No cost refinancing a.k.a. no cost refi

January 2nd, 2018

I frequently have people ask me for “one of those no-cost refi’s”. Some people think that mortgage lenders are so hard up for business that they are willing to lose money and simply pay the closing costs for the mortgage borrower. I don’t know of any businesses where losing money is part of the process of making money. A no cost refi actually comes with a cost…a higher interest rate.

 

The reality is that a no cost refi is one where the closing costs are built into a higher interest-rate. Read the rest of this entry »

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What Portion of My Income Should I Spend on a Mortgage?

November 28th, 2017

 

Deciding on how much mortgage you can afford is very complicated with several things to consider. Before you plan to spend the maximum amount you’ve been approved for consider what you feel comfortable with. And before you treat your home purchase like a zero-sum game consider spending a sufficient amount to buy enough house to keep you happy for a longer period of time, due to the hefty transaction costs of real estate. Read the rest of this entry »

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7 Warning Signs You’re Not Ready To Buy A Home

October 28th, 2017

Buying a home is the most important and expensive decision that most of us will undertake.  It is surprising to me how many people are not prepared to buy a home. A potential homebuyer should do extensive amounts of research and give a lot of thought to what they want to buy, and when they feel they’ll be ready. Below are some of the warning signs that you might not yet be ready to buy a home and you may need to do some more research. Read the rest of this entry »

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How to Make an Offer on a House When You Are Getting A Mortgage: 5 Important Topics

September 28th, 2017

There are many things to consider when you are making an offer on a house. While it may be important to think in advance about movers, painters, budgets, your mortgage, furniture, school districts, utilities, contractors, house warming parties, and more, when it comes to making an offer there are some key things that can make a difference!  Below are some important topics related specifically to the mortgage when you’re getting ready to write up an offer on a home. Read the rest of this entry »

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Tax Credits When Buying In Washington DC?

July 30th, 2017

 

When buying a home in Washington, D.C. you should work with a lender familiar with Mortgage Credit Certificates (MCC’s) and who is participating in the MCC Program.  A Mortgage Credit Certificate allows eligible borrowers to claim a Federal Tax Credit of 20% of the mortgage interest paid on the mortgage during each calendar year.  The remaining 80 percent of the mortgage interest paid for that year may still be claimed as a tax deduction.

You can click here to get Read the rest of this entry »

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Does It Really Matter Where Your Loan Officer Is Located?

July 13th, 2017

It is very common for realtors to ask a homebuyer who their mortgage loan officer is and where they are located. There is a belief that a lender, and for that matter all the service providers to a real estate transaction, needs to be very local.

 

Realtors assign some magical powers to a mortgage loan officer who is Read the rest of this entry »

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Interest Rates Are Still Low. Or Did They Go Up? Are They Down?

April 24th, 2017

Interest rates rose after the presidential election. The news from the bond market according to MBS Online was “Trump has advocated for greater spending on defense and infrastructure, and at the same time he proposes to cut taxes. These policies raise the prospects for increased deficits and inflation, neither of which are good for mortgage rates.”1

 

Recently rates have come back down a bit. Rates are Read the rest of this entry »

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New Loan Limits For 2017

February 28th, 2017

The mortgage loan limits have been changed for 2017. For Conventional loans the new limits are:

Conforming loans are:

Units
1 $424,100
2 $543,000
3 $656,350
4 $815,650

For Conforming “High Balance” loans in designated high cost areas the new limits are:

Units
1 $636,150
2 $814,500
3 $984,525
4 $1,223,475

Find more details on Conventional loan amounts click here.

Any Conventional loan amount which is higher than the above limits is considered a Jumbo loan (aka non-conforming) and is subject to different underwriting guidelines.

To look up FHA loan limits for your area click here.

To look up VA loan limits for your area click here.

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You Can’t Get A Mortgage In 21 days, Especially In November!

January 19th, 2017

There is a lot of discussion around how fast you can close a loan, especially in some of the hot urban markets like Washington DC, Boston, San Francisco, Los Angeles and New York. A three-week close won’t typically be possible for various reasons. Even in the best possible situation someone else will drop the ball or delay a lender, like a buyer, a title company, or the appraiser won’t be able to gain immediate access to the property, or the IRS will not provide the tax transcripts we need fast enough. There are a lot of third parties that provide critical information that are out of a mortgage lender’s control. Twenty-one days is a no error “drop everything” situation and it is almost certain some party won’t be able to drop everything when they are called on to execute their role immediately. Read the rest of this entry »

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Appraisers Need To Live In The Neighborhood?

January 13th, 2017

I told a realtor once that appraisers do not appraise a home, data does. I was trying to respond to their over-hyped level of concern about where the appraiser lives or works and the realtors’ hope that the appraiser will have some sort of intimate knowledge about the subject property’s market area. I wrote a good blog you can read here about why it does not matter where the appraiser lives or works. My point is that if the data exists, i.e. recent settled sales that make for appropriate comparables for an appraisal, then the appraisal should turn out fine. In other words, it is not about the appraiser, it is about the data! Read the rest of this entry »

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