AnnZeilingold.com

Are All Underwriters the same?? What should you do if you get DENIED.

Ann Zeilingold — Wed, 29 Aug 2012 00:36:07 +0000

Are All Underwriters the same?? What should you do if you get DENIED. This is the fear everyone who applies for a mortgage has. You read and hear the horror stories.

If you get denied for a loan what is your recourse? The answer depends on what type of lender you have applied for your loan with.

If you had applied with a Mortgage Broker, your broker will most probably submit your file to a different Lender, to try to get your loan approved. Remember, a Broker is a “third Part lender,” which means they structure and put the loan file together, but don’t make the decision; instead, they send the file to a bank that will ultimately make the decision to approve or deny a loan.

If you’d applied with a bank, a major bank, if you get denied, that is it. The large banks put you through there process and it is one-tracked. If the loan gets denied, they move on to the next file. There is usually no or very little recourse.

A correspondent mortgage lender is a lender like First Meridian. Our bank, like the large “major” banks, underwrites itself. So, ultimately it is our decision. If our underwriter denies a loan, and the loan officer feels the file has merit, the file goes to a credit committee where the merits of the file are discussed along with the risks that concern the underwriter. We then have the choice to bring in additional documentation so that the issues that were raised can be addressed. Ultimately, if our underwriter really has an issue with the loan, but the credit committee feels there is some merit to the file, we will send the file to another underwriter, either within our company or a contract underwriting service for a second opinion. If the file gets approved, we will close the loan.

Sometimes, the reason why a file is denied is because the file is missing an important element. An example: A mortgage loan that I closed for a client, who had been with a mortgage broker for 3 months and the file was denied by 3 of their banks. The client came to me distraught and desperate to get a mortgage and close on this home. I reviewed the entire file. The main reason that I found that the file was denied, was it was put together in a sloppy manner. The file was missing pages of bank statements; large deposits and inconsistencies were not explained. The main problem was the occupancy. The clients were moving from, what seemed to an underwriter, an equal house but on the other side of town, and the underwriter just didn’t believe that they were moving. I went through the file, and addressed every inconsistency. We backed up everything with solid documentation. We asked the client to write a detailed motivation letter explaining the move. The client did all that we asked. My underwriter had NO problem with believing the occupancy, but she was concerned about other issues in the file, which we promptly addressed. We closed the file.

Another reason why a file is denied is because different lenders have different guidelines regarding “layers of risk”. An example is a client that we closed 2 weeks ago. A large bank denied the file because of her “student loan payments.” These were deferred loans that the woman had co-signed for her son. We do have to count deferred payments in our income/debt ratios. We called the student loan company with the client and got the minimum payments that would be due. This was an investment property purchase. We have investors that qualify clients using rental income, even for a first time investment purchaser, like our borrower. We closed. Her previous bank did not use rental income to qualify the loan, which was why she was initially denied.

So are all underwriters the same? The answer is NO. An underwriter doesn’t just “validate “ the file, making sure all the points required to close the loan are properly documented; an underwriter also has to look at the file from an objective point of view and weigh the layers of risk on every file. Different underwriters weigh different issues differently.

So if you get denied, what should you do? It depends. If you are with a major bank, apply a second time with a different lending institution. If you are with a correspondent lender or mortgage broker, find out the reason for the denial and see if you can correct the problem. Many times something in your file was not structured properly. Once the item in question is addressed, very possibly, you can reverse that denial into a successful mortgage closing.

If you have any questions regarding any mortgage issue, contact Ann Zeilingold,Lic# 41850, Branch Manager of First Meridian Mortgage Corp. Licensed Mortgage Banker NY, NJ, CT, banking departments. 1609 Route 202, Pomona NY 10970. 845-354-9700 or ann@annzeilingold.com or www.annzeilingold.com

Did I Commit Fraud on My Mortgage Application?

Ann Zeilingold — Thu, 05 Jul 2012 14:18:02 +0000

It came to my attention recently that it appears many folks possibly aren’t being taught properly what you, as the borrower should, and more importantly, should NOT be doing, before, during and after the mortgage application process. Here’s some important information with regard to potential fraud on a mortgage application.

