Archive for the ‘Mortgages’ Category

Loan

Loan (Photo credit: Philip Taylor PT)

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with GMAC Mortgage.  Email Chuck at chuck.walden@gmacm.com or call 678-725-8076. Website is www.ChuckWalden.com

It’s time to act.  If you have been patiently waiting for better rates and better home prices, 2013 could be your last chance.

1.  Move if you’re a buyer – Rates are still awesome and you may never hear the words “it’s a perfect time to buy a house” again.  Interest rates are expected to increase this year.  Higher rates mean more money out of your pocket and the amount of home you can afford will decrease.

2.  Be picky about your lender – Always ask your friends and family who they trust or have used in the past.  I guarantee that you will not only find out who to use, but you will definitely find out who not to.  Talk with the recommended lenders about service and turn times.  Buying a home can be the most stressful event in your life.  Closing on time should not be taken for granted.  GMAC Mortgage has a closing on time guarantee. Trust me.  Your agent and you will appreciate not having to worry.

3.  The fat lady hasn’t sung until the loan closes – At the risk of sounding strange….closing a loan is a battle.  It doesn’t matter if you have an 800 credit score, no debt, and a seven figure income.  You must work hard with your loan officer as a team.  If they need something, get it now.  Putting things off even one day slows down the process.  Three things I always tell me buyers.  First, do not accept any money from anyone until your loan closes.  What if we need an updated bank statement and there is a large deposit listed?  This is a problem and even more documentation is needed.  Second, do not apply for any credit until the loan closes.  Do not apply for any credit cards so you can get a discount of the new stove for the new house.  Your credit will be monitored and if an inquiry pops up, more documentation is needed.  Third, do not quit your job.  Now, I know this sounds crazy, but I have seen it happen on the day of closing.  You have to have a job with income.

4.  Check your credit annually – www.annualcreditreport.com is a great website to track your credit.  If you are planning on buying a home later this year, pull your three free reports and make sure that every item listed is in fact yours.  If not, take the steps to correct it.  Take a look at your credit card balances.  Generally speaking, you never want to go over 30% of the credit limit.  People tell me all of the time that they pay it off in full every month.  Great, but that will not matter if I check your credit and you have a $750 balance on a $1000 limit card.  Keep that balance at or below $300.  Do you have a MasterCard, Visa, AMEX, Kohl’s, Target, Sears, and Discover cards?  That’s too many.  Available credit is also a factor in determining credit scores.  If you’re interested, call or email me to discuss how to tackle this problem.

5.  Get preapproved – A good real estate agent will never show you a house without you getting preapproved first.  Some still do, but I think you would agree that it’s a waste of time and money to drive you around only to find out later that you don’t qualify.  Find out how much house you can afford and then proceed from there.  Lenders (good lenders) will give you exact figures on payment and a price range you should concentrate on.  It is imperative that you are armed with this knowledge before you Google the first area to start looking.

2013 I going to be a great year, but change is ahead of us.  Please let me know if I can help in any way.

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Renovation

Renovation (Photo credit: HatM)

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

Recently, in Georgia, an interesting thing has occurred.  There is a housing shortage.  If you place an offer on a home, there may be 10 or more offers already submitted.   Over the last few months, this has become increasingly frustrating to the buyers I am speaking with on a daily basis. On one hand, it’s great for the housing market because houses are beginning to be sold for more than the listing price.  But on the other, potential home buyers are having difficulties buying homes.

One thing that I have seen separate winning offers from others is potential buyers are making offers on homes that need a little TLC.  These homes are not receiving as many offers if any.  The 203K loan program is a perfect fit for this market.  If you’re not familiar with the 203K, a basic synopsis is below.

1)  There are two types of 203K loans.  The first is called a Streamline K.  This is for any repairs or renovations needed when the dollar amount is $35,000 or below.  The second is a Consultant K.  This would be for any repairs or renovations needed when the cost is greater than $35,000.

2)  You can choose your own contractor as long as he/she is licensed and has liability insurance

3)  This program can be used to bring the house up to standards and to perform any renovations that you would like.  For instance, if you want to redo the kitchen, add new appliances, upgrade a bathroom, etc feel free to do it

4)  This program does require extra work.  The buyer will need to get a bid(s) for the work being performed

5)  The appraiser will take the bid(s) and appraise the home for what it would appraise for after improvements have been made

6)  After closing, the repairs and renovations are completed and you’re all done

7)  Real estate agents do get paid at closing just like a normal transaction

8)  Make sure to use a seasoned 203K company and loan officer.  If you don’t, you’re setting yourself up for failure. Make sure they lend their own money, have their own draw department, and underwrite their own loans.

