Archive

Archive for February, 2011

Mortgage Mistakes… “Seasoning” (not salt and pepper) your assets…


All the money involved in your mortgage transaction needs to be “seasoned”.  “Seasoned” simply means it is YOURS and has been yours, and in your account for the last 60 days. 

Many people don’t realize that you cannot deposit unaccounted for money into your account for your mortgage closing.  ALL money has to be accounted for and where it came from.  Why?   The lender wants to see this is YOUR money and not borrowed.  Did you borrow the money and will have a repayment obligation that may affect your ability to make your mortgage payment?  Mortgage closing funds cannot be borrowed and cannot have any repayment associated with it.   Believe it or not, the biggest issues lenders have is FIRST payment default so any large deposits throw up a big red flag. 

With FHA loans, your mortgage closing funds can be a GIFT but remember, we do not give “gifts” with the intention of getting one in return (or at least most of us don’t).  Gifts are (according to Webster)  “something voluntarily transferred by one person to another without compensation”  But ONLY on an FHA loan can you use gift funds towards your mortgage closing.   IF you are in a conventional transaction, gifts are only allowed if you have 5% of your OWN money PLUS another 15% as a gift, at a minimum.   There are strict rules around gifts, where they can come from and who can give them.  Be sure to discuss this with your mortgage loan officer.

On a side note, many borrowers don’t borrow money or receive a gift however, they MOVE their own money around.  From one bank account to another.  In and of itself this is not an issue however, we have to account for ALL deposits into your bank accounts so we need a papertrail of where the money came from (proof from bank statements).

A good rule of thumb: Just dont borrow, receive a gift or move any money within 60 days of your mortgage closing without discussing it with your mortgage loan officer first.  It is much easier to control the specifics than it is to unravel what has already happened.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

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Mortgage mistakes to avoid! Check your credit…well in advance!


Remember, you can request a FREE (if it’s FREE, it’s for ME!) copy of your credit report annually from www.annualcreditreport.com.  This will give you an overview of what is being reporting on your behalf.  Credit and credit scoring is CRITICAL to the lending process these days, so knowing what your loan officer will see, ahead of your application, is imperative.

Lower credit scores can affect your mortgage interest rate or can you leave you with no approval at all. 

Once you get your FREE (if it’s FREE, it’s for ME!) (not be be redundant) credit report, it is important to review it with your loan officer FIRST, before you resolve anything that may be reporting derogatory.  Many times, derogatory credit is so far back in the picture of your credit, by paying it off, it may bring it into the forefront of your credit “story” and actually LOWER your credit score initially.  This can be a bit confusing and some delinquent credit does NOT need to be paid in order to qualify so it is best to just sit down with your loan officer and discuss it thoroughly.

So, go request a copy of your credit report and husband’s and wives… it is not a competition to see whose score is higher.  You know who I am talking about.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

Mortgage Mistakes to Avoid! The inside scoop … P.I. + +


One mistake many house hunters make is not taking into consideration P.I. + +. Huh?

Typically payments are NOT quoted as P.I. they are P.I. + T.I. and then +, again ! Huh again?

Let me explain:

P. is the Principal portion of your payment.

I. is the Interest portion of your payment.

That is not all! You have monthly taxes, insurance AND potentially HOA payments too!

T. is the Property Taxes portion of your payment.

I. is the Home Owners Insurance portion of your payment.

another Plus? Yep. Potential Home Owners Association Dues.

When using a mortgage calculator, shameless plug—> http://fcfs.net/loancenter-calculators-default.aspx

the calculator will ONLY calculate the principal and interest portion of your payment.  Don’t forget to add your taxes,insurance and HOA payments to this number. 

A good rule of thumb is .78% of your VALUE for your ANNUAL property taxes. Divide that by 12 and you will have your estimate for monthly.

A good rule of thumb is .35% of your VALUE for your ANNUAL home owners insurance.  Divde that by 12 and you will have your estimate for monthly premium.

HOA fees can vary from $15 a month to $300 a month so it is important you keep that on your radar when you are house hunting as it may either exceed your personal budget or affect your ability to qualify.

A good loan officer will help guide you through the PITI process to ensure you have accounted for everything in the qualifying process.

Having a dream is good, Owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

Mortgage Mistakes to Avoid! My inside scoop…. Get your LSR!


First, you need to get pre-approved.  In Arizona specifically we have a requirement that an LSR (Loan Status Report) be included as part of the fully executed contract.  This LSR can only be acquired if you are pre-APPROVED.  This is not pre-QUALIFIED.  This should mean that your loan officer has, at a minimum, underwritten your loan through the automated underwriting engine to ensure you are approved.  Many loan officers are providing LSR’s for borrowers without underwriting their loan.  With the changes in lending guidelines and requirements, this is a risky place to be AND negates the responsibility of the LSR. 

Getting pre-approved will require your credit report, income and assets as well as employment reviewed by your loan officer.   Now your loan officer sees your entire picture (with your potential new home hypothecials) to ensure the max amount you qualify for and that you met ALL of the lender requirements BEFORE you hit the streets with your realtor. 

Realtors…. ensure your buyer has their LSR before you take them shopping.  There is nothing worse than finding what I really LOVE and finding out I can’t get it!   In a wierd way that makes me think about my chances with Brad Pitt right now but I digress…

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

Oh by the way, I am never too busy for your mortgage referral!

Question of the day: What is the difference between Fannie Mae, Freddie Mac and FHA?


Q: What is the difference between Fannie Mae, Freddie Mac and FHA?

A: First, Freddie Mac AND Fannie Mae.  These two entities buy mortgages on the secondary market, pool them, and sell them as a mortgage backed securities to investors on the open market.  The secondary market allows for additional pools of money for future lending.   These “conventional” loan typically requires a higher down payment and higher credit scores to qualify.  They also require monthly mortgage insurance if you do not put a minimum of 20% down payment.   Conventional loans have a MAXIMUM loan amount based on STATE.

Second, FHA.  Federal Housing Administration.  These loans are GOVERNMENT backed loans.  They allow for a lower down payment (3.5%)  with MANDATORY mortgage insurance (this ensures the loan in the event of default) and typically allow for lower credit scores to qualify.  FHA loans also have a MAXIMUM loan limit (lower than Fannie/Freddie loans) based on COUNTY in your state.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999. 

602.294.9288 (o)              602.294.9830 (f)

www.fcfs.net

MB#0902810/ NMLS# 162476

Oh by the way, I am never too busy for your mortgage referral!

Reverse Mortgage, AKA “Fully Lived Mortgage” anyone?


Reverse Mortgage, AKA “FULLY LIVED Mortgage” anyone?

The Reverse Mortgage in my book is also called the “Fully Lived Mortgage”…

There is a big stigma around Reverse Mortgages and although I understand why, it all boils down to mis-information.  They really can be a LIFE saver…

It’s this simple:

1.  62+ years old.

2. Equity in their primary residence OR a free and clear primary residence.
THATS it! Borrower can either forego future mortgage payments (which can take an incredible burden off an older home owner) OR can provide monthly income back to the homeowner (which can take an incredible burden off an older home owner) OR BOTH!

The “Fully Lived Mortgage” is really that simple. 

Many Reverse Mortgage recipients are concerned about their ability to leave their property to their heirs after taking the Reverse Mortgage.  There are no restrictions to the heirs.  The heir may not be receiving as much “benefit” from the asset but if it is at the sake of the older home owner being able to FULLY LIVE while they are alive, I’m sure most heirs would agree, the benefits of the Reverse were worth it. 

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288(O)

602.294.9830(F)

http://www.fcfs.net

MB#0902810

NMLS #162494

AZDFI Loan Officer # LO-0911453

I had a short sale, my credit score is 700 now, can I qualify for a new mortgage?


A: Unfortunately, although credit scores drive so much these days, when it comes to a short sale or foreclosure, your credit score does not trump time.  If you have had a short sale or foreclosure, the MINIMUM wait time is 3 years from the date of the sale or date of foreclosure, (for an FHA loan) regardless of your current credit score. 

Be careful if your next step is to do a lease purchase option.  Make sure to work with your realtor to ensure the terms of the “purchase” portion to ensure it allows you enough time to qualify.  You don’t want to loose any initial investment into the lease purchase option because you cannot meet the purchase terms.

In the interim, continue to USE and payoff your credit cards each month.  It will help maintain your credit rating and ensure you make your monthly rent payments on time.

Feel free to contact me if you have questions.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services, proudly mortgage lending since 1999!

602.294.9288 (P)

602.294.9830 (F)

www.fcfs.net

MB#0902810/ NMLS#162494

Oh by the way, I am never too busy for your mortgage referral!