8 Ways To Accidentally “Un-Approve” Your Mortgage

8 Ways To Accidentally “Un-Approve” Your Mortgage

 

 

 

For all the talk of how tough it is to be "mortgage approved", the basics of mortgages haven't changed. Mortgage approvals are still the 3-legged stool of income, equity, and credit.
Sometimes, though, it's not getting approved that's hard -- it's staying approved.
You have to watch out for landmines. 

When Things Go Wrong

Mortgage approvals take time. In a typical home loan market, it's about 3 weeks from start-to-finish.
Approvals can take longer, however, depending on market conditions. For example, if rates are low and there's a refi boom on-going, a refinance can take 6 weeks to close. Banks don't have capacity to do work much faster.
Or, if you're buying a home and it's a short sale or foreclosure, expect delays there, too. With REO, it can take up to 6 months to get to the closing table.
Click to get today's mortgage rates.
Thing is, during that "extra time" -- 3 weeks, 3 months or longer -- a lot can go wrong, and when things go wrong, your loan goes bad. For example, if lose your job, become ill, or see your home damaged by storms, you may lose your mortgage approval -- even if you were previously cleared-to-close.
Unfortunately, these are all events that are beyond your control. You can't control sickness any more than you can control Mother Nature. But you can control yourself during those extra few weeks.
Good behavior matters in mortgage.

Bad Mortgage Behavior, Defined

Keeping "good behavior" in mind, here are 8 things you should absolutely not do between your date of application and your date of funding. I've been doing this long enough that I can say with certainty: Ignore these rules at your own peril.

1. Don't buy a new car or trade-up to a bigger lease
2. Don't quit your job to change industries or start a new company
3. Don't switch from a salaried job to a heavily-commissioned job
4. Don't transfer large sums of money between bank accounts
5. Don't forget to pay your bills -- even the ones in dispute
6. Don't open new credit cards -- even if you're getting 20% off
7. Don't accept a cash gift without filing the proper "gift" paperwork
8. Don't make random, undocumented deposits into your bank account

And that's it.
Now, you may find it 100% impractical to have follow these rules to the letter. I know that.
For example, if your car lease is expiring, you have to do what you have to do. Renew the lease. But before doing it, you should check with your loan officer to see if renting a car in the short-term, instead, would be a more mortgage-friendly solution instead.
The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept a cash gift from family and if you do it the "wrong way", your gift may be prohibited from use as part of your downpayment funds.
There are a bevy of "gotchas" in Mortgageland and you can't expect to know them all. These 8 rules, however, are a good start.
Click to get today's mortgage rates.

Get Low, Long-Term, Locked Mortgage Rates

Mortgage refinances take time and the best thing while your loan is in process is to keep the status quo. You can't control nature, but you can control you. Be smart with your finances and don't let your mortgage get un-approved.
Click to get today's mortgage rates.

Contact The Mortgage Mark with any questions!!

Mark@themortgagemark.com   www.themortgagemark.com 

Bi-Weekly Mortgage Payments : Will You Pay Your Mortgage Faster?

Bi-Weekly Mortgage Payments : Will You Pay Your Mortgage Faster?

Thinking of starting a bi-weekly mortgage payment plan? You may want to think again. A bi-weekly plan may sound terrific, but it's a program not without its risks.
There may be better, less expensive ways to own your home faster.
Click here to see today's mortgage rates.

Typical Mortgage : 12 Payments Per Year

The typical mortgage asks for one payment per month, which equals 12 payments per year. With a 30-year fixed rate mortgage, therefore, 360 payments are required to pay the loan in full.
Each mortgage payment is split into two parts -- a principal portion and an interest portion. The principal portion is applied to the amount that you owe the bank. This diminishes your remaining loan balance. The interest portion is your cost for borrowing from the bank.
As your loan moves toward maturity, the balance between your mortgage payments' principal-and-interest shifts. In the early years, a significant portion of your payment is comprised of interest and just a small part goes to paying down your balance. It's not until later in your loan's lifecycle does the principal portion of the payment start to grow.
This repayment schedule is the reason why after 5 years or so, your loan's balance has been barely paid down. The technical term for this repayment schedule is amortization (ah-mor-ti-ZHAY-shun).
Click here to see today's mortgage rates.

