Tag Archives: #lending

Things NOT to do before escrow closes

I am going to write another blog about what to expect at your mortgage closing, but I feel it is equally important to point out the things that you should stay clear of before we even get to the closing, because these things could put the whole mortgage at risk!

These are the things you should not do before you close escrow.

Changing Jobs

Lenders prefer a steady and consistent job history, and your whole mortgage to this point has been based on your current income history. Any changes in your employment at this point such as changing jobs, companies or becoming self-employed could spell disaster to your ability to purchase your home. At the very least, it could put the process on hold while the lender re-evaluates your financial position.

Making Big Purchases

Yes, you are getting ready to move into that new home and you need new furniture or appliances or you want to celebrate with a trip to Cancun, or maybe even want a new car to make your commute from your new home more enjoyable. All of this is definitely a bad idea! Your loan is based on something called “debt to income ratio” and it was calculated based on your current debt. Adding any more debt at this point will change that ratio not in your favor! Even buying these things with a cash reserve you have set aside is a bad idea, because you would have had to disclose your savings during the mortgage process and this was all taken into account when you were approved. So for now, do not make any purchases with any type of credit or cash savings. Wait until you have closed escrow and have the keys to your new home.

Paying Your Bills Late

This should be self explanatory, but you don’t want to be late on your car payments or credit card payments now, when your new home hangs in the balance. Be sure to stay current on all debt before and during the escrow process. Of course, you want to continue to stay current and pay off that debt even after you get the keys to your new house!

Opening/Closing New Credit Card Accounts

This is just a bad idea during your escrow. There is nothing to be gained by having more debt and opening new accounts could impact your credit status. The same is true for closing accounts, even though that may seem counter intuitive; closing accounts during the escrow could affect your credit rating. Now, sometimes lenders will ask you to pay off small debts in order to get your debt to income ration down to an acceptable level, but that is a request the lender will make, otherwise, just keep paying your monthly payments as usual.

Being Unreachable

The escrow process only last about 30 days on average, and during this time, your lender should be able to reach you easily. Don’t travel to remote places where you cannot be reached. Don’t get a new cell phone number, unless you give it to your lender first thing. Don’t take extended vacations, or travel to places you may not be able to get back from in time to close escrow. Many times during the closing there are small or large glitches, and the lender needs your attention right away, Not being available could push back the closing date on your new home.

These are just the big ones, and the ones that could impact you the most. Please feel free to contact me any time if there are questions about your closing. It is better to get the answers ahead of time, rather than dealing with a potential issue during the closing process. I am always available to help make this process easy and get you into your new home!

Advertisements
Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Using Gift Money To Secure Your Loan

Congratulations on your decision to buy a house! Chances are you may be getting a gift to help secure the mortgage on that house, so we wanted to give some guidelines in receiving and using that money!

Conventional –Fannie Mae
Gift Donors may be a relative, such as the borrower’s spouse, fiancé, domestic partner, child (or other dependent), or any other individual related by blood, marriage, or adoption (or legal guardianship).

  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

Conventional – Freddie Mac

  • Gift Donors may be a relative, such as a blood relative, spouse, fiancé, domestic partner, or legal guardian.
  • The donor MAY NOT be—or have any affiliation with—the builder, the developer, the real estate agent, or any other party interested in the transaction.
  • Gifts are NOT allowed for investment properties.

FHA Loan

  • Donors can be a relative as defined below*, or a close friend with a clearly defined and documented interest in the borrower.

”Relative” is defined as follows, regardless of actual or perceived sexual orientation, gender identity, or legal marital status:

    • Child (son, stepson, daughter, stepdaughter, foster child, or adopted son or daughter, including a child who is placed w/the borrower by a legal adoption agency)
    • Parent, step-parent, or foster parent
    • Grandparent, step-grandparent, or foster grandparent
    • Spouse or domestic partner
    • Brother or step brother
    • Sister or stepsister
    • Uncle or aunt
    • Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law

VA Loan

  • You must be able to document that the gift funds come from an acceptable source — a family member or someone with a family-like relationship — with a legitimate paper trail via a bank account or financial institution.
  • No one involved in the loan transaction, including the lender, can be the source of the funds.