It’s important for borrowers to understand that any change they make to their current credit, financial, or employment picture could have a negative effect on their ability to secure the financing they are seeking. I’m sure the last thing that any borrower wants to hear, several weeks into the lending process, that their loan was declined due to lending policies and protocol they weren’t even aware of.

In light of this, and hoping to save anguish and grief to those seeking to obtain a new mortgage loan, and want to avoid any potential fraud with regard to the mortgage application, I’d like to offer the following example:

I recently spoke with a potential client who was unable to secure financing with the lender she had been working with for the past few months because her employment status had changed. Just weeks before the closing on the purchase, the borrower had gone from being a salaried wage earner, to being self-employed. You may ask yourself, “So, what’s the big deal? If there’s still a job, why can’t the bank still lend the money?” The answer to that may not be as simple as one would think.

In this case, the client remained in the same line of work. So simple, right? Actually, it’s not so simple. The rule of thumb when lending to a self-employed individual is that the lender evaluates two years worth of tax returns in order to determine income eligibility. So, in this case, because this client just recently became self-employed, there aren’t tax returns available to determine that newly self-employed earnings even exist. Again, you may ask yourself “I don’t understand the problem. If the client is in the same line of work, and they’ve been doing that job for a significant period of time, why won’t the bank lend the money?”

Here’s an example: Suppose that you’re a baker for a local grocery store in their bakery department. At the beginning of your loan application you provided your mortgage lender with current paycheck stubs and your W-2′s for the previous two years. Sometime during the mortgage approval process you think to yourself, “heck, I’m one of the best bakers here at the bakery, I bet I can make more money selling my cakes and cookies on my own rather than just working for the bakery department!” While you may be the best cookie and cake baker out there, merely having the skills to bake a cake, doesn’t necessarily mean one has the ability to run their own business. There are licensing requirements, food safety and health issues, and all of those things would currently be on the shoulders of the grocery store. That is their liability issue, not yours as the employee. So, from a lender’s point of view, they have no way of knowing or verifying how well this business is going to succeed, since there is no documented history of it. Make sense?

So, after the potential client understood the “why” obtaining financing would be most impossible due to the newly self-employed status, the client gave me reason to believe (verbal information provided over the phone) that documents could in essence be “manipulated” to indicate they were still salaried. The client wanted no one to be the wiser they were really self-employed.

So, several problems occurred because of this. Falsifying of any credit documents or providing misleading or false information on the mortgage application can be flagged as fraud. Regular pre-closing and post-closing audits are conducted on mortgage files. Should an audit determine fraud on the mortgage application was involved, not only could the lender call the note “due and payable”, but parties involved in the transaction could face prosecution.

The fastest growing fraud in today’s mortgage industry is Occupancy Fraud. The rates and terms are more attractive on a primary residence over an investment purchase. Consumers should be aware of that many lending and bank institutions’ employees are required to report any suspicious activity through the SAR (Suspicious Activity Report) or similar, reporting system.

I believe it’s the goal of all lending institutions and their employees to make the mortgage process as easy and seamless for all parties involved, and I believe the best way to achieve that is for the borrower to be educated in what’s involved. In addition, it’s important for the lending professional to successfully coach their clients as to potential pitfalls that may occur during the process, or even after the transaction has closed.

If you have any questions regarding any mortgage issue, contact Ann Zeilingold, Branch Manager of First Meridian Mortgage Corp. Licensed Mortgage Banker NY, NJ, CT, banking departments. 1609 Route 202, Pomona NY 10970. 845-354-9700 or ann@annzeilingold.com. www.annzeilingold.com

A Refinance Story

Ann Zeilingold — Wed, 22 Feb 2012 21:50:29 +0000

Margie called me to help her with the refinance of a home she lived in her entire life. In 1965, when her parents originally bought the house, her father wasn’t yet legal in this country, so her mother and her aunt (her mother’s sister) bought the house together. Margie, her brother Joel and their parents lived in the house together. Eventually, Margie’s parents paid off the mortgage in full. Then Margie’s father died.

