Historical Real Estate Values

April 26th, 2022
money and housing

I often have conversations with potential homebuyers in speaking with them about their mortgage financing, where they ask me about whether I think Real Estate is due for a correction. Let’s face it, Real Estate has been going up in value at a striking pace in the last few years. It’s a realistic question to ask if some of that increase is due for a correction to some degree.

Of course, I don’t have the answers. But we can have a discussion to give homebuyers a frame of reference. Read the rest of this entry »

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Are Well And Septic Inspections Needed To Get A Mortgage?

March 22nd, 2022
septic truck

Well and septic inspections may indeed be required to get mortgage approval. But it depends on the type of mortgage you are seeking.

A conventional mortgage through Fannie Mae or Freddie Mac typically do not require  well and septic inspections. I say “typically” not required because there may be an instance where they are required. Read the rest of this entry »

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How Much Mortgage Does My Car Loan Cost Me?

March 9th, 2022
car loan

When a mortgage lender analyzes your finances to qualify you for a mortgage, they’re looking at all of your debt along with the new proposed mortgage payment. The other debts that they consider outside of your new mortgage payment are debts like minimum credit card payments, car loans, student loans, and any losses from other rental property. They do not look at debts like utility bill payments, car insurance or cell phone bills.

A mortgage lender will approve your loan allowing you to spend a certain percentage of your gross monthly income on your new mortgage payment and your debts.

Let’s see how much more mortgage you could qualify for if you did not have a car loan. Then you can see if paying off a car loan off  leaves you with the cash needed to  make a down payment and pay the closing costs to purchase a new property. Read the rest of this entry »

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Is It Cheaper to Rent or Own a House? Pros & Cons of Renting vs. Buying

January 19th, 2022
calculating finances

To rent or to own? If you are planning on moving and are financially stable enough to potentially qualify for a mortgage, there is a lot for you to consider. Buying a home usually requires a down payment plus closing costs; renting also comes with its own fees, but those are generally less than you will need to buy a home. Here, we will explore whether it is cheaper to rent or own a house and the pros and cons of both.

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Maximum number of financed properties

November 7th, 2021
monopoly houses

There are some mortgage agencies, like Fannie Mae, that will not do a loan for an investment property buyer that already has what they consider to be excessive financed properties.

If you are buying a new primary residence, there is no limit to the number of financed properties that you already have.

However, if you are buying a second home/vacation home or rental property, you cannot have more than 10 financed properties already. Read the rest of this entry »

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Condominium Litigation When Getting A Mortgage

October 7th, 2021
law books judge gavel

If a condominium has litigation against it, to get a loan approved there are certain things a mortgage lender has to document or the loan may be denied.

A mortgage lender has to prove that the litigation has no impact on the safety and structural soundness of the condo.

And the insurance carrier that insures the condominium building has to have agreed to provide the defense, and the amount of the litigation must be covered by the HOA’s insurance.

There are other reasons why litigation against a condominium may not be an issue, such as:

  • It is non-monetary litigation including, but not limited to neighbor disputes or rights of quiet enjoyment;
  •  the HOA is the plaintiff in the litigation and not the defendant;
  •  the reasonably anticipated or known damages and legal expenses are not expected to exceed 10% of the project’s funded reserves.Financing a condominium can be tricky for other reasons. Mortgage guidelines have the ability to change at any time, so always talk to a well-reviewed mortgage loan officer to make sure you understand the current guidelines and how they might apply to you.
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2021 Mortgage Loan Limits

March 23rd, 2021
loan limit

Every year, the Federal Housing Finance Agency (FHFA) sets a dollar cap on conventional mortgages that Freddie Mac or Fannie Mae are allowed, commonly referred to as a conforming loan limit. In 2020, the conforming loan limit for a single-family home was $510,400. This year, the conforming loan limit for a single-family home increased to $548,250, nearly 7.6% higher!

This means Freddie Mac or Fannie Mae can purchase conventional loans valued at or under the conforming loan limit from mortgage lenders. In most areas, the maximum conforming loan limits are as follows: Read the rest of this entry »

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Can paying off a debt help qualify you for a mortgage?

February 25th, 2021
debt paydown

When you qualify for a mortgage loan, it may not be for the amount you want. Outstanding debts can affect how much you are able to borrow. But in some instances, you may be able to pay off the debt in order to qualify for a larger loan.

If you reduce the number of installment payments to 10 or fewer, the loan may not be included in your debt-to-income ratios. However, if the debt requires a large monthly payment, an underwriter may consider it a risk in your debt-to-income ratio. Read the rest of this entry »

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Getting A Mortgage In Community Property States

January 17th, 2021
divorced couple

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. Read the rest of this entry »

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Mortgage Forbearance in 2020

August 29th, 2020
no money

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. Read the rest of this entry »

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