I would encourage you to explore this program further. It is awesome for the buyer and for the neighborhoods these homes are located in.  If you are a real estate agent if your searching for a new home, call me or email me if you want more information. It is amazing that more people are finally taking advantage of this program in a seller’s market.  I’m here to help walk you through it every step of the way.

Loans

Loans (Photo credit: jferzoco)

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

As a loan officer, I have to look at every loan as if I’m the underwriter.  If I put myself in her/his shoes, what will I see?  What are potential issues and red flags?  A question asked of me constantly is, what does an underwriter look at when evaluating my loan?  Listed below is my opinion on what can make a strong loan.

First, your credit will be evaluated.  Your credit score is a number which will tell the underwriter if you have been paying bills on time and if you have had any issues related to collection accounts, judgments, liens, bankruptcy, or a foreclosure.  if you have credit cards, are they maxed out?  Your credit score is also a great representation of the likelihood of you making your future house payment.  The higher the score, the more likely you are to make your payment and make it on time.

Second, your debt to income ratio will be evaluated.  Debt to income is basically money coming in verses money going out.  If you make $2500 per month and your bills are $1250 per month, the debt to income ratio is 50%.  The debt to income ratio is also broken down into two numbers.  The first number is your housing ratio. This number is your total house payment (principal,interest, taxes, insurance, and mortgage insurance if applicable) divided by your monthly income.  The strongest number would be anything at 28% or less.  If your number is over 28%, that’s ok.  Loans are approved all the time with a number higher than 28%.  The second number analyzes your total debt.  This would be your future house payment plus all of your other monthly debt divided by your monthly income.  A solid number is 42%.Once again, loans are approved at a higher number up to and including 50%.  The higher the number, the weaker the loan.

Third, the property you are buying will be evaluated.  Lenders do not want to lend money on a home that has issues or that does not appraise for the amount you are purchasing the home for.  The underwriter will look at the appraisal to determine if there are any safety and health issues, comparable sales in the area, square footage, etc. If you are using FHA financing, appraisals are very strict and if anything is noted on the appraisal that could be a concern, then it will be imperative that the issue is resolved before an approval will be granted.  The appraisal is one aspect of the loan that cannot be predicted.

Fourth, your assets will be evaluated.  The underwriter will look at how much money you are putting down on the home and how much you will have after you close.  If you are using every dollar you have to purchase the home, that will be an issue.  Don’t forget, you have to turn on utilities, buy furniture, etc.  All of which will cost money.  The more money you put down the stronger you look to the underwriter.  The more money you have in the bank after you close, the stronger your file will look.  If your bank statements have large deposits or multiple deposits that are not payroll related, you will have to prove where that money came from.

All four of the above items are important and will be looked at as a total picture.  When discussing buying a new home with your loan officer, do not hold anything back.  Layout your problems, concerns, and dreams.  It’s best for everyone involved in the transaction to be upfront and honest right from the beginning.  This will make your home buying experience much less stressful.  Also, when you first start thinking about purchasing a home, call me. Don’t wait until you have already found your dream home.  It’s much better to know how much you can afford and if there are any issues before you even start looking for your home.

Pontypool Park Choices

Pontypool Park Choices (Photo credit: Wikipedia)

I deal with first time homebuyers on a daily basis and I love it.  Most first time buyers need guidance, advice, and someone they can trust.  One of the main questions I get asked is what choices do I have?  Or, I want a first time buyer program.  It’s my job to ask the right questions in order to lead them down a path where they can achieve their dream of owning a home.

First time homebuyer choices:

A Conventional Loan – A conventional loan normally requires a 5% down payment.  Underwriting guidelines can be a little more stringent and may require a debt to income ratio (money coming in versus money going out) less than 45%.  Anytime you put down less than 20% you will also have a mortgage insurance premium added to your payment.

A FHA Loan – A FHA loan only requires a 3.5% down payment.  Underwriting guidelines allow for a buyer to have some issues as long as there is a reasonable explanation.  This program does have mortgage insurance added to your monthly payment.  FHA also has Upfront Mortgage Insurance.  Until April 9th, this is 1% of your purchase price.  After April 9th, it will be 1.75%.  This amount is charged to the buyer but is added back into the loan and is financed over the life of the loan.

A HomePath Loan – A HomePath loan only requires a 3% down payment.  HomePath loans are only available for HomePath houses.  These are foreclosed homes owned by Fannie Mae.  This loan does not require an appraisal and does not require mortgage insurance.

A Rural Development Loan (USDA Loan) – A USDA loan does not require a down payment.  It does require the home to be located in a specific area and qualify for this program.  Properties can be located online at http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do .  Also, USDA has a cap regarding how much income your entire household receives.  If your household is over this cap, you would not qualify.

Renovation Loans – 203K, HomePath Renovation, and Homestyle.  While these loans do require additional effort on the buyers part, they do help the buyer purchase the home with the repairs or renovations included in the original loan.  After closing, the repairs are made.  These programs are also helping home values and steadily increasing values in neighborhoods.  Each renovation program has its own guidelines and requirements.

VA Loan – A VA loan does not require a down payment.  Being a veteran myself, I always love doing loans for other members of the armed forces.

Buying your first home can be stressful.  Make sure you are dealing with someone who can explain all of your options, clearly, and is willing to hold your hand through the entire process.  If you would like to discuss your options, please feel free to give me a call or email me anytime.  I would love to help you realize your dream.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

 

Finally.  More and more home  buyers are discovering the benefits of homeownership using a Rehab or Renovation Loan.  Why buy a home that isn’t exactly what you want?  You shouldn’t. Why settle for an outdated kitchen?  You shouldn’t.  If you’re an investor, why use your own funds to repair the problems with the property you are buying?  You shouldn’t.   What if you could replace all of the kitchen appliances, paint the interior, and replace the carpet in your mortgage?  You can. 

There are several types of renovation loans that work with most home purchases.  They all have the same benefit to the buyer.  Finance in repairs, remodeling, and renovation into one loan.  The main three types of renovation loans are 203K, HomePath Renovation, and Homestyle.  They are each different but the end result is the same.  A happy homeowner with a house they are proud to call home.

Another added benefit is that the new home will appraise for more than the purchase price.  This increases home values in neighborhoods which I know all of us appreciate.

If you are an agent or buyer and interested in an easy cheat sheet, email or call me anytime and I’ll send it to you.  This program benefits the homebuyer, the agent, and the community.  A win win for everyone involved.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

What do real estate agents want and expect from their loan officer? Great question!  I would love some feedback on this because I have heard them all.  I recently dealt with an agent that said not to call, email, text, or send carrier pigeon. Close on time and I’ll see you at closing.  Then there’s another agent that wants an email every morning by 10:00 stating the status of the loan.

My thoughts are simple. What if you were provided a weekly update?  What if you were notified any time something happened?  For instance, the appraisal is in, the title is in, or the file is out of underwriting.  I realize that all agents are different, just like all loan officers

Carrier Pigeon

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are different and I don’t have a problem with that.  I believe the agent should be kept up to speed as we move through the process.  I believe that an agent should never have to “wonder” what is going on with the loan.  I believe that if there is a problem the agent should know ASAP.

I know that some agents need more information and some need less.  I would suggest that the first time you speak with your loan officer, you tell them what you expect.  Then if they don’t live up to that, move on until you find one that meets and exceeds your expectations.  Find one that doesn’t like drama.  Find one that loves to communicate.  Find one that is willing to tell you NO when he or she knows a deal will not work.  Find one that you know has your back.  Find one that returns your calls immediately.

I would love to hear your thoughts.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

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A month or so ago, I discussed the upcoming release of HARP 2.0.  HARP 1.0 is a mortgage program which allows homeowners to refinance up to 125% of their home’s value.  Of course, some lenders do put their own restrictions on the Loan to Value (LTV).  HARP 2.0 is “supposed” to remove the LTV cap for underwater homeowners and provide them with the much needed benefit of a refinance at a lower rate.

Even though this program was released last year, the official launch should be in mid March 2012.  Fannie Mae and Freddie Mac have been updating their systems in order to accomplish the approvals of this new program.

Call to action:  DO NOT wait until mid March to start thinking about doing this.  Go ahead and get your loan officer on the phone and get the process started now.  I’m sure you can imagine the massive influx of new refinance applications that will pour in once this has been released.  Your loan officer will give you a list of items needed in order to process and underwrite your new loan.  Make sure you’re at the top of the stack not the bottom.

To apply immediately, you can call me at 678-725-8076 or go to my website www.ChuckWalden.com and apply there.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076.  Bonus: Click to get a free, no obligation preapproval. I love to work with my readers!