delays in your loan closing. The mortgage process can be stressful enough these days. Supplying the required documentation the first time a loan is submitted to underwriting will increase the chances of a stress free closing.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Thursday, November 4, 2010
Mortgage Definition: Stability Of Income
Stability Of Income — A Simple Definition:
One of the factors that underwriters will consider on a loan application is “stability of income”. The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.
Stability Of Income — An Expanded Definition:
While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.
These include:
Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation. If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.
The Probability Of Continued Employment — What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.
Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics. Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.
Stability of income is one of the important items that an underwriter will consider when you apply for a loan. By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
One of the factors that underwriters will consider on a loan application is “stability of income”. The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.
Stability Of Income — An Expanded Definition:
While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.
These include:
Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation. If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.
The Probability Of Continued Employment — What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.
Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics. Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.
Stability of income is one of the important items that an underwriter will consider when you apply for a loan. By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Monday, November 1, 2010
Can I have 2 FHA loans at the same time?
Why would someone have two FHA loans at the same time? Here are the reasons and the exceptions that may allow someone to have 2 concurrent FHA Loans.
Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value). An FHA approved appraiser must be used to determine such new value.
Relocation – If the borrower is relocating and it is established that they aren’t in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender.
Note – If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.
Vacating a jointly owned property – A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated.
A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.
Non-Occupying co-borrower – If someone previousily co-signed for a family member or relative while using a FHA loan. This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.
Without meeting any of these requirements, a potential borrower would not be approved for a second FHA insured loan.
Contact The Mortgage Mark with any questions! mark@themortgagemark.com
www.themortgagemark.com
Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value). An FHA approved appraiser must be used to determine such new value.
Relocation – If the borrower is relocating and it is established that they aren’t in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender.
Note – If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.
Vacating a jointly owned property – A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated.
A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.
Non-Occupying co-borrower – If someone previousily co-signed for a family member or relative while using a FHA loan. This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.
Without meeting any of these requirements, a potential borrower would not be approved for a second FHA insured loan.
Contact The Mortgage Mark with any questions! mark@themortgagemark.com
www.themortgagemark.com
Wednesday, October 20, 2010
Primary Residence — A Simple Definition
Primary Residence — A Simple Definition:
When getting a mortgage, one of the factors that will influence the rate and terms of your loan is whether or not you will occupy the property as a primary residence. Generally speaking, the best deals on mortgage terms are available to people who are going to occupy the property as their primary residence. Also, generally speaking you can only have one FHA insured loan at one time.
Primary Residence — An Expanded Definition:
When getting an FHA loan, it is generally not possible to have more than one FHA loan per borrower. Anyone who owns a home (either alone or with someone else) that is insured by FHA generally can’t get another FHA insured loan except under the following circumstances:
Relocation – if you are relocating to another area that is not within a reasonable commuting distance from your current home, you can get another FHA loan without being required to sell your existing home that currently has FHA financing.
Increase in Family Size – You can get another home with an FHA loan if you have an increase in the number of legal dependents where your present house no longer meets the family’s needs. If this is the case, you must pay your current FHA loan down to 75% LTV and a current appraisal must be used when determining the 75%.
Vacating a Jointly-Owned Property – If you are getting divorced and are moving out of your house that is currently financed with an FHA loan, you can get another FHA loan if you can qualify for it financially.
Non-occupying co-borrower — A non-occupying co-borrower on a property that is being purchased with an FHA-insured mortgage as a primary residence by other family members. This is often the case with what is known as “FHA kiddie condo loans”.
Primary residence.
It matters whether the property you are buying is going to be your primary residence or not. When getting a conventional loan, it matters for the rates and terms of the loan and when getting an FHA loan, it often matters whether or not you can get a loan at all.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
When getting a mortgage, one of the factors that will influence the rate and terms of your loan is whether or not you will occupy the property as a primary residence. Generally speaking, the best deals on mortgage terms are available to people who are going to occupy the property as their primary residence. Also, generally speaking you can only have one FHA insured loan at one time.
Primary Residence — An Expanded Definition:
When getting an FHA loan, it is generally not possible to have more than one FHA loan per borrower. Anyone who owns a home (either alone or with someone else) that is insured by FHA generally can’t get another FHA insured loan except under the following circumstances:
Relocation – if you are relocating to another area that is not within a reasonable commuting distance from your current home, you can get another FHA loan without being required to sell your existing home that currently has FHA financing.
Increase in Family Size – You can get another home with an FHA loan if you have an increase in the number of legal dependents where your present house no longer meets the family’s needs. If this is the case, you must pay your current FHA loan down to 75% LTV and a current appraisal must be used when determining the 75%.
Vacating a Jointly-Owned Property – If you are getting divorced and are moving out of your house that is currently financed with an FHA loan, you can get another FHA loan if you can qualify for it financially.
Non-occupying co-borrower — A non-occupying co-borrower on a property that is being purchased with an FHA-insured mortgage as a primary residence by other family members. This is often the case with what is known as “FHA kiddie condo loans”.
Primary residence.
It matters whether the property you are buying is going to be your primary residence or not. When getting a conventional loan, it matters for the rates and terms of the loan and when getting an FHA loan, it often matters whether or not you can get a loan at all.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Monday, October 18, 2010
What is an escrow account?
Understanding Escrow
What is an escrow account?
An escrow account is used to collect and hold funds to pay your property taxes, homeowners insurance premiums or other charges when they become due.
The account is often established for you by your mortgage company when you take out your mortgage. However, if an escrow account was not set up when you took out your mortgage, you may be able to do so now.
Real estate taxes and insurance premiums must be paid regularly — typically, payments are due once or twice a year — and failure to pay these bills on time may cost you money in tax penalties or result in cancellation of your insurance coverage.
What are the benefits of an escrow account?
An escrow account helps you:
Manage your budget: You do not have to make lump sum payments when your taxes and insurance are due. You have made monthly payments throughout the year to cover those obligations.
Gain peace of mind: You don’t need to keep track of when your tax and insurance bills are due. The payments will be made, on time, on your behalf.
Ensure that your home is protected: With paid-up insurance coverage and taxes, you protect your investment in your home and meet your lender’s requirements.
Most mortgage companies require an escrow account for mortgages with less than a 20 percent down payment.
How does an escrow account work?
Your monthly mortgage payment includes an amount for property taxes and insurance in addition to the amount you owe for principal and interest.
The amount of your monthly mortgage payment that is for taxes and insurance is placed by your mortgage company into an escrow account. The funds can be used only to pay taxes and insurance on your behalf.
Your mortgage company pays the taxes and insurance bills for you when they are due. Your mortgage company examines any changes in your tax and insurance costs (for example, your local government may change the amount of your real estate taxes). Your mortgage company sends you a statement each year showing the prior year's activity — amounts collected from you and placed in escrow as well as the payments made on your behalf — and showing any adjustments that may be needed based on changes in your tax and insurance costs.
Here is a simplified example* of how escrow payments are calculated:
Annual real estate taxes: $1,800 ÷ 12 months = $150 per month
Annual property insurance: $720 ÷ 12 months = $60 per month
Total monthly taxes and insurance: $210
So in this example, $210 would be added to your total monthly mortgage payment and applied to your escrow account. You might hear your total monthly mortgage payment referred to as your “PITI” — for principal, interest, taxes and insurance.
Do you have an escrow account?
If you are not sure if you have an escrow account, check your monthly mortgage account statement or contact your mortgage company. Your account statement will typically indicate your “Escrow Balance” and the amount of your total monthly mortgage payment that is applied to escrow.
Should you establish an escrow account?
If you do not have an escrow account, you may want to establish one. Ask your mortgage company for more information.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
What is an escrow account?
An escrow account is used to collect and hold funds to pay your property taxes, homeowners insurance premiums or other charges when they become due.
The account is often established for you by your mortgage company when you take out your mortgage. However, if an escrow account was not set up when you took out your mortgage, you may be able to do so now.
Real estate taxes and insurance premiums must be paid regularly — typically, payments are due once or twice a year — and failure to pay these bills on time may cost you money in tax penalties or result in cancellation of your insurance coverage.
What are the benefits of an escrow account?
An escrow account helps you:
Manage your budget: You do not have to make lump sum payments when your taxes and insurance are due. You have made monthly payments throughout the year to cover those obligations.
Gain peace of mind: You don’t need to keep track of when your tax and insurance bills are due. The payments will be made, on time, on your behalf.
Ensure that your home is protected: With paid-up insurance coverage and taxes, you protect your investment in your home and meet your lender’s requirements.
Most mortgage companies require an escrow account for mortgages with less than a 20 percent down payment.
How does an escrow account work?
Your monthly mortgage payment includes an amount for property taxes and insurance in addition to the amount you owe for principal and interest.
The amount of your monthly mortgage payment that is for taxes and insurance is placed by your mortgage company into an escrow account. The funds can be used only to pay taxes and insurance on your behalf.
Your mortgage company pays the taxes and insurance bills for you when they are due. Your mortgage company examines any changes in your tax and insurance costs (for example, your local government may change the amount of your real estate taxes). Your mortgage company sends you a statement each year showing the prior year's activity — amounts collected from you and placed in escrow as well as the payments made on your behalf — and showing any adjustments that may be needed based on changes in your tax and insurance costs.
Here is a simplified example* of how escrow payments are calculated:
Annual real estate taxes: $1,800 ÷ 12 months = $150 per month
Annual property insurance: $720 ÷ 12 months = $60 per month
Total monthly taxes and insurance: $210
So in this example, $210 would be added to your total monthly mortgage payment and applied to your escrow account. You might hear your total monthly mortgage payment referred to as your “PITI” — for principal, interest, taxes and insurance.
Do you have an escrow account?
If you are not sure if you have an escrow account, check your monthly mortgage account statement or contact your mortgage company. Your account statement will typically indicate your “Escrow Balance” and the amount of your total monthly mortgage payment that is applied to escrow.
Should you establish an escrow account?
If you do not have an escrow account, you may want to establish one. Ask your mortgage company for more information.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mwilkins@capitalfmc.com
Wednesday, October 13, 2010
Today’s Mortgage Definition is: Subordination
Today’s Mortgage Definition is: Subordination
Subordination — A Simple Definition:
In the mortgage arena, most of the time when someone refers to a subordination, they are referring to a process involving second mortgage on a property. If you are interested in refinancing your home and you have a second mortgage, you will need to get a subordination agreed to by the lender who holds the second mortgage. In plain English: getting a subordination completed by the lender who holds the second mortgage means that the lender agrees to have their loan remain in second position while the loan in first position is refinanced.
Subordination — An Expanded Definition:
In most cases, your loan officer or a member of the loan officer’s team will do virtually everything required to get a subordination completed. The general steps to getting a subordination completed include:
Contact the lender who holds the second mortgage and get a copy of the subordination requirements.
Complete a subordination application with the information required – typically it is information about the current first mortgage, the new first mortgage and appraised value.
Follow up with the lender who holds the second mortgage until the subordination is approved.
Now that rates are low, many people are going through the refinance process and subordination(s) are a common occurrence. While it can be tricky to get a subordination approved, if you have a second mortgage it is important you remember that you will want to discuss the subordination requirements with your loan officer before either of you spend a great deal of time and effort into refinancing your first mortgage.
Why?
Because if your second mortgage lender won’t subordinate your loan, there is virtually no chance that you can refinance your first mortgage.
Be sure to ask your loan officer about subordination of your second mortgage if want to refinance.
Contact The Mortgage Mark if you have any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Subordination — A Simple Definition:
In the mortgage arena, most of the time when someone refers to a subordination, they are referring to a process involving second mortgage on a property. If you are interested in refinancing your home and you have a second mortgage, you will need to get a subordination agreed to by the lender who holds the second mortgage. In plain English: getting a subordination completed by the lender who holds the second mortgage means that the lender agrees to have their loan remain in second position while the loan in first position is refinanced.
Subordination — An Expanded Definition:
In most cases, your loan officer or a member of the loan officer’s team will do virtually everything required to get a subordination completed. The general steps to getting a subordination completed include:
Contact the lender who holds the second mortgage and get a copy of the subordination requirements.
Complete a subordination application with the information required – typically it is information about the current first mortgage, the new first mortgage and appraised value.
Follow up with the lender who holds the second mortgage until the subordination is approved.
Now that rates are low, many people are going through the refinance process and subordination(s) are a common occurrence. While it can be tricky to get a subordination approved, if you have a second mortgage it is important you remember that you will want to discuss the subordination requirements with your loan officer before either of you spend a great deal of time and effort into refinancing your first mortgage.
Why?
Because if your second mortgage lender won’t subordinate your loan, there is virtually no chance that you can refinance your first mortgage.
Be sure to ask your loan officer about subordination of your second mortgage if want to refinance.