Who ever gifts you this money is helping you achieve a dream, and could position you in a great spot with regards to your new mortgage! Be sure to thank them in a grand way for their generous gift!

Sources:
Kim Kirk – SPMC.com
Veteransunitied.com

Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

What Is An IRS Levy?

Do You Know What An IRS Levy Is?

If you are selling a home and have had past IRS tax issues that may be unresolved, you should know what a levy is.

A IRS levy is a legal seizure of your property to satisfy a tax debt. It differs from a lien which is a legal claim against your property to secure payment for a tax debt, a levy will actually take your property.

The IRS will only issue a levy to taxpayers who do not pay their taxes or make arrangements to pay their taxes. Normally the IRS will levy your property only after these three conditions are met:

• The IRS assessed the tax and sent you a Notice and Demand for Payment (a tax bill);
• You neglected or refused to pay the tax; and
• The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested. Please note: if the IRS levies your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.

How Could A Levy Impact My Home Sale

The IRS has asked all depositories (Banks, credit unions, escrow companies and similar institutions) to review and understand their responsibilities, and to process the levy immediately upon receipt from the IRS. Your escrow company will run a search to see if there are any pending transactions where the taxpayer, in this case you, will be receiving any payments. If the answer is yes, the IRS will be expecting to be paid before any money is distributed to you, the seller of the home. This should not be a surprise as the IRS notifies all taxpayers of any impending levy.

What You Should Do

Contacting the IRS to resolve your tax liability is always a good idea, and you are always entitled to hire counsel to help you navigate the process. If the levy causes an economic hardship you can request the levy be released. You also have the right to appeal the levy the IRS places on your wages, bank accounts and other property. More information is always available at http://www.irs.gov. Just do a site wide search for “IRS LEVY”

Tagged , , , , , , , , ,

Understanding Mortgage Insurance Q&A

By: Kathleen Beck, Mortgage Lender

West Coast Mortgage Group

NMLS #243181 | BRE #01058848

Mortgage insurance is an important element of the loan process if you have a low down payment, yet many first time borrowers aren’t very familiar with what it is and how it works. Mortgage insurance helps borrowers lower the risk they are placing on lenders for qualifying them for a loan with a low down payment. There are two types of mortgage insurance, “Borrower Paid” and “Lender Paid.” Understanding the difference between borrower and lender paid, and why utilizing this insurance option could benefit the buyer as well as the lender.

Here are some great questions and answers that I have provided my clients that all borrowers may also find useful.

  • Q – Who needs mortgage insurance?
    • A – Most borrowers making down payments fewer than twenty percent of the purchase price need to obtain mortgage insurance.
  • Q – What is the purpose of mortgage insurance?
    • A – Mortgage insurance lowers the risk the lender making a loan to you holds, so you can qualify for a loan.
  • Q – What is Borrower Paid Mortgage Insurance (BPMI)?
    • A – BPMI is insurance on your loan for the lender when a borrower has a low down payment and a lender is looking for assurance that the loan will be paid in full and on time. If a borrower decided to utilize BPMI, the lender charges a yearly premium paid in monthly installments.
  • Q – What is the average a borrower will pay a lender for their BPMI?
    • A – On average, BPMI premiums costs between 0.3 and 1.15 percent of the total loan amount.
  • Q – What is Lender Paid Mortgage Insurance (LPMI)?
    • A – LPMI is mortgage insurance that the lender pays for the insurance premium instead of the borrower. The cost of the LPMI is reflected in a higher interest to the borrower.
  • Q – Does mortgage insurance increase your monthly payment?
    • A – Mortgage insurance does increases the cost of your loan.
  • Q – Will the mortgage insurance payment be included on my monthly payment statement?
    • A – Yes, mortgage insurance will be included in your total monthly payment.
  • Q – If I default on my payments and the insurance kicks in, what will happen to my credit and my home?
    • A – If you fall behind on your monthly payments, your credit score may suffer and there is a possibility your home could foreclosure.

