Tuesday, November 27, 2012

FHA Mortgage Insurance Is Going Up


FHA will be raising their mortgage insurance rates sometime in 2013.  For loans with the minimum down payment of 3.5%, the annual mortgage insurance rate will go up from 1.25% to 1.35%.  For a $200,000 loan, that means the monthly payment will go up by $16.67. 

Also, FHA has announced that the mortgage insurance will no longer go away when the borrower has 22% equity in the property.  Instead, it will remain in effect until the loan is paid in full.

It is important to keep in mind that with FHA loans, the mortgage insurance is based on the remaining loan balance, so even though the mortgage insurance will not go away, it will go down each year. 

Many people will say that these new rules are the end of the FHA loan program, but they are mistaken.  FHA loans will remain an excellent choice for borrowers who want to minimize their down payment. 

These new rules are ONLY for new FHA loans, and a start date has not been announced yet, other than sometime in 2013.  If you already have an FHA loan, or are in the process of getting one at the moment, nothing will change.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Crazy New Fannie Mae Underwriting Guidelines


On November 13, Fannie Mae changed the rules for getting a cash-out refinance for people with 5-10 financed properties.  Effective immediately, you can no longer get a cash-out refinance on a second home or an investment property if you have more than 4 financed properties.  The only exception to this is if you purchased the property within the previous 6 months.

This is a Fannie Mae rule, so any lender that sells their loans to Fannie Mae has to follow it. 

What does this mean for someone who has equity in an investment property?  It means you can't touch it - at least not with a Fannie Mae loan.  You might still be able to get a home equity line of credit (HELOC), but forget about a low interest fixed-rate mortgage. 

This only applies if you have more than 4 financed properties, and it does not apply to primary residences.

When investment banks get back into the mortgage market and provide an alternative to Fannie Mae, this will surely change, but that's not going to happen until Congress can stop bickering and defines which loans Fannie Mae is going to be allowed to purchase in the future. 


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Is Changing Loan Programs Allowed?


A lot of people ask us if it's OK to change loan programs after they have signed a sales contract to buy a house.  For example, can someone change from an FHA loan to a conventional loan?

Although the sales contract may stipulate which types of loans are acceptable, we have NEVER seen a seller back out of a deal because the buyer wanted to change the type of loan.  If a buyer wants to change loans and it is a concern, the best thing to do would be to get an amendment to the contract signed by both the buyer and the seller, stating that the loan type has changed. 

The lender does not care about this part of the contract at all, so there's no need to amend the contract to satisfy lender requirements.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Allowable Seller-Paid Closing Costs


When purchasing a house, the seller is allowed to pay for some of the buyer's closing costs, but there are limits to how much the seller can pay.  Here are the maximum amounts the seller can pay for various types of loans:

Conventional Loans
  • Primary residence or second home with less than 10% down = 3% of the purchase price
  • Primary residence or second home with between 10% and 24.99% down = 6% of the purchase price
  • Primary residence or second home with 25% or more down = 9% of the purchase price
  • Investment property = 2% of the purchase price 
FHA Loans
  • Primary residence only (down payment does not matter) = 6% of the purchase price 
VA Loans
  • Primary residence only (down payment does not matter) = no limit

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Thursday, November 1, 2012

When Does Mortgage Insurance Go Away?


What is mortgage insurance?  When do you have to get it?  When does it go away?

Here's what you need to know:

Mortgage insurance is an insurance policy that you must have if you get a mortgage for more than 80% of the value of your property.  You, as the borrower, pay for it, and the lender gets paid if you go into foreclosure.  You do not get any money from the mortgage insurance policy - only the lender gets paid.

The value to you is that it allows you to buy a house with less than 20% down.  You only need 3% down with a conventional loan and 3.5% down with an FHA loan - as long as you have a mortgage insurance policy.

Mortgage insurance automatically goes away when you have 22% equity in your house, based on the original purchase price.  As an example, if you paid $200,000 for your house, then the mortgage insurance would go away automatically when you pay down your mortgage to $156,000.

If you have a conventional loan (a non-government loan) and you can get an appraisal showing that you have 20% equity in your house, then you can ask the lender to drop the mortgage insurance early.  Instead of needing 22% equity, you might be able to get rid of the mortgage insurance when you have only 20% equity.

If you have an FHA loan, then you cannot get rid of the mortgage insurance early by proving you have 20% equity.  You must wait until you have 22% equity.  Also, with FHA loans, you must pay for mortgage insurance for a minimum of 5 years, regardless of the size of  your down payment.  This is why it makes no sense to get an FHA loan if you have 20% down. 