Bi-Weekly Mortgage Payments : 13 Payments Per Year

A bi-weekly mortgage payment program is meant to short-circuit your loan's amortization schedule. Instead of taking 12 payments per year, the bi-weekly payment plan asks for one payment every two weeks, which adds up to 13 payments per year.
Except that you can't make 13 payments per year on your mortgage -- that's not how a mortgage works.
With a mortgage, you pay a certain amount of interest on an annual basis and that amount is covered in your first twelve payments. The 13th payment has to go somewhere, though, so it gets applied to your principal balance; the amount that you still owe to the bank.
And, this is how a bi-weekly payment plan works. With each "13th payment", your loan balance is reduced by the entire amount of the payment. You reach your loan's payoff date sooner.
At today's mortgage rates, bi-weekly payments shorten your loan term by 4 years.
Click here to see today's mortgage rates.

Effective Alternatives To Bi-Weekly Payments

Bi-weekly payments plans work; there's no doubt about that. It's just basic math. However, there are several reasons why homeowners may want to avoid enrolling in a bi-weekly mortgage payment plan.
The first -- and most obvious -- reason to avoid bi-weekly mortgage payment programs is that homeowners choosing to self-manage their bi-weekly payments get better results than via a bank-managed bi-weekly payment program.
Here's how to self-manage : Rather than sending payments to the bank every other week, achieve the same result by making your regular mortgage payment once monthly, an adding 1/12 of your regular mortgage payment to your check.
For every $1,200 in your mortgage payment, in other words, add $100 to your monthly payment. By sending $1,300 to your lender monthly, you will "overpay" your mortgage by $1,200 annually, which is a 13th payment.
Assuming a $300,000 mortgage at 4.000%, look at how the math works :

• Bank-managed bi-weekly mortgage payments pays off in 26 years, 0 months
• Self-managed bi-weekly mortgage payments pays off in 25 years, 11 months

This math works because banks don't apply that 13th payment until the year is complete. By contrast, your self-managed system applies 12 times per year.
Click here to see today's mortgage rates.
Another reason to skip the bi-weekly mortgage program is that bi-weekly payments are a contract and once that contracts starts, as a homeowner, you're obligated to make those 13 payments per year no matter what.
By contrast, with a self-managed payment plan, you never have that obligation. You can choose to skip a month during the holidays, for example, then double-up on payments later on, or not at all. It's all in your control -- not the bank's.
And, lastly, if you find your bank is charging for it bi-weekly mortgage payment program, make sure to say "no" no matter what. That's just wasted money.
Click here to see today's mortgage rates.

See Your Mortgage Payment Choices By Email

Putting bi-weekly mathematics aside, the thing is, with mortgage rates low, your best alternative to the bi-weekly mortgage plan may be to get a new mortgage altogether.
Extra payments can speed up your payoff, but not as well as taking a zero-closing cost refinance, then putting your monthly savings back to your loan balance. Your mortgage payment stays the same, but your loan payoff date shrinks.
Assuming a 1 percent drop in your mortgage rate, the Refinance-and-Reinvest plan can shorten your loan's term 63% more than via a bi-weekly mortgage payment program.
And with lower interest rates, of course, comes larger long-term savings.
Click here to see today's mortgage rates.

Contact The Mortgage Mark with any questions!!

mark@themortgagemark.com

www.themortgagemark.com

September 12, 2012


Dear Valued Customers and Past Clients,

We have recently been made aware of a deceptive attempt to extract money from unsuspecting customers of banks, including our Bank.

Some Capital Financial Mortgage Corporation customers recently received a Litigation Notification from the Residential Litigation Group, PA. The notification indicates that this “Group” is intending to file a claim against Capital Financial Mortgage Corporation for improper lender actions.

While it may first appear otherwise, this notification is actually an advertisement for a law firm. In fine print on the form itself, it explicitly states that, “This advertisement does not contain or constitute legal advice.”

