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Posts Tagged ‘az home mortgage’

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

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

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

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!