After his death, Margie’s Aunt moved in with them. She was old and sickly. Margie’s mother took care of all her needs. As Margie’s mother’s health began to fail, Margie took care of both of them.

Her brother Joel was married with a wife and family of his own, and lived out of state.

Margie parents wanted their home to be inherited by their children. It was understood that Margie would get the house because she had selflessly taken care of her aunt and then her mother, until her mother eventually passed away. Her brother had agreed to this.

New York State did not agree. It seems that Margie’s parents never changed the deed of the house. The owners were Margie’s mother and aunt. Because there was no will, the laws of the state dictated who would inherit Margie’s childhood home. The fact that her parents solely paid the mortgage, taxes and upkeep was immaterial.

Margie’s home had been owned by her mother and Margie’s aunt, Margie and her brother both inherited her mother’s portion of the house. Since Margie’s aunt never married, her siblings inherited her portion. There were four siblings in total, Margie’s Mother and two uncles. All the siblings inherited one third of the aunt’s portion. To make matters more complicated, all the siblings were already dead. Therefore their children, Margie’s cousins, who were virtual strangers and had never visited with Margie’s aunt or helped with her care before she passed away, owned part of her childhood home. And they wanted their share.

In total, there were actually 17 heirs to the aunt’s portion of Margie’s home.

We completed a $210,000 refinance, which was what the courts had deemed the other heirs’ portion of the home. Margie did not have great credit and her income was limited. Her brother had to co-sign for the loan.
What a mess.

The lesson: When purchasing a home for another, or with another person, have a serious discussion with your Attorney regarding the type of ownership. Will you hold title as “Tenants of the Entirety” (only for married folk, where if one passes away, the remaining spouse automatically inherits the others interest in the home), “Tenants in Common”, (where different people own the same or different percentage of ownership in a property, and when any of the parties passes away, their interest is passed on to their heirs or according tom the terms of their will) or “Joint Tenants with Rights of Survivorship” (similar to a married couple, in that the ownership percentage is equal, and when one party passes away, their ownership interest reverts to the other owner automatically).

Common Mistakes First-Time Homebuyers Make

Ann Zeilingold — Wed, 25 Jan 2012 00:47:51 +0000

The mortgage process is an extremely tedious and detailed process. Some first time homebuyers don’t realize that their normal day-to-day actions regarding their employment and bank activity can cause undue stress when applying for a mortgage.

Some examples:

Large deposits: Every deposit into your bank accounts is questioned. You have to be prepared to explain any cash deposits or any unusual deposits into your accounts. I recall a conversation with an elderly, first-time home buyer client. This client was putting $150,000 down on a new home in Monsey. This occurred a few months ago and went as follows:
Ann: Mr.Smith, your bank accounts total $90,000 and you need an additional $60,000. Where is that money coming from?

Mr. Smith: I am 79 years old and I am a man of my word. If I tell you that I have $150,000, then I have $150,000. I will bring the money to the closing.

Ann: Mr. Smith, I have to show the under-writer that you have enough money to complete the purchase.

Mr. Smith: My daughter will be giving the money to me.

Ann: She will need to sign a gift letter and prove source of funds and the transfer of funds.

Mr. Smith: That is utterly ridiculous. My daughter will not give you a copy of her bank statement. That is none of your business. If my daughter wants to give me money, it’s between her and me.

And so it went…

Large deposits are defined as anything over normal pay stub deposits. Sometimes we have to explain deposits as low as $500!

Cash money usually cannot be documented and money coming from employers or congregations also is not acceptable. Before purchasing a home, this is a discussion that you MUST have with your Mortgage Specialist.