Contact The Mortgage Mark if you have any questions!
http://www.themortgagemark.com mwilkins@capitalfmc.com
Wednesday, September 29, 2010
FHA loans set to require minimum 640 middle score
FHA loans set to require minimum 640 middle score
The numbers have been considered and tossed around for some time and now most lenders and banks are making the official move to raise FHA minimum scores to 640 from a current 620. While there will almost certainly be those who claim they can and will still offer insured loans below 640 the reality is they likely will not close or be extremely difficult to close – especially if the advertiser is a correspondent lender or mortgage broker.
With bankers and lenders everything is about risk. It used to be about risk and market demands but with what has happened over the course of the last several months the market no longer gets what it wants and, just as the author predicted four years ago, the lenders once again make the rules and the people must work within them.
Each lender has a different time line for roll out and with the exception of less than a handful of banks every one is going to the 640 point. Even those who will still be offering solutions for borrowers with less than a 640 middle score will be charging extra points to the borrowers. This means if someone with a 650 score receives a loan at, for example, 4.5% interest the borrower with a 638 score may pay 5.5%. While increased pricing does not mitigate risk it does, technically, create a profit drip to cover losses in that pool.
According to an indisclosued source in the secondary marketing department of a major national lender “loans below 640 have a 10% greater delinquency rate than loans with scores about 640″. This means if the delinquency rate above 640 is 5% the delinquency rate below 640 is 15% and that’s a big hit for any lender to take.
Make sure you are working with a lender who knows how to work with borrowers who have credit challenges because it is still getting tighter in some arenas of lending. A select few lenders do have true in-house re-scoring systems to work with borrowers who have faced past issues but who are starting over or overcoming challenging times.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mark@themortgagemark.com
The numbers have been considered and tossed around for some time and now most lenders and banks are making the official move to raise FHA minimum scores to 640 from a current 620. While there will almost certainly be those who claim they can and will still offer insured loans below 640 the reality is they likely will not close or be extremely difficult to close – especially if the advertiser is a correspondent lender or mortgage broker.
With bankers and lenders everything is about risk. It used to be about risk and market demands but with what has happened over the course of the last several months the market no longer gets what it wants and, just as the author predicted four years ago, the lenders once again make the rules and the people must work within them.
Each lender has a different time line for roll out and with the exception of less than a handful of banks every one is going to the 640 point. Even those who will still be offering solutions for borrowers with less than a 640 middle score will be charging extra points to the borrowers. This means if someone with a 650 score receives a loan at, for example, 4.5% interest the borrower with a 638 score may pay 5.5%. While increased pricing does not mitigate risk it does, technically, create a profit drip to cover losses in that pool.
According to an indisclosued source in the secondary marketing department of a major national lender “loans below 640 have a 10% greater delinquency rate than loans with scores about 640″. This means if the delinquency rate above 640 is 5% the delinquency rate below 640 is 15% and that’s a big hit for any lender to take.
Make sure you are working with a lender who knows how to work with borrowers who have credit challenges because it is still getting tighter in some arenas of lending. A select few lenders do have true in-house re-scoring systems to work with borrowers who have faced past issues but who are starting over or overcoming challenging times.
Contact The Mortgage Mark with any questions!
www.themortgagemark.com mark@themortgagemark.com
Thursday, September 16, 2010
Veteran’s Administration Home Loans over $417,000
Veteran’s Administration Home Loans over $417,000
Did you know that you can get a VA Home Loan over the $417,000 limit? With Mortgage Insurance rates for jumbo loans being so high, a “VA Jumbo Loan” might be the most affordable option!
VA Home Loans require that the Veteran make a down payment equal to 25% of the Balance over $417,000. This means that if the Sales Price on a property is $550,000 the calculation looks like this:
$550,000 – $417,000 = $33,250 That means you are making about a 6% down payment! In addition to this, there’s no monthly PMI. On a Jumbo Conforming loan (where you made a 10% downpayment) your mortgage insurance premium could be $317.00 a MONTH!
With a VA Home Loan, the funding fee would be 1.5%. This means on our $550,000 sales price, with a loan amount of $516,750 the Funding Fee adds less than $45.00 a month to your payments!! WOW!
Every situation is different – but if you qualify we would strongly suggest that you consider a VA home loan for your next purchase!
Contact The Mortgage Mark with any Questions! http://wwwthemortgagemark.com/ mark@themortgagemark.com
Did you know that you can get a VA Home Loan over the $417,000 limit? With Mortgage Insurance rates for jumbo loans being so high, a “VA Jumbo Loan” might be the most affordable option!
VA Home Loans require that the Veteran make a down payment equal to 25% of the Balance over $417,000. This means that if the Sales Price on a property is $550,000 the calculation looks like this:
$550,000 – $417,000 = $33,250 That means you are making about a 6% down payment! In addition to this, there’s no monthly PMI. On a Jumbo Conforming loan (where you made a 10% downpayment) your mortgage insurance premium could be $317.00 a MONTH!
With a VA Home Loan, the funding fee would be 1.5%. This means on our $550,000 sales price, with a loan amount of $516,750 the Funding Fee adds less than $45.00 a month to your payments!! WOW!
Every situation is different – but if you qualify we would strongly suggest that you consider a VA home loan for your next purchase!
Contact The Mortgage Mark with any Questions! http://wwwthemortgagemark.com/ mark@themortgagemark.com
Wednesday, September 15, 2010
How and Why You Get Your Money Back by Refinancing
How and Why You Get Your Money Back by Refinancing
Many are bemoaning the fact that their home has lost value in the last three years. They purchased the home in the early 2000s and saw some nice increase for a few years. Then the housing market flattened and even turned downward. Then it kept going down, and down, and down. It has not stopped for many homeowners in many markets. Folks are wondering if real estate prices will ever go back up.
Take heart. They will rise again. If inflation is a reality, which it almost certainly will be, then along with everything else, home prices will rise too.
But the key is to make wise decisions based on today’s economic realities. This is a principle I’ve written about before, but it’s worth repeating.
The premise here is that when the [free] market corrects in one category, as it has in the housing market, it usually creates a few opportunities in other areas of the market at the same time.
Inflation, for example, is very low right now. Potentially even negative depending on where you are. This gives many households the unique opportunity to spend a little less on groceries and vacations. This has been true for our family these past two years.
Combine the inflation numbers with what is happening in the stock market. Prices in the stock market are low relative to the recent past creating a good opportunity for making investments with some of the “low-inflation” generated savings.
The clearest example I can give though is in the housing market. A very close connection exists between the drop in housing values and the drop in interest rates. If the housing market had not dropped as much as it has, we would almost certainly not have interest rates as low as they are right now.
If you purchased your home five years ago for $300,000, and today it’s worth $200,000, then you’ve lost $100,000 in equity.
But if you refinance your 5.75% 30-year mortgage (which has 25 years remaining on it) to a (near 4%) 15-year fixed loan, your payment increases just a little bit, but you cut 10 years (or 120 payments) from your loan term. In this example, the total savings is upwards of $150,000 (120 payments of $1260 per month).
The market takes care of the wise and requires very little intervention to do so. Refinancing for a shorter term mortgage is the best way to get back the money you lost in your home’s value – and then some.
Contact The Mortgage Mark with any questions!
Apply today Online!!!!!!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Many are bemoaning the fact that their home has lost value in the last three years. They purchased the home in the early 2000s and saw some nice increase for a few years. Then the housing market flattened and even turned downward. Then it kept going down, and down, and down. It has not stopped for many homeowners in many markets. Folks are wondering if real estate prices will ever go back up.
Take heart. They will rise again. If inflation is a reality, which it almost certainly will be, then along with everything else, home prices will rise too.
But the key is to make wise decisions based on today’s economic realities. This is a principle I’ve written about before, but it’s worth repeating.
The premise here is that when the [free] market corrects in one category, as it has in the housing market, it usually creates a few opportunities in other areas of the market at the same time.
Inflation, for example, is very low right now. Potentially even negative depending on where you are. This gives many households the unique opportunity to spend a little less on groceries and vacations. This has been true for our family these past two years.
Combine the inflation numbers with what is happening in the stock market. Prices in the stock market are low relative to the recent past creating a good opportunity for making investments with some of the “low-inflation” generated savings.
The clearest example I can give though is in the housing market. A very close connection exists between the drop in housing values and the drop in interest rates. If the housing market had not dropped as much as it has, we would almost certainly not have interest rates as low as they are right now.
If you purchased your home five years ago for $300,000, and today it’s worth $200,000, then you’ve lost $100,000 in equity.
But if you refinance your 5.75% 30-year mortgage (which has 25 years remaining on it) to a (near 4%) 15-year fixed loan, your payment increases just a little bit, but you cut 10 years (or 120 payments) from your loan term. In this example, the total savings is upwards of $150,000 (120 payments of $1260 per month).
The market takes care of the wise and requires very little intervention to do so. Refinancing for a shorter term mortgage is the best way to get back the money you lost in your home’s value – and then some.
Contact The Mortgage Mark with any questions!
Apply today Online!!!!!!!
http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Monday, September 13, 2010
What can Football tell us about the economy?
Can we measure the economy based on a football game?
Are you a diehard football fanatic?
Can you fathom the thought of not watching your favorite team on TV?
Blackout restrictions are in place between NFL teams and their local television markets. If the game sells out it is on TV. If the game is not a sell out, local fans become “blacked out” of signal and cannot watch their teams play. Or in other words, it will no longer be televised on your local network. NFL rules state a game must be sold out 72 hours prior to kickoff.
NFL ticket sales have been down for the past three years and it looks as if this year may be the worst yet. According to USA Today at least 11 NFL teams could be facing blackouts as franchises fight through a downward trend of stadium attendance. Last year the league had 22 blacked out games, a five year high.
Today’s economy has many consumers ultra focused on spending habits and an increasing number of consumers with no disposable money available. Maybe NFL franchise owners have priced themselves out of consumers comfort zones and now the economy will force ticket prices and the overall stadium experience back in place. Maybe consumers are at fault for paying the asking price for season tickets and supporting team revenue by shelling out for concessions and team jersey’s and such.
Tampa Bay Buccaneers: Blackouts likely.
Jacksonville Jaguars: Seven blackouts last year.
Oakland Raiders: Seven blackouts last year.
Detroit Lions: Four blackouts last year.
Can football tell us anything about the economy?
Let’s see… the cities above located in California, Michigan and Florida… States which just happen to lead the country in foreclosures. And the NFL expects it to get worse this year. I for one think this is a very viable measurement on the state of our economy. Just examine the statistics of the number of TV blackouts for NFL games and come to your own conclusion.
In fact, if you really want to feel the pulse of the economy, ask the following shops you patronize how’s business: your favorite restaurant, your cleaner, your car dealer, your real estate agent, your neighborhood pub, your car mechanic…. get my point?
Go Eagles!
Contact the Mortgage Mark with any questions! www.themortgagemark.com mwilkins@capitalfmc.com
Thursday, September 9, 2010
Mortgage Definition: VA Loan Certificate of Eligibility
Today’s Mortgage Definition is: VA Loan Certificate of Eligibility
VA Loan Certificate of Eligibility — A Simple Definition:
The VA Loan Certificate of Eligibility is a key ingredient to getting a VA loan which is very popular with people who are Military Active Duty, Reservists, Veterans, and their immediate families. Simply put – if you can’t get a VA Certificate of Eligibility, you can’t get a VA loan.
VA Loan Certificate of Eligibility — An Expanded Definition:
There is a long list of potential people who could get a VA loan – but rather than break those out, I can offer a simple rule of thumb:
If you are in the military or have served in the military, or you are a spouse or a dependent of someone who was or is in the military you may be eligible for a VA loan and a Certificate of Eligibility.
You can visit the Dept of VA website to check military service requirements for VA loan eligibility.
From a more technical standpoint, the VA loan eligibility certificate is called Form 26-1880 and you can get it directly from any VA regional center, or you can get it online at the Veterans Information Portal.
Most VA lenders can also help you with getting your certificate if needed.
The certificate does not say that you are qualified for a VA loan, it simply means that you are eligible for a VA loan.
To qualify for a VA loan you will have to apply and qualify for it with a VA lender. It is during the application process where you will need to prove your eligibility for a VA loan with your certificate.
Lastly, the Certificate of Eligibility informs your VA lender what loan amount you are eligible to get which is based on your level of military service. In general, full eligibility without a down payment will get you up to a mortgage amount of $417,000. If you are eligible for the full amount and you don’t borrow all of the $417,000 in one mortgage, it is possible to get another mortgage on another property if you meet certain qualification requirements.
For more specific details on this, or other items relating to the VA Loan Certificate of Eligibility, you can speak to your loan officer.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
VA Loan Certificate of Eligibility — A Simple Definition:
The VA Loan Certificate of Eligibility is a key ingredient to getting a VA loan which is very popular with people who are Military Active Duty, Reservists, Veterans, and their immediate families. Simply put – if you can’t get a VA Certificate of Eligibility, you can’t get a VA loan.
