Tag Archives: borrower

Why & How to Keep Your Household Financial Records

Whether your applying to purchase a home or thinking about selling, there are many different reasons why having up to date household financial records can help save you time and money.

Check your current financial records income taxes, W2s, bank, investment and retirement statements, also insurance such life health and disability and see what is missing or out of date. Contact the record keeper and request new copies. Keeping accurate records will help you make important financial decisions.

How Long Should You Keep Records?

  • 7 Years – Taxes/Credit Card Statements and Property Records
  • ALL IRA contribution records
  • 1 Year – Utility bills
  • Indefinitely – Property records

Safely Dispose of Records

Make sure you dispose of your records properly.

  • Digital – overwrite data or physically destroy storage medium
  • Paper – Shred or incinerate

Record Organization Categories:

Keeping your records organized is just as important as accurate. Here are some great categories to organize your records.

  • Health Records – Health insurance policies, bills, prescriptions, life insurance
  • Financial Records – Bank statements, taxes and loans
  • Home/Property Records – Mortgages, Deeds and property tax information

Knowing what records to keep and the proper way to store them can really make a difference when it comes to making important life decisions.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #Records #HouseholdRecords #FinancialRecords #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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4 Exceptions To Having More Than 1 FHA Mortgage

It is well known that the FHA will not insure more than one property as a principal residence for any Borrower.  What is missing from that information to complete the understanding of what the FHA insures, are the circumstances in which a borrower with an existing FHA-insured Mortgage for a principal residence may obtain an additional FHA-insured Mortgage on a new principal residence.

  1. RELOCATION – Borrowers may be eligible for a second FHA-insured Mortgage without being required to sell an existing property covered by an FHA-insured Mortgage if the Borrower is relocating or has relocated for an employment-related reason. Also if the borrower is establishing or has established a new principal residence in an area more than 100 miles from the borrower’s current Principal Residence.
  2. FAMILY SIZE INCREASE – Borrowers may be eligible for another house with an FHA-insured Mortgage if the borrower provides satisfactory evidence that the borrower has had an increase in legal dependents and the property now fails to meet family needs. Also when the Loan-to-Value (LTV) ratio on the current principal residence is equal to or less than 75% -OR- is paid down to that amount, based on the outstanding mortgage balance and a current residential appraisal.
  3. VACATING JOINTLY-OWNED PROPERTY – Borrowers may be eligible for another FHA-insured Mortgage if the they are vacating (with no intent to return) the principal residence which will remain occupied by an existing co-borrower.
  4. NON-OCCUPYING CO-BORROWER – A non-occupying co-borrower on an existing FHA-insured Mortgage may qualify for an FHA-insured Mortgage on a new Property to be their own principal residence.

The FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395

#Mortgage #MortgageLoanProcess #FHALending #FHAMortgage #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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Buying A Home is Easier Than You Think

The most common misconception about buying a home is that it has to be a complicated process. Obviously factors can play into the simplicity of making a home purchase but if you do your homework, you should walk out of the experience feeling empowered by the simplicity of it.
Step 1 – How Much You Can Afford?
The first thing most buyers do that sets them on the wrong path, is looking for the home, going to open house or searching the web, before finding out what they are financially qualified to buy. Now, maybe you are a “cash” buyer, meaning you are making the purchase with cash you already have on hand, but the average home buyer utilizes home financing to make the purchase so the first step should always be research and consult a trusted mortgage lender. I love Yelp and feel it is a great tool to do background on lenders. Find a great lender that has your best interest at heart and is familiar with all the different loan programs. That lender will work with your financial options to find the best loan program for you. Your lender should work directly with you, meaning you aren’t just talking to their assistant or the loan processor.
Step 2 – Find the Realtor, Find the House
Do the same homework to find the best realtor. A great realtor will know what is on the market in your price range, as well as be in the loop to what is approaching the market and should work with your lender directly to communicate all the interest you have in each property. It is very important that you understand how different elements, such as Home Owners Association Fee’s or flood or other insurance fees pertaining to each individual property can play a role in your monthly mortgage payment.
It is very important that you work with a trusted lender who always have your best interest in mind. By “best interest” that means what you as a buyer will be most comfortable living with, while you transition into home ownership. Sometimes “best interest” gets twisted into maximum you can afford. Buying a home that stretches your budget beyond what allows you to live a good life is a recipe for disaster. The home buying process should be a simple process. Work with people you trust. Communicate when you are not feeling comfortable or do not understand. Your lender and your realtor should have no problem sitting down with you and explaining and outlining how each step of the home buying process works.
If you are interested in learning how to become a homeowner and want to see what you qualify to purchase let me know. Check my Yelp or follow me on Facebook to learn more about my process.
Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395 

