Cash reserves are monies that you need to show a mortgage lender that you have leftover after settlement for emergency and for cash cushion. This convinces the lender you have some reserves after settlement in case of any issues when transitioning into a new mortgage loan. Obviously underwriting guidelines can change based on loan type and Read More
Sometimes clients think loan officers are robots, almost unimportant. And that all we represent is a set of terms we quote, and they treat the mortgage transaction like a commodity. But getting a mortgage is enormously complicated with lots of moving parts. And the type of loan officer you are working with is critical. This includes personality traits like work ethic, integrity, organizational skills, the speed at which they work, and much more. Read More
I think one thing that causes a lot of problems in life is our perception of time. We all seem to think we have plenty of time to do things. But what we are really doing is justifying our procrastination. We think we have plenty of time to get around to working on our tax filing, the yard work, paying bills, departing to meet friends for dinner, or sending in the paperwork for our loan application. Do we? No. Then what happens? Read More
There is a lot to think about when negotiating a sales contract. I recently wrote several blogs about the pros and cons of waiving contingencies to make a more aggressive offer in a sellers market. But there are also other ways to make a more aggressive offer that I would like to discuss. Some other ways you can get an offer accepted in a competitive environment are based on Read More
Everyone likes to think PMI (Private Mortgage Insurance) is evil. People like to think they should not have to pay it, and want to find a way around paying it. There are ways to work around PMI. But like all things in life, there are trade-offs. A person really needs to look at all the options and trades-offs, and consider how long they think they are likely to spend in their new home. Then everyone needs to consider paying PMI! What do I mean? Read More
I recently had a refinance client who got their home appraised for $1,000,000. You would think this would be good news, except that the client was expecting $1.2MM. Uh oh, I guess we didn’t get good news. However, the more important question is, did we get accurate news? In other words, was the appraisal valuation accurate and were the comparable sales used in the appraisal appropriate? This is where the debate started. Read More
Rough day? I had an experience recently I’d like to share. It will help people understand why underwriters are so rigid in requiring what Fannie Mae mandates. And why they require it to be submitted prior to closing, with no excuses. This is important because there are times where an underwriter requires some documentation that sometimes cannot be provided immediately by the client. And the client inevitably asks why can’t I send it in after closing.
There was a rule that was a problem for some mortgage borrowers who had unreimbursed business expenses (UBE). Some people write off UBE on their tax returns. Writing off your unreimbursed business expenses is great at tax time because it reduces taxable gross income. But when applying for a mortgage it results in less income counted towards qualifying. And this obviously creates unforeseen problems. Read More
I sometimes get asked about waiving one or all contingencies in a real estate contract. This helps make for a more aggressive offer in a competitive sellers’ market. The main contingencies in most real estate contracts are the appraisal contingency, the financing contingency, the termite inspection contingency, and the home inspection contingency. I am not a proponent or an opponent of any of these strategies. I simply want to discuss the pros and cons of each since it is a question I do get. Let me take these one at a time. Read More
I sometimes get asked about waiving one or all contingencies in a real estate contract. This helps make for a more aggressive offer in a competitive sellers’ market. The main contingencies in most real estate contracts are the appraisal contingency, the financing contingency, the termite inspection contingency, and the home inspection contingency. I am not a proponent or an opponent of any of these strategies. I simply want to discuss the pros and cons of each since it is a question I do get. Let me take these one at a time. Read More
I sometimes have a client tell me they are getting their down payment to buy a new home from some interesting sources. I have had client sell an antique guitar collection on eBay, sell a car, get cash from a suitcase under their bed, and sell an art collection, among many more interesting stories. However, homebuyers need to be aware of what is allowed and what is not allowed. Some sources of down payment are not allowed. Read More
I lost a client recently, mostly because she was a price shopper, and would not answer my questions. And then I heard from her again mostly because she was a price shopper, and would not answer my questions! Confused? I was too. It has to do with currencies, underwriting rules, foreign countries and more. Sounds mysterious. I’ll explain. Read More
