From the category archives:

Mortgages

Oh I’m SURE I Can Get a Mortgage!

by Heather on March 5, 2010

in Mortgages

I often lack words to describe to my clients exactly how mind-bogglingly fast the world of mortgage lending is changing lately. Home buyers not only need good credit, a steady income, and piles of documentation to back all that up.. . . . .   you need to be aware that loan guidelines change near-daily.

Yep. Nearly daily loan investors make changes to their rules about what they’ll lend on, what they won’t, who qualifies for a mortgage and who doesn’t, and how to properly fill out 9 inches of forms in triplicate to get the loan money.

I subscribe to a daily email that discusses changes in lending standards throughout the industry. It’s usually 2 pages long. Two pages of changes in loan guidelines per day!

Don’t assume you’re going to have zero trouble getting approved for a mortgage. If you have excellent credit you’ll probably get approved, but you’ll have to produce more paperwork than you can imagine.

Get approved. Then start shopping. Trust me. You don’t want to spend weeks looking online at this:

Nice EF, SFH in Phx, sold 325k in Feb 2010

only to be told you’re approved for a mortgage to buy this:

Shabby EF, SFH in phx sold Feb 2010 for 15k

Want to get pre-approved? Our favorite lenders, in no particular order:

  • Kevin Reiser, AmeriFirst Loans, 480-289-7635
  • Andrew Schmidt, WJ Bradley Mortgage, (602) 999-1912
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heather

Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.

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More on the new GFE

by Heather on March 2, 2010

in Mortgages

This is a pile-on to Chris’ recent post explaining the new Good Faith Estimate form . . . .  I just received an email from a Loan Officer (“LO”) friend reviewing some rule clarifications issued by HUD after a February 18, 2010 meeting with a bunch of FHA mortgage investors.

LO Question: “When are consumers entitled to receive a Good Faith Estimate (GFE)?”

HUD Answer: If a consumer has an executed purchase contract, a GFE is required. Until that point, LOs can issue “worksheets” which are “useful for generic rate quotes.”

HUD guidelines for “worksheets” - -

  • Worksheets should not look like GFEs,
  • A worksheet should never should be used “in lieu of” a GFE,
  • Consumers do not have to show an “intent to move forward” with a mortgage in order to obtain a GFE.

I’m assuming the Loan Status Report (LSR) in use in metro Phoenix which must be submitted along with any purchase offer falls under HUD’s “worksheet” rules.

What’s It Mean for Home Buyers?

Loan Officers can still give you a rate quote that’s not binding. However, once you have an executed purchase contract on a specific home, Loan Officers must issue you a GFE and per HUD’s new GFE rules, those numbers can’t change very much.

Buyer, if you got an LSR/worksheet that said 5.00 interest rate and $1,200 in closing costs. . . but when you got your signed purchase contract on your Dream Home you got a GFE that showed closing costs of $5,300 on a 5.375% rate. . .  you can cancel your purchase without penalty.

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heather

Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.

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Lenders Behaving Madly

by Heather February 27, 2010 Buyer Help

An illustration of just how ridiculous lender requirements have become, direct from an email written by a loan officer and sent to loan specialist Rob Chrisman:

“Rob - The following is an actual underwriting condition from a large wholesale lender which is known for having the best wholesale pricing for conforming loans. (As background, the borrower [...]

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New GFE and HUD-1 Settlement Statement “help” buyers?

by Chris Butterworth February 22, 2010 Mortgages

The Federal Department of Housing and Urban Development (HUD) announced changes to the Real Estate Settlement Procedures Act (RESPA) last fall, with 2 of the more noticeable changes going into effect on January 1st, 2010.
The changes were made in an effort to better inform and protect the consumer (borrower).  I like what they tried to [...]

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Mortgage Rates to Rise in Spring

by Heather January 12, 2010 Buyer Help

I was going to try to write a witty, engaging piece about how mortgage rates are expected to rise in the coming few weeks and months. But being witty about money is hard.
Instead, I’ve blatantly stolen this tidbit from the wonderful Kris Berg’s San Diego Home Blog (via Phoenix’s own wonderful blogging Realtor Jonathan Dalton [...]

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Is That Condo FHA Approved?

by Heather January 7, 2010 Buyer Help

Buyers using an FHA mortgage who are shopping for condos (or patio homes, or townhomes) need to be aware there’s a list of FHA-approved communities. If the community is not on the FHA-approved list, your FHA mortgage money might not be good there.
Bookmark this website and check for FHA-approved status before you fall in love [...]

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Can I Buy Now, and Rent My Old House?

by Heather October 26, 2009 Mortgages

QUESTION: I currently own a home and want to buy another. I want to rent out my old home to a family member who’s ready to move in next month and will take over my current mortgage payments. Can I buy another home?
ANSWER: Not yet.
Courtesy of our good friend and great lender, Kevin Reiser of [...]

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Loans Are Hard

by Heather October 9, 2009 Mortgages

If you’re thinking about buying a home, this might be a useful warning. Not to warn you off buying a home of course, but just because “forewarned is forearmed”. It might prepare you for what’s likely to happen to slow down the approval of your loan.
If you’re currently buying a home and having trouble with [...]

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How Much for Closing Costs?

by Heather September 19, 2009 Buyer Help

I asked one of our favorite lenders the question many, many buyers are asking their Realtors: “How much do I need to cover closing costs?” Here’s his answer.

Purchase Price
Amount to Cover Closing Costs

$75,000 - $100,000
6.00%

$105,000 - $145,000
5.00%

$150,000 - $185,000
4.00%

$190,000 - $255,000
3.00%

$260,000 - $305,000
2.50%

$310,000 - $359,000
2.00%

Chart courtesy of Andrew Schmidt of WJ Bradley Mortgage Capital Corp.
You [...]

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Multiple Offers and “Winning” the Bidding War

by Heather September 1, 2009 Mortgages

Ever hear that old saying “win the battle but lose the war”?  That might be the case for buyers submitting multiple offers on different homes in an attempt to “win” the bidding war.
What?
Here’s the thing. The house you “won” the bidding war at has to appraise for the agreed-upon purchase price. Appraisers can only look [...]

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The 40 Year Mortgage. Why Not?

by Heather August 30, 2009 Mortgages

I don’t understand why lenders don’t offer 40 year mortgages more often. Anyone?
I also don’t understand why lenders won’t talk about extending homeowners’ 30-year mortgages for 40-year mortgages, when the homeowners get behind and face foreclosure.
So many metro Phoenix-area homeowners are underwater but aren’t eligible for federal Making Home Affordable money because those refi limits [...]

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$8,000 Tax Credit – Timeline for last chance

by Chris Butterworth August 24, 2009 Mortgages

Heather recently reminded us the $8,000 tax credit for first-time buyers is currently set to expire on 11/30/2009.  This means you need to CLOSE ESCROW, with a HUD-1 Settlement Statement showing your closing date, by November 30th.
 
Photo credit to Stockxpert Woodsy.
Let’s work backwards from there to see when you need to be under contract on [...]

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