#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #HomeBuyingProcess #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender

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What is “Boarder Income” and How Is It Utilized When Applying for a Loan?

Did you know you can use boarder income to help you qualify for certain loan programs? Understanding which programs allow you to utilize boarder income and the requirements for each can help you get ahead when applying for a loan.

Boarder income is income that a person receives for lodging, meals, or related services from people living on their property. There are three types of loans that you can apply boarder income to:

  1. Federal Housing Association (FHA)
  2. Fannie Mae (FNMA)
  3. Freddie Mac (FHLMC)

Federal Housing Association (FHA)

Boarder income applies to Boarders of the subject property renting space inside the borrower’s dwelling unit.

  • Mortgagee must obtain a copy of the executed written agreement documenting intent to continue boarding with the Borrower for purchase transactions.
  • Borrower has a two-year tax return history of receiving income from boarders and the borrower is currently receiving boarder income.
  • Obtain two years of the Borrower’s tax returns evidencing income from boarders and the current lease.

Fannie Mae (FNMA)
Boarder income from boarders in the borrower’s principal residence or second home is only acceptable when:

  • Documentation of the boarder’s history of shared residency that shows the boarder’s address as being the same as the borrower’s address.
  • Documentation of the boarder’s rental payments for the most recent 12 months.
  • When a borrower with disabilities receives rental income from a live-in personal assistant, the rental payments can be considered as acceptable stable income in an amount up to 30% of the total gross income that is used to qualify the borrower for the mortgage loan.
Freddie Mac (FHLMC)

Rental income from the subject 1-unit primary residence rental income generated from a borrower’s primary residence may be used to qualify with a disability if the rental income is from a live-in aide. This Income source may be considered stable monthly income if:

  • The rental income may be considered in an amount up to 30% of the total gross income that is used to qualify the borrower.
  • The live-in aide plans to continue to reside with the borrower for the foreseeable future.
  • Borrower received rental payments from a live-in aide for the past 12 months on a regular basis.
Boarder income can be tricky but is important to take into consideration when applying for a loan. If you have boarder income and want to learn more about how you can utilize it, please let me know as we can discuss your specific scenario.
Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395
#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender #BoarderIncome #Income
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Thinking About Buying A Condo?

The question of “should we buy a condo” crosses everyones mind, especially those who live in urban areas. A condominium is a building or complex of buildings containing a number of individually owned unit homes. Just like owning home, when you buy a condo you own it outright. But there are a few things that all interested condo buyers should understand before they decide to buy.

Understand the Home Owners Association (HOA) Rules
When you buy a condo, you’re also buying into the association’s rules. This includes monthly ownership fees, operating budget, liens and personalities that are included within your potential condo. Before escrow is closed you should receive documentation of all the HOA rules. If you want to hang things outside your home, plant a tree, park your RV at your home, you’d better check with the HOA first.

Condominium Fees
Condo’s have monthly fees that are charged to each resident and cover an array of expenses. These expenses can include painting the exterior, landscaping, insurance, upkeep, maintenance, garages and other things. Knowing what your HOA has saved in the reserve is important so you know they actually have saved for these types of expenses and also understanding if there are any special projects slated for the next few years.

Reserve Fund and HOA Budget
Speaking of reserve fund, this is a very important item to be aware of if you are planning on buying a condo. The reserve fund is used for general maintenance and special assessment projects. If the reserve fund is low, this could lead to an increase in your HOA monthly fees to build the fund up. You also want to understand how the HOA is used and you can better understand that by reviewing the budget. These items should be included in the documents your realtor provides you when you are in contract.

Condominium Management
If the condominium you are interested is managed by a particular company, ask for the name and check its reputation. Two great ways to look into a management company is through the BBB (Better Business Bureau) or even a simple Yelp search.