Do not respond to this letter and please do not send them money. We are taking appropriate action in order to bring such misleading advertising practices to an immediate halt. If you received this letter and have any further questions, we urge you to contact us locally at 267-704-0050 or 610-532-1775.

As always, thank you for being a Capital Financial Mortgage Corporation customer.

How Does Refinancing Work?

In the world of mortgages, the term "financing" refers to borrowing money from a bank to help pay for a property.

If then, at a later date, the homeowner wishes to replace his mortgage with a new one -- one with either a lower mortgage rate, for example, or one that provides cash-out at closing -- the financing process is repeated.
This repeat is called a "refinance". Refinancing is when you obtain a new mortgage loan to pay off and replace an existing one.
Click here to get today's mortgage rates.

Refinances Require Re-Verification

Because a refinance amounts to establishing a brand-new loan with brand-new terms, it follows that refinance applicants are subject to the same approval process as for the initial mortgage which was given at the time of purchase. A refinanced mortgage represents a brand-new debt and must be underwritten accordingly.
As with a home purchase, there are three basic areas against which a refinance applicant is evaluated :

1. Credit Score and Payment History
2. Income and Employment History
3. Retirement Assets and Cash Reserves

Furthermore, the home being refinanced is subject to an appraisal to determine its current value.
Next, the above traits are compared against today's mortgage standards. If both the refinancing household and the home itself meet current mortgage guidelines, the refinance will be approved and the old loan will be replaced.
Click here to get today's mortgage rates.

3 Types Of Mortgage Refinance

Mortgage refinances come in three varieties -- rate-and-term, cash-out, and cash-in. The refinance type that's best for you will depend on your individual circumstance.

Rate-And-Term Refinance

In a rate-and-term refinance, the only terms of the new loan which differ from the original one are either the mortgage rate, the loan term, or both. Loan term is the length of the mortgage. For example, in a rate-and-term refinance, a homeowner may refinance from a 30-year fixed rate mortgage into a 15-year fixed rate mortgage; or, may refinance from a 30-year fixed rate mortgage at 6 percent mortgage rate to a new, 30-year fixed rate mortgage at 4 percent.
With a rate-and-term refinance, a refinancing homeowner may not walk away from closing with more than $2,000 in cash. Closing costs and escrow reserves may be added to the loan balance.
Click here to get today's mortgage rates.

Cash-Out Refinance

In a cash-out refinance, the new mortgage may have a lower mortgage rate or shorter term as compared to the original home loan. However, the defining characteristic of a cash-out mortgage is that the loan balance of the original mortgage is increased to account for cash-in-hand at closing of more than $2,000; for debt consolidation; or, to combine an existing first and second mortgage.
Cash-out mortgages represent more risk to a bank than a rate-and-term refinance and, as such, carry more strict approval standards. For example, a cash-out refinance may be limited to a lower loan size as compared to a rate-and-term refinance; or, may require higher credit scores from the applicant.
Click here to get today's mortgage rates.

Cash-In Refinance

With a cash-in refinance, a refinancing homeowner brings cash to closing in order to pay down the loan balance. The refinanced mortgage may also have a lower mortgage rate, or a shorter loan term, or both. There are several reasons why homeowners opt to do a cash-in mortgage, but the most common reason is to get access to lower mortgage rates which are only available at lower loan-to-values, or to remove mortgage insurance payments for loans over 80% LTV.
A mortgage at 75% loan-to-value, for example, may get better rates than a mortgage at 80% loan-to-value, and conforming loans under 80% LTV pay no PMI.
Click here to get today's mortgage rates.

"Special" Refinance Programs For Homeowners

With respect to refinancing, there are four mortgage programs for which the mortgage approval process is different. Collectively, these programs are known as "streamline" programs because their respective underwriting requirements are grossly simplified.
With a streamline refinance, lender often waive large chunks of the "typical" mortgage approval process which may include waiving appraisals, waiving income verification, and waiving credit score minimums.
Four common streamline refinance programs are :

• FHA Streamline Refinance : For homeowners with an existing FHA mortgage
• VA Interest Rate Reduction Refinancing Loan (IRRRL) : For homeowners with an existing VA mortgage
• Home Affordable Refinance Program (HARP) : For homeowners with an existing Fannie Mae or Freddie Mac mortgage
• USDA Streamline Refinance : For homeowners with an existing USDA mortgage

Streamline refinances are available via any lender and mortgage rates are the same as with "traditional" refinances.