If you have very good credit, it is possible to get two loans when you buy a house.  The first loan would be for 80% of the sales price, and the second loan would be for 10% of the sales price.  You would need 10% down if you did things this way.  Because neither of the loans would be more than 80% of the sales price, you would not have to pay for mortgage insurance.

Some lenders will tell you that they will sell you a loan without mortgage insurance, but they are not really telling you the truth (imagine that!).  What they are doing is charging you a higher interest rate, and then using the extra profit they are making to buy mortgage insurance.  It is called lender-paid mortgage insurance and is rarely a good deal because you end up paying a higher interest rate for the next 30 years.  That costs you thousands of dollars more than getting a mortgage insurance policy that goes away when you have 22% equity.  Watch out for lenders who try to sell you loans like this.  They are deceiving you if they don't explain that you are paying a higher interest rate forever.

By the way, if you get a VA loan (only for veterans, members of the active military, National Guard, or Reserves), you do not have to pay any mortgage insurance, even if you have no money down.  That is a benefit of serving the country, so if you qualify for a VA loan, you really should get one.

We sell all types of loans - give us a call if you have any questions.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:




By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Monday, October 29, 2012

Waiting Periods After Bankruptcies, Foreclosures, and Short Sales


After a bankruptcy, a foreclosure, or a short sale, a potential home buyer must wait a certain period of time before they are eligible to get a mortgage.  The minimum length of time after a bankruptcy is 2 years, and the minimum length of time after a foreclosure or a short sale is 3 years.

In addition, the underwriting guidelines state that they must "re-establish" their credit.  Many buyers are unaware of this additional requirement, and it prevents them from getting a loan. 

Here's what re-establishing credit means: for the 12 months preceding the loan application date, the borrower must have a perfect payment record on all of their existing credit accounts.  In other words, they can't have any late payments for one full year before applying for the mortgage.

If you have any prospects who have had a bankruptcy, foreclosure, or short sale, do them a favor and tell them to make sure they are paying all of their bills.  Even one late payment will prevent them from getting a loan.

This "no late payments" rule ONLY applies to people who have had a bankruptcy, foreclosure, or short sale.  Everyone else is allowed to have late payments on their credit report and they can still get a mortgage.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Down Payment Requirements


Here are the most recent down payment requirements for the various types of home loans:

For conventional (non-government) loans:
  • 5% down for a primary residence (3% is allowed, but the rates are higher and the mortgage insurance is higher)
  • 10% down for second homes 
  • 20% down for investment properties
For FHA loans (primary residences only):
  • 3.5% down - can be a gift from a relative of the borrower
  • $100 down if the property is a HUD home and the offer is for the full price 
For CHFA loans (primary residences only):
  • $1,000 minimum investment by the borrower - can be a gift from a relative of the borrower
VA loans (primary residences only):
  • 0% down

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Friday, October 26, 2012

How Much Can I Qualify For?


The top two questions we've been asked this past week are: "How big a mortgage can I qualify for if I make X amount of money?" and "How big a mortgage can I qualify for if I have X amount of debt?"

The two questions are really related because the amount you qualify for is based on the ratio of your debt-to-income.  Here's how you figure it out:
  1. Add up the total housing payment for the mortgage you are trying to get.  Add together the monthly principal, interest, taxes, homeowner's insurance, and any mortgage insurance and HOA fees.
  2. To the sum above, add the minimum monthly payments that show on your credit report.  This number is your total monthly debt for mortgage approval purposes.
  3. Divide your total monthly debt by your gross monthly income.  This will give you your debt-to-income ratio (DTI).
  4. Once you know your DTI ratio, then you can tell which kinds of loans you can qualify for.  The maximum DTI for a conventional loan is 45%, and the maximum DTI for an FHA loan or a VA loan is usually 50% or slightly higher, depending on the lender.
As you can see, you need to know a lot of information before you can say how much you qualify for.  At a minimum, you need to know your gross monthly income (income before taxes) and you need to know what shows on your credit report.  Your credit report does not show everything you owe each month, so don't make the mistake of guessing what's on your credit report.

The only way to know for sure how much you can qualify for is to let a competent lender figure it out for you.  We've got a great suggestion on who to call if you're looking for a competent lender: call us! 


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Friday, October 19, 2012

Which Credit Score is Used?

There are three credit reporting agencies: Experian, TransUnion, and Equifax.  When a lender pulls someone's credit, they get a score from all three agencies.  The score that is used to determine whether the borrower qualifies for a mortgage (and what their interest rate will be) is the middle score.

If two people are applying for a loan together, then the score that is used by the lenders is the lowest of the two middle scores.  If one borrower has a mid-score of 720 and the other borrower has a mid-score of 680, the loan approval and the interest rate would be based off the 680 score.