Owner Occupancy
Understanding the ratio of tenants to renters is actually an important aspect when buying a condo. Some loans have minimum owner occupancy rates that a condo must meet to qualify for Fannie Mae, Freddie Mac, FHA and VA loans.

Knowing Your Neighbors
The best way to meet the neighbors is to attend a HOA board meeting. Most of the time, if there are complicated neighbors they surface at these meetings. You can also get a better understanding of the current owners viewpoints and personal feelings on living at the condominium.

Insurance
It is common that liability and hazard insurance are covered by the HOA and if it is not then it is up to the owner to cover these.  You will be responsible for the “Walls In Coverage” also known as a Renter’s Policy cover the interior of the condo.

Condominiums can be great purchases, especially in urban areas where walk scores are high and they have well ran HOA’s. Many times sellers will not release the HOA documents until a buyer is in contract. Do not allow this to turn you away from making an offer. Once you are in contract you are allocated time to review the HOA documents once they are provided to you so that you can make sure they fit with the lifestyle you are looking to create.

Kathleen Beck – Mortgage Lender
2716 Broadway
Sacramento, CA 95818
916-722-0395
#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #Refinance #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing #TrustedLender #Condo #Condominium
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Understanding the Mortgage Loan Process

 

By: Kathleen Beck – Mortgage Lender
West Coast Mortgage Group
NMLS #243181  |  BRE #01058848

There are four important steps in buying or refinancing a home. Before you get started it is important to organize your documents from the “Needs List” (see prior blog for complete “Needs List”) to ensure your loan or refinance is processed in a timely manner without unanticipated hurdles.

In order to simplify the loan process I have summarized the timeline into four simple steps to better understand the process.

  1. Needs List and Pre-Qualification:
  • Your mortgage professional receives your loan application and documents needed to verify your application (see blog on “Mortgage Needs List”) from you.
  • Buyer: Your mortgage professional will process your application and issue you a Pre-Approval letter for you and your realtor to use to verify your loan pre-approval for the offers you present to the seller. You can now view homes, make offers and enter into contract with a seller.
  • Refinance: Your mortgage professional should process your application and issue you a Pre-Approval letter based on your qualifications and interest rates currently available.

2. Offer Time:

  • You made an offer, it was accepted and you are in contract!
  • You will receive a Loan Disclosures within 5 days of receiving your complete purchase contract.
  • Your appraisal will be ordered and scheduled with your realtor.
  • Additional documents may be required at this time to further prepare your file for underwriting of your loan.

3. Underwriting (UW):

  • Your loan package is submitted to underwriting for approval.
  • The underwriter will send out a Conditional Loan Approval.
  • You will work together with your mortgage professional to complete your “Prior To Doc Conditions” from underwriting so your file is cleared to close.

4. Closing:

  • Your “Prior-To Doc Conditions” are completed and signed off by the underwriter.
  • Once underwriting has signed off you receive a clear to close (CTC).
  • Your “Closing Disclosure” (CD) is issued.
  • You acknowledge your “CD” and your 3-day waiting period begins before you can sign your final loan documents.
  • 48 to 72 Hours after you sign the final loan documents, the title company will receive funds from your mortgage lender and records your Deed of Trust (special circumstances apply with holidays and weekends).

The entire loan and refinance process takes approximately 30-45 days and mortgage loan officers work to make this as simple and stress-free as possible for borrowers. If you have questions about the loan process or are interested in learning more about refinancing your home direct message me and lets get you moving towards your home ownership goals.

#Mortgage #MortgageLoanProcess #Buying #HomeBuyer #Refinance #NeedsList #ConventionalLoan #FHALoan #VALoan #JumboLoan #PreQualifications #PreApproval #OfferTime #Underwriting #Closing #Borrower #HomeOwnership #Sacramento #BayArea #HomeFinancing

 

 

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Outlook for Real Estate Mortgages for 2014

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The big question on everyone’s minds is “Where are interest rates going this year”.  Of course there are no concrete answers only opinions and predictions.  The opinions and predictions are just educated guesses at best; no one really knows for sure what is going to happen in the markets over the next 12 months as our crystal balls are broken.

