How Income is calculated for loan approval in 2010
Posted On: August 3rd, 2010 by James Posted In: FHA Mortgage • Mortgage Programs • Mortgages • Refinancing
The rules of the mortgage game keep changing. Ultimately, the changes are a reflection of a much more risk averse lending environment. It is increasingly difficult to get approved for a mortgage. Now, don’t get me wrong, this isn’t the end of the world, and if you have decent credit, and a stable and verifiable employment/income history you will likely be approved for some kind of financing.
The thing to be aware of now is what is considered to be “verifiable” by mortgage underwriters is certainly not what it used to be, nor what a sane person might expect it to be.
THE COMMON TYPES OF INCOME: Continue Reading – How Income is calculated for loan approval in 2010
Portland Mortgage Broker who is Accountable
Posted On: July 22nd, 2010 by James Posted In: Financial Health • Local Interest • Mortgage Programs • Mortgages
I was listening to the Adam Corolla show the other day and he was off on some rant about how horrible the airline industry has become. Horrible customer service, zero pride or respect from airline employees. I also heard an anecdote about the airline industry that each flight only makes an average profit of $100 dollars or so after all the expenses are backed out. It got me thinking about my mortgage industry and how many new regulations will likely point us towards this type of experience in the future with getting mortgages.
Conversely, I also began to fantasize about what might happen if some of the current mortgage business model were applied to the airline industry- particularly that of the “commission only” sales model. What if flight crews, and ground crews could pick their own members, and work together to create a fantastic customer experience. They would make their own websites, and try to make it easy for Continue Reading – Portland Mortgage Broker who is Accountable
If your rate is above 4.5%
Posted On: July 20th, 2010 by James Posted In: Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
I’ve been hearing the radio ads just like everyone else, and our favorite breathless loan cheerleader has lately been urging you to call him “if your rate is higher than 4.5%”. I’m sure he would love to refinance you over and over again without any regard to if it makes sense for you.
Lets say you currently have a mortgage for $180k at 5.5% interest. Your principal and interest payment is $1,078. And now you really think that you are being foolishly ripped off for paying more than 4.5% on this loan. Lets also say that your credit score is 685. So now, in order to achieve this magical interest rate, you will need to pay a load of mortgage processing fees, an appraisal fee, title fees, plus 2% in points to cover the premium associated with a 685 credit score. Lender and title fees totaling $7,000. This is what you will pay in order to achieve a monthly savings of $115. The easy math is to divide the monthly savings into the upfront costs and calculate how many months it will take to pay for itself: $7.000 / 115 = Continue Reading – If your rate is above 4.5%
Gift Funds for a Down Payment: What to Expect
Posted On: June 18th, 2010 by James Posted In: FHA Mortgage • Mortgage Programs
Most home buyers bring some kind of down payment to the table in a real estate purchase.
The money down can come from any variety of sources, and a very common source of funds is that of the “family gift”.
Different loan programs have different requirements when using gift funds as the down payment. Most lenders will require there to be a legitimate and verifiable family relationship between the donor and recipient. The FHA mortgage allows for the ENTIRE balance of cash due to be from a family gift, whereas conforming agency loan programs will require the borrower to have 5% of his own funds in the deal if the down payment is less than 20% (if the down payment is 20% or greater, conforming loans will allow the full balance of the down payment to be from a gift).
So here comes the tricky part – HOW TO DOCUMENT THE TRANSFER OF GIFT FUNDS
Continue Reading – Gift Funds for a Down Payment: What to Expect
Refinancing Could Be Easier Than You Think
Posted On: June 14th, 2010 by James Posted In: Mortgage Programs • Mortgage Rates • Refinancing
With interest rates absolutely plummeting and apparently staying low for some time here, I really want to get a message out to the huge contingent of people who feel like they WON’T qualify for a mortgage, or a refinance. I have had many conversations with clients in recent weeks who seem to be in disbelief that they should refinance. Perhaps they just refi’d a year or so ago, and don’t want to take on another load of closing costs.
For borrowers who find themselves in this position, I only suggest a “no-closing cost mortgage refinance”. This will potentially get them a lower rate without any upfront costs, and put them in an immediate cash flow win.
Continue Reading – Refinancing Could Be Easier Than You Think