VA Loan Certificate of Eligibility — An Expanded Definition:
There is a long list of potential people who could get a VA loan – but rather than break those out, I can offer a simple rule of thumb:
If you are in the military or have served in the military, or you are a spouse or a dependent of someone who was or is in the military you may be eligible for a VA loan and a Certificate of Eligibility.
You can visit the Dept of VA website to check military service requirements for VA loan eligibility.
From a more technical standpoint, the VA loan eligibility certificate is called Form 26-1880 and you can get it directly from any VA regional center, or you can get it online at the Veterans Information Portal.
Most VA lenders can also help you with getting your certificate if needed.
The certificate does not say that you are qualified for a VA loan, it simply means that you are eligible for a VA loan.
To qualify for a VA loan you will have to apply and qualify for it with a VA lender. It is during the application process where you will need to prove your eligibility for a VA loan with your certificate.
Lastly, the Certificate of Eligibility informs your VA lender what loan amount you are eligible to get which is based on your level of military service. In general, full eligibility without a down payment will get you up to a mortgage amount of $417,000. If you are eligible for the full amount and you don’t borrow all of the $417,000 in one mortgage, it is possible to get another mortgage on another property if you meet certain qualification requirements.
For more specific details on this, or other items relating to the VA Loan Certificate of Eligibility, you can speak to your loan officer.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Friday, September 3, 2010
FHA monthly mortgage insurance increases
Effective for FHA loans for which the case number is assigned on or after October 4, 2010 the Upfront Mortgage Insurance will decrease from 2.25 to 1.00 (100 basis points) on most FHA insured loans except Home Equity Conversion (HECM – “reverse mortgage”). Chances are you have heard this or some version of it but until yesterday, September 1, 2010, it was not in writing in the official form from HUD.
When are FHA case numbers assigned?
Case numbers must be assigned prior to ordering third party services such as the appraisal. Appraisals are not ordered until there is a fully executed sales agreement in the lender’s possession. The lender orders the FHA case number and assigns it to the loan application where it becomes permanent record.
Monthly Mortgage Insurance also changing.
With UFMIP going down MMIP is heading up. Much more dangerous to the industry because it impacts monthly payment and thus debt-to-income ration (DTI). Currently on loans of over 95% the MIP is .55% annually and from 95% and lower it is .50% annually. Effective October 4, 2010 those numbers will be .85% and .90% which results in an increased monthly payment.
Contrary to some reports there has been no notification of change in the amount of closing contributions by the seller which can be contributed to cover closing costs which is 6% and has not (yet) changed. The buyer must contribute 3.5% of their own money but it can be a gift.
This information applies to 203b and 203k loans.
Examples – top row is now, second row is after 10/4 and the $43.39 is the monthly payment increase:
Sales Price Down Loan Amt UFMIP Total Loan P&I Pmt MIP P&I&MIP
200,000 7,000 193,000 4,342.50 197,342.50 1,054.98 88.46 1,143.44
200,000 7,000 193,000 1,930.00 194,930.00 1,042.08 144.75 1,186.83
43.39
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
When are FHA case numbers assigned?
Case numbers must be assigned prior to ordering third party services such as the appraisal. Appraisals are not ordered until there is a fully executed sales agreement in the lender’s possession. The lender orders the FHA case number and assigns it to the loan application where it becomes permanent record.
Monthly Mortgage Insurance also changing.
With UFMIP going down MMIP is heading up. Much more dangerous to the industry because it impacts monthly payment and thus debt-to-income ration (DTI). Currently on loans of over 95% the MIP is .55% annually and from 95% and lower it is .50% annually. Effective October 4, 2010 those numbers will be .85% and .90% which results in an increased monthly payment.
Contrary to some reports there has been no notification of change in the amount of closing contributions by the seller which can be contributed to cover closing costs which is 6% and has not (yet) changed. The buyer must contribute 3.5% of their own money but it can be a gift.
This information applies to 203b and 203k loans.
Examples – top row is now, second row is after 10/4 and the $43.39 is the monthly payment increase:
Sales Price Down Loan Amt UFMIP Total Loan P&I Pmt MIP P&I&MIP
200,000 7,000 193,000 4,342.50 197,342.50 1,054.98 88.46 1,143.44
200,000 7,000 193,000 1,930.00 194,930.00 1,042.08 144.75 1,186.83
43.39
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Monday, August 30, 2010
FHA monthly mortgage insurance premiums to rise
FHA monthly mortgage insurance premiums to rise
There are many posts on the internet about FHA MIP rising to 1.55% that is factually inaccurate. The act signed into law on August 14, 2010 (HR 5981) does not state FHA monthly mortgage insurance premium (MIP) is increasing to 1.55% – it simply states MIP “may” be increased to a maximum of 1.55% (of the loan amount per year) by the commissioner without further need for congressional approval.
Currently no official FHA announcement has been published as to exactly how much MIP will increase. There has, however, been printed and spoken information circulated stating the increase on FHA monthly insurance will be to .90% on loans with less than 5% down payment and 85% on loans with 5% or more down payment.
On August 10th Deputy Assistant Secretary Vicki Bott sent a letter which ended with an italicized paragraph including the statement that on October 4th 2010 FHA MIP would increase. “FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years.”
Statements that indicate the Federal Housing Authority will be adjusting the monthly MIP to 1.55% are unfounded and not factual. A final announcement from FHA will be made prior to the October 4th date of implementation.
HR 5981 - Amends the National Housing Act with respect to requirements for the insurance of mortgages secured by a one- to four-family dwelling which are obligations of the Mutual Mortgage Insurance Fund. Authorizes the Secretary of Housing and Urban Development (HUD) to establish and collect annual premium payments of up to 1.5% of the remaining insured principal balance on such a dwelling.
It also authorizes an annual premium of up to 1.55% of the remaining insured principal balance of any 30-year mortgage on such a dwelling involving an original principal obligation greater than 95% percent of such value. (Currently, an annual premium of up to 0.55% of the remaining insured principal balance on such a mortgage is required.) Authorizes the Secretary to adjust the amount of any initial or annual premium through notice published in the Federal Register or mortgagee letter, which shall establish the effective date of any such adjustment.
Contact me with any questions! http://www.themortgagemark.com/
mark@themortgagemark.com
Tuesday, August 24, 2010
Penn State/Navy Yard energy project wins $129 million federal grant
By Susan Snyder
INQUIRER STAFF WRITER
In a highly competitive grant process, a research consortium led by Penn State won up to $129 million in federal funding to develop a "energy innovation hub" at the Philadelphia Navy Yard aimed at saving energy and cutting pollution.
"This will have a huge impact on Philadelphia and the region, just in the amount of job creation that should come from this alone," said Henry C. Foley, vice president for Research and Dean of the Graduate School at Penn State.
Foley, who will lead the Penn State research team also including researchers from Princeton, Rutgers, the University of Pennsylvania, Drexel and other institutions, said the project will focus on creating more energy efficient buildings and training workers to both retrofit and do new construction in the efficient ways.
"It's really a technological game changer," Foley said this afternoon in a brief telephone interview, before going into a meeting with Mayor Nutter and Penn State President Graham Spanier.
The grant, to be paid out over the next five years, is the largest in Penn State's history. It largely comes from the Department of Energy with $7 million from three other federal agencies.
The state of Pennsylvania through Gov. Rendell also will kick in $30 million, which state officials believe may have helped Penn State win the grant.
The Department of Energy could not be reached for comment today on how many other groups applied, but Crain's New York Business reported that the project beat out a "consortium of more than 100 education, nonprofit, government and industry groups," which had claimed the project would create 76,000 jobs at Syracuse University.
It becomes the second major energy hub project to be funded by the federal government. A project focused on solar energy will be based in California.
Foley said he was thrilled with the Navy Yard location because it includes more than 200 buildings and operates an independent electric microgrid as a "virtual municipality" where the new technologies can be tested and validated.
"It's a little city within a city... with very old buildings we can experiment on," he said.
Researchers from academia, U.S. National Laboratories and the private sector will use the funding to develop energy efficient building designs, officials said.
The project is expected to begin by Oct. 30.
"This funding is great news for the Commonwealth and is a crucial step towards creating a more sustainable and environmentally friendly America," Sen. Casey, (D-Pa) said in a prepared statement. "With this support, the consortium can focus on energy efficiency and innovation and assist communities in reducing their energy use and creating good jobs for Pennsylvanians."
Penn State officials, who were readying an announcement of their own about the project this afternoon, also said they were pleased.
"It's a great partnership among a number of researchers from academia, the private sector and national laboratories. It's a great collaboration for a solid project that will help the environment," said Penn State spokeswoman Annemarie Mountz.
Foley said the project "will spur real innovation and job growth for Philadelphia, the region and the nation. We have a world class team of universities, corporations, and economic development entities that made this proposal come to life. There is no better place to do this work than in the Philadelphia Navy Yard."
Buildings account for nearly 40 percent of U.S. energy consumption and carbon emissions. The research could lead to reduced energy use and bills, less pollution and more jobs in the building efficiency industry, officials said.
Gov. Rendell and Sen. Arlen Specter also praised the project in statements yesterday.
DOE Secretary underscored the importance of the energy hubs in a press release.
"The Energy Innovation Hubs are a key part of our effort to harness the power of American ingenuity to achieve transformative energy breakthroughs," said Secretary Chu. "By bringing together some of our brightest minds, we can develop cutting-edge building energy efficiency technologies that will reduce energy bills, cut carbon pollution, and create jobs. This important investment will help Philadelphia become a leader in the global clean energy economy."
http://www.themortgagemark.com/
INQUIRER STAFF WRITER
In a highly competitive grant process, a research consortium led by Penn State won up to $129 million in federal funding to develop a "energy innovation hub" at the Philadelphia Navy Yard aimed at saving energy and cutting pollution.
"This will have a huge impact on Philadelphia and the region, just in the amount of job creation that should come from this alone," said Henry C. Foley, vice president for Research and Dean of the Graduate School at Penn State.
Foley, who will lead the Penn State research team also including researchers from Princeton, Rutgers, the University of Pennsylvania, Drexel and other institutions, said the project will focus on creating more energy efficient buildings and training workers to both retrofit and do new construction in the efficient ways.
"It's really a technological game changer," Foley said this afternoon in a brief telephone interview, before going into a meeting with Mayor Nutter and Penn State President Graham Spanier.
The grant, to be paid out over the next five years, is the largest in Penn State's history. It largely comes from the Department of Energy with $7 million from three other federal agencies.
The state of Pennsylvania through Gov. Rendell also will kick in $30 million, which state officials believe may have helped Penn State win the grant.
The Department of Energy could not be reached for comment today on how many other groups applied, but Crain's New York Business reported that the project beat out a "consortium of more than 100 education, nonprofit, government and industry groups," which had claimed the project would create 76,000 jobs at Syracuse University.
It becomes the second major energy hub project to be funded by the federal government. A project focused on solar energy will be based in California.
Foley said he was thrilled with the Navy Yard location because it includes more than 200 buildings and operates an independent electric microgrid as a "virtual municipality" where the new technologies can be tested and validated.
"It's a little city within a city... with very old buildings we can experiment on," he said.
Researchers from academia, U.S. National Laboratories and the private sector will use the funding to develop energy efficient building designs, officials said.
The project is expected to begin by Oct. 30.
"This funding is great news for the Commonwealth and is a crucial step towards creating a more sustainable and environmentally friendly America," Sen. Casey, (D-Pa) said in a prepared statement. "With this support, the consortium can focus on energy efficiency and innovation and assist communities in reducing their energy use and creating good jobs for Pennsylvanians."
Penn State officials, who were readying an announcement of their own about the project this afternoon, also said they were pleased.
"It's a great partnership among a number of researchers from academia, the private sector and national laboratories. It's a great collaboration for a solid project that will help the environment," said Penn State spokeswoman Annemarie Mountz.
Foley said the project "will spur real innovation and job growth for Philadelphia, the region and the nation. We have a world class team of universities, corporations, and economic development entities that made this proposal come to life. There is no better place to do this work than in the Philadelphia Navy Yard."
Buildings account for nearly 40 percent of U.S. energy consumption and carbon emissions. The research could lead to reduced energy use and bills, less pollution and more jobs in the building efficiency industry, officials said.
Gov. Rendell and Sen. Arlen Specter also praised the project in statements yesterday.
DOE Secretary underscored the importance of the energy hubs in a press release.
"The Energy Innovation Hubs are a key part of our effort to harness the power of American ingenuity to achieve transformative energy breakthroughs," said Secretary Chu. "By bringing together some of our brightest minds, we can develop cutting-edge building energy efficiency technologies that will reduce energy bills, cut carbon pollution, and create jobs. This important investment will help Philadelphia become a leader in the global clean energy economy."
http://www.themortgagemark.com/
Monday, August 16, 2010
Single mom Qualifying for FHA loan
There are several considerations when a single parent comes to us to discuss purchasing a home and their financing options.