If one of the borrowers has a mid-score that is too low to qualify for a loan, or that is too low to get a good interest rate, then the person with the higher score should be the only person applying for the loan.  The only potential problem is that the income of the person whose credit score is not being used cannot be counted to qualify.  If someone's income is counted, then their credit score needs to be counted.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Tuesday, October 16, 2012

Home Inspections


We are often asked by buyers and real estate agents to recommend a good home inspector.  Without hesitation, we can recommend Ken Ishmael.  Here is Ken's contact info:
 
Ken Ishmael
Colorado Property Inspections
303-384-3773
 
 
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!
 
Make sure you check out our web site:
 
 

 
By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Asset Documentation


Here's a list of the information that needs to be provided for a conventional loan when a borrower has to show that they have sufficient assets.  This is taken directly from the Fannie Mae guidelines:

Copies of bank statements or investment portfolio statements. The statements must cover account activity for the most recent two-month period (or, if account information is reported on a quarterly basis, for the most recent quarter). The statements must:
  • clearly identify the borrower as the account holder
  • include the account number
  • include the time period covered by the statement
  • include all deposits and withdrawal transactions (for depository accounts)
  • include all purchase and sale transactions (for financial portfolio accounts)
  • include the ending account balance 
Online printouts are not acceptable unless they contain all of this information, in addition to the name of the bank.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Closing Funds Changes

Some title companies are now requiring that the cashier's checks that buyers bring to the closing be made payable to the title company only.  They no longer allow the checks to be made payable to the buyer, who then endorses the check over to the title company at the closing.

Make sure you check with your title company if you are in the habit of advising your buyers to make cashier's checks payable to themselves.  It could prevent a considerable hassle for the buyers.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Wednesday, October 10, 2012

How Much Down Payment Do I Need?

Here are the required down payments for various types of loans.

For conventional (non-government) loans:
  • 5% down for a primary residence (3% is allowed, but the rates are higher and the mortgage insurance is higher)
  • 10% down for second homes 
  • 20% down for investment properties
For FHA loans (primary residences only):
  • 3.5% down - can be a gift from a relative of the borrower
  • $100 down if the property is a HUD home and the offer is for the full price 
For CHFA loans (primary residences only):
  • $1,000 minimum investment by the borrower - can be a gift from a relative of the borrower
VA loans (primary residences only):
  • 0% down

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:




By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

How Much Interest Am I Paying?


Everyone knows that when you first get a mortgage, most of the monthly payment goes to pay the interest and not to pay down the loan principal.  But how much exactly goes towards the interest each month?

Here's how to figure it out without a calculator - it's really pretty easy.

Mortgage interest is simple interest, meaning that you only pay interest on the actual loan balance.  At the end of the month, you owe interest on whatever the balance was on your mortgage at the beginning of that month.  

To calculate how much of your mortgage payment is going towards interest, multiply the loan balance by the interest rate, and then divide that number by 12.  You divide by 12 because the interest rate is an annual rate, but you pay your mortgage each month, or 12 times a year.

Here's an example.  Let's assume your loan balance is $200,000 and your interest rate is 4%.  To figure out how much of your next payment is going to pay interest, multiply 200,000 by 4%, and then divide by 12.

200,000 x 0.04 = 8,000.  Then divide that number by 12 to get the monthly amount due.  8,000 / 12 = $666.67

So for that month, you are paying $666.67 in interest. 

If you'd like to get an amortization calculator to figure out how much the balance will go down each month, just give us a call and we'll send it over to you.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Recent CHFA Loan Changes


Here are some recent changes to the CHFA (Colorado Housing and Finance Authority) loan program:
  • The minimum borrower contribution of $1,000 may now come from a gift from the borrower's relatives.
  • If the earnest money is more than $1,000, the excess can now be given back to the borrower at the closing.
CHFA loans are good loans for people who don't have a down payment.  There are two loans: the first loan is for 96.5% of the purchase price and the second loan is for 3% of the first loan amount.  The borrower only needs to contribute $1,000 towards the transaction.

Need a CHFA loan?  Give us a call and we'll hook you up.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Friday, September 7, 2012

Should You Dispute a Credit Account?

Many credit repair companies advise their clients to dispute accounts on their credit report, telling them the accounts will be removed from their report.  That is horrible advice.  Here's why:

When you dispute a credit account, lenders are now required to underwrite loans manually, rather than using the software that allows higher debt-to-income ratios.  The underwriting software frequently allows debt-to-income ratios as high as 45% for conventional loans and as high as 50% for government (VA and FHA) loans.  However, if a borrower is approved for a loan by the software with a 45% or 50% debt-to-income ratio and they have disputed an account, the underwriting guidelines say that the debt-to-income ratio must be lowered to:
  • 36% for conventional loans
  • 41% for VA loans
  • 43% for FHA loans
This means that a borrower may not be able to qualify for the mortgage they thought they could qualify for.

