Archive

Archive for March, 2011

Mortgage Mistakes to Avoid: Sounds to good to be true?


Does the pitch your loan officer made, sound too good to be true? It probably is.  If the payment seems, “let me jump out of my shoes in excitement”, low… there’s a catch.  If the rate sounds, “let me run and kiss a stranger”, low… there’s a catch.  Mortgage lending is not rocket science.  Use common sense with this stuff and you can usually sniff out anything that is not on the up and up.  REGARDLESS of what you might hear from the loan officer!  OR you can just call me.  We can discuss the specifics.  I will likely repeat what I have posted here but certainly am open to the discussion. 

Thankfully with all of the licensing requirements, legislation changes and market changes, most of the scary loan officers have moved on however it is best to just keep it simple.  Go with the loan program that makes the most sense to you.  Go with the loan officer that has done the best job explaining the rate, the fees and the features of the loan. 

In the end, just make sure you ask ALL the questions, over and over, if you have to BEFORE you sign anything.  I have received many phone calls asking for explanations as to what borrowers have gotten themselves into AFTER it is already closed.  Once you are in, whether you like it or not, you are in.   In the short term, it may be too late to do anything about the loan until you are eligible, at a cost, to refinance out of it. 

How does that saying go? Measure twice, cut once?

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services

602.294.9288 (p)

www.fcfs.net

mortgagedr@fcfs.net

MB#0902810/ NMLS#162476

Advertisements

Mortgage Mistakes to Avoid: Job Hopping!


In honor of Easter, I thought I would talk about Job Hopping!

In this economic environment, it is not unusual for borrowers to have changes in employment however the underwriter is looking for consistency.  The underwriter will want to see that your monthly income is consistent and expected to continue into the future.  The underwriter isn’t necessarily concerned about job changes in the same line of work, however a big career change can be an issue and could require a minimum of a 2 year history.  

Perhaps, if you are considering a change, you just wait until after your mortgage transaction has closed before you make any moves.  Just keep in mind, your impending mortgage payment is going to come due and your job change will need to be able to support your new happy house payment.

Having a dream is good, owning one is better!

Leslie Pelletiere, Owner

First Class Financial Services

602.294.9288 (p)

www.fcfs.net

MB#0902810 / NMLS# 162476

Mortgage Mistakes to Avoid: Simply… applying for other credit…

March 29, 2011 Comments off

 
Applying for credit.  Yep. Simply applying for credit during your mortgage transaction is a huge mortgage mistake! When qualifying for your new home purchase, the ONLY applying you want to be doing is for your mortgage.  There are many things with this:
1.  After doing your mortgage research,  determine WHO you want to do your mortgage with THEN have THAT loan officer pull your credit report.  You do not need ALL of the loan officers you speak to, to be inquiring on your credit.  Each inquiry can affect your mortgage credit score.  Since mortgages are so tied to credit score, you risk having your credit score drop below where you are eligible.

2.  Applying for NEW credit during the mortgage process.  I had a client offer to drop off her most recent paystub as part of her mortgage closing.  When she got to my office she was very excited to show me her new MERCEDES.  WHhhhAT? NOoooooooo…….  the inquiry for the Mercedes dropped her credit score.  The new account for the Mercedes dropped her credit score.  The high credit limit in relation to her balance dropped her credit score.  In addition to her credit score issues, the new debt of her Mercedes impacted her monthly budget and made her ineligible for her mortgage. I’m all for a beautiful new Mercedes but NO Mercedes is worth that!

3.  IF your mortgage transaction requires you to obtain monthly mortgage insurance (PMI), the PMI premiums are also tied to credit score.  If your credit score drops from applying for alternative credit, this could make you ineligible for issuance of mortgage insurance.

4. INTEREST RATE! Interest rates are determined in part by credit score.  All programs are tiered based on credit score.  Your interest rate can be dramatically impacted if your credit score drops.

5.  Many clients want to start furniture or appliance shopping.  Although I understand the need for these items in a new home, it is critical to wait for these purchases until you have closed escrow.

Ok. You get the point. Shop til you drop…with CASH! Try not to USE credit and definately don’t APPLY for credit during your mortgage loan process.  You will thank me later!

 Having a home is good, owning one is better!

Leslie Pelletiere Owner/Broker

602.294.9288(p)

www.fcfs.net

MB#0902810 / NMLS# 162476

Question of the day: How quick can I get Pre-approved?


First, YAY that you want to buy a house! Second, YAY that you want to buy a house!  I’m stumped as to what most people are waiting for… inventory is great, rates are still great, FHA loan limit in AZ is still $346K and FHA allows for a minimim of 3.5% down payment AND you know a GREAT loan officer! What more could you ask for?

Getting pre-approved is easy.  All you have to do is apply! You can do that online or over the phone.  Once we have your application,  your permission to review your credit report and income/asset documentation, we can underwrite your loan in order to provide your real estate agent the important LSR document (remember, this is what shows you are APPROVED not just pre-qualified)

With that LSR, you can hit the streets! It’s that easy!

The LSR and your pre-approval does not obligate you to anything.  It only allows you to begin shopping and make an offer when you find your dream home!

You owe it to yourself to get started today!

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# 162476

Mortgage Mistakes to Avoid- Assets are NOT income… let me explain:


Gone are the days of no income verification loans. Gone are the days of assets only to qualify. Assets are considered assets on your mortgage application. Income is considered monthly receipt of money. The key distinction there is “monthly receipt of money”. Many borrowers assume that if they have retirement assets (they have yet to begin to draw on) they can set up a new monthly draw against those assets and use them to qualify for their home mortgage. Unfortunately unless there is proof of monthly receipt for a minimum of the last 12 months of an INCOME stream from those assets, they cannot be used to income qualify. They will count as assets however assets do not qualify to make monthly mortgage payments- income does.

If you are retired or considering retiring, keep this in mind as it will affect your ability to qualify for your new home mortgage. Remember, we want to see no more than 38% of your gross monthly INCOME going out to your debts. Does your budget currently exceed that? If so, you may want to set up a draw from your asset accounts NOW, in order to show proof of receipt when it comes to qualifying for your next home mortgage.

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