FHA is a great mortgage program for many single parents because of it’s flexibility. There are some qualifying details that are specific to Single Parents that you should consider:
- Child Support and Alimony must be documented for the past 12 months. We will need to see cancelled checks, documented deposits in your account, or court records from the State showing that you’ve received at least 12 months of support in order to count it as a “stable” income source.
- It must be continuing for at least 36 more months after closing. So if support will continue until your child is 18, and the child is 16 – we can not count that income.
- You can get a gift for the down payment
- You need to have a credit score of 640
- You can put a parent, or other family member on the loan to help you qualify
- We can not count rent you might receive from a roommate
Court Recorded Seperation Agreements, stating that the other person is responsible for the debt, does NOT take the liability off of you.
If there’s a CAR payment, or another type of debt that you are still on the note for… and you can provide 12 months of cancelled checks showing where the other person is making the payments… we can SOMETIMES get that payment waived (in other words we might not have to count it as a debt when we are qualifying you).
Contact me today to see if you can qualify! mwilkins@capitalfmc.com
http://www.themortgagemark.com
Tuesday, August 10, 2010
Mortgage Definition: UFMIP (Up Front Mortgage Insurance Premium)
Today’s Mortgage Definition is: UFMIP
Main Entry: u · f · m · i · p
Pronunciation: : \ˈyü ·ˈef · ˈem · ˈī · ˈpē \
UFMIP and MI – A Simple Definition:
UFMIP stands for Up Front Mortgage Insurance Premium and anyone who takes out an FHA loan is required to pay the premium. This lump sum is allowed to be financed into the loan, so you don’t have to actually write a check for it at closing – but make no mistake, you are still paying it. MI stands for Mortgage Insurance (in the case of FHA loans, this is the amount of money that you pay each month) and MI is diffferent than UFMIP. With FHA loans, you are required to pay both UFMIP and MI.
UFMIP and MI – An Expanded Definition:
Many people are aware that FHA doesn’t actually loan you money when you get an FHA loan, they only insure your loan. The insurance does the borrower no good, the insurance is in the event of a default, then FHA agrees to pay the lender, not the borrower.
And for this insurance guarantee (having an FHA insured loan), the person who wants an FHA loan gets to make insurance premium payments in the form of UFMIP and MI.
For years, HUD has required that anyone getting an FHA loan pay both UFMIP and MI so that is nothing new. It is also somewhat common (every couple of years or so) for HUD to adjust either the UFMIP requirement and/or the MI requirement which makes FHA loans either slightly more or less expensive depending on the adjustment.
Recently, HUD has made an announcement that the MI requirement will rise from .55% (annually) of the loan amount to .85 – .9% and has lowered the UFMIP requirement from 2.25%, down to 1%.
Some simple calculations of what UFMIP and MI requirements are going to be effective September 7, 2010 on a $200,000 mortgage:
UFMIP = $2,000
MI = $1,800 / year paid monthly ($150/month)
The net change is that on an overall basis, it is going to be more expensive to get an FHA loan. The UFMIP requirements went down, but the monthly MI increased and the overall effect is that your monthly mortgage payment will now be higher with FHA loans due to higher mortgage insurance costs.
Contact The Mortgage Mark with any questions!
http://www.themortgagemark.com
mwilkins@capitalfmc.com
Thursday, August 5, 2010
101 Ways to Improve your Credit Score
101 Ways to Improve Your Credit Score
You want to buy a house, a car, apply for a loan; pretty much anything these days require good credit. While some people may be in denial that the credit system should have this much influence on your life – the fact of the matter is that good credit goes a long way.
So why not improve it? Even if you have good credit, excellent credit will get you better mortgage rates on your home loan, potentially saving you thousands of dollars. Here are 101 tips to help you do just that – everything you ever wanted to know to be financially successful.
1.Pay your bills on time. Duh right? But this can significantly help your score, even if you make the minimum payment.
2.Keep your credit card balances low. Avoid owing a lot of money, makes payment time less miserable.
3.Don’t close unused credit card accounts. It lowers your credit score when they lose records on previous transactions – which happens when you close a card.
4.Avoid temptation and cut extra credit cards. It’s just too easy to charge on one more… And even easier to forget that 5th credit card bill.
5.Only keep bare minimum of credit cards available for charge. Finding a wallet big enough to contain all your credit cards is probably not the best idea in terms of controlled spending.
6.Don’t open extra credit card accounts. That 10% off your first purchase is probably not the best idea if you’re only going to use it once or twice.
7.Make sure you shop around for the best rate on a credit card. There’s no need to donate extra money towards the credit card companies.
8.Make sure you receive all the cards you applied for. You don’t want to take a chance that someone else got the one lost in the mail.
9.Keep track of where all your credit cards are.
10.Utilize free credit reports by going to annualcreditreport.com.
11.Check your credit report 3 times a year to monitor any identity theft or security issues. But be sure to stagger these reports so you can monitor it over time.
12.Opt for paperless statements for better security and to save trees.
13.Don’t buy bigger things because you can charge it, debt affects your credit score as well.
14.Don’t charge items you need months to pay off and isn’t a necessity.
15.Check around for the best interest rates on your home loan before going with that mortgage company.
16.If you’re divorced, make sure to separate your accounts after the divorce.
17.Start building your independent credit as soon as possible.
18.For those who are not in love, try to marry someone who has not declared bankruptcy – or even better, with excellent credit.
19.Meticulously examine your credit report and make sure to remove any inaccuracies.
20.Check back to make sure inaccuracies on your report has actually been removed.
21.Avoid too many inquires. Potential creditors will inquire about your credit score, too many in a short amount of time can affect it.
22.Don’t apply for too many credit cards, inquires, debt, multiple liabilities, etc all negatively impact your score.
23.Buy within your means.
24.Don’t buy that car, house, whatever that’s just out of your range.
25.Don’t put yourself in stressful debt situations.
26.Charge what you can pay off quickly.
27.Don’t skip payments; even paying the bare minimum is better.
28.Don’t default on a loan.
29.Don’t declare bankruptcy.
30.Lower your monthly payment by charging less and buying what you can afford.
31.Talk to your bank and try to waive extra fees and charges.
32.Avoid late fees. Banks charge around $40 per late payment – ouch!
33.Try and get late fees waived from your bank.
34.Avoid overdrafts.
35.Get overdraft protection.
36.Avoid signing up for extra monthly services you don’t need.
37.Evaluate all existing bills from monthly services; are you getting a lot of enjoyment from all of them?
38.Look into refinancing with a lower mortgage rate, interest rates are at a record low.
39.Talk to your creditors if you can’t make a payment ahead of time, they may allow you one freebie in return for a loan extension.
40.Don’t avoid mounting payments; procrastination often leads to more late fees.
41.Don’t close accounts with good payment history.
42.Remember while the credit reports are free, the actual score may not be. Quizzle offers your score for free without any credit card information.
43.Try not to carry a monthly balance if you don’t have to.
44.Don’t apply for more credit cards in an attempt to combat existing mounting debt.
45.Request to be an authorized user on your spouse’s accounts if they have good credit.
46.Avoid charge-off accounts, negative items such as this and bankruptcies can stay on your credit report for 7 years – ouch!
47.Take less vacations each year to pay off debt – it’s no fun, but it’ll give you a better rate on a mortgage later on.
48.Don’t exceed your credit limit. Seriously, that last purchase just isn’t worth it sometimes.
49.Look into secure credit cards to prevent overdraft fees which lower your credit score. Secure credit cards make you pay upfront, so your credit card bill “payments” are just deducted from what you’ve already paid.
50.Narrow what you buy with credit cards and find the right rewards program for that. For example, if you’re a student, get a card for what you spend the most money on – say books, and use that credit card only on books, and find a rewards program that offers more cash back on books. This way you’re not overcharging and letting debt get out of control.
51.Try not to charge over 30% of your credit limit, and never charge more than what you can pay off within a short amount of time.
52.Never use your credit cards for an impulse buy.
53.Don’t incur debt that generates interest – this makes monthly payments and budgeting far more difficult as it’s increasing the owed amount beyond what you’re spending.
54.Establish a bill paying day each month so you don’t forget any, and it’s a consistent method of preventing procrastination.
55.Build credit history – approximately 15% of your credit score comes from the length of your credit history.
56.Don’t be more than 30 days late on a credit card. If you have to be late on a card – your credit score isn’t affected until after 30 days.
57.Find a reputable credit counseling place for financial advice if you need it.
58.Be educated in your purchases and financial situation.
59.Watch out for future interest rates – many credit card companies offer 0% APR, but that goes up into an astronomical rate after the 12 months.
60.Don’t practice credit card arbitrage. This is when you borrow money from one credit card account and use it to invest in other places while paying this card off with another one that has 0% APR. While making money from your good credit may sound like a good idea – the juggling often leads to missed payments or opening too many credit card accounts which lower your score.
61.Don’t subscribe at freecreditreport.com if you don’t want to enter credit card numbers and have to cancel later.
62.Go to Quizzle if you want a free credit score (many other free credit reports charge you for the score).
63.Watch forms of “revolving credit” which lowers your credit if you have a high withstanding debt balance.
64.Don’t open accounts too rapidly and close together.
65.Checking your own credit report and score does not count as an inquiry which lowers your score.
66.Have a healthy balance of different types of loans and credit cards. Too many credit cards or too much taken out on a loan may hurt your credit score.
67.Set a goal of a credit score above 700 to encourage you to check it the 3 times a year to see if you’ve reached it.
68.Your salary does not affect your credit score, so even if your debt is relatively small compared to your income – charging over 50% of your credit limit still affects your score negatively.
69.Your age and location also does not affect your credit score, so build your credit with positive habits early.
70.For those with existing good credit scores – try using to leverage a good interest rate from your credit card company (but keep in mind they may use a different scoring system).
71.Do not cosign a loan with someone with bad credit.
72.Inquires from yourself or employers pulling reports does not affect your credit score.
73.Utilize your credit cards in a way that spreads out debt, so the amounts owed are low on each card.
74.Never close a credit card that still has a balance.
75.Don’t close your only credit card left with available credit.
76.Don’t close your only credit card.
77.Watch out for the universal default clause that allows creditors to increase your interest rate.
78.Make sure the grace period is long enough for what you need.
79.Make credit card and bill payments a few days before the due date to ensure it credits you properly and on time.
80.Don’t write bad checks. Bounced checks are tracked by banking systems and can affect your credit score.
81.If you already have bad credit, look into lenders that offer loans with flexibility, such as the FHA Express.
82.Get a co-signer with good credit to help you get that loan.
83.Try to keep a consistent employment record. Switching jobs every other month makes you look flighty to a potential lender regardless of credit scores.
84.Set an amount you can pay down your debt each month. Then make that the first payment you make when it comes time.
85.Pay down all high balanced credit cards equally – it’s ok to have remaining balances on all of them if it’s all low (this is better than 2 maxed out credit cards).
86.Make sure you know your limits on credit cards – if your limit is much lower than you thought (making your balance relatively higher), that may be attributing to your low credit score.
87.If you have old cards that never get used, use them periodically so that they are still getting as much weight in the credit scoring formula.
88.Charge small amounts with the old cards you never use, and pay it off quickly.
89.Lower your collection amounts – if you have inaccuracies on your credit report, consistently check and dispute them so you don’t have an outstanding collection amount.
90.If you miss one payment, or know you’re going to miss one, see if your lender will simply erase that from your credit history (providing that you’ve been a great borrower).
91.When reading your credit report: watch out for accounts that don’t say “current” or “paid as agreed”. Comments such as “paid charge-off” may hurt your credit, so make sure to dispute the wrongful listings.
92.If you see accounts listed as unpaid on your credit report, and you declared bankruptcy since then, make sure to correct the bureaus.
93.Credit limits on your credit report shown lower than they actually are, need to be disputed.
94.Negative items that are older than 7 years should have fallen off your report. (10 years for bankruptcy)
95.Don’t focus on misspellings of your name on credit reports (if identity theft is related then you’ll see open accounts you don’t recognize long before that).
96.Be patient. While changing your habits and budgeting hardcore is painfully clear to you, this takes awhile to show up on your credit score.
97.For beginners in building their credit – look into department store credit cards. These may be easier to get and also restrict where you can use it at, often only in that store.
98.Avoid credit repair scams. You can repair your credit through good budgeting and reasonable purchasing; don’t believe bad credit scores can be wiped away magically.
99.Don’t pay for multiple credit scores from different places. FICO score is the major one, but don’t feel like you need to pay for all of them.
100.Employers checking on your score when you apply for a job cannot affect your credit score negatively.