A few common mistakes regarding income:

When applying for a mortgage, work a complete week. If you get paid hourly, we will look at your pay-stubs and the verification of employment from your job to calculate your income. Over the Yomim Tovim this is a big problem. Applicants that work in schools or work by the hour suddenly have very short work weeks. It is important to provide paystubs covering a one month period showing a consistent hourly average. Therefore, a savvy mortgage consultant will advise you as to what to do and how to plan your contract dates so that a complete month of complete paystubs can be provided.

Another common mistake is that people start a new job and get paid with a 1099, meaning that the taxes are not taken out. Technically, you are an independent consultant. You need be working two years on a 1099, and have at least one filed tax return to verify the income prior to being able to use ANY of this income.

Just recently, I was asked by a realtor to try to salvage a deal. The client had been in contract for three months and had just gotten turned down. The client gave me his tax return. When I asked for paystubs, he told me he started a new job five months before. When I saw his paystub, I saw that he was being paid with a 1099. I had to tell him that even though he had filed a tax return last year, and he had already made a substantial amount from his new job, that I could not consider ANY of his income for mortgage purposes!

Being a first time homeowner is daunting. Don’t expect the mortgage process to be easy. You must choose a competent mortgage professional to guide you and they must ask you a lot of questions. Only then will you get the guidance that you need to reach the finish line, your closing!

If you have any questions regarding any mortgage issue, contact Ann Zeilingold, Branch Manager of First Meridian Mortgage Corp. Licensed Mortgage Banker NY, NJ, CT, banking departments. 1609 Route 202, Pomona NY 10970. 845-354-9700 or ann@annzeilingold.com or www.annzeilingold.com.

Home Buyers Face Decisions that Affect Their Long-Term Financial Picture

Ann Zeilingold — Mon, 16 Jan 2012 01:05:54 +0000

Seek a Qualified Mortgage Consultant to Ensure the Best Results
Home Buyers Face Decisions that Affect Their Long-Term Financial Picture

Taking the step into home ownership is one of the most important financial decisions a person will make in a lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.

First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.

Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect’s future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.

If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.

It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!

Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn’t make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.

Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.

Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

Is It Time to Refinance? Three Questions to Consider.

Ann Zeilingold — Tue, 20 Dec 2011 18:51:00 +0000

So you’ve read that interest rates are near historic lows and you want to figure out if you can refinance. Financing has become significantly harder to do and more expensive in the past few years, thanks to the financial crisis. But refinancing is still possible and may make financial sense.

In this article, we will run through some of the basic issues you should contemplate to help give you a framework for deciding whether to refinance. The best person to help you sort through this framework and help you reach a final decision about when to refinance is your mortgage lending professional. But doing a little homework beforehand will help you ask your mortgage professional the right questions.

Here are three questions to consider when you are thinking about refinancing:

Planning on moving? The first item to consider is whether you’re going to own the house in question for at least two to four more years–the longer the better. If you’re not planning on owning for at least a couple years, refinancing may not be a net benefit to you. HOWEVER: The bigger the mortgage, and the bigger the differential between your current mortgage interest rate and the rate you might get by refinancing, the more refinancing might make sense even on a shorter term basis like two years. So rather than dismiss the idea, this is a good topic to discuss with your mortgage professional in terms of your unique situation.

Can you even qualify for a refinance? It can be tough to refinance these days. If your loan-to-home-value ratio is too high–meaning that your property doesn’t appraise at a high enough value in comparison to the amount that is still outstanding on your loan–it may be harder to refinance. The bank may also consider you to be a higher risk if you’re self-employed, have a high debt-to-income ratio, or if you have credit issues. But the only way to know for sure is to check with your mortgage lender to examine your options.

What are the costs versus the reduction in interest rate? If you are qualified for financing, your lender will also let you know what interest rate you can secure and how much it will cost you to refinance. You can then do a rate versus loan fee comparison to see if refinancing makes sense. For example, if you refinance a $300,000 loan it might cost $6,500 once you add up points, escrow, title, appraisal, etc. If your loan is dropping by one-half of a percentage point you will save $1,500 per year, which is about $1,000 after taxes. So if you are paying $6,500 to save $1,000 per year, it will take you 6.5 years to earn your money back. That may or may not be a good deal for you, depending on how long you are planning to stay in your home. The bottom line is add up all the costs you will incur by refinancing (remember to exclude items like prepaid interest, taxes and HOA fees that you pay whether you refinance or not) and compare these to your cost savings. This will help you determine whether now is the time to refinance.