What I do know is rates are excellent right now, so if you are waiting to refinance to lower your interest rate or term, or buy a home, now is the time to check out your mortgage options.  If your interest rate is over 5% it may be worth checking with me to see if it makes good financial sense to refinance now.

January 10, 2014 new mortgage laws went into effect regarding allowed debt ratios and lower caps on fees allowed to be charged to the borrower.  What this means for you is the debt  to income ratios have been lowered on mortgages and have to be kept below 43% to 45% depending on the program and investor.  The amount of fees Mortgage Brokers can charge has to be 3% or less of the loan amount as a general rule.  Loan amounts under $100,000 may have different guidelines.  Both of the new rules are very borrower friendly for instance you will not be approved for a loan if you do not qualify with the new debt to income ratios which should cut down on borrowers going into payment shock when they make their new payments on their new mortgages.  Also, the new limits on fees will help the borrower from being over-charged on their new mortgages.

As always, please call me with any questions.  I look forward to working with you in 2014. Call today 916-722-0395!

Kathleen Beck – Mortgage Lender

“A person you can count on”

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One Last Shot at Super-Low Rates?

ImageIf you missed your chance at refinancing your mortgage at a super-low rate, the standoff over the raising the federal debt limit is giving you what may be one final opportunity.

Normally, signs of a softening economy are a bad thing for consumers. But if you’re still hoping to refinance your mortgage or are looking to buy a home, the standoff offers what will likely be a short-lived opportunity to lock in the kind of low rate that many thought was gone for good.

Approaching 4 percent again

Rates dropped sharply in mid-September after the Federal Reserve announced that it would not be cutting back on its bond-buying program as many had speculated, and they’ve continued to sink with the partial government shutdown that began Oct. 1 and as the prospect of a full government shutdown appears more likely.

According to some surveys, fixed-mortgage rates have declined by about half a percentage point since the Federal Reserve meeting in mid-September. Many services are reporting average 30-year fixed-rates of around 4.25 percent are available for borrowers with good credit and 20 percent down/equity, with Zillow reporting 30-year rates approaching the 4 percent level once again.

Surveys are reporting 15-year fixed-rate mortgages, popular for refinancing, are currently running about a full percent lower than the 30-year variety.

Delays in approvals are likely

If you’re looking to buy or refinance, the shutdown does present a few problems. Although lenders are continuing to process most mortgage applications, including those for loans backed by the FHA, VA, Fannie Mae and Freddie Mac, they can’t finalize until at least some government operations are restored.

That’s because they need to verify incomes and social security numbers with the IRS and Social Security Administration before those loans can be approved, and those agencies are officially on shutdown at the moment.

So if you are applying for a purchase or a refinance, you may want to lock in your rate for a bit longer than you normally would – for example, 60 days instead of the usual 30.

Mortgage rates generally sink on economic uncertainty, as investors become more pessimistic and are willing to accept lower returns on safe investments. This reduces the rate of return on Treasury bonds, considered the safest of investments, and mortgage rates and other interest rates typically follow.

What about a full shutdown?

The partial government shutdown that began Oct. 1 is generally seen as having a slightly dampening effect on the economy, due to federal workers not getting their paychecks and the closure of federal offices preventing certain government-dependant business transactions – such as approvals for small business loans – from being carried out.

The greater concern though, is the uncertainty over the possible effect of a full government shutdown and failure of the U.S to make its debt payments. That’s the main thing that has investors scurrying for safe cover and allowing interest rates to sink even further.

The deadline for resolving the standoff – in which House Republicans are refusing to raise the debt limit without significant changes or delays to the Affordable Care Act, or ObamaCare – is Oct. 17. If it appears a deal is in the offing, rates may begin to edge back up before that date; if the deadline passes, they could fall even further.