101.Having good credit is not rocket science. Budget well, keep track, and be educated in your finances and a good score will naturally follow. Go to Quizzle for a free credit score/report today to start managing your finances
Contact The Mortgage Mark with any questions http://www.themortgagemark.com/
mwilkins@capitalfmc.com
You want to buy a house, a car, apply for a loan; pretty much anything these days require good credit. While some people may be in denial that the credit system should have this much influence on your life – the fact of the matter is that good credit goes a long way.
So why not improve it? Even if you have good credit, excellent credit will get you better mortgage rates on your home loan, potentially saving you thousands of dollars. Here are 101 tips to help you do just that – everything you ever wanted to know to be financially successful.
1.Pay your bills on time. Duh right? But this can significantly help your score, even if you make the minimum payment.
2.Keep your credit card balances low. Avoid owing a lot of money, makes payment time less miserable.
3.Don’t close unused credit card accounts. It lowers your credit score when they lose records on previous transactions – which happens when you close a card.
4.Avoid temptation and cut extra credit cards. It’s just too easy to charge on one more… And even easier to forget that 5th credit card bill.
5.Only keep bare minimum of credit cards available for charge. Finding a wallet big enough to contain all your credit cards is probably not the best idea in terms of controlled spending.
6.Don’t open extra credit card accounts. That 10% off your first purchase is probably not the best idea if you’re only going to use it once or twice.
7.Make sure you shop around for the best rate on a credit card. There’s no need to donate extra money towards the credit card companies.
8.Make sure you receive all the cards you applied for. You don’t want to take a chance that someone else got the one lost in the mail.
9.Keep track of where all your credit cards are.
10.Utilize free credit reports by going to annualcreditreport.com.
11.Check your credit report 3 times a year to monitor any identity theft or security issues. But be sure to stagger these reports so you can monitor it over time.
12.Opt for paperless statements for better security and to save trees.
13.Don’t buy bigger things because you can charge it, debt affects your credit score as well.
14.Don’t charge items you need months to pay off and isn’t a necessity.
15.Check around for the best interest rates on your home loan before going with that mortgage company.
16.If you’re divorced, make sure to separate your accounts after the divorce.
17.Start building your independent credit as soon as possible.
18.For those who are not in love, try to marry someone who has not declared bankruptcy – or even better, with excellent credit.
19.Meticulously examine your credit report and make sure to remove any inaccuracies.
20.Check back to make sure inaccuracies on your report has actually been removed.
21.Avoid too many inquires. Potential creditors will inquire about your credit score, too many in a short amount of time can affect it.
22.Don’t apply for too many credit cards, inquires, debt, multiple liabilities, etc all negatively impact your score.
23.Buy within your means.
24.Don’t buy that car, house, whatever that’s just out of your range.
25.Don’t put yourself in stressful debt situations.
26.Charge what you can pay off quickly.
27.Don’t skip payments; even paying the bare minimum is better.
28.Don’t default on a loan.
29.Don’t declare bankruptcy.
30.Lower your monthly payment by charging less and buying what you can afford.
31.Talk to your bank and try to waive extra fees and charges.
32.Avoid late fees. Banks charge around $40 per late payment – ouch!
33.Try and get late fees waived from your bank.
34.Avoid overdrafts.
35.Get overdraft protection.
36.Avoid signing up for extra monthly services you don’t need.
37.Evaluate all existing bills from monthly services; are you getting a lot of enjoyment from all of them?
38.Look into refinancing with a lower mortgage rate, interest rates are at a record low.
39.Talk to your creditors if you can’t make a payment ahead of time, they may allow you one freebie in return for a loan extension.
40.Don’t avoid mounting payments; procrastination often leads to more late fees.
41.Don’t close accounts with good payment history.
42.Remember while the credit reports are free, the actual score may not be. Quizzle offers your score for free without any credit card information.
43.Try not to carry a monthly balance if you don’t have to.
44.Don’t apply for more credit cards in an attempt to combat existing mounting debt.
45.Request to be an authorized user on your spouse’s accounts if they have good credit.
46.Avoid charge-off accounts, negative items such as this and bankruptcies can stay on your credit report for 7 years – ouch!
47.Take less vacations each year to pay off debt – it’s no fun, but it’ll give you a better rate on a mortgage later on.
48.Don’t exceed your credit limit. Seriously, that last purchase just isn’t worth it sometimes.
49.Look into secure credit cards to prevent overdraft fees which lower your credit score. Secure credit cards make you pay upfront, so your credit card bill “payments” are just deducted from what you’ve already paid.
50.Narrow what you buy with credit cards and find the right rewards program for that. For example, if you’re a student, get a card for what you spend the most money on – say books, and use that credit card only on books, and find a rewards program that offers more cash back on books. This way you’re not overcharging and letting debt get out of control.
51.Try not to charge over 30% of your credit limit, and never charge more than what you can pay off within a short amount of time.
52.Never use your credit cards for an impulse buy.
53.Don’t incur debt that generates interest – this makes monthly payments and budgeting far more difficult as it’s increasing the owed amount beyond what you’re spending.
54.Establish a bill paying day each month so you don’t forget any, and it’s a consistent method of preventing procrastination.
55.Build credit history – approximately 15% of your credit score comes from the length of your credit history.
56.Don’t be more than 30 days late on a credit card. If you have to be late on a card – your credit score isn’t affected until after 30 days.
57.Find a reputable credit counseling place for financial advice if you need it.
58.Be educated in your purchases and financial situation.
59.Watch out for future interest rates – many credit card companies offer 0% APR, but that goes up into an astronomical rate after the 12 months.
60.Don’t practice credit card arbitrage. This is when you borrow money from one credit card account and use it to invest in other places while paying this card off with another one that has 0% APR. While making money from your good credit may sound like a good idea – the juggling often leads to missed payments or opening too many credit card accounts which lower your score.
61.Don’t subscribe at freecreditreport.com if you don’t want to enter credit card numbers and have to cancel later.
62.Go to Quizzle if you want a free credit score (many other free credit reports charge you for the score).
63.Watch forms of “revolving credit” which lowers your credit if you have a high withstanding debt balance.
64.Don’t open accounts too rapidly and close together.
65.Checking your own credit report and score does not count as an inquiry which lowers your score.
66.Have a healthy balance of different types of loans and credit cards. Too many credit cards or too much taken out on a loan may hurt your credit score.
67.Set a goal of a credit score above 700 to encourage you to check it the 3 times a year to see if you’ve reached it.
68.Your salary does not affect your credit score, so even if your debt is relatively small compared to your income – charging over 50% of your credit limit still affects your score negatively.
69.Your age and location also does not affect your credit score, so build your credit with positive habits early.
70.For those with existing good credit scores – try using to leverage a good interest rate from your credit card company (but keep in mind they may use a different scoring system).
71.Do not cosign a loan with someone with bad credit.
72.Inquires from yourself or employers pulling reports does not affect your credit score.
73.Utilize your credit cards in a way that spreads out debt, so the amounts owed are low on each card.
74.Never close a credit card that still has a balance.
75.Don’t close your only credit card left with available credit.
76.Don’t close your only credit card.
77.Watch out for the universal default clause that allows creditors to increase your interest rate.
78.Make sure the grace period is long enough for what you need.
79.Make credit card and bill payments a few days before the due date to ensure it credits you properly and on time.
80.Don’t write bad checks. Bounced checks are tracked by banking systems and can affect your credit score.
81.If you already have bad credit, look into lenders that offer loans with flexibility, such as the FHA Express.
82.Get a co-signer with good credit to help you get that loan.
83.Try to keep a consistent employment record. Switching jobs every other month makes you look flighty to a potential lender regardless of credit scores.
84.Set an amount you can pay down your debt each month. Then make that the first payment you make when it comes time.
85.Pay down all high balanced credit cards equally – it’s ok to have remaining balances on all of them if it’s all low (this is better than 2 maxed out credit cards).
86.Make sure you know your limits on credit cards – if your limit is much lower than you thought (making your balance relatively higher), that may be attributing to your low credit score.
87.If you have old cards that never get used, use them periodically so that they are still getting as much weight in the credit scoring formula.
88.Charge small amounts with the old cards you never use, and pay it off quickly.
89.Lower your collection amounts – if you have inaccuracies on your credit report, consistently check and dispute them so you don’t have an outstanding collection amount.
90.If you miss one payment, or know you’re going to miss one, see if your lender will simply erase that from your credit history (providing that you’ve been a great borrower).
91.When reading your credit report: watch out for accounts that don’t say “current” or “paid as agreed”. Comments such as “paid charge-off” may hurt your credit, so make sure to dispute the wrongful listings.
92.If you see accounts listed as unpaid on your credit report, and you declared bankruptcy since then, make sure to correct the bureaus.
93.Credit limits on your credit report shown lower than they actually are, need to be disputed.
94.Negative items that are older than 7 years should have fallen off your report. (10 years for bankruptcy)
95.Don’t focus on misspellings of your name on credit reports (if identity theft is related then you’ll see open accounts you don’t recognize long before that).
96.Be patient. While changing your habits and budgeting hardcore is painfully clear to you, this takes awhile to show up on your credit score.
97.For beginners in building their credit – look into department store credit cards. These may be easier to get and also restrict where you can use it at, often only in that store.
98.Avoid credit repair scams. You can repair your credit through good budgeting and reasonable purchasing; don’t believe bad credit scores can be wiped away magically.
99.Don’t pay for multiple credit scores from different places. FICO score is the major one, but don’t feel like you need to pay for all of them.
100.Employers checking on your score when you apply for a job cannot affect your credit score negatively.
101.Having good credit is not rocket science. Budget well, keep track, and be educated in your finances and a good score will naturally follow. Go to Quizzle for a free credit score/report today to start managing your finances
Contact The Mortgage Mark with any questions http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Wednesday, August 4, 2010
Was my loan funded by Fannie, Freddie or neither?
Posted: 02 Aug 2010 09:38 AM PDT
I have likely sent more than 200 files this year alone to Karen in my office with a sticky note that says, “Fannie / Freddie?” She will send it back to me, most of the time circling one of them, or writing “neither” right below.
Everyone who owns a TV or radio recognizes by now these names as mortgage lenders. Most also associate them closely with what went wrong the past few years. Did they lend too liberally? Most agree that they did. Do they still? The jury’s out on that one. Who made them do it? Well, let’s not talk politics. Did they act alone? Not a chance.
That being said, most people are unaware that their own mortgage was likely funded by one of them.
When I ask a client if theirs is a Freddie or Fannie backed loan, the most common response I get is “I don’t think so.” And yet, in the past decade over half of all loans and most fixed rate loans (over 90%) were funded by one of those two giant lenders.
So how is it that I don’t know who lent me the money? Here’s why: The lender you send your payments to is simply servicing the loan for Fannie or Freddie. It collects payments, works out tough situations, and arranges the payoffs when that time comes. Fannie or Freddie lent the money behind the scenes and earns the return or takes the loss net of the servicing fees of the bank. It’s a good system. Each organization specializes in what it does best. At least that’s how it’s designed. Losses are reserved for those who take the risk and have the potential to reap the reward.
So the odds are pretty good that your loan is backed by Freddie or Fannie. And that’s okay. It doesn’t make you a bad person if it is. It’s just a fact—and, as it turns out, one that may be of some benefit to you now.
Here’s the point: If your loan was funded by Fannie Mae or Freddie Mac there may be refinance options available to you that otherwise would not exist, and if you are paying on time, you will likely be eligible for them.
You can check your loan here:
Does Fannie Mae Own Your Mortgage? Loan Lookup Tool
Avoiding Foreclosure – Does Freddie Mac Own Your Mortgage?
(If you don’t find yours here, call your lender. And be sure that they’re sure—sometimes legitimate matches don’t show up)
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Posted: 02 Aug 2010 09:38 AM PDT
I have likely sent more than 200 files this year alone to Karen in my office with a sticky note that says, “Fannie / Freddie?” She will send it back to me, most of the time circling one of them, or writing “neither” right below.
Everyone who owns a TV or radio recognizes by now these names as mortgage lenders. Most also associate them closely with what went wrong the past few years. Did they lend too liberally? Most agree that they did. Do they still? The jury’s out on that one. Who made them do it? Well, let’s not talk politics. Did they act alone? Not a chance.
That being said, most people are unaware that their own mortgage was likely funded by one of them.
When I ask a client if theirs is a Freddie or Fannie backed loan, the most common response I get is “I don’t think so.” And yet, in the past decade over half of all loans and most fixed rate loans (over 90%) were funded by one of those two giant lenders.
So how is it that I don’t know who lent me the money? Here’s why: The lender you send your payments to is simply servicing the loan for Fannie or Freddie. It collects payments, works out tough situations, and arranges the payoffs when that time comes. Fannie or Freddie lent the money behind the scenes and earns the return or takes the loss net of the servicing fees of the bank. It’s a good system. Each organization specializes in what it does best. At least that’s how it’s designed. Losses are reserved for those who take the risk and have the potential to reap the reward.
