Perhaps you get a monthly credit score on your credit cards. Maybe you subscribe to a credit monitoring company like CreditKarma. Perhaps you pulled a credit report from one of the three major credit bureaus. Your credit score for a mortgage uses only certain scoring models. You may have more than 40 different scores from many different companies and for […]
Derogatory credit refers generally to items which count against you for your credit score. Minor credit items such as a single late payment may not show up at all on a credit report. Say you paid two days late. You may see a late fee on your next bill, but usually you receive consideration as current as of the next […]
Expect inflation through 2025 to remain elevated. It may persist longer. Based on extraordinary federal government spending, waves of extra cash will flow into the economy for at least 3-4 more years. Massive injections of extra cash lead to high inflation. Every. Single. Time. Few, if any, exceptions can be found anywhere in history. The Federal Reserve did the absolute […]
Forbearance opportunity has ended The HUD foreclosure and forbearance moratoriums for FHA and USDA loans ended. The same for FNMA and FHLMC. Forbearance is just one example of avoiding mortgage default, however, the window to enter forbearance has closed. Those still in forbearance must find out the best way to exit in the shortest time period possible. The costs […]
Fire season. Tornado season. Hurricane season. Ice storms. Floods. Do You Have The Right Homeowner’s Insurance? Do You Know How To Get The Most Reimbursement on Claims? Beware “Amendatory Endorsements” such as the type appearing in Allstate and others’ policies. Read the entire policy. These endorsements don’t get disclosed to you in pricing or buying a policy. They come buried […]
Why improve mortgage knowledge? Isn’t everything available on a google search? A recent google search on mortgage yielded more than 1 billion hits. As anyone knows, google results over time have been modified to reflect those paying the most to advertise dominating the first page and multiple early pages of results. Those results likely tell you little. Multiple recent surveys […]
What are some of the most common complaints about mortgage origination and lenders? How can you avoid mortgage origination complaints? In order to get to your goal and navigate the financing process, there are common complaints from borrowers about lenders which point to obstacles to overcome. Every borrower is unique, so complaints vary. Different studies can show different results as […]
Down payments and risky mortgages — of course the down payment matters. Winning Mortgage, Winning Home covers a variety of ways to manage the down payment amount against the loan pricing. The interest rate paid on a loan has a detailed scale of penalties covered in the book and the book provides insights on using them to your advantage. But […]
Most first time home buyers misunderstand their budgets. These are not only buyers, but also shoppers who didn’t buy. According to a recent survey by Realtor.com, most first time home buyers were surprised at what they were able to afford. More than two-thirds found that their budget wasn’t accurate. Some first time home buyers found they could afford more home […]
Every year, more than 1 million mortgage applications are denied. Avoid a loan denial and being part of this statistic! Borrowers have tools to turn a loan denial into an approval by planning before applying. The 1 million denials do not include the number of applications which were withdrawn. Many borrowers apply to more than one lender. The Consumer Finance […]
Fannie Mae (FNMA) and Freddie Mac (FHLMC) represent the gorillas in the home loan market. Since both are in conservatorship (they went broke in 2008) under the federal government, the Federal Housing Finance Agency (FHFA) exerts total control over them. These two entities are referred to as Government Sponsored Enterprises (GSEs) since they have always had a federal government related […]
Updated. EXERCISE CAUTION in all home and market investments for the next 60 days! Many data points released on November 24 show the Federal Reserve has room to become more aggressive in fighting inflation. With the Federal Reserve pushing rates up now, their previous rate forecast looks incompetent. The Federal Reserve ignored the broad evaluations of top economists of every […]
You probably know someone who would like help understanding how to get approved. Or how to get better mortgage knowledge and a better rate, maybe the best interest rate for a mortgage. Or help understanding the reverse mortgage process. News commentary and helpful discussions can be found in the News/Commentary articles. Browse articles individually or by category of interest. Feel […]
Why Pay Rent? In previous posts, we covered an early bill introduced in Congress to provide grants, not tax credits, to certain individuals to use towards a down payment. Joe Biden had proposed a tax credit, but the plan morphed a bit. Now those wacky politicians plan to top themselves! It’s common for government programs to try to pick winners […]