Contact The Mortgage Mark with any Questions!!

mwilkins@capitalfmc.com

www.themortgagemark.com

Now Accepting Applications For The FHA’s New, Lower Mortgage Insurance Premiums

For certain FHA-backed homeowners, refinancing via the FHA Streamline Refinance program is about to get a lot less expensive.
Beginning June 11, 2012, the FHA implements a new policy for its mortgage insurance rates.
Click here to get FHA mortgage rates.

Millions Of FHA Homeowners Now Eligible

FHA mortgage rates have been steadily falling. Unfortunately, the FHA mortgage insurance rates have not. Today's FHA homeowners pay up to 1.50% in annual mortgage insurance premiums -- triple the rates that FHA-backed homeowners paid just 4 years ago.
For new FHA homeowners -- the ones using the FHA's low downpayment mortgage program, for example -- the FHA's rising mortgage insurance rates are a nuisance more than anything else. High insurance premiums are the price you pay for getting access to a mortgage with just 3.5% down.
But, for homeowners already with the FHA, rising mortgage insurance rates have made it exceedingly difficult to qualify for the FHA Streamline Refinance, the FHA's "no appraisal needed" refinance program. This is because the program rules state that a mortgage applicant's mortgage payment fall by at least 5% in order to qualify for the FHA Streamline Refinance.
"Mortgage payments" are defined as (1) monthly principal + interest payments, plus (2) monthly mortgage insurance payments.
Principal + interest payments have dropped significantly since 2008, but rising mortgage insurance rates have negated these effects. Making that 5% savings marker has become exceedingly difficult. Potentially millions of FHA-backed homeowners have been heretofore eliminated from the FHA Streamline Refinance program and from access to today's low rates.
For long-time FHA-backed homeowners, that's all changing.
Click here to get FHA mortgage rates.

"Grandfathered" FHA Mortgage Insurance Premiums

June 11, 2012, the FHA introduces a new mortgage insurance premium schedule for long-time, FHA-backed homeowners.
If your current FHA mortgage was endorsed by the FHA prior to June 1, 2009, you are eligible for the FHA's "grandfathered" mortgage insurance premiums. The new premiums are dramatically lower than the premiums paid by today's new FHA customers.
For eligible homeowners, the new FHA MIP schedule is as follows :

• All loans : 0.01% upfront mortgage insurance premium
• All loans (except 15-year fixed with LTV of 78% or less) : 0.55% annual mortgage insurance premium
• 15-year fixed with LTV of 78% or less : No annual mortgage insurance premium

Click here to get FHA mortgage rates.
As a real-life example of how the new FHA mortgage insurance premiums work, a homeowner in Chicago, Illinois with a $400,000 mortgage from 2008 could refinance under the new FHA Streamline Refinance program, paying just $40 in upfront MIP and $183 per month in annual MIP.
This is a huge savings over the FHA's current MIP schedule which would require $7,000 to be paid in upfront MIP and $417 per month in annual MIP.
With the grandfathered FHA Streamline Refinance schedule, there are no other fees, no other adjustments, and the terms are available to all FHA-backed homeowners whose mortgages were endorsed prior to June 1, 2009.
Mortgages endorsed post-June 1, 2009 are subject to the current FHA mortgage insurance premium schedule.

Don't Wait Until June 11. Start Today.

The FHA's new mortgage insurance premiums go into effect June 11, 2012. However, you don't need to wait until June 11 to get your loan application started. You can start your loan application today, and lock your mortgage rate, too.
You'll be among the first in the country to use the FHA's new, lower MIP schedule. And you'll get today's great rates. Get started with a rate quote and see what lower MIP can do for you.
Click here to get FHA mortgage rates.

Contact The Mortgage Mark with any questions!!

www.themortgagemark.com  mwilkins@capitalfmc.com

How To Cancel Your FHA Mortgage Insurance Premiums (MIP)

How To Cancel Your FHA Mortgage Insurance Premiums (MIP)

As compared to conforming loans and jumbo mortgages, FHA-backed loans are great for a lot of reasons.