So the odds are pretty good that your loan is backed by Freddie or Fannie. And that’s okay. It doesn’t make you a bad person if it is. It’s just a fact—and, as it turns out, one that may be of some benefit to you now.
Here’s the point: If your loan was funded by Fannie Mae or Freddie Mac there may be refinance options available to you that otherwise would not exist, and if you are paying on time, you will likely be eligible for them.
You can check your loan here:
Does Fannie Mae Own Your Mortgage? Loan Lookup Tool
Avoiding Foreclosure – Does Freddie Mac Own Your Mortgage?
(If you don’t find yours here, call your lender. And be sure that they’re sure—sometimes legitimate matches don’t show up)
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Tuesday, August 3, 2010
Five Types of Refinance Loans
Five Types of Refinance Loans
With mortgage rates hovering at or near record lows, there’s been a lot of interest in refinancing lately.
Heck, you may be able to lower your interest rate by 1% or more, resulting in some serious savings every month.
But when inquiring about a refinance, you may be wondering which type is right for you in your current situation.
So let’s take a look at five different types of refinance loans:
Rate and Term Refinance
The rate and term refinance is is the most common type of refinance, where the original loan is paid off and replaced with a fresh loan with a new rate and set of terms.
For example, you may refinance your adjustable-rate mortgage and opt for a 30-year fixed instead to take advantage of the stability.
This type of refinance is perfect for those simply looking to lower their rate and/or change loan programs.
Cash Out Refinance
On the other hand, if you’re in need of cash, a cash-out refinance might be just the ticket.
It involves pulling out equity from your home, resulting in a higher loan balance. Ideally, you can pull out cash and snag a lower interest rate all at the same time.
Of course, you’ll be stuck with a larger loan amount, which will raise your monthly mortgage payment. However, you may be able to offset that rise with a lower interest rate on the new loan.
Cash In Refinance
There are times when you may want (or need) to bring in cash while refinancing, perhaps to keep the loan amount below a certain threshold or the loan-to-value below a certain limit.
A cash-in refinance allows you to do just that, resulting in a smaller loan amount with a reduced monthly payment.
Home Affordable Refinance (HARP)
This next refinance option was born out of the ongoing mortgage crisis.
The Home Affordable Refinance Program allows struggling borrowers to refinance up to 125% of the value of their home, helping “underwater” homeowners take advantage of the low interest rates on offer.
But the mortgage must be current, tied to a 1-4 unit owner-occupied home, and guaranteed by either Fannie Mae or Freddie Mac.
Short Refinance
Lastly, a short refinance is a transaction in which your bank or mortgage lender agrees to pay off your existing mortgage and replace it with new a loan with a reduced balance, essentially helping you avoid foreclosure.
They aren’t easy to come by, but some lenders may be offering them as an alternative to a short sale, or worse, foreclosure.
Be sure to go over all your options with your loan officer or mortgage broker to ensure you end up with the right product.
Contact The Mortgage Mark with any questions http://www.themortgagemark.com/
mwilkins@capitalfmc.com
With mortgage rates hovering at or near record lows, there’s been a lot of interest in refinancing lately.
Heck, you may be able to lower your interest rate by 1% or more, resulting in some serious savings every month.
But when inquiring about a refinance, you may be wondering which type is right for you in your current situation.
So let’s take a look at five different types of refinance loans:
Rate and Term Refinance
The rate and term refinance is is the most common type of refinance, where the original loan is paid off and replaced with a fresh loan with a new rate and set of terms.
For example, you may refinance your adjustable-rate mortgage and opt for a 30-year fixed instead to take advantage of the stability.
This type of refinance is perfect for those simply looking to lower their rate and/or change loan programs.
Cash Out Refinance
On the other hand, if you’re in need of cash, a cash-out refinance might be just the ticket.
It involves pulling out equity from your home, resulting in a higher loan balance. Ideally, you can pull out cash and snag a lower interest rate all at the same time.
Of course, you’ll be stuck with a larger loan amount, which will raise your monthly mortgage payment. However, you may be able to offset that rise with a lower interest rate on the new loan.
Cash In Refinance
There are times when you may want (or need) to bring in cash while refinancing, perhaps to keep the loan amount below a certain threshold or the loan-to-value below a certain limit.
A cash-in refinance allows you to do just that, resulting in a smaller loan amount with a reduced monthly payment.
Home Affordable Refinance (HARP)
This next refinance option was born out of the ongoing mortgage crisis.
The Home Affordable Refinance Program allows struggling borrowers to refinance up to 125% of the value of their home, helping “underwater” homeowners take advantage of the low interest rates on offer.
But the mortgage must be current, tied to a 1-4 unit owner-occupied home, and guaranteed by either Fannie Mae or Freddie Mac.
Short Refinance
Lastly, a short refinance is a transaction in which your bank or mortgage lender agrees to pay off your existing mortgage and replace it with new a loan with a reduced balance, essentially helping you avoid foreclosure.
They aren’t easy to come by, but some lenders may be offering them as an alternative to a short sale, or worse, foreclosure.
Be sure to go over all your options with your loan officer or mortgage broker to ensure you end up with the right product.
Contact The Mortgage Mark with any questions http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Monday, August 2, 2010
Mortgage Definition: No Money Down Mortgage
Today’s Mortgage Definition is: No Money Down Mortgage
Main Entry: no mo·ney down mort·gage
Pronunciation: : \ˈnō ·ˈ mə-nē · ˈdaun ˈ· mȯr-gij\
No Money Down Mortgage – A Simple Definition:
A no money down mortgage means that it is possible to get financing for a home where you are not required by the lender to make a down payment.
Essentially, if you qualify for a no money down mortgage you can agree to buy the home and not be required to make a down payment.
You may need to cover the closing costs or other associated fees (unless you get the seller to pay them on your behalf), but are not required to make a down payment.
No Money Down Mortgage – An Expanded Definition:
One of the most common questions I get today is “can I get a mortgage with no money down”? And the answer is…
Maybe.
No money down mortgage options used to be plentiful – there were multiple programs that would allow you to buy a home without robbing your IRA or begging your parents for a gift. But with the credit crunch and tighter guidelines, many programs that used to be available have been eliminated.
Except for two.
The VA loan program and the USDA loan program both have no money down options available for people who can qualify for their programs.
The VA No Money Down Program
When financing a home with a VA loan, you are not required to have a down payment, there is no monthly mortgage insurance and the VA funding fee (required to be paid up front) can be financed into the loan.
In order to qualify for a VA loan, you must have a certificate of eligibility and a DD214.
The maximum loan amount for VA loans is generally speaking currently $417,000 and in some cases higher based on the Veteran’s entitlement amount.
The USDA No Money Down Program
The bad news about the USDA loan program is that it has been so popular in the last couple of years that they have run out of funding for 2010. The good news is that they are on the brink of getting more funding – and many lenders are accepting applications for the USDA loan program because funding is on the way.
Legislation that raises the “guarantee fee” to 3.5% and designed to make the USDA program self sufficient so it won’t run out of funds again is currently headed to President Obama’s desk for signature.
With the USDA loan program, the two main qualification points for the USDA loan program are that the property you are interested in purchasing must be eligible for USDA financing and you can’t make more than 115% of the median income for the county where you live.
No money down mortgage programs.
They are still available… if you meet the loan program criteria.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mwilkins@capitalfmc.com
Main Entry: no mo·ney down mort·gage
Pronunciation: : \ˈnō ·ˈ mə-nē · ˈdaun ˈ· mȯr-gij\
No Money Down Mortgage – A Simple Definition:
A no money down mortgage means that it is possible to get financing for a home where you are not required by the lender to make a down payment.
Essentially, if you qualify for a no money down mortgage you can agree to buy the home and not be required to make a down payment.
You may need to cover the closing costs or other associated fees (unless you get the seller to pay them on your behalf), but are not required to make a down payment.
No Money Down Mortgage – An Expanded Definition:
One of the most common questions I get today is “can I get a mortgage with no money down”? And the answer is…
Maybe.
No money down mortgage options used to be plentiful – there were multiple programs that would allow you to buy a home without robbing your IRA or begging your parents for a gift. But with the credit crunch and tighter guidelines, many programs that used to be available have been eliminated.
Except for two.
The VA loan program and the USDA loan program both have no money down options available for people who can qualify for their programs.
The VA No Money Down Program
VA Loans Require No Down Payment
In order to qualify for a VA loan, you must have a certificate of eligibility and a DD214.
The maximum loan amount for VA loans is generally speaking currently $417,000 and in some cases higher based on the Veteran’s entitlement amount.
The USDA No Money Down Program
The bad news about the USDA loan program is that it has been so popular in the last couple of years that they have run out of funding for 2010. The good news is that they are on the brink of getting more funding – and many lenders are accepting applications for the USDA loan program because funding is on the way.
Legislation that raises the “guarantee fee” to 3.5% and designed to make the USDA program self sufficient so it won’t run out of funds again is currently headed to President Obama’s desk for signature.
With the USDA loan program, the two main qualification points for the USDA loan program are that the property you are interested in purchasing must be eligible for USDA financing and you can’t make more than 115% of the median income for the county where you live.
No money down mortgage programs.
They are still available… if you meet the loan program criteria.
Contact The Mortgage Mark with any questions! http://www.themortgagemark.com
mwilkins@capitalfmc.com
Friday, July 30, 2010
Later than Expected, 4.5% Fixed rate Mortgages!
Posted on Fri, Jul. 30, 2010
Later than expected, 4.5 percent fixed-rate mortgage arrives
By Alan J. Heavens
Inquirer Real Estate Writer
The 4.5 percent fixed-rate mortgage is here, although more than 14 months late.
That magic number, or a close approximation, was reached Thursday, when Freddie Mac reported a 30-year rate of 4.54 percent.
The possibility first arose in early 2009, when the government began mass-purchasing mortgages from Fannie Mae and Freddie Mac to prop up housing.
Just about everyone predicted the rates would hit what builders and real estate agents call a "sweet spot" in a few months, and the housing recovery would begin, especially if consumer confidence had recovered to prerecession levels as well.
"What gets people buying again?" asked mortgage broker Peter Buchsbaum of Arlington Capital Mortgage Corp., of Horsham. "The answer is confidence - confidence in the value not falling and confidence they'll still have a job."
So even if behind schedule, the 4.5 percent rate has arrived, but in an environment that buyers perceive as anything but inviting.
Consumer confidence fell again in July, and why?
Jobs and sagging real estate values.
"People will start buying houses again when they feel securely employed, house prices are rising, and they can make low down payments," Bankrate.com columnist Holden Lewis said.
"I don't see any of those conditions coming anytime soon, at least in most parts of the country," Lewis said. "Job security is the most important factor. Who feels secure in their job? Nobody, except the people who work in the unemployment office."
Suburban home builder Marshal Granor said that "when we went under 6 percent, I was amazed and excited, but 4.5 percent artificially increases affordability. If rates start to climb, it will severely dampen already spotty sales."
Moody's Economy.com chief economist Mark Zandi concurs.
"The key to more home buying is more jobs," he said. "Once job growth kicks in earnestly, household growth will ramp up and so will demand."
Zandi added that despite these "extraordinarily low rates," many prospective buyers have little savings for a down payment and tattered credit scores.
The securely employed, however, appear to be nibbling at the bait.
"There's a new group of buyers just entering the market because of the low rates," said Art Herling, regional vice president of Long & Foster Real Estate Inc., although the weather is keeping them "from totally getting into the buying mood."
Buchsbaum also reports "a greater influx of buyers than past summers."
Philadelphia Realtor Fred Glick compared the economy to a driver with his "feet on both the accelerator and the brake at the same time."
"Until the jobs are produced, the banks start lending, and the underwriting guidelines start to make sense, we'll be caught in this conundrum," Glick said.
What about home prices?
Although the Case-Shiller Home Price Index rose again in May, economists say they believe that prices nationally will drop 6 percent to 8 percent more through the end of the year.
May's increase, economists say, is attributable to the federal tax credit that expired April 30, and to seasonal buying patterns that typically boost prices.
The indexes are three-month moving averages, "so May's readings reflect transactions in 20 markets that closed in March, April, and May," IHS Global Insight Inc. economist Patrick Newport said.
With the credit gone, "we expect them to rise for two months, then start to decline," with recovery in 2011.
Although Philadelphia's prices rose 1 percent in the second quarter of 2010 from the same period in 2009, Fiserv Case-Shiller predicted that prices here would fall 2.8 percent in the next year.
That means a lot of buyers will remain on the sidelines until prices level off completely. The lowest fixed interest rates in 50 years will not be enough to draw them in.