What is a QM Loan? If you’ve read our prior posts or read in more detail Winning Mortgage, Winning Home, a Qualifying Mortgage is one which has to meet a number of tests concerning underwriting, pricing and Ability to Repay (ATR). Why is this important? Lenders prefer to write QM loans because they are easy to sell and they provide […]
Forbearance jumped into the forefront of housing issues in March 2020 with the beginning of Covid. The federal government immediately enacted a plan to allow homeowners to defer payments on mortgages. While it had the ability to do that on mortgages controlled by the federal government, it did not have the authority to do so on private mortgages. The federal […]
Who hasn’t gone to the Zillow website to look at a house value estimate or to pretend your house is worth what they say or more? Zillow put all that data to use buying homes. When web surfers searched more frequently about a particular submarket, Zillow’s AI concentrated bidding for houses there. The computer algorithms created a ”Zillow Effect” where […]
With an update below. And Zillow hits the skids!. The news cycle blares apocalyptic news every day about the state of the current housing market. FOMO shouts buy now! Let’s check FOMO vs common sense choices. Like every story these days, news programs cycle repetitively through any event like its Armageddon. They throw more and more fear into the anecdotes […]
If you are a first time buyer with a limited down-payment, FNMA (Fannie Mae) requires a home buyer education course. The course must be completed before a lender can make you a loan using FNMA funds. This also applies to borrowers with low-to-moderate income and to those borrowers without a credit score. Prepare to ante at least $75 for the […]
The proposed first time home buyer tax credit was introduced in Congress along with additional housing related bills. But, these may create problems in housing market and drive up prices, affecting buyers across the board. Industry groups who want to sell more houses have concerns that it will make homes less affordable for the low to moderate income buyer is […]
Most buyers will require financing to purchase a home. This will involve either a purchase contract contingent on getting an affordable mortgage or knowing if an affordable mortgage is available prior to making an offer. In a competitive market, not knowing the financing prior to making an offer puts a buyer at a disadvantage. Winning Mortgage, Winning Home is the […]
Thanks to friends at the Consumer Finance Protection Bureau (CFPB), you must be more protected from yourself. Starting July 1, new restrictions affecting mortgage credit have sent the index tracking this to near lows not seen in 7 years. The Mortgage Bankers Association tracks an index (chart below) to estimate how available mortgage credit is to borrowers. With the new […]
Virtually all of the information today that is available on internet searches or typical lender loan sites focuses on typical borrowers. These borrowers land mainly in the buckets of conventional (FNMA/FHLMC), FHA, or VA loans. But what if you aren’t a typical borrower? Perhaps income is highly variable. You may run your own business and have complicated finances. Do you […]
In earlier posts, we outlined our outlook for an opportune time to purchase a home. In this June purchase window update, we see many factors continuing to move in the direction predicted. On June 16, the Federal Reserve Board of Governors announced no rate hike was imminent and minimal increases expected through the end of 2023. Additionally, the short term […]
Nearly 3 months ago, we provided discussion of a likely advantageous purchase window which addressed home prices, home availability, the mortgage market and the factors driving home prices. As additional support for moderation in the home price increases, April has reinforced the materials price factors raising prices for home builders and either hurting builders’ profits or pushing new home prices […]
So you thought you were looking at all the houses available in your price range and where you want to buy? Pocket listings by real estate agents prove you wrong. These have been around for years. Also called whisper listings today, this unethical practice persists among many real estate agents. Buyers frequently speak to many real estate agents and provide […]
Rate locks continue to be a source of frustration for many borrowers. They sound like a good idea. Lock your rate for 30 days and any change in interest rates doesn’t affect you. Some lenders may offer a rate lock of 45 days or even 60 days. The loan officer may ask if you want to lock the rate at […]
One of the common complaints voiced by home buyers results from a property tax surprise. These come in a few different flavors. However, the most common surprise results from a change in valuation by the taxing jurisdictions. This may occur in the year of purchase. But more commonly, it arises in the year after purchase. Many real estate agents rely […]