There are multiple loan options available to borrowers with low down payments. I enjoy working with my clients to help them find the down payment and loan that best fits their financial needs and I always recommend that they ask questions and maintain communication throughout the lifecycle of their loan. The last tip I would like to leave you with is, once the loan is paid down some, you may be eligible to cancel your mortgage insurance. If you are able to cancel, you won’t have to continuing to pay the monthly insurance expense.

#Mortgage #MortgageInsurance #LPMI #BPMI #LenderPaidMortgageInsurance #BorrowerPaidMortgageInsurance #Market #RealEstate #Lending #HomeOwnership #Jumbo #FHA #VA #Conventional #Sacramento #BayArea #HomeBuyer #CreditScore #DownPayment #KathleenBeck #TrustedMortgageLender

Tagged , , , , , , , , , , , , , , , , ,

2017 Increasing Loan Limits

With so many changes taking place as we transition into this New Year, the Federal Housing Administration (FHA), Fannie Mae, Freddie Mac and VA increased loan limits for the first time since 2006! Two large changes that have helped create this shift are the steady rise in property values and the housing market continuing to recover. The new limits will be considered for borrowers looking for lending on or after January 1, 2017, and will remain in place through the end of the year.

The maximum loan limits have increased across the board, mainly being seen through one-unit properties as well as in high cost areas and FHA-insured Home Equity Conversion Mortgages (or reverse mortgages).

Maximum loan limits:

  • One-Unit Properties – Increase from $417,000 to $424,100(Sacramento Tri-County area).
  • High-Cost Areas – Increase from $625,500 to $636,150.
  • FHA-Insured Home Equity Conversion Mortgages (or reverse mortgages) – Increased to $636,150.

These increases mark a rising confidence in borrowers ability to repay their loans and have lead to more options for buyers when it comes time to choose a home due to a wider variety of financial lending options.

It is important to understand that lenders still work diligently to get borrowers approved and the documentation requirements have not changed. These increasing lending limits have allowed me to create a competitive landscape for my clients, focused on providing more financial lending options.

For more information regarding these lending limits shifting and the requirements for buyers to make a home purchase, I am always available to help my clients, friends and family and look forward to the new opportunities these increased loan limits will create for buyers in 2017.

#Mortgages #LoanLimit #Market #RealEstate #Lending #HomeOwnership #Jumbo #FHA #VA #Conventional #Refinance #Millennials #BabyBoomers #2017 #Sacramento #BayArea #HomeBuyer #CreditScore #KathleenBeck #TrustedMortgageLender

Tagged , , , , , , , , , , ,

Four Trends Will Shape the Housing Market in 2017

By: Kathleen Beck, Mortgage Lender

CA BRE #01058848  |  NMLS #243181

It doesn’t take much reflecting on 2016 to understand that 2017 will find creative ways to surprise us. Knowing the complexity of the market I want to break down what we can expect to see shape our buyers market for 2017 and also combine that with what Realtor.com annual market study to draw a picture of the key housing trends to come.

According to Jonathon Smoke, Chief Economists of Realtor.com, “The pace of growth is still strong and, for pricing, still represents an above-average level of appreciation.”

Key 2017 Predictions:

The West Will Lead the Way

Realtor.com expects metropolitan markets in the West to see price increase of up to 5.8% and sales increase of 4.7%. The Western markets also are dominating the 2017 Realtor.com Top Housing Markets, including Sacramento, Los Angeles, Tuscan and Portland.

Millennials and Baby-Boomers Will Move Markets

Both millennials and baby boomers are approaching life stages that naturally motivate people to change their living experiences such as, getting married, buying a home, having children, empty nesting and retiring. Jonathon Smoke predicts that millennials will make up 33% of buyers in 2017.

Slowing Down Price Appreciation

Home price increases are forecasted to slow from what was forecasted at 4.9% in 2016 to 3.9%. “Prices are still likely to go up at an above-average pace as long as supply remains so tight,” Smoke says.