FHA mortgages allow purchases with low downpayments; they allow refinances without appraisal; and FHA mortgage rates are often pretty low.

One place where FHA mortgages fall short, though, as compared to other loan types is with respect to mortgage insurance. FHA mortgage insurance can be cumbersome and costly.
If you're going to take an FHA-backed mortgage, you need to know how FHA mortgage insurance works.

Click here for an FHA mortgage rate quote.

With FHA, Everyone Pays Mortgage Insurance Twice

The FHA's role in Mortgage World is different from Fannie Mae and Freddie Mac. The FHA doesn't "buy mortgages" from banks like Fannie and Freddie do. Rather, it insures them.
It works like this : The FHA issues mortgage guidelines to which banks can underwrite a mortgage. These mortgages are commonly called "FHA mortgages".
If a bank underwrites an FHA mortgage and the loan goes into default, the FHA repays the bank's losses from its capital reserves. The FHA's capital reserves are funded by mortgage insurance premiums paid by the nation's FHA-insured homeowners.
FHA homeowners pay two types of mortgage insurance -- Upfront Mortgage Insurance Premiums and Annual Mortgage Insurance Premiums. These insurance types are sometimes abbreviated and known as UFMIP and MIP, respectively.

Since April 18, 2011, every FHA-insured homeowner has been required to pay both at least one form of FHA mortgage insurance.

Click here for an FHA mortgage rate quote.

How To Calculate Your FHA Mortgage Insurance

The FHA's mortgage insurance requirements are generally simple.
FHA Upfront Mortgage Insurance Premiums
The FHA's current upfront mortgage insurance premium (UFMIP) is 1.75 percent of your loan size. For example, if you want to apply for an FHA purchase mortgage and your loan size is $300,000, then your Upfront MIP will be equal to $5,250.
Upfront MIP is not paid as cash. It's automatically added to your loan balance by the FHA. Therefore, your final loan size in the example above will be $305,250.
Furthermore, upfront MIP is not used in your FHA loan-to-value calculation. This means that you can make a 3.5% downpayment on your purchase, add the 1 percent UFMIP to your loan size, and still meet the FHA's low downpayment guidelines.
Upfront MIP is paid to the FHA upfront, at closing, and never paid again. Hence the name, "upfront" MIP. However, because UFMIP is added to your loan balance, you do pay mortgage interest on it for the life of your loan.
FHA Annual Mortgage Insurance Premiums
The FHA's other type of mortgage insurance is paid monthly. Called Annual Mortgage Insurance Premiums (MIP), it's paid as a part of your mortgage statement.
Annual MIP is required on all FHA mortgages and premiums vary according to your FHA loan's individual characteristics. The FHA's MIP table is below :

• 15-year loan terms with loan-to-value over 90% : 0.60 percent annual MIP
• 15-year loan terms with loan-t0-value under 90% : 0.35 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.25 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.20 percent annual MIP

As a real-life example, a 30-year fixed rate FHA mortgage in a high-cost area such as Loudoun County, Virginia; or Bethesda, Maryland may be for as much as $729,750. If the FHA mortgage is a purchase and the buyer is putting the minimum 3.5% down on the home, the annual MIP is 1.15 percent, or $699 per month.
15-year FHA mortgages with a loan-to-value of 78% or less are exempt from annual MIP payments.
Click here for an FHA mortgage rate quote.

How To Get Rid Of Your FHA Mortgage Insurance

One nice thing about FHA mortgage insurance is that it's not permanent. FHA mortgage insurance eventually goes away.
The schedule for getting rid of FHA mortgage insurance changes by loan term.