The average price of homes sold reportedly jumped to about $375,000 by the end of April 2021. This represents a 22% gain over the prior 12 months. But this doesn’t mean that the average home increased in price by 22%. In fact, the average price gain comes from the fact that a greater share of homes sold were luxury homes […]
Many thought processing times for loans in 2020 were slow. Lenders were caught unprepared for the tidal wave of refinance applications driven by a plunge in interest rates. Many lenders couldn’t find enough people to process and underwrite loans. A significant number of individuals changed jobs and entered the mortgage world for the first time. The hot market lured new […]
Reverse mortgages have become more popular in the last decade. Are you looking at a reverse mortgage? As the statistics and performance of a large number of reverse mortgage come in, they have become more acceptable. A greater number of lenders and loan officers have become familiar with them and now originate them. FHA continues to be the dominant force […]
New Fannie Mae and Freddie Mac restrictions are already affecting lenders. The Mortgage Bankers Association special bulletin noted that FNMA and FHLMC have begun to implement the investor/2nd home caps. The MBA has seen the market for these loans deteriorate significantly. Investors have raised rate penalties by imposing loan level price adjustments. These adjustments seek to avoid getting an excessive volume […]
New Fannie Mae and Freddie Mac rules on lending are here and go into effect soon. These may have a sweeping impact limiting loans or driving up interest rates. Your lender may not be able to honor a pre-approval letter even if you would otherwise qualify for the financing. It may impact the ability to close a loan at the […]
A prior post regarding the most significant credit events included foreclosures, pre-foreclosures, deed-in-lieu, and bankruptcies as negative credit flags. These significant credit events keep the primary mortgage buyers (Fannie Mae and Freddie Mac) from purchasing a mortgage loan from an affected borrower. These events also preclude guarantees by federal agencies (FHA, VA, USDA). Private entities likely follow the timelines from […]
Home Owner’s Associations and Condominium Associations can rack up big assessments against an owner’s property. Can you stop paying these if you have trouble affording them? There are substantial differences between Home Owner’s Associations and Condominium Associations. In general, a Condominium Association has a substantial duty to maintain a variety of insurance coverages for common areas (walls, roofs, physical structures, […]
Chances are a buyer knows nothing about the potential flood risk on the home the buyer fell in love with and the one on which an offer has been made. Some real estate agents’ websites may provide a note as to the flood zone for listed properties, but is it accurate? What does the letter for the flood zone mean? […]
Many stories in the news recently credit a spike in home sales and home sale prices to the pandemic. The theme consistently refers to Work From Home job moves from high cost locations to suburban or remote locations. Clearly, moving from high cost, high density housing or rentals to a larger home provides more space. A more relaxed location with […]
Are you a first time home buyer? Are you representing a first time home buyer? Do you have friends who are first time home buyers? Many states offer assistance, but the money availability can be limited. The assistance isn’t always free, but it can be very close to it. Let’s look at the Texas program – My First Texas Home. […]
Would you like to know when an advantageous mortgage window opens? Did you miss the historic low rates at the end of 2020 and into early 2021? It benefited well those who were re-financing. But many new buyers paid premium prices or bid up prices to buy a home. Get prepared for the upcoming advantageous window! Now may be the […]
Since the beginning of 2020, building material costs have skyrocketed and driven up the cost to build new homes and apartments. The increase caused builders to increase new home sale prices. As a result, new home prices were bid higher and this spilled over to higher price bidding on existing homes. What happens when the market stabilizes? For example, lumber […]
What’s in the title? Title insurance that is. For most buyers, not a clue. Schedule A? Schedule B? Perhaps Schedule C? Schedule D? Any mention of these likely draws blank stares. And yet, a borrower risks losing the house and potentially a lot of money by not knowing what’s in the title. Title insurance plays a different role than casualty […]
FNMA and FHLMC limited the amount of loans for second homes and investment properties. Announced on March 10, these limits kick in quickly.