"Many people are bottom-fishing," Herling said.
On the other hand, "People are starting to view houses as places to live and build equity over time, not financial assets where they can make a killing," said economist Joel L. Naroff of Holland, Bucks County. If that is the case, demand for housing would increase much more moderately.
"Add to that the lack of equity and the difficulty in qualifying for a mortgage, and the outlook for sales is not great," Naroff said.
Interest rates are rock-bottom because the economy is rock-bottom. As more investors shift their money out of a volatile stock market and to the safety of Treasurys, rates will drop further, at least in theory.
"I think you'll see them stay low until there is real improvement in employment," said Jerome Scarpello of Leo Mortgage in Spring House.
"No one can say for sure how low they will go, but what I can guarantee is that they will go higher," he said.
Assuming "the debt crisis abates and the economy doesn't double-dip, both of which seem more than likely," Zandi expects rates to close in on 5 percent by year's end and over 6 percent next year.
"I wouldn't bet my mortgage payment on rates remaining this low for a long time," Lewis said. "If I were refinancing, I would lock now instead of floating in hopes of rates falling further. I think there's a greater possibility of rates rising than falling."
"Then again, I said the same thing when rates were 5 percent," Lewis said. "So what the [heck] do I know?"
Read more: http://www.philly.com/philly/business/20100730_Later_than_expected__4_5_percent_fixed-rate_mortgage_arrives.html#ixzz0vBGVNAWt
Watch sports videos you won't find anywhere else
Contact the Mortgage Mark with any questions!
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Later than expected, 4.5 percent fixed-rate mortgage arrives
By Alan J. Heavens
Inquirer Real Estate Writer
The 4.5 percent fixed-rate mortgage is here, although more than 14 months late.
That magic number, or a close approximation, was reached Thursday, when Freddie Mac reported a 30-year rate of 4.54 percent.
The possibility first arose in early 2009, when the government began mass-purchasing mortgages from Fannie Mae and Freddie Mac to prop up housing.
Just about everyone predicted the rates would hit what builders and real estate agents call a "sweet spot" in a few months, and the housing recovery would begin, especially if consumer confidence had recovered to prerecession levels as well.
"What gets people buying again?" asked mortgage broker Peter Buchsbaum of Arlington Capital Mortgage Corp., of Horsham. "The answer is confidence - confidence in the value not falling and confidence they'll still have a job."
So even if behind schedule, the 4.5 percent rate has arrived, but in an environment that buyers perceive as anything but inviting.
Consumer confidence fell again in July, and why?
Jobs and sagging real estate values.
"People will start buying houses again when they feel securely employed, house prices are rising, and they can make low down payments," Bankrate.com columnist Holden Lewis said.
"I don't see any of those conditions coming anytime soon, at least in most parts of the country," Lewis said. "Job security is the most important factor. Who feels secure in their job? Nobody, except the people who work in the unemployment office."
Suburban home builder Marshal Granor said that "when we went under 6 percent, I was amazed and excited, but 4.5 percent artificially increases affordability. If rates start to climb, it will severely dampen already spotty sales."
Moody's Economy.com chief economist Mark Zandi concurs.
"The key to more home buying is more jobs," he said. "Once job growth kicks in earnestly, household growth will ramp up and so will demand."
Zandi added that despite these "extraordinarily low rates," many prospective buyers have little savings for a down payment and tattered credit scores.
The securely employed, however, appear to be nibbling at the bait.
"There's a new group of buyers just entering the market because of the low rates," said Art Herling, regional vice president of Long & Foster Real Estate Inc., although the weather is keeping them "from totally getting into the buying mood."
Buchsbaum also reports "a greater influx of buyers than past summers."
Philadelphia Realtor Fred Glick compared the economy to a driver with his "feet on both the accelerator and the brake at the same time."
"Until the jobs are produced, the banks start lending, and the underwriting guidelines start to make sense, we'll be caught in this conundrum," Glick said.
What about home prices?
Although the Case-Shiller Home Price Index rose again in May, economists say they believe that prices nationally will drop 6 percent to 8 percent more through the end of the year.
May's increase, economists say, is attributable to the federal tax credit that expired April 30, and to seasonal buying patterns that typically boost prices.
The indexes are three-month moving averages, "so May's readings reflect transactions in 20 markets that closed in March, April, and May," IHS Global Insight Inc. economist Patrick Newport said.
With the credit gone, "we expect them to rise for two months, then start to decline," with recovery in 2011.
Although Philadelphia's prices rose 1 percent in the second quarter of 2010 from the same period in 2009, Fiserv Case-Shiller predicted that prices here would fall 2.8 percent in the next year.
That means a lot of buyers will remain on the sidelines until prices level off completely. The lowest fixed interest rates in 50 years will not be enough to draw them in.
"Many people are bottom-fishing," Herling said.
On the other hand, "People are starting to view houses as places to live and build equity over time, not financial assets where they can make a killing," said economist Joel L. Naroff of Holland, Bucks County. If that is the case, demand for housing would increase much more moderately.
"Add to that the lack of equity and the difficulty in qualifying for a mortgage, and the outlook for sales is not great," Naroff said.
Interest rates are rock-bottom because the economy is rock-bottom. As more investors shift their money out of a volatile stock market and to the safety of Treasurys, rates will drop further, at least in theory.
"I think you'll see them stay low until there is real improvement in employment," said Jerome Scarpello of Leo Mortgage in Spring House.
"No one can say for sure how low they will go, but what I can guarantee is that they will go higher," he said.
Assuming "the debt crisis abates and the economy doesn't double-dip, both of which seem more than likely," Zandi expects rates to close in on 5 percent by year's end and over 6 percent next year.
"I wouldn't bet my mortgage payment on rates remaining this low for a long time," Lewis said. "If I were refinancing, I would lock now instead of floating in hopes of rates falling further. I think there's a greater possibility of rates rising than falling."
"Then again, I said the same thing when rates were 5 percent," Lewis said. "So what the [heck] do I know?"
Read more: http://www.philly.com/philly/business/20100730_Later_than_expected__4_5_percent_fixed-rate_mortgage_arrives.html#ixzz0vBGVNAWt
Watch sports videos you won't find anywhere else
Contact the Mortgage Mark with any questions!
http://www.themortgagemark.com/
mwilkins@capitalfmc.com
Thursday, July 22, 2010
Today’s Mortgage Definition is: Appraisal Cutting
Today’s Mortgage Definition is: Appraisal Cutting
Main Entry: ap·prais·al cut·ting
Pronunciation: \ə-ˈprā-zəl ˈkə-tiŋ\
Appraisal Cutting – A Simple Definition:
When you buy a new home or refinance an existing home, you typically will be required to obtain an appraisal for the property. Getting an appraisal done involves hiring a licensed appraiser who produces an opinion of value in the form of an “official” appraisal. This number is known as the “appraised value” of the property.
Occasionally, when an underwriter reviews the appraisal provided by the licensed appraiser, they will engage in the sport of Appraisal Cutting by reducing the appraised value provided by the appraiser by a random, arbitrary number.
Appraisal Cutting – An Expanded Definition:
The sport of appraisal cutting has long been practiced by many underwriters and has left plenty of potential homeowners wondering what exactly happened. In my experience, it was a common practice for many transactions involving cash-out-refinances but I thought it had tapered off recently. Apparently, it still happens enough to catch the eye of Fannie Mae who recently announced that they are outlawing the practice of appraisal cutting by underwriters.
Effective Sept. 1, Fannie Mae is prohibiting lenders who sell loans to them from changing appraisers’ appraised value numbers. In guidance issued June 30, Fannie Mae said that if an underwriter has an issue with an appraised value, they must contact appraisers to “resolve” any disagreements about the valuation. If it is not possible to resolve an opinion-of-value dispute, then the only option available to the lender is to order a second appraisal – they are no longer allowed to just chop the value that the appraisal states.
Which makes sense (to me at least) if you think about it – an appraiser goes through the licensing process and is a practicing licensed professional who physcially inspects the property and then comes up with an opinion of value based on his expert opinon according to standard methodolgies.
If an underwriter happens to have a different opinion of what a property is worth, does it make any sense to allow them to engage in the sport of appraisal cutting?
According to Fannie Mae, not any more.
Contact me at mwilkins@capitalfmc.com or www.themortgagemark.com with any questions
Monday, July 19, 2010
How long does it take to close on a home mortgage?
Turn that around with another question, “how long does it take to get to work?” Yes it is that variable and those variations come from every aspect of the loan process so we must examine the major processes in closing a loan. By the end of this short article you should know how to help your loan close quickly and smoothly as possible. Just as the answer for one person getting to work on one particular day can be quite different for another person in another city mortgage closing times are subjective and cannot be stamped with a cookie cutter type guarantee.
With every loan the first step is the application. This step takes only a short time but if it is completed sloppily or with inaccurate answers to the questions there could be delays later in the process. To make the process go quicker and more smoothly you should have your most recent pay stub and your bank account information, including your account numbers and balances, readily available. There are four pages to the application and if you have those items ready you should easily be able to complete an accurate application in less than thirty minutes.
Next is the pre-approval process which can take as little as 15 minutes if you are getting only an automated approval. Essentially the loan officer will “pull your credit” and import it back into the application software then digitally submit the entire application and credit to an automated underwriting engine (essentially a network based computer application). If they receive what is called an “approve eligible” (eligible to be approved) you will then have an automated underwriting pre-approval decision. The application along with all supporting documentation must later be submitted to a human underwriter to verify the “findings” delivered by the automated underwriter. Other scenarios can occur but those are beyond the scope of this article.
If you are refinancing or have already made an offer which has been accepted on a home purchase (never a good idea unless you have already been pre-approved) then all you need to do is sign the application package along with federal and state disclosures and perhaps some lender specific forms along with reviewing the federally mandated Good Faith Estimate (no signature required but you must review it). After this is provided, initially, there is a 7 day waiting period before the loan can be consummated. If the GFE has to be redisclosed due to significant changes in particular prices there is an additional 3 day mandatory waiting period.
During the mandated waiting period after the borrower has signed the “Intent to Proceed” which is an acceptance of the terms proposed on the GFE the loan officer should order the appraisal, title, proof of insurance, proof of income/employment verification, and any other verifications. You, the borrower, should be prepared to provide all of the following for each borrower even if you are not asked for it. Additionally the underwriter may ask for something not on this list: the last 1 month’s worth of pay stubs, the last two months of all bank statements all pages, up to three years of tax returns all schedules all pages, the name address and phone number for all of your employers over the last 2 years, the name address and phone number for all of your landlords over the last 2 years, the last 2 years of W2s from all jobs, copies of government issued identification, letters of explanation if you have applied for any credit in the last 90 days or so, and any other documents the loan officer asks for.
Sound like a lot? Remember, you are asking a complete stranger to buy a home for you and trust you to repay them a very small portion of the sales price every month. Be glad you are getting a loan at all in this economy!
All said if everything falls into place a good lender, like the author’s company, could conceivably close your loan in as few 10 days. However that is highly unlikely due to many reasons not limited to waiting on the fully executed sales agreement to return, any title/appraisal issues to be resolved, and possibly even for you, the borrower, to find all of your paperwork. Therefore the more accurate truth is it takes anywhere from 21 to 30 days to close most standard loans for the average buyer or home owner by most direct lenders. Mortgage brokers and banks may take a little longer. If you expect to close or have been told you can close in a shorter time prepare to be disappointed and be handed a fresh copy of the disclaimers from the lender who guaranteed you a shorter closing.. If your expectations are reasonable and the lender does their job you’ll close quickly and smoothly.
To wrap it all up if you have all of your documentation ready including the fully executed sales contract it is much more possible to close your loan quickly. It is not, however, recommended to find yourself in a position where if you do not close in 10 days something not so pleasant will occur in your life.
Contact The Mortgage Mark with any questions. http://www.themortgagemark.com/ mwilkins@capitalfmc.com
With every loan the first step is the application. This step takes only a short time but if it is completed sloppily or with inaccurate answers to the questions there could be delays later in the process. To make the process go quicker and more smoothly you should have your most recent pay stub and your bank account information, including your account numbers and balances, readily available. There are four pages to the application and if you have those items ready you should easily be able to complete an accurate application in less than thirty minutes.
Next is the pre-approval process which can take as little as 15 minutes if you are getting only an automated approval. Essentially the loan officer will “pull your credit” and import it back into the application software then digitally submit the entire application and credit to an automated underwriting engine (essentially a network based computer application). If they receive what is called an “approve eligible” (eligible to be approved) you will then have an automated underwriting pre-approval decision. The application along with all supporting documentation must later be submitted to a human underwriter to verify the “findings” delivered by the automated underwriter. Other scenarios can occur but those are beyond the scope of this article.