By Kirk Haverkamp, Published: October 07, 2013

First published on MortgageLoan.com at: http://www.mortgageloan.com/one-last-shot-super-low-rates-9582

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Big win for consumers and Home Buyers

Changes to FHA Underwriting: “Back to Work – Extenuating Circumstances” (ML 2013-26).  Image

As a result of the recent recession, many borrowers who experienced unemployment or other severe reductions in income were unable to make their monthly mortgage payments and ultimately lost their homes to a short sale, deed-in-lieu, or foreclosure.  Some borrowers were forced to file for bankruptcy to discharge or restructure their debts.  Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected.  FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:

•     certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;

•     the borrower has demonstrated full recovery from the event; and,

•     the borrower has completed housing counseling

 Effective Date

 The guidance in this ML is effective for case numbers assigned on or after August 15, 2013 through September 30, 2016.  Note: This ML will serve as Section G until the 4155.1 Handbook can be updated.

 Applicability

•             Purchase loan in all FHA programs with the exception of Home Equity Conversion Mortgages.

•               Utilize the provisions of this ML for eligible borrowers when AUS results in a “Refer” or is manually downgraded.

•               Borrowers must meet all other applicable FHA eligibility and policy criteria. 

Borrower Eligibility

Borrowers that may be otherwise ineligible for an FHA-insured mortgage due to FHA’s waiting period for bankruptcies, foreclosures, deeds-in-lieu, and short sales, as well as delinquencies and/or indications of derogatory credit, including collections and judgments, may be eligible for an FHA-insured mortgage if the borrower:

•        can document that the delinquencies and/or derogatory credit are the result of an Economic Event as defined in this ML, and

•        have completed satisfactory Housing Counseling, as described in this ML, and

•        can meet all other HUD requirements

Definitions

Economic Event – any occurrence beyond the borrower’s control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months.

Onset of an Economic Event – the month of Loss of Employment/Income.

Recovery from an Economic Event – the re-establishment of Satisfactory Credit for a minimum of twelve (12) months.

Housing Counseling – for purposes of this ML, means counseling from a HUD-approved housing counseling agency related to homeownership and residential mortgage.

Satisfactory Credit

A borrower is deemed to have Satisfactory Credit if:

•               the borrower’s credit history is clear of late housing or installment debt payments, and major derogatory credit issues on revolving accounts;

•               any open mortgage is current and shows twelve (12) months satisfactory payment history.

Non-traditional credit history is acceptable per the guidelines of the Mortgagee Letter.

Verification of 20% Reduction in Household Income

Verification of a reduction in Household Income of twenty (20) percent or more for a period of at least six (6) months that resulted from the Loss of Employment, Loss of Income, or a combination of both is required.

 Loss of Employment can be verified by obtaining:

          _              a written VOE evidencing the termination date or in cases where the prior employer is no longer in business:

–              a written termination notice, or

–              other publicly available documentation of the business closure, and documentation of receipt of unemployment income.

 Previous income prior to the “Loss of Income” must be verified by obtaining:

·                     a written VOE evidencing prior income; or

·                     signed tax returns or W-2s evidencing prior income.

 Post Economic Event Income

Verification of the Borrower’s Household Income after the onset of the Economic Event in also required.

 

Economic Event-Related Payments or Credit Deficiencies

To establish that the borrower’s derogatory credit was the result of an Economic Event, it is required to determine that:

•           the borrower exhibited Satisfactory Credit prior to the Economic Event Onset;

•           the borrower’s derogatory credit occurred after the Economic Event Onset, and

•           the borrower has re-established Satisfactory Credit for a minimum of twelve (12) months

Note: Foreclosures, deeds-in-lieu, Short Sales and Bankruptcies require that 12 months have elapsed since the date of the derogatory item (i.e., date of sale for a short sale, discharge date for a bankruptcy, etc).

  

Housing Counseling

To qualify under the guidelines of the Mortgage Letter, borrowers must:

•          receive home-ownership counseling or a combination of home-ownership education and counseling provided that each participant receives, at a minimum, one hour of one-on-one counseling from HUD-approved housing counseling agencies

•         The counseling must address the cause of the economic event and the actions taken to overcome the economic event and reduce the likelihood of re-occurrence. The housing education may be provided by HUD-approved housing counseling agencies, state housing finance agencies, approved intermediaries or their sub-grantees, or through an on-line course.

 

Note:  Counseling must be completed a minimum of thirty (30) days but no more than six (6) months prior to application.  Housing counseling may be conducted in person, via telephone, via internet, or other methods approved by HUD. 

 

A list of agencies can be obtained online at http://www.hud.gov/.

 

 

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