What is a community property state?
In the U.S., nine states have tried to alleviate the pressure of divorce by passing community property laws.
In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, community property laws require divorcing couples to split assets acquired during a marriage equally. Marital property includes earnings, all property bought with those earnings, and all debts accrued during the marriage.
When getting a mortgage in a Community Property State, a spouse might not be on the new mortgage but their credit report will still be pulled and their debts will be added to the debt-to-income ratios of the mortgage borrower. However, this only applies to FHA & VA mortgages taken in the above states, not on Conventional loans. Continue reading Getting A Mortgage In Community Property States
If you have variable income that changes and fluctuates, the rules of assessing your income to qualify for a mortgage are different than if you had a fixed salary.
Some types of variable income would be: Continue reading Variable Income Types
Mortgage lenders are now required to confirm that you are still employed prior to closing on a mortgage, three business days prior in fact. Mortgage lenders are always required to verify that a borrower has not lost their job, been furloughed, laid off, or had their income altered prior to closing because it impacts their ability to repay the loan. Previously, lenders were able to document a borrower’s employment 10 calendar days prior to settlement. Continue reading What is a COVID VOE?
With a VA loan, the United States Department of Veterans Affairs requires that the closing costs on a VA refinance be recouped in 36 months or less. If the recoupment period is over 36 months the loan will be rejected.
In other words, the refinance closing costs divided by the monthly savings has to be 36 or less, signifying the number of months in the recoupment period.
For example, if the closing costs on a VA refinance are $3,000 and the monthly savings on the refinance are $400 a month, the recoupment period is 7.5 months because $3,000 divided by $400 a month in savings = 7.5 (well within 36 months). Continue reading VA Refinance Recoupment Period
A Credit Score Simulator can help with “What If” scenarios to determine what you could potentially do to raise your credit score. It can also show you what could negatively impact your credit score. It is important to see how your credit choices might affect your credit score because your credit score will impact the underwriting of your loan, your interest rate quote, and even the cost of your mortgage insurance.
Some of the various things a Credit Score Simulator can measure to see how they will impact your credit score are: Continue reading Credit Score Simulator
Forbearance, only do it if you absolutely have to. Some people are taking a Forbearance on their mortgage as a way to take a break on their mortgage payment when they really do not need to.
But forbearance does not mean you can skip mortgage payments and never pay them back. You have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.
Taking a forbearance will also impede your ability to refinance. Having a forbearance on your credit report means you cannot get a new mortgage. You would have to bring the loan current. Continue reading Mortgage Forbearance
Newly revised mortgage guidelines for self-employed people due to the Covid-19 pandemic: There are temporary requirements for assessing income derived from self-employment. The additional due diligence is due to the disruption from the pandemic. Mortgage lenders now need to consider if and how a business has been impacted and the likelihood of income continuance.
There is additional income documentation required and you may need an audited Profit & Loss statement with supporting documentation for the Profit & Loss statement. The continuity and stability of income is what will be considered. Continue reading SELF EMPLOYED LOANS DURING COVID
Forbearance – you should only do it if you absolutely have to. Some people are taking a forbearance on their mortgage as a way to take a break on their mortgage payment when they really do not need to.
Forbearance does not mean you can skip mortgage payments and never pay them back. You have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.
Taking a forbearance will also impede your ability to refinance. Having a forbearance on your credit report means you cannot get a new mortgage. You have to bring the loan current to do so. Continue reading Mortgage forbearance
When you buy a new home, you need a mortgage to purchase it. And before you get a mortgage, you need to determine how much mortgage you qualify for. Different sources may qualify you for different mortgage amounts. And how much you qualify for does not necessarily equate to how much you can afford.
How much you can afford is based on your personal budget. When a mortgage lender tells you how much you can qualify for, that is the highest mortgage amount they’ll approve you for. But this may not be the mortgage size you end up closing on. Continue reading How Much Mortgage Can I Afford?
People spend a lot of time looking for the perfect home. There are the countless hours spent poring over real estate listings, the weekend trips to open houses, and the days of driving with your realtor from showing to showing. However, choosing a mortgage lender or broker is often treated as an afterthought—many buyers simply go with their own bank or a broker/lender recommended by their realtor without researching competitive rates and looking for lenders who will also educate them.
This is a critical mistake. Continue reading 6 Tips on Choosing a Mortgage Lender or Broker