Tuesday, August 27, 2013

FHA Quick Reference Guide

Have questions about FHA loans?  We have a link to an FHA Quick Reference Guide on our web site that will help you out. Here's the link to our web site.  Look for the FHA Quick Reference Guide near the bottom of the home page.


Or, you can click here to go directly to the FHA Quick Reference Guide.

We sell all kinds of loans: conventional, FHA, VA, CHFA, and even have a loan that only requires 3% down and it doesn't have any mortgage insurance!

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!
 
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, August 22, 2013

Only 3% Down and NO Mortgage Insurance

Did you know that you can buy a house for only 3% down, with absolutely NO mortgage insurance?  We’re not talking about mortgage insurance that is hidden in the interest rate – we mean NO mortgage insurance! 

Not every lender is allowed to offer these loans, but we are. 

Here’s what you need to know:
  • Only 3% down and the down payment can be a gift from a relative
  • There is no mortgage insurance
  • 30-year, fixed rate mortgage
  • This is for owner-occupied properties only
  • The borrower cannot own any other properties
  • No condos, but townhouses are OK
  • The borrower does NOT have to be a first-time homebuyer
  • Maximum purchase price in the Denver-Metro area is $375,000.  Boulder County is $417,000.
  • Maximum household income in the Denver-Metro area is $79,300 for a 1-2 person household and $91,100 for a 3+ person household.  Boulder County is $93,800 for 1-2 people and $107,800 for 3+ people.
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!
 
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, August 19, 2013

When Does Mortgage Insurance Go Away?

There is a lot of confusion regarding when mortgage insurance goes away these days. Here's what you need to know:

If the loan is a conventional loan (meaning it is NOT an FHA loan), then mortgage insurance goes away once the borrower has 22% equity in the property (based on the purchase price).  

A borrower can request that the mortgage insurance go away if they have 20% equity in the property, but they will need to pay for a new appraisal to prove that they have 20% equity.  The equity in this case is based on the appraised value, not the original purchase price.  The lender does not have to honor the request for the mortgage insurance to go away early, but they usually do.

For FHA loans, the mortgage insurance never goes away if the borrower put less than 10% down, and it goes away after 11 years if they put 10% or more down.  There is no option to get a new appraisal and have the mortgage insurance go away early with FHA loans.

It is important to note that the old rules for FHA mortgage insurance are still in effect for FHA loans that had a case number assigned on or before June 3, 2013.  In that case, the mortgage insurance goes away once the borrower has 22% equity in the property, or after 5 years, whichever is later.

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!
 
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, August 15, 2013

Mortgage Insurance Is Easier to Get

Did you know that the underwriting overlays for mortgage insurance have been removed?  That means you can get mortgage insurance for a conventional loan without worrying about additional rules that the mortgage insurance company may impose. 

All you need is an approval from the Fannie Mae underwriting software and you are automatically approved for private mortgage insurance.  


Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!

 
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, August 12, 2013

Debt-to-Income Reference Sheet

Lenders use a ratio called the Debt-to-Income ratio (referred to as the DTI) to determine whether a borrower makes enough money to qualify for a loan.  
Different loan types have different DTI ratios.  We have the current DTI ratios for different types of loans posted on our web site near the bottom of the home page.  Here is the link to our web site:
Or, you can get to the DTI reference sheet directly by clicking here.

Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!  Call us if you want to use the best lenders in Colorado!
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, August 7, 2013

Down Payment Reference Guide

There is a lot of confusion regarding the latest down payment requirements.  Here's how to avoid that confusion forever!

We have a reference sheet on Down Payment Requirements on our web site (near the bottom of the home page).  Here's the link to our web site:


Or, you can get to the reference sheet directly by clicking here.

Call us if you want to use the best lenders in Colorado!


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.

Why Interest Rates Change

We are constantly being asked if interest rates are going to go up or down.  Our answer is always the same: we don't have any idea.  Here's why we don't know.

Mortgage interest rates go up and down depending on how the mortgage bond market is trading.  If investors (China, Japan, the Federal Reserve, etc.) buy a lot of mortgage bonds, then rates will be low.  If those same investors decide to buy fewer mortgage bonds, then rates will go up.

NO ONE knows how big the demand for mortgage bonds is going to be every day.  Some days it's pretty big, and some days it's not so big. 

We call Beijing, Tokyo, and Ben Bernanke every morning, to find out how many bonds they are going to buy that day, but we always have to leave a message and they never return our calls.

So we don't know if rates are going to go up or down.

Plenty of lenders will tell you that they know whether rates are going to go up or down, but they are just making it up so you will think they know what they are doing.  It's a lot like flipping a coin - you're going to be right exactly 50% of the time.