Generally speaking, it can be time consuming and challenging to properly dissect the costs versus benefits of refinancing a property. That’s why it’s a good idea to talk to your trusted lending professional, who understands the right questions to ask and can help you work through the details to make an informed decision.

Baby Boomers Retire – Reverse Mortgages Gain Popularity

Ann Zeilingold — Fri, 09 Dec 2011 00:48:59 +0000

Born between 1946-1964, the generation known as the Baby Boomers will begin to retire in large numbers, substantially shrinking the labor force in the US. As a result, Social Security, Medicare, and other government programs will be significantly affected over the next several years. In fact, the Social Security Advisory Board (SSAB) estimates that, by 2030, about 20% of the American population will be 65 years old or older.

With rising costs of living and a dwindling budget to accommodate the elderly and disabled, we will see increased usage of the reverse mortgage. This loan allows equity to be taken out of the home to meet day-to-day expenses, and was designed in the late 1980s to help those who owned property, but lacked sufficient income to live on. However, there are benefits and disadvantages to be considered before going into this type of loan.

In most loan scenarios a home will go into foreclosure if payment is not made. If payments are made, the debt decreases and equity increases. The opposite holds true for a reverse mortgage; equity is taken out of the home to sustain the family, causing debt to increase while equity decreases. There is an exception – if the actual value of the home increases, less equity will be lost overall.

Most reverse mortgages are set up so there is no monthly payment as long as the owner resides in the home. There are no minimum income requirements, and the money can be used for any purpose. Equity disbursed from this type of loan is tax-free. Depending on the type of plan, reverse mortgages will usually allow the owner to retain the title to the property until they have lived in a different residence for 12 months, sold the property, died, or the end of the loan term has been reached.

On the flip side, reverse mortgages can be more costly than a normal equity loan. Interest is added to the principal balance each month, and the amount of interest owed is compounded over time. The interest will not be tax deductible until the loan is paid off, in part or in full. Also, since the reverse mortgage uses equity in the property, this constitutes a loss of assets one could pass on to heirs.

The Federal Trade Commission warns of abuse with this type of loan, as they have received reports of predatory lenders taking advantage of the elderly. It is best for the individual interested in a reverse mortgage to research and obtain counsel from reputable sources.* HUD does not recommend consulting an estate planning service to obtain a referral to a lender. HUD provides this information free to the public. Even if the home loan was not originally an FHA loan, the reverse mortgage can be federally secured.

Life After Bankruptcy

Ann Zeilingold — Wed, 30 Nov 2011 15:56:53 +0000

Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma that is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results.

Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.

Here are some additional steps you can take to make the bankruptcy process as painless as possible:

• Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.

• Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.

• Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.

• Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

Tips for Rebuilding Credit:

• If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.

• Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of “easy credit” or any card which asks you to call a 900 number. You will be charged for the call.)

• Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well.

While it does take time, there is definitely life (and credit) after bankruptcy. Some mortgage lenders will even lend to you within a year or so after a bankruptcy. If you’re in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.

If you have any questions regarding any mortgage issue, contact Ann Zeilingold
ann@annzeilingold.com
www.annzeilingold.com
Facebook: Ann Zeilingold
845-354-9700

Mortgage Uncertainties Explained

Ann Zeilingold — Wed, 31 Aug 2011 17:02:53 +0000

If you speak to any Realtor or attorney today, they will tell you that the problem with the home buying market is not the price of the home or how that home is marketed to potential buyers. The key concern in the home selling process is whether the buyer will be able to get a mortgage and close.

What can you do to insure that you will be able buy a home and get a mortgage loan?

