The Importance of Verification of Funds in Mortgage Process

Where the money comes from is important to underwriters

One topic ... one direction provided during the Mortgage Process that seems to baffle and frustrate my prospective home buyers during their Mortgage Process, surrounds the sourcing and documenting of Down Payment and Closing Cost Funds. When I touch upon this portion of the Process I often hear the comment, "it shouldn't matter where the money comes from" from my Borrowers.  There also seems to be a mindset that their Earnest Money is something other than an initial portion of the Down … [Read more...]

How to Make Your First Mortgage Payment

How to make your first mortgage payment on your Los Angeles home

Inside Mortgage Finance News reported on October 28, 2014 ... "Total mortgage-related complaints filed by borrowers with the Consumer Financial Protection Bureau fell again in the third quarter of 2014 – the fifth drop in the last six quarters, according to figures compiled by Inside the CFPB.      Data contained in the CFPB’s consumer complaint database show that such consumer gripes fell 17.6 percent in the third quarter of the year, and are now down 23.6 percent from the same period in … [Read more...]

I Received a New Property Assessment. What Do I Do?

What happens if I receive a property assessment

As a Chicago-area Mortgage Lender, I've always been asked a lot of questions regarding Taxes and Property Assessments.  Property Taxes, and subsequently monthly tax escrow contributions, play a very important role in loan approvals/denials. But throughout the recent housing downturn, the topic of property taxes and assessments has cropped-up more often and has become far more important to homeowners ... As of this writing (Sept. 2014), property Assessments have been completed in much of … [Read more...]

Using Gift Funds or a Co-Signer to Help With Your Mortgage

gift 1

Should I Pray or Should I Co?   I tend to see a fair amount of high loan-to-value mortgage scenarios, mostly because real estate values here in Marin County, the San Francisco Bay Area and coastal California, in general, tend to be high.  And I think it also has a lot to do with the formidable task of saving the funds necessary to purchase some homes, which we know can take a prohibitively long time.  So 10% down payments, or even less, are not at all uncommon, and I’ll see these … [Read more...]

The Many Ways Poor Credit Scores Cost You

Bad credit scores can affect you in many ways

A large percentage of the potential home-buyers I speak to have a basic knowledge of how credit scores influence the interest rate received when they finance their home purchase.  Most understand the basic principal:  The higher their credit scores, the lower their interest rate. I read a CNBC article today entitled, "How poor credit costs you on homeowners insurance".  It delivered a strong message.  Poor credit scores cost you.      In that article it was reported that:  "Homeowners … [Read more...]

Waiting Periods After Short Sale, Foreclosure, Bankruptcy

Extenuating circumstances after a short sale or bankruptcy

I wrote recently about Fannie Mae's announcement regarding the extension of the waiting period for those Buyers hoping to become Homeowners once again after having experienced a Short Sales (Pre-Foreclosures). The waiting period is now extended out to 4 years ... regardless of Loan-to-Value considerations (or Down Payment percentages). Naturally, there's been a wide range of reaction to Fannie Mae's announcement.  There's also been many questions asked in regards to this change and my post.  … [Read more...]

The ABCs of DTIs – Debt-to-Income Ratios

Debt to income 101

Definition of Debt-to-Income Ratio:   The figure that represents how much of your income is spent repaying your recurring monthly debts.  The HIGHER your Debt-to-Income Ratio is, the more of your monthly income is being devoted to paying back your debts.  Formula Used to Find Your Debt-to-Income Ratio:  Monthly debts owed divided by monthly income.  This includes utilizing ALL Recurring Monthly Debt VS Gross Monthly Income, as determined ultimately by an Underwriter at Final Approval.      … [Read more...]

A Pragmatists Guide to Qualified Mortgages (QM)

Los Angeles mortgage, new rules

A Pragmatists Guide to Qualified Mortgages (QM) On January 10, 2014, new mortgage rules will go into effect that will change the way home loans are originated by just about every institution.  These changes stem from the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010.  Here is what a buyer, seller and borrower need to know: Conforming Loans You are a buyer with more than a 5% down payment.  Your loan amount falls somewhere below the conforming loan limit of … [Read more...]