We have always found that saying "I don't know" is one of the best things you can do to increase your business.  We say that every time someone asks us about interest rates changing, and we're right 100% of the time.  People really like that.

Call us if you want to use the best and most knowledgable lenders in Colorado.  We can tell you the answer to anything you want to know about mortgages, except for whether interest rates are going up or 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.

Seller-Paid Closing Costs

Ever had a question about how much a seller can pay towards a buyer's closing costs?  Well, question it no more!

We have a reference sheet on Seller-Paid Closing Costs on our web site (near the bottom of the home page).  Here's the link to our web site:


Or, you can get to the reference sheet directly by clicking here.

Call us if you want to use the best lenders in Colorado!

 
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 to Find the Correct Property Address

Here's a great way to avoid having to amend sales contracts. 

Before approving a loan for closing, underwriters need to make sure the address that is on the sales contract is the correct address.  If the address is incorrect, the sales contract will need to be amended to show the correct address, and that can cause unnecessary delays. 

The address that shows on the title commitment is NOT the official address, so if for some reason you have the title commitment before writing the contract, you can't rely on that address. 

Underwriters use the United States Postal Service Zip Code look-up web site to get the official addresses of properties. 

Here's the link to the site:


Once you are on the site, enter the street address, city, and state that you have (you do not need to enter the Zip Code), and hit FIND.  The correct USPS address will be returned.

If you use this official USPS address on the sales contract, you will avoid closing delays.

 
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.

Here's How Lenders Get the Details

Ever wonder how underwriters find out all the details about a buyer or a property?  One of the greatest resources for an underwriter is the Public Records Online Directory.  This web site is a portal to all the official Assessors', Recorders', and Treasurers' web sites.

Here are just a few of the things that can be found by using this site:
  • assessed value
  • taxes
  • current owners' name and address
  • sales history
  • deed recording dates
  • zoning information
  • property type (end the confusion about whether a property is a condo or a townhouse)
Here's the link to the site:


When the web page opens, just click on the state, then the county, and then the link to the Assessor, Recorder, or Treasurer.  If the link says "Go to Data Online" that means you will be able to access the information yourself.  If the link says "Website Only" or "No Information Online", then you won't be able to get the information yourself, but you can call the phone number listed next to the link to get what you need. 

We use this web site for every loan we sell, just so we'll know exactly what the underwriter is going to see when they start their research.  It's much better to head off problems early in the game than to have a deal fall apart at the last minute.


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 to Calculate Self-Employed and Rental Income

We get many calls from consumers and real estate agents asking how to calculate self-employment income or rental income.  It can seem complicated, but it's really a pretty easy calculation if you do it step by step.  Here's how it's done:
  • Take your net self-empoyment income or rental income that you reported on your tax returns.  Your net income is the number after you subtract all of your expenses.  Sometimes, this number may be a negative number because your expenses were more than your revenue.
  • Add back in any amounts you counted as expenses for depreciation, depletion, or business use of your home.
  • Subtract any amount you counted as an expense for meals and entertainment. 
  • The result is how much you can count as income for that year to qualify for a mortgage.  HOWEVER, you must also average self-employed or rental income over the past two years.  Figure it out for both years, add the income for both years, and divide by 2.
  • The only thing that makes this complicated is that if your income decreased from one year to the next, you do NOT get to average the two years.  You have to count the most recent year's income - the lower income. 
  • Depending on how much your income dropped from one year to the next, the lender may require you to provide proof that your income has either stabilized or is increasing in the current year.  Typically, the proof they require is a Profit and Loss (P&L) statement and a Balance Sheet for the current year.
If you have any questions regarding self-employment or rental income, just give us a call. 


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.

When Second Job Income Counts

Many people have second jobs these days and we are often asked when that income counts towards qualifying for a mortgage.  Here are the rules:

Second job income (whether part-time or full-time) can only be counted towards qualifying for a mortgage if the borrower has had both jobs (primary job and second job) for a full two years.

If the borrower has had the second job for less than two years, then only the income from their primary job can be counted.

Have questions about income or anything else related to mortgages?  Give us a call and get the correct answer the first 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:



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 You Need to Know about ARMs

Thinking of getting an adjustable rate mortgage (ARM) now that interest rates are rising?  Here's what you need to know:
  • The interest rate of every ARM is designed to go up.  Yes, it can also go down, but lenders are hoping it will go up so they'll make more money.  The industry term for the initial interest rate of an adjustable rate mortgage is a "teaser rate" because the lenders are teasing you with an interest rate that they know will probably go up in the future.
  • You need to know how often the interest rate will change.  How long is it fixed before it changes, and how often does it change once it starts changing?
  • You need to know the interest rate caps.  Every ARM has three interest rate caps: the first cap is how much the rate can change the first time it changes, the second cap is how much it can change every time after that, and the third cap is the most it can change over the life of the loan. 
  • You need to know how the new interest rate will be calculated.  All ARMs have both an index and a margin.  The index fluctuates, depending on how the financial markets are doing, and the margin is a fixed number that gets added to the index to determine your new interest rate.  Index + margin = new interest rate.
Adjustable rate mortgages are getting popular again, but they are definitely not for everyone.  If you have any questions at all about how ARMs work and whether they are appropriate for you or one of your clients, just give us a call and we'll explain them in detail.