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

In other words, if you have a 30-year fixed rate FHA mortgage, you must pay mortgage insurance for at least 5 years before it can go away -- regardless of your loan balance. By comparison, if you have a 15-year fixed-rate FHA mortgage, your mortgage insurance is removed as soon as your LTV is low enough.
No action is needed on your part -- the FHA handles MIP removal automatically.
Also, note that the FHA does not allow a new appraisal to determine whether your loan is at 78% loan-to-value. The 78% LTV is based on the lesser of your purchase price, or its original appraised value.
At today's mortgage rates, a 15-year FHA mortgage on which the minimum 3.5% downpayment was made should pay down to 78% of the original purchase price within 26 months. A 30-year fixed will take 9 years to reach the same point.
Click here for an FHA mortgage rate quote.

Compare FHA Mortgage Rates And MIP

FHA mortgage rates are cheap right now; cheaper than conventional loans and cheaper than VA. There are great bargains for first-time buyers and other households planning on minimum downpayments.
The trick is understanding FHA mortgage insurance. FHA mortgage insurance can be costly in the long run and there's good cause for comparing options.
Before you lock a 30-year fixed FHA loan, do your due diligence -- look at 15-year payments, too. 15-year FHA mortgage rates are often lower than comparable 30-year FHA mortgage rates and the mortgage insurance terms are more favorable.
You'll pay less MIP each month, and can be rid of it as much as 7 years sooner.

Contact The Mortgage Mark with any questions!   www.themortgagemark.com 

mwilkins@capitalfmc.com

Mortgage Rates Responding To Rising Gas Prices?

Mortgage Rates Responding To Rising Gas Prices?

Political unrest across the Middle East has oil prices on the move. Crude oil raced past $110 per barrel last week, a 38 percent increase since just 5 months ago. Gas prices are rising, too -- up 26 days in a row nationwide.
For mortgage rate shoppers, it adds up to bad news at the pump, and at the bank. Rising oil prices are linked to higher mortgage rates.
Click here to get today's mortgage rates.

Higher Oil Prices Lead To Higher Mortgage Rates

When oil prices rise, they tend to take mortgage rates with them. We've seen it time and again throughout history. The link is a natural one, too -- it's tied to inflation.
First, oil prices rise. This can happen for any number of reasons:

1. Demand for oil increases because of expanding economies
2. Supply of oil falls because of reduced drilling capacity, or abrupt disruption
3. The U.S. dollar loses value (because oil is bought/paid for using U.S. dollars)

As oil prices rise, so does the cost of "doing business".
This should be intuitive -- energy costs are an input for manufactured items, and just the cost of keeping the lights on all day goes up when oil prices rise. Before long, business profits shrink.
Meanwhile, as this is happening, homeowners start to experience rising heating and cooling costs, plus higher prices at the gas pump. Furthermore, food costs rise because it's more expensive for food producers to get food from the farm to the supermarkets. Disposable income shrinks.
Before long, the cost pressures on business and households converge. To make up for rising costs, businesses raise prices and households demand higher wages. This cycle is self-perpetuating and costs move ever higher.
This, my friends, is inflation and inflation is awful for mortgage rates.
Click here to get today's mortgage rates.

Gas Prices Are Rising. Lock Your Mortgage Rates.

According to government data, core inflation is up just 1.9% from last year, well within the Fed's "target range" and low enough to warrant holding the Fed Funds Rate near 0.000% until at least 2014.
However, although prices remain tame, the next inflation cycle has already started.
This is because the Federal Reserve has created for the U.S. economy an ideal, expansionary environment.

1. A 0.000% percent Fed Funds Rate
2. More than a trillion dollars worth of bond market support
3. A unwavering message that the Fed Funds Rate will stay low for "an extended period"

And now, with gas prices rising, the cycle gets a boost. Mortgage rates for all loan types -- FHA, conventional, USDA and VA -- should rise in the next few days. Even jumbo loans.
If you've been shopping, consider cutting your losses today. Lock your mortgage rate and get a move on.
Click here to get today's mortgage rates.

Your Next Step : Get A Rate Quote

The Federal Reserve is closely watching inflation, and has been. Rising costs concern Fed Chairman Ben Bernanke to the point that he suggested a third round of quantitative easing may not be necessary.
Remember : Markets had taken QE3 as a foregone conclusion.
Click here to get today's mortgage rates.

Contact The Mortgage Mark with any questions!

www.themortgagemark.com   mark@themortgagemark.com