For many borrowers, there is a lack of knowledge when to use FHA or conventional loans. Often the lender decides for the borrower at the time of application. The lender might decide to put a borrower in the program generating the highest commission. It may or may not go well; the borrower may be in the wrong loan program. Or […]
Perhaps you have found that it is possible to waive some or all escrows for your loan. Should you? Escrowing money each money for property taxes, property insurance and other items (PMI, flood insurance) is designed to make sure that the taxes and insurance is paid timely and there is sufficient money available to do that when each payment comes […]
As a first time home buyer, you may have educational requirements of mandatory counseling prior to qualifying for a mortgage. This is an additional step which may take time. Do you have this step in your plan and in your preparation? Do you need to borrow 95% of the purchase price? Are you a Realtor helping first time home buyers? […]
It’s possible for home buyers to get a conventional mortgage with a down payment as low as 3%. However, the down payment requirement will vary based on your personal situation and the type of loan or property you’re getting. FHA mortgage requirements differ. VA mortgages can come with as little as no down payment. The down payment basics can be […]
Borrowers routinely question lenders and loan officers about the right mortgage for them. Loan officers and lenders are wary of answering. Many factors affect the right mortgage and lenders lack all the important details about the borrowers needs. As a result, the lenders speak in options available. Fixed Rate or ARM? 5 Year, 10 Year, 15 Year, 30 Year or […]
During the week of July 19, FHA published a revised version of loss mitigation options for borrowers coming to the end of their forbearance period. FHA terminated the old framework. Now, FHA offers two options. First, a COVID-19 recovery standalone partial claim for borrowers who can resume making payments on the mortgage. Second a COVID-19 recovery modification option for borrowers […]
UPDATE: The CFPB in April 2021 rescinded consumer friendly rules put in place for Covid 19 and during a shortage of appraisers. There is a real risk of appraisal delays killing deal financing, delaying deals, or causing thousands in extra costs for borrowers. In our prior post on FOMO, we covered just what FOMO is and how it might be […]
Building permits and housing affordability go hand in hand. Without building, increasing population has nowhere to live. Build less housing than is needed and prices skyrocket quickly. Build too many homes and prices remain flat. Areas with unfriendly building departments concentrate on the west coast and northeast. Cities such as LA, San Francisco, Boston, and Portland actively discourage much building […]
At the end of 2020, mortgage delinquencies and the mortgage delinquency rate fell from the 3rd quarter of 2020. It’s still well above a year ago. What types of mortgages are performing best and which are the most delinquent?
DTI has been a component of mortgage underwriting and loan underwriting for decades. The general rule was 28/36 for a long time. If you are unfamiliar with DTI, pick up a copy of Winning Mortgage, Winning Home; you should not be applying for a mortgage without understanding these numbers and what they mean for you. Politicians pushed to raise these […]
2020 was a big year for mortgage loans. Interest rates fell and millions re-financed or purchased a new home. For the vast majority of borrowers, they looked at the rate and took it. Could they have done better on the rate or did they overpay? Winning Mortgage, Winning Home is designed to prepare borrowers for getting a better rate. Let’s […]
Thank you for the 10s of thousands of page views, all the book purchases and the positive comments/feedback from following the book. Congratulations to everyone who saved thousands on the mortgage and planned well with our book. To close out the year, Winning Mortgage, Winning Home is discounted for Christmas and the holidays! Go to Amazon with your recipient’s email […]
Many first time borrowers are challenged by student debt racked up recently or even a decade or more in the past. Winning Mortgage, Winning Home outlines how student loan payments fit both in the actual budget and in the lender’s calculated underwriting. HUD announced on June 18 that it will change the way lenders underwrite student debt. The changes become […]
Failure of lenders to close on time frustrates many borrowers. This failure to close on time can be found in our summary of frequent borrower complaints. Many reasons account for delays in closing on time. But home buyers can be hardest hit when closing delays occur. Purchase contracts have deadlines for financing and closing. Missing those deadlines can create significant […]
The Federal Reserve has telegraphed it wants to rein in its continuing massive asset purchases. It may begin in 2022 or perhaps as early as November 2021. Note that doesn’t mean unwinding the $8.5 trillion of money it has pumped into the economy. This $8.5 trillion propped up and inflated asset prices of everything over the past decade. The list […]
Which agency fiefdom will expand the most? Is a fight over territory and fiefdoms in the making at CFPB vs FHFA? Government bureaucrats often seek to expand their reach as much as they can slip through in new regulations. Is the new FHFA Refi program for lower income borrowers at odds with CFPB’s new push for QM/ATR? The Consumer Finance […]
Adjustable rate mortgages (ARMs) move up and down in popularity depending on the level of interest rates. Many choose an ARM such as a 7 year or a 5 year because they don’t expect to be in a home for a long period. These two loans have a period where the interest rate is fixed (7 years or 5 years, […]