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.

Lender Checklist

We get a lot of calls from real estate agents who are looking for new lenders.  Many agents say they don't really know how to tell if a lender is any good, and they ask for our advice.  Here's a quick checklist of questions to help you choose a lender:
  • Do they quote interest rates without knowing the borrower's credit score, the size of the loan, the amount of the down payment, the occupancy type (primary residence, second home, investment property), and the property type (single family residence, townhouse, condo)?  A lender needs to know all of that info before they can possibly quote an accurate interest rate.
  • Can they explain all of the closing costs - not just the dollar amount, but what the fees are actually for?
  • Can they explain all of the disclosures so the borrowers understand them? 
  • Are they approved by Fannie Mae, Freddie Mac, FHA, VA, and CHFA?
  • Do they charge an application fee?  There should never be an application fee.
  • Do they personally attend 100% of their closings?
  • Do they review the final numbers with the borrower the day before the closing?
  • How do they do pre-approvals?  Do they know that they have to manually check the investor guidelines and the mortgage insurance guidelines before they will know whether a loan will be approved, or do they just rely on the Fannie Mae or Freddie Mac underwriting software to give pre-approvals?

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 to Get Pre-Approved for a Mortgage

There is a great deal of confusion about how to get pre-approved for a mortgage (probably because just about anyone can get a job selling mortgages - there is no IQ test to be a lender - and a lot of us don't have the slightest idea what we're doing). 

Here is the mortgage pre-approval process:
  • A lender needs to pull your credit, and will ask you where you lived for the past two years, how much money you make and where you worked for the past two years, and how much money you have in the bank.  All of this takes about 15 minutes on the phone.  There is no need for you to fill out a loan application online or come into the office of the lender.  A good lender can do it all over the phone.  By the way, this is free.
  • The lender then enters all this information into underwriting software, and the software tells you how large a loan you qualify for.
  • The lender checks the underwriting guidelines for the investor they will be using, and also checks the guidelines for the mortgage insurance company they will be using (only if mortgage insurance is required).
  • That's it.  You're ready to shop for a house.
If you have experienced something that is more complicated than this, you need to use a different lender.  Give us a call and see how easy it is to 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.

Do NOT Dispute Credit Accounts

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, just because they disputed a credit account.

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.

Hands Off that Credit Report

Federal guidelines require lenders to refresh credit reports before a real estate closing.  We are not looking to see if a borrower's credit scores have changed, but we are looking to see if a borrower has applied for any new credit since the mortgage loan application, and also to see if any significant new debt has been added to any of the borrower's existing accounts. 

Additional credit accounts or additional debt will not necessarily prevent a loan from closing, but we do need to have a written explanation addressing any new credit inquiries that show up on the refreshed credit report.  If new accounts or new debt raises the borrower's debt-to-income ratio above certain tolerances, then the loan must go back to underwriting, which will inevitably cause a delay in the closing.
  
How can a borrower avoid these delays?  It's simple: tell your lender if you have applied for additional credit or increased your debt as soon as you do it.  Of course, the best thing to do is not to apply for any new credit and not to increase your debt until the mortgage loan closes, but sometimes that is impossible.  Cars break down, people get sick, emergencies happen.  Just please tell your lender as soon as something happens.  We're going to find out right before the closing anyway, so tell us early and avoid closing delays.

  
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.

Five Star Mortgage Professionals

For the third year in a row, Debbie and Chris have both been awarded the designation of FIVE STAR Mortgage Professional.  Once again, 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 us 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:



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.

Sometimes Cash is Useless

All large deposits into a borrower's bank account now need to be verified, meaning the borrower must provide documentation showing where the money came from.  The definition of a "large deposit" is different for every lender. 

If the source of the money is cash, as opposed to a payroll check, a transfer from another account, or some other source that can be verified, then the lender will not allow that money to be counted towards the borrower's assets.  That can be a huge problem if the borrower needs the money for closing. 

What can you do to prevent a delayed closing?  Contact a lender as early in the home-buying process as possible, so the lender can offer some guidance regarding what to do with the cash.  The easiest way around the cash problem is to deposit the money in the bank two months before applying for a mortgage.  If the money is already in a bank account and is included in the opening balance that's shown on a two-month old bank statement, then the source of the money does not have to be verified.


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.