Archive for Mortgage News
May 22, 2010
The First Time Homebuye Tax Credit came to an end on April 30, 2010. The month ended with record numbers of new mortgage applications because the new nationwide mortgage guidelines dictate that an application doesn’t officially begin until there is a property determined. This huge influx of applications has slowly gone through the “documentation and processing” stage and is quickly resulting in extended delays in actual underwriting decisions.
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April 24, 2010
The First Time Homebuyer Tax Credit is about to expire. If you haven’t applied for a mortgage yet, you are virtually out of time. All buyers must have committed to a “binding contract” by April 30, 2010 and the transaction must close by June 30, 2010. If you have already been “pre-approved” but not yet secured a property I want to ask you one question. “Have you provided income documentation to your lender yet?” Did you give the lender W2s, paystubs, tax returns, etc? If you have not you need to understand that you are NOT “pre-approved”. You may have been pre-qualified but without the income docs and an authorized credit report, the lender has put you in a very compromising position. The guidelines have changed extensively in the past year and there are many “qualifying” issues that can only be answered if you provide those documents. Don’t wait another hour. Get those docs to your lender and ahve them confirm that you are “income qualified” for the mortgage that you want.
This brings to mind another issue for you to understand. Today’s guidelines state that a lender will officially begin a mortgage application when a property address is determined. Without an address you will not have been issued an official “Good Faith Estimate of Closing Costs”. You may have been given an itemization of estimated costs but it is NOT a binding document for the lender. I am going to provide to you the Official HUD Booklet that explains how to understand the new GFE. The lender is required to provide this to you at the time of application but that could be too late. You absolutely need to read this document. Save it to your desktop and read it from there as it is more than 50 pages. If you become familiar with this booklet and compare it to the “itemization” that you should have already received, when your new GFE is issued you will be able to determine that your lender is NOT playing games with you. You should be able to see that what you were told and what you are going to get (mortgage loan costs) are what you are expecting.
The new GFE is very confusing and you need to prepare for it. A lender that wants to take advantage of you will use that confusion to their benefit and at the time of closing you will have a very disappointing and possibly very expensive experience. That is, unless you perform your own “due diligence” and prepare yourself. It is absolutely the only way you will be able to protect yourself and your family.
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March 24,2010
FHA Mortgage costs are changing. Effective April 5, 2010 the current upfront mortgage insurance premium that FHA charges for new mortgages will increase from 1.75% to 2.25% of the base loan amount for the FHA loan. FHA requires a 3.5% down payment for most FHA insured purchase mortgages. If your purchase price is $100,000.00 and the down payment requirement is 3.5% then your base loan amount will be $96,500.00. FHA allows the upfront MIP to be added to the base loan amount. As a result your loan amount increases from $96,500.00 to $98,671 (base loan amount + 2.25%). You now have a LTV (loan to value) of 98.67% of the purchase price; less than 2% equity in the property.
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01/11/2010
What is a “Title”?
When purchasing a home, the new owners are not only buying the structure, but they are also purchasing the title to the property – which is the right to occupy and use the space. That title could be contested based upon past rights and claims asserted by others, and these types of claims can infringe upon your purchase of the property or cause you to lose money. Title Insurance helps to protect against those claims, through research and examination of previous ownerships.
Why do you need “Title Insurance”? Read More→