In addition, if you dispute an old, unpaid collection account, the collection company will now know you are trying to improve your scores, and they may start trying to collect from you again.  Your credit scores will drop.

So stay away from anyone who advises you to dispute credit accounts!

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

What Does POC Mean?


We get a lot of calls from people who have looked at our blog and web site.  The most common question we've had this past week is, "What does POC mean on a Settlement Statement?"  Here's the answer:

POC stands for Paid Outside of Closing, and refers to any fee that is not being disbursed at the closing. The two most common POC charges are the appraisal fee (if it has been paid by the borrower before the closing) and the yield spread premium (the rebate that the lender pays the mortgage broker).

When POC is listed on the Settlement Statement, the letters are often followed by the words Borrower, Seller, Broker, or Lender. This refers to who paid the fee. For example, if the borrower paid for the appraisal before the closing, the fee would be marked as "POC Borrower" on the Settlement Statement.

If a fee is marked as POC, it is not included in the bottom line on the settlement statement because someone has already paid it (in the case of a paid appraisal) or the borrower does not owe it (in the case of a yield spread premium).

POC fees are listed on the Settlement Statement because the Real Estate Settlement Procedures Act (RESPA) states that all fees associated with a federally regulated mortgage must be shown on the Settlement Statement, regardless of whether they have already been paid or not.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Conventional Vs. FHA Loans

Here are the main differences between conventional loans and FHA loans:

Conventional Loans
  • Minimum down payment is 3% of the purchase price.  You can get a cheaper rate if you put 5% down.
  • You need mortgage insurance if you don't have 20% down.  The mortgage insurance is paid to a Private Mortgage Insurance company.  The premium for mortgage insurance depends on your down payment and your credit score.
  • There is no limit to the size of the loan.  If it is $417,000 or more, it is called a jumbo loan and you need a larger down payment.
  • You get the cheapest interest rate if your credit score is 740 or higher. 
  • The maximum debt-to-income ratio is 45%.

FHA Loans
  • Minimum down payment is 3.5% of the purchase price.
  • You always have to pay mortgage insurance for the first 5 years, regardless of how much you put down.  The premium for mortgage insurance is the same for everyone, regardless of their credit score.
  • The maximum loan size depends on the county you live in.  For Metro Denver counties, it is $406,250.  For Boulder County, it is $460,000.
  • You get the cheapest interest rate if your credit score is 640 or higher. 
  • The maximum debt-to-income ratio for most lenders is 50%.
Make sure your lender is allowed to sell both conventional loans and FHA loans (not all lenders are), and then ask them which one is going to be cheaper for you.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Down Payment Requirements

Here are the latest down payment requirements for mortgages in the US:

Primary residence (your main house):
  • 3% for conventional loans
  • 3.5% for FHA loans
  • 0% for VA loans
With primary residences, you can get a gift from a relative to cover the down payment!

Second homes (a second home that you do not rent to others):
  • 10% for conventional loans
Investment properties (houses that you rent to others):
  • 20% for conventional loans
  
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Does Net Worth Affect Your Mortgage?

People often ask us if their net worth affects whether they will be approved for a mortgage.  The simple answer is NO.

Net worth is defined as a borrower's assets minus their liabilities.  In other words, their net worth is the value of the things they own (including money in the bank) minus the amount of money they owe.

As an example, if someone has $5,000 in the bank and owns a car worth $15,000, their assets are $20,000.  If they have $15,000 in credit card debt and owe $10,000 on a car loan, they have $25,000 in liabilities.  Assets ($20,000) minus liabilities ($25,000) gives them a net worth of -$5,000.  So they have a negative net worth of $5,000. 

Does a mortgage lender care that they owe more than they have in assets?  Nope - not at all. 

The only thing a lender cares about is whether a borrower makes enough money to pay the mortgage, and whether they have a history of paying their bills on time.  Net worth has nothing to do with income or paying bills, so no one should worry about their net worth when applying for a mortgage.  Having a positive net worth does not help, and having a negative net worth does not hurt.  Mortgage lenders just don't care.

  
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Don't Forget the Property Tax Credit

Now that we're well into the second half of the year, it's a good time to remember that the property tax credit that the seller gives to the buyer will affect the amount of money the buyer needs for closing costs.

At the closing, the seller will credit the buyer one day of taxes from January 1 until the closing date.  If the taxes on a property are $2,400 a year, the tax credit will be about $1,600 if the closing is at the end of August, and about $200 more every month after that.