Fast Markets with Fewer Homes

The average time it takes a home to move from “listed” to “sold”, is currently 68 days in the top 100 metropolitan areas. That average age of inventory (68 days) is 11 days faster than the national average. The conditions limiting home supply are not expected to change in 2017.

The number one thing I recommend for all my clients is to get your documents in order and lets talk about what the market is doing and when would be best for them to buy. Everyone’s timeline is different and making sure you feel comfortable with both what the market is doing and also what you want your financial future to looks like are always my top two priorities.

#Mortgages #Market #RealEstate #Lending #HomeOwnership #PriceAppreciation #Jumbo #FHA #VA #Conventional #Refinance #Millennials #BabyBoomers #2017 #Sacramento #BayArea #HomeBuyer #CreditScore #KathleenBeck #TrustedMortgageLender

 

Tagged , , , , , , , , , , , , , ,

3 New Year Resolutions for Future Homeowners

As the holidays swirl and the New Year is just around the corner, it’s time to start thinking about your new years resolutions. If buying a home is on your list of 2017 goals, it’s the right time to start creating resolutions that direct you to accomplishing that milestone of home ownership.

Here are some great New Years resolutions to focus on in 2017 to help make your goals a reality in the New Year.

Check and Raise Your Credit Score

Being familiar with your credit score and history is one of the biggest factors mortgage brokers and banks will look at when determining whether or not to lend to you. Starting with a free online credit report provider and analyzing your score is the beginning to finding ways to raise your current credit. If your credit score is lower than you’d like don’t panic. It is always a good time to start taking easy steps to improve your credit.

Tips to Raising Your Credit Score:

  • Pay your bills on time
  • Pay credit cards down to 1/3 of the high limit each of your credit cards
  • Pay off your credit balances every month

Organize the Documents Needed to Purchase a Home

Having the documents and forms need to complete the home buying and mortgage process can help your entire transaction run smoother and also help you get a better sense of where you stand in terms of loan qualifications.

Documents to Start Gather:

  • Tax returns for the past two years
  • W-2 income statements
  • Two most recent pay stubs
  • Most recent credit-card statements
  • Most recent bank and investment account statements
  • Divorce decrees and child support documents

Get a Pre-Approval

A pre-approval means a legitimate financial institution has looked into your financial background and determined what you qualify for, letting real estate brokers and sellers know that you’re the real deal. Regardless of where you stand on the map to homeownership, connecting with a trusted mortgage professional should be at the top. Understanding what steps are needed to get you from point A to point B can provide a sense of ease during this process. More importantly, knowing what your home buying budget is changes the entire buying experience and also gives you leverage to move forward if you do walk into the home of your dreams over the weekend.

Tagged , , , , , , , , , , , ,

Millennial Buyers to Transform the 2017 Real Estate Market

Every year realtor.com® does an annual survey of home buyers to compile data on home-buying trends. According to their 2016 findings, more than half of all homes next year will be bought by first-time home buyers, and the survey states most of those buyers will be millennials.

  • In 2016 33% of home buyers were first-time buyers
  • In 2017 52% of home buyers were first-time buyers
  • In 2017 61% of first-time buyers will be under age 35.

Jonathan Smoke, chief economist for realtor.com® said, “This represents an ‘Oh, shift’ moment in housing. With so many first-time buyers in the market, competition will be even fiercer next year for affordable starter homes in the suburbs. Those looking to buy may want to consider a winter home purchase in order to avoid bidding wars and higher prices spurred by a potential increase in millennial buyers.”

Millennial First Time Home Buyer Focus:

  • Safety
  • Privacy
  • More Space
  • Indoor and outdoor space

Millennials’ Top Reasons for Buying:

  • Moving in with a partner
  • Getting married
  • Growing tired of their current living space
  • planning an addition or two to their family

Millennial Buyers Prefer:

  • Single-family homes (39%)
  • Townhomes (34%)
  • Multifamily homes (15%)
  • Condos (10%)

If you are a millennial thinking about buying in the near future, or just someone who wants to beat the millennial rush, we should sit down and talk about what you are looking for and how your financing can be lined up to meet your home buying needs.