If you are refinancing or have already made an offer which has been accepted on a home purchase (never a good idea unless you have already been pre-approved) then all you need to do is sign the application package along with federal and state disclosures and perhaps some lender specific forms along with reviewing the federally mandated Good Faith Estimate (no signature required but you must review it). After this is provided, initially, there is a 7 day waiting period before the loan can be consummated. If the GFE has to be redisclosed due to significant changes in particular prices there is an additional 3 day mandatory waiting period.
During the mandated waiting period after the borrower has signed the “Intent to Proceed” which is an acceptance of the terms proposed on the GFE the loan officer should order the appraisal, title, proof of insurance, proof of income/employment verification, and any other verifications. You, the borrower, should be prepared to provide all of the following for each borrower even if you are not asked for it. Additionally the underwriter may ask for something not on this list: the last 1 month’s worth of pay stubs, the last two months of all bank statements all pages, up to three years of tax returns all schedules all pages, the name address and phone number for all of your employers over the last 2 years, the name address and phone number for all of your landlords over the last 2 years, the last 2 years of W2s from all jobs, copies of government issued identification, letters of explanation if you have applied for any credit in the last 90 days or so, and any other documents the loan officer asks for.
Sound like a lot? Remember, you are asking a complete stranger to buy a home for you and trust you to repay them a very small portion of the sales price every month. Be glad you are getting a loan at all in this economy!
All said if everything falls into place a good lender, like the author’s company, could conceivably close your loan in as few 10 days. However that is highly unlikely due to many reasons not limited to waiting on the fully executed sales agreement to return, any title/appraisal issues to be resolved, and possibly even for you, the borrower, to find all of your paperwork. Therefore the more accurate truth is it takes anywhere from 21 to 30 days to close most standard loans for the average buyer or home owner by most direct lenders. Mortgage brokers and banks may take a little longer. If you expect to close or have been told you can close in a shorter time prepare to be disappointed and be handed a fresh copy of the disclaimers from the lender who guaranteed you a shorter closing.. If your expectations are reasonable and the lender does their job you’ll close quickly and smoothly.
To wrap it all up if you have all of your documentation ready including the fully executed sales contract it is much more possible to close your loan quickly. It is not, however, recommended to find yourself in a position where if you do not close in 10 days something not so pleasant will occur in your life.
Contact The Mortgage Mark with any questions. http://www.themortgagemark.com/ mwilkins@capitalfmc.com
Summary of FHA changes for 2010
What was just hearsay and what has actually happened?
A summary of FHA changes since the first of the year, 2010.
The main changes are…
1. 3.5% down payment. This happened last year, actually, from the 3% down mark of previous years. The amount is an extra $500 from a home buyer purchasing a $100,000 home. We didn’t even feel the change – if HUD gets excited about lending $500 less, then I say we let them have this one. The upside is that the payment gets better by $3 to $5 per month.
2. 2.25% Up-Front Mortgage Insurance premium. This used to be 1.75%. On a $100,000 mortgage it means an extra $500 in the loan amount and around $3 to $5 per month more in the payment for a 30 year or 15 year fixed loan respectively. Yes, the increase here exactly offsets the savings in #1 above.
3. The monthly mortgage insurance premium will also increase in certain situations. Right now the monthly amount is .55% per year in most cases, and on a 15-year fixed loan with 10% down, the monthly is not required. FHA intends to add tiers to their Mortgage Insurance Pricing. For lower credit scores, you pay higher MI. For less down, your rate will be higher. For a combination of the two, the rate is higher still. The good news here is that FHA becomes more palatable for more people. If you have good qualifications, then you’ll shoulder less of the cost of the riskier loans. This will be a good move. It has not taken effect yet.
4. Credit score minimums have risen again. FHA estimated that 580 would be the lowest score they would allow. Most lenders, however, have already set the number at 620 or even 640 for some. FHA can sometimes allow for more risk than some lenders are willing to take on. This is one of those areas. See my article on Zillow about increasing your scores with the help of a credit action report.
The following link outlines the main changes that have been proposed by the FHA. We believe that by the end of the year ALL of them will have taken effect.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016
Contact The Mortgage Mark with any questions.
http://www.capitalfmc.com/
mwilkins@capitalfmc.com
A summary of FHA changes since the first of the year, 2010.
The main changes are…
1. 3.5% down payment. This happened last year, actually, from the 3% down mark of previous years. The amount is an extra $500 from a home buyer purchasing a $100,000 home. We didn’t even feel the change – if HUD gets excited about lending $500 less, then I say we let them have this one. The upside is that the payment gets better by $3 to $5 per month.
2. 2.25% Up-Front Mortgage Insurance premium. This used to be 1.75%. On a $100,000 mortgage it means an extra $500 in the loan amount and around $3 to $5 per month more in the payment for a 30 year or 15 year fixed loan respectively. Yes, the increase here exactly offsets the savings in #1 above.
3. The monthly mortgage insurance premium will also increase in certain situations. Right now the monthly amount is .55% per year in most cases, and on a 15-year fixed loan with 10% down, the monthly is not required. FHA intends to add tiers to their Mortgage Insurance Pricing. For lower credit scores, you pay higher MI. For less down, your rate will be higher. For a combination of the two, the rate is higher still. The good news here is that FHA becomes more palatable for more people. If you have good qualifications, then you’ll shoulder less of the cost of the riskier loans. This will be a good move. It has not taken effect yet.
4. Credit score minimums have risen again. FHA estimated that 580 would be the lowest score they would allow. Most lenders, however, have already set the number at 620 or even 640 for some. FHA can sometimes allow for more risk than some lenders are willing to take on. This is one of those areas. See my article on Zillow about increasing your scores with the help of a credit action report.
The following link outlines the main changes that have been proposed by the FHA. We believe that by the end of the year ALL of them will have taken effect.
http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016
Contact The Mortgage Mark with any questions.
http://www.capitalfmc.com/
mwilkins@capitalfmc.com
Tuesday, July 13, 2010
Fannie Mae will ban lenders from cutting appraised values
Did you know that lenders across the country have been appraised values when they decide that an appraiser has over-valued a property? It's true, and it has been going on for a couple years now. But, thankfully, Fannie Mae is stepping in to ban this practice, at least on loans that are pre-sold to Fannie Mae.
To understand the problem we need to back up a little to what has transpired with appraisals over the last few years. When the housing crisis began, part of the bank "almost failure was that lenders were being forced to issue was due to forced buy backs of home loans that had been sold to Fannie and Freddie if it was found the appraised values were over-inflated.
The answer to this issue was passage of HVCC (Home Valuation Code of Conduct) which mandated that all appraisals for loans to be sold to Fannie and Freddie, had to be performed by AMCs (Appraisal Management Companies). Seeing yet another opportunity to make more fees, many lenders, including the biggest banks, opened their own AMCs and kept up to half the appraisal fees that were being charged.
Most independent appraisers refused to work for these companies because they were being paid half what they were used to making for the same amount of work, so the AMCs were forced to hire inexperienced appraisers, and often sent out these inexperienced appraisers to areas they were unfamiliar with. To make matters worse, these appraisers didn't even have access to local real estate information. The result was these new appraised values became a "crap shoot.," Real estate agents, sellers, buyers, builders, and anyone else involved in the process never knew where a value was likely to come in. We saw wildly low values, because foreclosures and short sales were being used as comparable sales, and sometimes we saw crazy high values as well because the appraisers did not know the areas.
Historically, lenders have always required the down payment amount to be based on either the sales price or the appraised value, whichever was lower. So, when appraisals started coming in very low, lenders increased the required down payment to keep the loan to value ratio the same, based on the appraised value. The result was sales were falling apart across the country. There are too may stories of builders losing sales on new homes because the appraisal came in below the actual cost to build, nevermind a profit for the builder.
Buyers often will not, or cannot pay the additional down payment - sellers usually will not, or cannot come down on price, so sales have been falling through in astonishing numbers since this fiasco began.
Enter the lenders - becoming ever more cautious - some lenders have taken this to another extreme and have actually been reducing the valuations their own appraisers brought in, for fear of potentially having to buy back a loan they thought they had sold to either Fannie or Freddie. They base their lower valuations on a computer value (such as Zillow - we all know how inaccurate Zillow is). The computer values do not reflect the condition of a house - they don't increase values for remodels, are often lacking information even on room additions - so, like Zillow, they can be grossly inaccurate. There is never an on-site inspection with computer models, as there is with a real appraisal. Nevertheless, lenders are using these valuations as justification to reduce appraised values, and sales continue to fall apart.
Fortunately, Fannie has announced that effective September 1, lenders will no longer be permitted to reduce appraised valuations. Instead, they will be required to contact the appraiser to resolve discrepancies between their value and the computer model. If the disagreement cannot be resolved on that level a second appraisal must be ordered by the lender. It has not yet been disclosed who will be responsible for the cost of the second appraisal, should one be required by the lender.
In addition, Fannie is looking at some other issues that have arisen due to HVCC (which was recently adopted by FHA as well.) Among issues being researched is the increasing number of inexperienced and non-local appraisers employed by AMCs. The dilemma here, of course, is that if AMCs are required to utilize only more experienced appraisers, either they will have to accept a lesser share of the fees, or appraisal costs will very likely rise.
Experienced appraisers are applauding this new action as there has been an uproar among the appraisers, builders, real estate agents, and independent mortgage brokers since HVCC went into effect.
Fingers crossed that fewer home sales will fall apart due to appraised values soon. This has been a nightmare for buyers and sellers alike
Contact mwilkins@capitalfmc.com with any questions http://www.themortgagemark.com/
To understand the problem we need to back up a little to what has transpired with appraisals over the last few years. When the housing crisis began, part of the bank "almost failure was that lenders were being forced to issue was due to forced buy backs of home loans that had been sold to Fannie and Freddie if it was found the appraised values were over-inflated.
The answer to this issue was passage of HVCC (Home Valuation Code of Conduct) which mandated that all appraisals for loans to be sold to Fannie and Freddie, had to be performed by AMCs (Appraisal Management Companies). Seeing yet another opportunity to make more fees, many lenders, including the biggest banks, opened their own AMCs and kept up to half the appraisal fees that were being charged.
Most independent appraisers refused to work for these companies because they were being paid half what they were used to making for the same amount of work, so the AMCs were forced to hire inexperienced appraisers, and often sent out these inexperienced appraisers to areas they were unfamiliar with. To make matters worse, these appraisers didn't even have access to local real estate information. The result was these new appraised values became a "crap shoot.," Real estate agents, sellers, buyers, builders, and anyone else involved in the process never knew where a value was likely to come in. We saw wildly low values, because foreclosures and short sales were being used as comparable sales, and sometimes we saw crazy high values as well because the appraisers did not know the areas.
Historically, lenders have always required the down payment amount to be based on either the sales price or the appraised value, whichever was lower. So, when appraisals started coming in very low, lenders increased the required down payment to keep the loan to value ratio the same, based on the appraised value. The result was sales were falling apart across the country. There are too may stories of builders losing sales on new homes because the appraisal came in below the actual cost to build, nevermind a profit for the builder.
Buyers often will not, or cannot pay the additional down payment - sellers usually will not, or cannot come down on price, so sales have been falling through in astonishing numbers since this fiasco began.
Enter the lenders - becoming ever more cautious - some lenders have taken this to another extreme and have actually been reducing the valuations their own appraisers brought in, for fear of potentially having to buy back a loan they thought they had sold to either Fannie or Freddie. They base their lower valuations on a computer value (such as Zillow - we all know how inaccurate Zillow is). The computer values do not reflect the condition of a house - they don't increase values for remodels, are often lacking information even on room additions - so, like Zillow, they can be grossly inaccurate. There is never an on-site inspection with computer models, as there is with a real appraisal. Nevertheless, lenders are using these valuations as justification to reduce appraised values, and sales continue to fall apart.
Fortunately, Fannie has announced that effective September 1, lenders will no longer be permitted to reduce appraised valuations. Instead, they will be required to contact the appraiser to resolve discrepancies between their value and the computer model. If the disagreement cannot be resolved on that level a second appraisal must be ordered by the lender. It has not yet been disclosed who will be responsible for the cost of the second appraisal, should one be required by the lender.
In addition, Fannie is looking at some other issues that have arisen due to HVCC (which was recently adopted by FHA as well.) Among issues being researched is the increasing number of inexperienced and non-local appraisers employed by AMCs. The dilemma here, of course, is that if AMCs are required to utilize only more experienced appraisers, either they will have to accept a lesser share of the fees, or appraisal costs will very likely rise.
Experienced appraisers are applauding this new action as there has been an uproar among the appraisers, builders, real estate agents, and independent mortgage brokers since HVCC went into effect.
Fingers crossed that fewer home sales will fall apart due to appraised values soon. This has been a nightmare for buyers and sellers alike
Contact mwilkins@capitalfmc.com with any questions http://www.themortgagemark.com/
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