There is a little known mortgage insurance product which is an alternative to the traditional monthly mortgage insurance. It is called LPMI which stands for Lender Paid Mortgage Insurance. In exchange for choosing a slightly higher interest rate the lender covers the mortgage insurance for you. The savings can be significant by choosing this option even though you do pay the higher interest rate for the life of your loan where the traditional monthly mortgage insurance can eventually … (0 comments)
mortgage: how does running a pre-approval effect a buyer's credit
- 08/02/14 05:36 AM
This is a very common (and valid) question that I get among homebuyers, especially first time homebuyers. The fear is by having a lender run your credit report your credit scores will drop so why do that unless you are sure you have found a house and are ready to make an offer. The reality is that an occasional credit inquiry will not have a material impact on your credit scores. While it may drop your score a couple of points, in only very rare cases will this result in a borrower not being able to qualify for a mortgage. Your TransUnion FICO … (2 comments)
mortgage: Financing foreclosed properties
- 12/19/13 04:07 AM
To obtain a conventional/residential loan on a foreclosed property your new lender will likely require that the property be in good condition. For example, the roof can’t need replaced, no mold, all utilities must be on and functioning which includes water & furnace. It is not uncommon for items to come up on the appraisal that the lender will require to be addressed prior to closing. When this occurs, commonly the seller won’t fix any problems nor allow you to fix them. If this occurs you won’t be able to get a conventional loan on the property. If you are looking to buy this house to live … (0 comments)
mortgage: FHA lowers loan limits starting Jan 1, 2014
- 12/10/13 08:58 AM
Did you know the FHA has announced that they have reduced their loan limits starting on Jan 1, 2014? For example, in Western Pennsylvania the limit for single family residences will drop from $327,500 to $271,050. So what does this mean for those that want to borrow more than $271,050? In order to be “grandfathered” for the higher loan limit you have to apply for an FHA loan and be sure they have obtained an FHA case number for you before Jan 1, 2014. The FHA case number is tied to a specific property address so if you are buying a … (0 comments)
mortgage: How an expiring credit report can impact your loan
- 11/25/13 03:52 AM
Be cautious with your credit from the time of mortgage pre-approval until you have closed on your mortgage. Your credit report is only good for 90 days for conventional loans and 120 days for government loans. So let’s say for example that you are pre-approved on 9/1, find a house and get it under agreement on 11/1 to close on 12/15. If you are getting a conventional loan your credit report will expire prior to the closing date which means the lender will require an updated credit report. IF from the time of pre-approval you do any of the following not … (2 comments)
mortgage: Financing investment properties with less than 20% down
- 11/22/13 02:13 AM
Traditionally one needs 20-25% down to finance a single family investment property. While that is great for those that have that much liquid funds but what about those of us who don’t? Well now we can offer conventional financing on those properties with only 15% down at an interest rate of approximately 5% on a 30 yr fixed loan. Unfortunately, if you are looking for a multi-family property you will still need to put 25% down. Don’t forget for any investment property the seller is allowed to pay up to 2% of your closing costs via seller’s assist.
Please … (0 comments)
mortgage: Mortgage Rate Renegotiations
- 11/20/13 05:08 AM
A great feature that most of our lenders offer is the Rate Renegotiation. The benefit to our customers is that we can lock in the interest rate at the beginning of the loan process or as soon as they have their new home under contract. IF the interest rates drop sharply before closing we can renegotiate with the lender to lower the interest rate.
Here is how it works. All of our lenders have slightly different policies but most of them are similar to this: When we are within 15 days of funding the loan IF rates are lower we … (0 comments)
mortgage: Condo financing
- 11/19/13 03:56 AM
Did you know that financing a condo is different than financing a regular home or a townhouse/PUD? There is an extra step involved and that is to make sure the condo project is satisfactory. And this isn't obvious because depending upon the type of loan that you are getting the requirements are different. For FHA financing, the condo association should be approved by HUD. To determine if it is approved by HUD you can look it up on their website at https://entp.hud.gov/idapp/html/condlook.cfm. All FHA/HUD approved condos will appear on their site. IF it isn't FHA approved you most likely will have … (0 comments)
mortgage: Why does the lender care where my downpayment came from?
- 11/14/13 05:19 AM
Q: Why does the lender care where the money is coming from to buy a house as long as I have it? What business is it of theirs? A: A few years ago they didn’t care but this is one area that has really changed. Any deposits or transfers into your bank account that are not clearly marked as payroll must be satisfactorily documented. If a buyer is taking out a cash advance on a credit card or borrowing money from a friend to buy a house, statistically they are more likely to default on the loan than if the buyer’s … (0 comments)
mortgage: Can I buy a house and use the equity as my down payment?
- 11/11/13 01:49 AM
Q: Can I buy a house that is worth $100,000 for $80,000 and use the $20,000 equity as my down payment or use it to pay-off some debt? A: The only way you can use the $20,000 equity as your down payment would be if you happened to be related to the seller and were buying the house to live in. In that case we can structure the $20,000 equity as a gift of equity which can be used as your down payment (gifts for down payment are allowed from relatives). As far as paying off debt with the $20,000 equity, … (1 comments)
mortgage: Did you know that the FHA & VA don't lend money?
- 11/06/13 09:01 PM
Did you know that FHA and VA don’t lend money? A common misconception is that you can go directly through FHA or VA to get a loan. FHA and VA only insure the mortgage for the lenders that are lending you the money. There are many websites and marketing pieces that I see regularly that appear to come from an official government agency trying to solicit you to borrow money. Fact is they are just trying to get your business by choosing slick names and misleading advertising. You have to read the fine print in the ad to see that they … (0 comments)
mortgage: What is the value in getting pre-approved before I look at houses?
- 11/04/13 02:11 AM
Q: My realtor insists that I get pre-approved before she will even show me a house? Why do I need to get pre-approved just to look at a house? A: Your realtor is requiring it because she doesn’t want to drive you around to tour houses unless she knows that you are a qualified buyer. It is respectful to the seller because the seller needs to prep the house and vacate for the showing which is a waste of time if you can’t get a mortgage. The benefit to you is that you aren’t wasting your time looking at houses you … (1 comments)
mortgage: What is seller's assist and why do I need it?
- 11/01/13 11:10 PM
A common question that I get asked by First Time Homebuyers is: What is seller's assist? Seller's assist is a credit that you are getting from the seller to cover some or all of your closing costs when you are buying a home. The reason most buyers ask for it is so they don't have to come up with a downpayment plus closing costs at the time of closing. Essentially it is a way for you to finance your closing costs. When interest rates are at very low levels like they are now it makes a lot of sense. It allows … (0 comments)
mortgage: Mortgage rates have quietly dropped to lowest level since June
- 10/31/13 02:34 AM
Mortgage rates have slowly and quietly dropped to their lowest level since early June. No one can say if they will continue to drop so if you have held off refinancing you may want to look at it now. If you have great credit and not a lot of equity in your home you should apply now as a great product will be gone in November. … (0 comments)
mortgage: Why to be wary of misleading mortgage quotes
- 10/29/13 11:55 PM
Occasionally I will get forwarded quotes from my clients from out of state lenders that appear to be better until we dig into the details. The most common mistakes that I see on these quotes are low estimates for property taxes, homeowner's insurance, and even transfer taxes. While these quotes appear to be a better deal the bottom line is that the lender has no control over these figures. They will be the same no matter where you get your mortgage from. The difference is who is giving you a better, more accurate estimate upfront. I am under the belief that … (1 comments)
mortgage: buy a house without monthly PMI and afford the house you really want
- 10/29/13 01:31 AM
You may not realize that you can buy a house and put less than 20% down and NOT have to pay monthly PMI. There are alternative options that can save you money and result in a lower monthly payment whereby you essentially buy out the mortgage insurance in the form of paying a slightly higher interest rate or more in closing costs. I met with clients today that were comparing buying a $300,000 house putting 10% down with the traditional monthly mortgage insurance versus putting 5% down and buying out the mortgage insurance with extra closing costs. The end result was the … (1 comments)
mortgage: bank advertises they don't pay commissions for mortgages
- 10/27/13 11:16 PM
I heard an ad by a local bank that their mortgage people don’t work on commission and that saves you money. I am not sure how. Their employees get paid. In fact they get paid whether you get your loan or not. We only get paid if your loan closes so we are very motivated to not only get your loan closed quickly but also tell you quickly if your loan won’t get approved. I don’t know about you but I would much rather have someone working on my loan that only gets paid if I get my loan versus someone … (1 comments)
mortgage: Divorce and keep house?
- 10/27/13 11:38 AM
Q: I am going through a divorce and I want to keep the house but she wants her share of the equity to sign off the deed. Is this something you can help me with? A: Yes. I have had plenty of experience working with people in this exact situation. We can guide you through the process of refinancing your mortgage to take your spouse off of the mortgage and deed and get the cash out necessary to buyout their equity so that you can stay in the house. Generally speaking the lender is going to require a copy of the property settlement agreement to see the terms … (1 comments)
A: This is not always the case. What is not common knowledge is that there is not just one rate on any given day but a range of rates, each with its own associated cost. By selecting a higher interest rate it will result in lower closing costs. So, for example, if you plan to sell your home in seven years the extra closing costs that you would pay to get the lowest possible rate may not … (0 comments)
mortgage: Having a real estate appraisal done soon? Here are some tips
- 10/25/13 03:12 AM
An appraisal is an opinion of value so you want to leave the appraiser a very positive impression about your home and how you have cared for it. Take the time to show the appraiser all of improvements that you have made to it since you have owned it. It can be helpful to provide the appraiser a list and even show receipts if you have them. Basic things such as tidying it up or some general cleaning and de-cluttering will help it look more presentable (think of it as if you are selling your home to the appraiser). All of … (1 comments)
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