Tagged , , , , , , , , , , , , ,

Colder Months Equal Better Home Prices for Buyers

As the temperature drops and we all brace for the winter, there are major advantages to finding the home of your dreams during the cold season.

During the warmer seasons there tends to be an increase in inventory on the market but with that increase comes a hefty increase in price and contract competition. More buyers are looking and when it comes time to put an offer in, chances are you are not the only buyer interested.

Research has found that by home hunting during the colder months, buyers are more likely to find that prices have dropped and competition has also lowered.

  • Sale prices decrease in the autumn months
  • In the 50 metro areas, home sale prices dropped 2.96% on average (that’s a drop of $8,300 on the median home)
  • Home sale prices are usually lowest in winter

When discussing winter buyers, Jonathan Smoke, Chief Economist of Realtor.com outlined “You have 50%-60% more inventory relative to the number of buyers, so there’s basically more options per buyer, and that translates into less competition.”

We found that NerdWallet backed up Smoke’s statements with data on how home prices usually bottom out in the winter months, providing an opportunity to save money.

The main advantages of less competition translates into lower home prices allowing buyers the opportunity for a lower down payment. During traditional market peak months, there tends to be more inventory on the market but with that inventory, buyers pay a higher premium.

We find that buying a home really depends on when you as a buyer are comfortable and prepared and that time is different for every buyer. When the numbers are crunched, winter statistically is the best opportunity for buyers as competition tends to fall away.

The best thing for all interested in purchasing a home is to connect with an experienced Loan Officer and discuss the home buying process. Every buyer has different needs and sitting down and discussing your home buying goals are is the best first step.

Tagged , , , , , , , , , , , ,

Avoid These Mortgage Mistakes

Buying a home is an exciting process. If done following my simple process, you could save time and money and potentially avoid some serious mistakes along the way.

Shopping For Your Home Before Shopping For Your Mortgage

This is often times the easiest thing for home buyers to miss. It is so easy to start viewing homes and make an estimated guess on what you can afford. This is actually the biggest time waster when it comes to home buying.

I always recommend to get pre-approved before looking. Don’t waste one minute of your time shopping for a home that is outside your price range. Not only does it waste your valuable time but it also can be an emotional process if you get attached to property outside your price range. I always advice my clients to start working with me three to six months before they start the  home buying process.  This will give us time to check your credit and put together a game plan if you need to improve your credit like paying down the right debt and removing possible errors on your credit report.

 Make sure you consider ALL your spending habits

When I work with borrowers, we review their credit report and their spending habits, including their disposable income (i.e. hobbies, habits and other items that will affect your bottom line when being lent to). Things such as golfing on weekends, shopping at the outlets, everything comes into play when deciding your mortgage affordability.

You don’t want to eliminate all the fun you have when you are looking to buy a home but I always recommend digging into spending and making decisions on which items will potentially make it more difficult to make your mortgage payments and also which items are important to your quality of life.

Failing to Review Disclosures and Other Important Documents Completely

I am always available to my clients to review documents and disclosures that may seem complicated or confusing to them as it may be their first time in the home buying process. Every time new disclosures are released it is vital that you review them in depth and feel comfortable with any changes that may be taking place. It literally can cost you money when you don’t review them completely and see minor changes that will ultimately be brought up at closing but could be better understood earlier the process.

Since 2015 there are two primary documents you want to make sure you pay close attention to.

  1. Loan Estimate

What to look for:

  • The total cost of the loan or the APR.
  • Cash to close.
  • Loan terms
  • Mortgage rate
  • Monthly payment
  1. Closing Disclosure

What to look for:

  • Did you receive the Closing Disclosure three days prior to close?
  • Does the Closing Disclosure match the loan estimate?
  • Are the interest rate and the APR the same?

When I am working with my borrowers it is vital that they understand each step of the process and also avoid making these mistakes. If you are interested in learning more about the mortgage process or are thinking about buying a home and want to make sure you don’t waste your valuable time, give me a call to discuss your mortgage needs.

Tagged , , , , , , , ,
%d bloggers like this: