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mortgage loan: Reader Questions | The Consumer Explanation Letter
- 05/06/15 11:29 PM
I’ve received several questions from readers just this week on one mortgage document: the consumer explanation letter. Most of them are just plain annoyed with having to complete this document and don’t understand how to complete it.
The consumer explanation letter prints at the end of your credit report and has five different sections: derogatory accounts, public records, addresses, inquiries, and name variations. Each of these sections contains items from your credit history for which the mortgage lender requires an explanation.
Derogatory AccountsIf you have any late payments or collections, they will show in this section. The document asks you for an explanation and an outcome … (1 comments)
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mortgage loan: How To Source Venmo Deposits for Your Mortgage Loan
- 04/07/15 12:39 PM
How cool is Venmo? A younger friend introduced me to it. There’s a small group of us girls who will go out to dinner once every month or so, and, if the restaurant isn’t of the friendly variety where they will split the check for your group of six or more, you’re in trouble if you don’t have cash. And, I hate IOUs between friends. I never have cash, so I hate paying them. I also do not want to be the cheap one asking for $23.73 three months after our dinner out when my friend forgets to pay me. (It’s so … (1 comments)
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mortgage loan: Floating Your Interest Rate
- 08/05/14 01:30 PM
As a Richmond VA mortgage lender, answering borrowers’ questions takes up a good portion of my day. Sometimes a question stems from the use of a term with which my borrower was not familiar. This happens with just about any profession–whether you’re a preschool teacher, auto mechanic, or physician, you’re bound to use workplace jargon your clients have never heard and do not understand.
Enter Word “Float” Well, last night I was guilty. I sent an email to a client recommending she float her interest rate. Now, this particular client was very savvy. She emailed back with what she assumed was the definition of float in the context of a mortgage, … (3 comments)
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mortgage loan: Dave Ramsey Is Wrong About the VA Loan
- 08/05/14 01:15 PM
I’ve been doing a lot of reading on Dave Ramsey’s website lately as one of my colleagues is a fan. I have to say that I like much of what he writes about living debt free and money management, but I found one thing while reading today that I did not agree with.
What Dave Is Wrong About… Dave is not a fan of the VA loan. And, he makes a claim on his website that is simply not true: “VA interest rates are usually higher than conventional loans.” In fact, VA loan interest rates are often times much lower than conventional interest rates, from a .25% to … (45 comments)
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mortgage loan: Qualifying for a Loan When You’ve Only Been Self-Employed for One Year
- 05/21/14 04:07 AM
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In general, a self-employed borrower must have been self-employed for a minimum of two years in order to use that income to qualify for a mortgage loan. A loan officer will request tax returns for the most recent two years and a year to date profit and loss statement to calculate qualifying income.
FHA does allow for an exception to the two year rule if the borrower meets the following requirement: The borrower must be self-employed between one and two years and can document “previous successful employment in the line of work in which the individual is self employed, or in a related occupation. A combination … (3 comments)
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mortgage loan: To Interest Credit, or Not to Interest Credit: That is the Question
- 04/17/14 03:58 AM
When your home purchase or refinance closes within the first days of the month (within 4-10 days, depending on the investor), you have the option to do an interest credit. That means your lender would credit you at closing with the days of interest for that month, and you would pay that interest in your first mortgage loan payment the following month.
Interest Credit Example:
Loan Amount: $260,988
Interest Rate/Term: 3.25%/30 year fixed
Closing Date: June 3
Interest Paid at Closing: $0
1st Mortgage Payment: July
PRO: Reduces the amount of cash you bring to closing.
CON: Your first mortgage payment is sooner.
Your other option would … (3 comments)
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mortgage loan: 203(k) FHA Renovation Loan
- 04/14/14 10:51 PM
Are you a fan of Property Brothers on HGTV? They’re the guys who help homebuyers turn dilapidated houses into dream homes. Well, it’s probably the only show my husband and I agree on, so we watch a lot of it. (He’s not so into The Bachelor, and I’m not so into WWE.)
Until I became a loan officer, I always wondered how the financing behind the project worked. Now I think I have a good idea: It’s called an FHA 203k loan. An FHA 203k loan allows you to purchase a home and finance the costs of renovations into one loan. Read all … (2 comments)
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mortgage loan: The USDA Loan: Find Your Green Acres
- 04/11/14 01:20 AM
Keep Manhattan, just give me that countryside! Are you looking to trade in your city life for the fresh air of the countryside? If so, a USDA loan might be ideal for you. The United States Department of Agriculture backs a government program which allows for 100% financing for properties in designated rural areas to borrowers who meet their income limits.
How Do I Find Eligible Properties? Here’s a map of the eligible areas in Central Virginia. Anything that is not shaded is eligible.
To check a specific property or to search your state for eligible regions, follow the steps below:
Visit this site. Click … (5 comments)
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mortgage loan: The Dreaded LOX
- 04/01/14 11:26 AM
Has one of your clients been asked by his or her lender to write a letter of explanation or LOX? This underwriter requirment is very common in the world of home financing today, and I find that it has a tendency to stump some borrowers and stall the loan process.
Reasons for a Letter of Explanation
There are so many reasons why an underwriter may request a letter of explanation. Here are the most common ones I run across:
Overdraft on a bank statement Employment gap Bank deposits other than payroll Reasons for a bankruptcy Reasons for lates on revolving or installment … (9 comments)
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I’ve received several questions from readers just this week on one mortgage document: the consumer explanation letter. Most of them are just plain annoyed with having to complete this document and don’t understand how to complete it.
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