mortgage tips: Use the Web Site the Underwriters Use - 11/09/09 05:03 PM
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 … (1 comments)
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mortgage tips: Should You Close One Credit Card Account and Open Another One? - 11/03/09 08:56 AM
There was a financial advice column in the Denver Post on November 1 that incorrectly stated that closing a credit card with an annual fee and opening another one without an annual fee would have little effect on a person's credit score. That is simply not true. The length of time … (2 comments)
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mortgage tips: Are Closing Costs 2%, 2.5%, 3%, 3.5%, 4%? - 10/29/09 05:23 PM
How much are the closing costs for a purchase transaction? 2.5%, 3%, 3.5%, 4%?
We get asked this question all the time, and here's why we can't answer it without actually preparing a Good Faith Estimate.
Many of the closing costs are fixed costs, meaning they are the same regardless of … (0 comments)
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mortgage tips: Banker Vs. Broker - What is the Difference? - 10/24/09 11:29 AM
We are often asked what the difference is between a mortgage broker and a mortgage banker. Here's the difference.
A mortgage broker is any loan sales person who represents more than one lender. Some brokers represent a few lenders and others represent dozens of lenders. When a loan is funded by … (5 comments)
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mortgage tips: How Long Does Money Have To Be In A Bank Account? - 10/16/09 03:33 PM
Borrower funds used for the down payment, closing costs, and reserves must be "seasoned" for two months before they can be used to qualify for a mortgage. This means the borrower must be able to provide proof that the money has been in their account for two months. Cash on hand … (1 comments)
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mortgage tips: Seasonal Work - Can You Use it to Qualify for a Loan? - 10/15/09 08:42 AM
As the holidays approach, there will be questions about whether income from seasonal employment can be used to qualify for a mortgage. Here are the rules:
The borrower must have worked in the same job, or in the same line of seasonal work, for the past two years.
The borrower's employer … (0 comments)
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mortgage tips: FHA or Conventional Financing? Which is Best? - 10/06/09 09:50 AM
There is a lot of confusion regarding when someone should get a conventional loan versus an FHA loan. Here's a brief overview of the differences:
FHA loans:
The loan is insured by the federal government, so it is only underwritten once. If the loan is approved by the lender, it automatically … (7 comments)
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mortgage tips: New FHA Appraisal Rules - 09/30/09 05:21 PM
Effective January 1, 2010, mortgage brokers and mortgage bankers will no longer be allowed to order appraisals directly from an appraiser for FHA loans. FHA is not adopting the Home Valuation Code of Conduct (HVCC), but they are adopting many of the guidelines spelled out in the HVCC.
At the moment, … (1 comments)
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mortgage tips: Fannie Mae Lowers Its Maximum Debt-to-Income Ratio and Raises Its Minimum Credit Score - 09/24/09 11:58 AM
This is something that will have incredibly far-reaching effects in the real estate industry.
Fannie Mae just announced that they are LOWERING the maximum debt-to-income ratio for all loans underwritten by their automated underwriting system to 45%, and to 50% for loan files that have strong compensating factors (very high credit … (3 comments)
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mortgage tips: Loan Fraud Red Flags - 09/17/09 09:38 AM
We get a lot of questions about loan fraud - how does anyone know if something's fraudulent, who checks to see if there's fraud, etc. Loan fraud is detected by reviewing the loan application (and all supporting documentation), sales contract, title commitment, closing docs, and anything else related to the … (4 comments)
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mortgage tips: How Does the Final Settlement Statement Get Prepared? - 09/11/09 05:33 PM
We're often asked what the process is for getting the HUD-1 Settlement Statement prepared. Here you go:
The underwriter issues the final approval for the loan, often referred to as the "clear-to-close".
The mortgage broker lists the lender fees on the doc prep order form and sends it to the doc … (3 comments)
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mortgage tips: Seldom Used Way to Buy a New Primary Residence - 09/02/09 04:21 PM
If a couple wants to buy a new primary residence and keep their current house as a rental, but are worried about qualifying based on the payments for both houses, here's a way to do things that sometimes makes it easier.
If only one spouse owns the couple's current house, and … (0 comments)
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mortgage tips: Half the Mortgage Brokers in Colorado THROWN OUT! - 08/31/09 01:34 PM
As of today, about half of the mortgage brokers in Colorado are no longer allowed to sell loans. We were told over a year ago that we needed to take classes and pass a test, but only half of us did it.
And we wonder why there are so many foreclosures!
… (3 comments)
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mortgage tips: How High Can the DTI Go? - 08/28/09 10:06 AM
We are often asked what the maximum allowable debt-to-income (DTI) ratio is for the various types of loans. Here you go:
For FHA loans, the maximum allowable DTI is 43% if the loan is manually underwritten and it is unlimited if the loan is underwritten through FHA's online underwriting software. We … (2 comments)
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mortgage tips: Gift Funds Used for the Down Payment - What are the Rules? - 08/21/09 11:58 AM
If a borrower does not have enough money to pay for the required down payment, it is permissible to have a relative give the borrower the money for the down payment.
With an FHA loan, the entire down payment amount can come from a relative. The gift donor must sign a letter stating that … (7 comments)
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mortgage tips: $8,000 Tax Credit Expires Soon - 08/20/09 05:05 PM
There is much news these days about an extension to the $8,000 first-time homebuyer tax credit. There is also talk that it might be expanded to include second homes and investment properties. PLEASE don't believe it. The tax credit is set to expire on November 30, 2009. Under the current IRS … (0 comments)
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mortgage tips: Is Anyone Reviewing the Title Commitment? - 08/17/09 12:29 PM
It's important to make sure your mortgage broker is reviewing the title commitment on all your deals. Many times, there are issues that must be addressed by the seller that could be deal-killers if they are not dealt with correctly. Some examples of things that might show on the title commitment … (0 comments)
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mortgage tips: How to Avoid Closing Delays - 08/10/09 09:17 AM
The new Truth-in-Lending law recently went into effect. One of the most important parts of the law says that if the Annual Percentage Rate (APR) on the final Truth-in-Lending disclosure differs by more than 0.125% from the APR that was disclosed on the most recent Truth-in-Lending disclosure issued by the lender, … (1 comments)
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mortgage tips: Read the Counter-Proposal! - 08/10/09 09:11 AM
We're seeing a lot of sales contracts with counter-proposals from the seller stating that the seller will only pay for non-recurring closing costs. A non-recurring closing cost is a fee that is only paid once, at the closing. If a fee will need to be paid more than once over the … (2 comments)
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mortgage tips: New Waiting Periods Before Closings - Good or Bad? - 07/24/09 04:43 PM
For loan applications taken on or after July 30, 2009, the Mortgage Disclosure Improvement Act imposes new waiting periods before closings can take place. There are many changes, but here are the things that will affect the closing date:
No loan can close in less than 7 business days from the … (2 comments)
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