If the buyer is asking the seller to pay some of the buyer's closing costs, the tax credit needs to be included in the calculations when deciding how much to ask the seller to pay.  If the buyer doesn't consider the tax credit and asks for more than the buyer will actually have to pay at closing, the seller gets to keep the excess money.  Good for the seller, but bad for the buyer.

If you're going to be asking a seller to pay some of the closing costs for your buyer, make sure you ask your lender if they have considered the tax credit when they tell you the amount to ask for.

  
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Quick Way to Make Closings Go Smoother


"I don't sign my name that way!"  Is that a common complaint from your buyers at closings?   We hear it all the time.

Did you know that the lender and the title company take the buyers' names from the sales contract? 

If you want to make your closings just a little bit easier and keep your buyers a little bit happier (always good for referrals), then ask them how they normally sign their names when you are writing a sales contract.  


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Monday, July 16, 2012

New Fannie Mae Underwriting Guidelines


Fannie Mae just announced some changes to their underwriting guidelines.  Here are a few of the most note-worthy:
  • The maximum loan-to-value (LTV) and combined loan-to-value (CLTV) ratios for adjustable rate mortgages (ARMs) is being lowered from 97% to 90% for 1-unit, primary residences for purchase and no cash-out refinances.  This means you will need 10% down if you're buying a house and financing it with an ARM.  The ratios are being lowered even more for other types of transactions.
  • They are eliminating exterior-only appraisals and property inspections.  This means only full, interior appraisals will be allowed.  No more "drive-by" appraisals.
  • They are raising the minimum credit score for ARM loans from 620 to 640.
These changes will take effect in October 2012, but lenders are free to implement the changes earlier than that if they want to.

So things just got a little bit stricter.  The message?  The government, which now runs Fannie Mae, Freddie Mac, FHA, and VA - the four places where just about all mortgages end up - is not fooling around with foreclosures.  They want to stop them. 


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!


Make sure you check out our web site:




By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

You Need This Much Money to Buy a House


One of the most common questions we are asked is, "How much money do I need in the bank to buy a house?"

If you don't own any other properties other than the house you're going to buy, then all you need is enough money to pay for the down payment and the closing costs.  If the seller is going to be paying the closing costs for you, or the lender is going to be paying them for you, then all you need is enough money to cover the down payment. 

With FHA loans, the money you need to buy a house can be a gift from a relative, so you don't really need any of your own money.

If you own more than one property, then you will need to have reserves in the bank, an investment account, or a retirement account.  The amount of reserves depends on the type of properties you own and the type of loan you are getting for the new purchase.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!


Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Friday, June 22, 2012

FHA Underwriting Changes

FHA has changed their underwriting guidelines regarding collection accounts.  They instituted a new requirement earlier this year that made borrowers pay off collection accounts if the total of all collection accounts showing on a credit report was $1,000 or greater.

However, effective immediately, they have rescinded that requirement, meaning that collection accounts no longer have to be paid, regardless of how much they total.

It is important to note that just because FHA has changed their rules, it does not automatically mean that lenders have to follow those rules.  Lenders are allowed to have stricter rules than FHA when they sell FHA loans.  In other words, individual lenders may still require collection accounts to be paid before they will approve a loan.  Always check with your lender before assuming anything. 


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!


Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Thursday, June 21, 2012

Awesome New Business in Denver

We don't often use this space to promote other businesses, but we're making an exception today. Kyla DeTienne, an entrepreneur I met through the Rocky Mountain MicroFinance Institute, is having a grand opening celebration this Friday at her new clothing boutique.

Kyla is a dynamic young business woman, and I predict she will have great success in her new venture. Stop by her store to introduce yourself and to shop. You'll be glad you did!

Here are the details:


Friends of birds & belles boutique,

We are proud to announce the GRAND OPENING of our location at 1113 S. Pearl St. in Denver. We hope you will join us in celebrating THIS Friday, June 22nd.

Birds & belles boutique embraces a buy-sell-trade model to obtain quality, brand name and designer clothing as well as modern accessories. So, stop by and have a cocktail while you shop!

• Complimentary drinks from Top Shelf Vodka & Cocktail Mixers
• Tapas provided by Confluence Catering
• Hair Bows & Butter baby bundt cakes
• The Filter coffee cart
• DJ Corytron of The Cardinal Grey
• Door prizes, including FREE haircuts & fitness passes from our neighbors, Dia Bella & Johnny Mac Fitness
• Free birds & belles boutique shopping bag with $100 purchase (get 10% off every time you shop with your birds & belles bag!)

Please stop by between 6-9 p.m. on Friday, June 22nd.

Happy Shopping!