The quick answer is to make sure that the potential buyer is pre-approved. BUT a pre-approval is not enough to guarantee that the buyer will get a mortgage. Here’s why:

There are four components necessary to close a loan. Those components are:
1. Credit. Is the buyer credit worthy? Do they have acceptable credit scores and is the credit acceptable for mortgage. The buyer may have scores that fit the program, but there may be something on the report that will be unacceptable to a lender lie a recent bankruptcy, short sale or foreclosure etc.
2. Assets. There has to be enough money to make the deal work. The buyer must have the down-payment and closing costs. Sometimes the buyer may have assets but they may be unacceptable. For example, some loan programs Some do not allow a gift, or if there are unexplained large deposits into the borrowers account, those may not qualify as assets.
3. Income. The client must make enough money to pay this loan. The mortgage payment, taxes, insurance and monthly debt are all taken into consideration. Some times a buyer has income sources that are not acceptable such as a short-term second job or a self-employed client that receives a W-2 and paystubs that currently show enough income but were lower on the last tax return.
4. Appraisal. The bank wants to make sure that the house that is being mortgaged is worth what the buyers are paying for it. An independent appraisal report is required. This has become a huge concern. An appraisal is an opinion of the individual appraiser. Even though the buyer may have looked at every house that was for sale and thinks the value is solid, an appraiser may not be able to find other homes within an acceptable geographic distance that can validate the value, or, the appraiser may comment on repairs that may be needed or deferred maintenance or mold and these comments can cause a lender to deny the loan.

A pre-approval from a reputable mortgage professional should cover the first three components. The fourth component, the appraisal, is a wild card and until the appraisal is in and has been reviewed satisfactorily, the deal is not a solid deal.

This is why it is so critical to have a mortgage loan originator you can trust, who has relationships and knows the region well. Understanding these issues and knowing how to navigate the mortgage uncertainties takes a team of committed and knowledgeable people. At First Meridian Mortgage, we pride ourselves on taking care of details to ensure that the loan process runs as smoothly as possible.

Don’t Fall Behind On These Deadlines!

Ann Zeilingold — Thu, 25 Aug 2011 12:14:19 +0000

  Expiring September 30, 2011: Super Conforming Mortgage Loan Limits When the economic crisis began a few years ago, the government temporarily increased loan limits in high cost areas across the country because many lenders would have refused to make those loans without the government covering the risk of default. But now these loan limits are due to expire, and this is a big deal because mortgage rates are typically much lower when they are supplied through Fannie Mae and Freddie Mac.   If you are looking to finance a large loan through the government, it’s important to act quickly. Get in now or you could be paying higher rates.   That’s because when these loans are no longer allowed under Fannie Mae and Freddie Mac, they will be considered non conforming (Jumbo) loans, and these usually have a much higher rate because they will be backed by private investors and not Fannie Mae or Freddie Mac.   In similar fashion, the FHA loan limits that were increased in 2008 due to the economic downturn are also scheduled to revert back to lower loan limits (those determined under the Housing and Economic Recovery Act of 2008) for loans insured by FHA on or after October 1, 2011. According to a brief released by the Department of Housing and Urban Development in May, this means that “FHA loan limits would likely decline in 669 of the 3,334 counties or county equivalents that are eligible for FHA insurance.” If you are planning to finance a large loan through FHA, contact me to see if this upcoming drop in loan limits could impact you.  

Expiring October 31, 2011: Home Path Buyer Incentive Offer Fannie Mae recently extended its HomePath Buyer Incentive Offer, in which buyers may be eligible to receive up to 3.5% in closing cost assistance, through October 31, 2011. To qualify, your initial offer must have been submitted on or after June 14, 2011 and you must close by October 31, 2011. In addition, buyers and/or selling agents must request the incentive upon submission of the initial offer in order to be eligible, and only buyers purchasing a HomePath property as their primary residence qualify.   It’s important to note that offers submitted after September 15, 2011 may be difficult to close by the October 31, 2011 deadline.

  If you think any of these deadlines could impact you, give me a call or send me an email. I’m happy to answer any questions you have.