When Inaccuracies Show on your Credit Report

Buying a home in L.A. Inaccuracies on your credit score

When Inaccuracies Show on your Credit Report ... What Then? Credit Scores and Credit Reports are very important ... That's true whether someone is hoping to buy a home (or refinance) or not.  But should you be someone in the hunt for Mortgage financing to purchase or refinance a home, the stakes get higher.  Your Credit Scores and Credit Reports become paramount to the success you'll discover when financing and the end-costs you face. Most of my Mortgage clients understand this when we … [Read more...]

Do You Possess the Perfect Recipe to Become a Home Buyer?

Are you ready to become a Los Angeles home buyer?

If you are buying a home in Los Angeles read another great post from Gene Mundt, Chicago mortgage lender, about the necessity of talking to a lender. As a Mortgage Lender, one of the most important messages I impress on area Home Buyers/Owners is one regarding timing ... the timing of when they should contact me when Buying a Home or Refinancing. If you've read a few of my past posts, you'll know the topic of timing is a drum I beat loudly and often.  My rule of thumb regarding proper … [Read more...]

Frequently Asked Questions When Buying a Home in L.A. What Can I Afford?

How much can you afford when buying a Los Angeles home

If you are buying a home in Los Angeles, especially if you are a first-time home buyer, you probably have a ton of questions.  I am not going to be able to cover them all, but hopefully this series will answer the main ones. Q:  What can I afford? A:  The first step you will want to take is to consult with a lender.  They will determine if and what you can afford to buy. This will be based on: Your gross income Available cash for downpayment, closing costs, and lender-required … [Read more...]

Good News. The New Non-Traditional Credit References May Help

New non-traditional credit references

When talking with potential clients seeking mortgage financing, one of the very first things I do is provide the address to my website.  I've loaded my mortgage website with helpful info and tools to benefit all those that visit there. One of the bits of info that I use and stress the importance of, is my "Mortgage Checklist".  This list includes the info and documentation that is typically needed for mortgage application and processing.   Having this list available ahead of time … [Read more...]

Buying a Home in Los Angeles. Great Credit is Not Enough

Buying a Los Angeles Home be Sure to have Lender Approval

If you are considering buying a home in Los Angeles please don't think we agents are being difficult when we tell you there is no point in starting the process until you have spoken to a lender. This is not personal.  YOU CANNOT MAKE AN OFFER ON ANY HOUSE WITHOUT A LETTER FROM YOUR LENDER.  Or if you are paying cash, without showing that you have the funds in place. You may have the best credit out there, which is good.  You may have way more money in the bank than you need.  Great. … [Read more...]

Know Your Terminology Regarding Mortgage Lenders, It’s Very Important

It is very important to know your mortgage terminology

I've offered multiple posts about the importance of being familiar with  frequently-used mortgage terminology prior to entering your mortgage processing.     With all the real estate and financing terminology or slang that can pop-up during a real estate transaction, it's just best to be prepared and educated about what you'll be hearing.  It's for your own benefit.      Over the last few years,  I have found that one piece of terminology, used frequently, is incorrectly … [Read more...]

Home Buyers’ Low Mortgage Interest Rates

Los Angeles Home Buyers Act Now While Mortgage Interest Rates Are Low

I May Not Be Yoda, but I'm Darn Close!      Yesterday, I was reading yet another blog about the low interest rates presently available to home buyers seeking mortgage financing.      Seems another new historic low was announced. Something not quite so noteworthy anymore, as we all have grown used to hearing about how the rates have dipped, dipped, and dipped again.      And therein lies my big worry, both as a mortgage lender and as a parent.   I think buyers have … [Read more...]

What’s Your Point?

Los Angeles mortgage, new rules

What's Your Point??  Nawwwww ... Not THAT Point! A great scene, isn't it?  But it's not those "points" I'm going to talk about in this blog.  No, I'm talking the "points" referred to when discussing mortgage costs and options.      I've had several discussions as of late, with some pretty confused borrowers regarding these "points".  They've had no real grasp of exactly what a "point" is prior to our discussion.  What it can equate to in cost to them.  How the cost of a "point" is … [Read more...]