Kyla DeTienne
Owner, birds & belles boutique
1113 S. Pearl Street
Denver, CO 80210


Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Monday, June 18, 2012

New Fannie Mae Underwriting Guidelines

Fannie Mae, the company that writes the underwriting guidelines for conventional loans, has made some changes to the income guidelines.

The most significant changes involve variable income. Fannie Mae now explicitly describes "how lenders should evaluate, document, and calculate income that fluctuates, such as hourly pay, overtime, and commission income." In the past, Fannie Mae allowed lenders a great deal of discretion in how they calculated and documented income. That has changed. Now, lenders are told exactly how they must calculate and document income.

Although the changes will probably have a big impact on some lenders, those lenders who are already using "common sense" underwriting will not notice any changes at all. After reading through the new underwriting guidelines, we discovered that Fannie Mae has finally put in writing what we have been doing for years.

This is very good news for real estate agents and borrowers because much of the guesswork has been removed from the loan approval process. If your lender knows the guidelines, their loans will close.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Thursday, June 7, 2012

Are FHA Loans Only for Poor People?

Many people think FHA loans are only for poor people and first-time home buyers. Nothing could be farther from the truth.

There is no income restriction with an FHA loan: no minimum income and no maximum income. Also, there is no requirement that a buyer be a first-time home buyer to get an FHA loan.

There is a maximum loan amount for FHA loans. It is currently $406,250 for the Metro-Denver counties, and $460,000 for Boulder County.

Why would someone want to get an FHA loan, rather than a conventional loan? There are three main reasons.

1. FHA loans allow much higher debt-to-income ratios, meaning a buyer can get a more expensive house
2. There are no additional, stricter mortgage insurance underwriting guidelines like there are with conventional loans, meaning more people will be able to qualify for an FHA loan
3. Interest rates are usually lower with an FHA loan if the borrower does not have very good credit (720 and above)

Why do some lenders try to talk borrowers out of getting an FHA loan? Because those lenders are not approved to sell FHA loans. Very few sales people are going to tell you how good a product is if they can't sell it to you.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

What Credit Score Gets the Lowest Interest Rates?

What credit score is needed to get the lowest interest rates? Here's what you need to know:

• For conventional (non-government) loans, a 740 credit score gets the lowest interest rate. Every 20 points below 740 has the potential to increase the rate. The amount of the increase depends on how the mortgage backed securities bond market is trading that day.
• For FHA loans, a 660 credit score gets the lowest interest rate. Scores between 640 and 660 pay a higher rate, and scores between 620 and 640 pay an even higher rate.
• For VA loans, scores above 660 get the lowest interest rate. Scores below 660 pay a higher rate.

Remember, there are many more things that go into determining the interest rate besides credit scores. If a lender quotes you a rate without knowing everything about your particular situation, they are just making it up.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Wednesday, May 23, 2012

Stated Income Loans - Are They Back?

People are always asking us if stated income loans are back. For those of you who are new to the real estate business, a stated income loan allows a borrower to simply "state" their income. In other words, the borrower does not have to document their income with pay stubs. Instead, they just make up a number and get approved for a mortgage based on that phony income.

Stated income loans were the hallmark of the sub-prime mortgage days.

So are they back? The answer is NO, and here's why. The federal government now runs Fannie Mae, Freddie Mac, FHA, and VA - and that's where just about all mortgages end up. Congress has passed regulations saying that Fannie and Freddie cannot buy stated income loans, and FHA and VA never allowed them. So until there is a private market for mortgages, there won't be any stated income loans available. Anyone who thinks that foreclosures are bad for our country would agree that getting rid of stated income loans is one of the smartest things our government has ever done.

The only exception to this "no stated income" rule is for certain types of refinance loans, called "streamline refinances". With a streamline refi, a borrower does not have to prove their income if they are refinancing into the same type of loan that they already have (FHA, VA, etc.) and they have a record of paying their existing mortgage on time.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Friday, May 11, 2012

Buying a House After a Bankruptcy

Can someone get a mortgage after a bankruptcy? Yes they can! And they only have to wait 2 years from the date that the bankruptcy was discharged.

The most important thing is that they "re-establish credit" after the bankruptcy. That means no late payments of any kind (including collection accounts) for the 12 months preceding the loan application date.

What are the down payment requirements for people with bankruptcies? They are that same as they are for anyone else: just 3.5% of the purchase price for FHA loans.

What are the interest rates for people with bankruptcies? They are the same as they are for anyone else.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!


Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Friday, May 4, 2012

5280 Magazine Again Recognizes The Mortgage Experts

5280 magazine notified Debbie and Chris that they have been awarded the designation of FIVE STAR Mortgage Professional for 2012.

This marks the second year in a row that we have been recognized as being among the top lenders in the Denver area.

