Blog Category: loan process

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Anatomy Of A Deal

Each mortgage process has an anatomy. Anatomy is the bodily structure of an organism. Loan transactions can almost be considered an organism. They certainly take on a life of their own and they have multiple humans assisting and sticking their hands into the transaction along the way. Since there are so many moving parts I think it’s important to dissect this anatomy. We should understand how it all works and understand how to make it work efficiently.

People involved in a mortgage transaction

First, its important to realize all the players involved in each transaction. The below list is not even 100% complete: Read More

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Cash Reserves

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

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Don’t Worry, We Have Plenty Of Time, It Can Wait

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

fast cars

How Quickly Can We Get to Settlement?

Everyone wants to close loans quicker these days. And I mean everyone. But when it comes time to do their part to move quickly people are not as excited to help out. The problem is that most of the other parties to the loan don’t realize that they are party to the loan. What I mean is that the loan does not occur in a vacuum. We as the lender are not the only party to the process. We need help from Read More

Hourglass Time Clock

I Need To Be Self-Employed For Two Years?

I had a self-employed borrower call me recently asking for a quote on an interest rate. She said she had been pre-qualified by someone else and just needed an interest rate quote. I asked her to fill out my pre-qualification form anyway and she agreed. It’s a good thing she did. I discovered an obstacle to her loan approval. She was never going to get her loan approved in her current situation, and she was wasting her time making an offer.

How Do Self-Employed People Determine Their Income?

Why was she wasting her time?

Because she was only self-employed for six months! The mortgage guidelines say that you have to be self-employed for two years before you can qualify for a mortgage. Six months of self-employment will not work. Twenty four months minimum is the rule. There may be some scenarios where an exception can be made, but that is considered under certain restrictions.

Lenders Do Not Know How To Pre-Qualify Borrowers?

Lenders don’t know their own self-employed guidelines?

It is astonishing that some lenders do not ask sufficient questions to make sure that a buyer is accurately representing their qualifications in a contractual real estate situation. As a result, mortgage borrowers are going to have do the research to make sure that what they are being told is correct.

To contact me to discuss your scenario, mortgage rates, or other mortgage questions, click here to schedule a call or you can email me directly.

Loan Transaction Checklist

The below is what a mortgage borrower should know about the steps in a mortgage process and what is expected of them when applying for a mortgage. The turn times and ability of the mortgage lender to execute these steps below will vary according to lender capacity and client deadlines.

Mortgage Loan Transaction Checklist

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paperwork signing

Negotiating a Sales Contract

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

doors and choices

PMI versus LPMI versus 1st trust/2nd trust Combo Loan

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

chandeliers in kitchen

Pool Tables, Patio Furniture and Chandeliers Have No Value?

When a buyer and seller are negotiating over the sale of a home sometimes the buyer indicates they would like to have certain personal property from the home. The seller is OK with that either due to not wanting those items, or wanting the buyer to have them to help facilitate the sale.

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apples and oranges

Proper Comparable Sales for an Appraisal

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

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Sloooooooow Down: Avoiding Mortgage Process Mistakes

Have you ever noticed that many of the mistakes you make in life are made in haste? I look back on all the things I’d like to do over. Most of them were because I was moving too quickly or thinking too fast. Usually because I’m in far too big a hurry to get to the next 1,000 things on my to do list. If I would just slow down I bet I’d make a lot less mistakes in life. The same wisdom can be applied to mistakes made in the mortgage process. Read More

credit reports

Three Credit Reports to Get a Mortgage?

 

A lender pulls three credit reports to issue a mortgage? Yes, potentially. One when you get pre-qualified. Then another at loan application, if loan application and settlement happens 120 days or more after pre-qualification. And then the third check is just before settlement! Yes, now Fannie Mae, Freddie Mac, FHA, and all the rule makers require lenders to check for credit activity just a day or two prior to settlement. Read More

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Top 15 Questions to Ask a Lender or Broker Before You Apply for a Mortgage Loan

It may seem odd that someone in the mortgage business wants to discuss how to help consumers find the best mortgage lenders. People search for mortgage providers every day without the benefit of professional help. So, I figured why not help people whether they find their way to me or someone else? Below I’ve listed the most important mortgage questions that you need to ask before you apply for a mortgage loan. Read More

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What Happens When an Appraisal Comes in Low?

When a homebuyer is getting a mortgage to buy a new home everyone seems to be on pins and needles waiting on the appraisal. When the appraisal does come in if the appraised value is below the contract price the response is usually alarm from the realtors. And confusion by the homebuyer. At that point there is a lot to talk about and coordinate. Read More

rules

Where is Your Down Payment Coming From?

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

Checkbook

Writing an Earnest Money Deposit Check Off A Friend’s Checking Account?

I have seen a few buyers be in a pinch for one reason or another, and not have immediate access to their checkbook. As a result, when writing an earnest money deposit as part of a real estate contract, they use any source they can find. They may use a friend or a parent. They figure they’ll pay them back later. However, that can create a problem or at the very least more paperwork. Read More