Thousands of recent home buyers were surveyed, and Debbie and Chris were each ranked among the top mortgage professionals in Denver, based on overall satisfaction and the willingness of those surveyed to highly recommend them to their friends.

Does that make us a TEN STAR team? We think so!

This presents a HUGE opportunity for Colorado real estate agents. When you refer your clients to The Mortgage Experts, you are referring your clients to a team that is recognized by home buyers - YOUR client base - as being the best. When your clients are satisfied - and they certainly are when you refer them to us - they will refer more business to you. Referring clients to us means more money in YOUR pocket.

Give us a call and join the winning team! Thousands of home buyers are extremely happy with what we do. You will be, too!

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Wednesday, March 14, 2012

HOA Fees

"Why are my HOA fees included in the loan payment section of the loan application if I don't pay my HOA fees to the lender?"

HOA fees are part of your monthly housing payment, even though they get paid directly to the HOA management company and not to the lender. HOA fees are a recurring debt and must be counted in the calculation of the debt-to-income ratio (DTI). The easiest way to do that is to include them in the monthly housing payment section of the loan application.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Wednesday, March 7, 2012

FHA Underwriting Just Got Tougher


Here is an important underwriting change for FHA loans.

At the moment, collection accounts do not have to be paid to qualify for an FHA loan.  However, for FHA loans with a case number assigned on or after April 1, 2012, the borrower must pay off collection accounts if the total amount of all collection accounts is $1,000 or greater.  The borrower can either pay them off prior to closing (not recommended because their credit scores will go way down), pay them off at the closing, or provide documentation that they have made payment arrangements with the creditor and they have already made three monthly payments.

Also, if the borrower has disputed accounts on their credit report, and if those disputed accounts total more than $1,000 and they are not at least 2 years old, they must be paid off or proof must be provided showing that payment arrangements have been made with the creditor and three monthly payments have been made.

How does this affect you?  Simply put, it will prevent a lot of people from getting FHA loans unless they can pay the disputed accounts or the collection accounts. 

What should you do about this?  First of all, NEVER use a credit repair company.  Credit repair companies will dispute every account on your credit report, and that means you will have to pay them all off.

The best thing to do is to use a lender who is as knowledgeable as we are.  We can advise you correctly.  



Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

How the FHA Increase Will Affect You


HUD just announced that they are increasing the up-front mortgage insurance premium and the annual mortgage insurance premium for FHA loans that have case numbers assigned on or after April 1, 2012.

The up-front MI payment will increase from 1.0% of the loan amount to 1.75% of the loan amount.

The annual MI payment will increase from 1.15% of the loan amount to 1.25% of the loan amount.

Here's how that will affect you:
  • For a $100,000 loan, the total mortgage payment will increase by about $13 per month.  
  • For a $200,000 loan, the total mortgage payment will increase by about $25 per month.
These are very small increases, and it is very unlikely that they will prevent anyone from being able to qualify for an FHA loan.  So when uninformed people tell you how the government is once again destroying the real estate industry, don't believe it.


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Tuesday, February 21, 2012

Use Credit to Have Good Credit


In order to have good credit scores, you need to use credit.  The credit bureaus (TransUnion, Experian, and Equifax) do not give good credit scores to people who do not use credit cards.

But how do you get a credit card if you don't have good credit scores?  Won't the banks just turn you down?

The answer is NO, not if you apply for a secured credit card.  When you get a secured credit card, you give the bank $300 or $500 and they give you a credit card with a limit of either $300 or $500, depending on how much you gave them.  The money you deposited with them is your credit limit. 

If you use the credit card regularly and pay it on time, then you will rapidly see an improvement in your credit scores. 

Two words of warning:
  • Make sure you shop around for the lowest fees.  Different banks charge different fees, and some banks charge outrageously high fees for their secured credit cards.  Call at least 3 or 4 banks to compare fees before opening a secured credit card.
  • A secured credit card is NOT the same as a pre-paid debit card.  With a pre-paid debit card, you do not have a line of credit - you just have a card that has some money loaded on it.  It will not improve your credit scores.

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!

Make sure you check out our web site:



By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.

Monday, February 13, 2012

Great News about Mortgage Insurance

Want some great news regarding mortgage insurance for conventional loans? How about this?


• The maximum allowable debt-to-income ratio (DTI) for mortgage insurance is being increased from 41% to 45%, regardless of the borrower's credit scores.

• Mortgage insurance monthly premiums are going down by a little more than 10% for borrowers with credit scores above 760.

These changes are for conventional (non-government) loans only. The mortgage insurance guidelines for FHA loans remain the same, meaning anyone who qualifies for an FHA loan automatically qualifies for FHA mortgage insurance. No additional underwriting is required.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Earnest Money and CHFA Loans

CHFA (Colorado Housing and Finance Authority) offers down payment and closing cost assistance for Colorado home buyers and they only require the buyer to contribute $1,000 of their own money to the transaction.

However, if a buyer pays more than $1,000 in earnest money, they are NOT allowed to get the amount that is in excess of $1,000 back at the closing. So make sure that when your buyer is getting a CHFA loan, they only pay $1,000 in earnest money.

Have a buyer who needs a CHFA loan? Send them to us and we'll take care of everything for you.


Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Re-establishing Credit

After a bankruptcy, a foreclosure, or a short sale, a potential home buyer must wait a certain period of time before they are eligible to get a mortgage.

In addition, the underwriting guidelines state that they must "re-establish" their credit. Many buyers are unaware of this additional requirement, and it prevents them from getting a loan.

Here's what re-establishing credit means: for the 12 months preceding the loan application date, the borrower must have a perfect payment record on all of their existing credit accounts. In other words, they can't have any late payments for one full year before applying for the mortgage.

If you have any prospects who have had a bankruptcy, foreclosure, or short sale, do them a favor and tell them to make sure they are paying all of their bills. Even one late payment will prevent them from getting a loan.

This "no late payments" rule ONLY applies to people who have had a bankruptcy, foreclosure, or short sale. Everyone else is allowed to have late payments on their credit report and they can still get a mortgage.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Wednesday, January 25, 2012

Tax Refunds as Assets

It's almost tax refund time. Many people ask us if tax refunds can be used to pay for a mortgage down payment or closing costs.

The answer is YES! All a borrower needs to do to document the tax refund is to provide a copy of the refund check and a bank statement showing that the refund has been deposited into their account. If the refund was automatically deposited into their account, they won't have a copy of the check, but the notation on their bank statement will show that it is a tax refund. In the case of automatic deposits, the only documentation necessary is the bank statement.

The money does NOT have to be "seasoned", meaning it has been in their account for 60 days. As soon as the refund has been deposited, it can be used to pay the down payment or closing costs.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Thursday, January 19, 2012

Real Estate Agents - Expand Your Sphere of Influence

By popular demand, one of the greatest ways to expand your sphere of influence is BACK!

If you're a Denver area real estate agent and you have a question about mortgages or credit reports, send us the question. If we choose your question, we'll answer it in our next email newsletter, AND we'll deliver a $25 Starbucks card to you as a way of saying "Thank You" for helping to expand the knowledge base of our local real estate industry.

We'll also include your name and contact information in our newsletter, which goes to more than 6,000 local people. We'll also post your question and contact information on our blogs, giving you outrageous exposure to thousands of people interested in real estate - buyers, sellers, and people who work in the industry.

Here's what you get, just for asking a question about mortgages:
  • $25 Starbucks card - delivered to you personally.
  • Your name and contact information sent directly to 6,000 Colorado Front Range people.
  • Your question and contact information on our mortgage blog. We had 20,446 people visit our blog in 2011 - that's an average of 56 visits per day!
  • Your question and contact information on our blog at Active Rain, a real estate blog with more than 210,000 members.The correct answer!
  • A chance to help expand the local real estate knowledge base.
All you have to do is email us your question. We take care of everything else.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
www.mtgsupportservices.com


By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

Debt-to-Income Ratio (DTI) - What Counts Against You?

The debt-to-income ratio (DTI) is the ratio of your debts divided by your income, and is one of the main things that determines how large a mortgage you can qualify for. But do all of your debts count against you?

The answer is no, not all debts count against you when determining the size of the mortgage you can get. Here is a list of some of the things that do NOT count against you when a lender calculates your DTI:
  • car insurance
  • electricity
  • water
  • gas
  • sewer
  • phone - land line
  • phone - cell
  • Internet 
  • cablecollection accounts
  • health insurance 
In basic terms, every debt that appears on a credit report (except collection accounts) needs to be included in the DTI, and everything that does not appear on the credit report does not need to be included.

Call us with any questions.

 
Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!


Make sure you check out our web site: 
www.mtgsupportservices.com

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

 

Friday, January 6, 2012

No W-2? No Problem

We get many calls this time of year from borrowers who are worried that they can't get a mortgage because their lender told them that they need their W-2 for 2011 and they haven't received it yet from their employer.

Employers have until the end of January to give W-2s to their employees and underwriters know that, so instead of a W-2, underwriters will accept the final pay stub for 2011, provided it shows the year-to-date income. The year-to-date income on the final pay stub will be the total income for the year, which is the same number that the underwriter takes from the W-2.

So don't worry if you have not received your W-2 yet. You can still get a mortgage without it.

Call us with any questions.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:
http://www.mtgsupportservices.com/

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.