Wednesday, December 30, 2009
A Happy and Prosperous New Year
As this year closes, I wish all a very happy, blessed and prosperous new year. We will be watching and reporting on the new SAFE act as well as any issues that affect home loans in California, Van Nuys and Hemet. May God be with you in the next year and grant your needs.
Thursday, December 3, 2009
Credt and Security
One aspect to doing loans in Hemet and home loans in California is to understand how credit can affect you. Here is a recently posted article that I included in an email to my customers in Hemet and Van Nuys regarding home loans and credit.
A Quick Recap!
A credit score is a number lenders use to help them decide: If I give this person a loan or credit card, how likely is it that he or she will become 90 days or more late in a 24 month period. A credit score is a snapshot of your credit risk at a particular point in time. It may range from 350 to 850 with the average consumer score being 686. Credit scores are provided to lenders by the three major credit reporting agencies also know as repositories: Equifax, Experian and TransUnion.
1. Late payments.
2. Frequency and patterns of credit use.
3. How long credit has been established.
4. The number of times credit has been requested (inquires).
5. The types of credit (i.e. revolving, installment, secured, unsecured.)
1. 35% is based on payment history.
A recent 30 day late payment is worse than a 90 day late payment that occurred more than 12 months ago. This can lower your score by 60 points or more.
2. 30% is based on existing balances.
Make sure the balances do not exceed 50% of the maximum limit on each card. Over 50% of the credit card limit will have a significant negative effect on your credit score. Distribute existing credit card debt among three to five cards.
3. 15% is based on how long your credit has been established.
Do not close accounts that have a perfect payment history and have been open for at least three years. These cards have a positive effect on your credit score.
4. 10% is based on types of credit.
A combination of credit types is best. For example, a mortgage, an auto loan and three to five revolving credit cards is ideal. Home equity lines of credit are reported as a credit card debt when the amount is less then $30,000. Try to apply for lines of credit for at least $30,000.
5. 10% is based on inquiries.
Credit inquiries from various industries can lower your credit score up to 60 points. If multiple mortgage inquiries are within a 30-day window, they count as one inquiry in total. This is also true for the auto and insurance Industry inquiries. Personal credit and bank account review inquiries do not count.
1) Be very careful providing personal financial information over the internet. If you are going to provide credit card numbers, social security number, etc over the internet make sure it is through a secure website. Look for https:// instead of http:// at the website address and look for the little yellow padlock on the lower right corner of the screen.
2) Use a paper shredder when discarding any personal credit information such as credit solicitations, credit card statements, pay stubs, invoices, bank statements, etc
3) Keep a list of all credit card accounts with their respective customer service phone numbers in a safe place in the event your wallet or purse is lost or stolen.
4) Never use your full name on personal checks, use your initials instead. For example: J. Doe or J.C. Doe. If your checkbook is lost or stolen, no one will know how to sign your check (except for the bank.)
5) When paying your credit card bill, do not put your full credit card number on the memo line of your personal check. Only list the last 4 digits of your account number.
6) It is not wise nor is it necessary to carry your social security card in your wallet or purse. Commit the number to memory and keep the card at home in a safe place.
7) If your wallet or purse is stolen, contact one of the three credit bureausimmediately and have them issue a fraud alert. That credit bureau will notify the other two. This will be done free of charge and you will receive a credit report showing that the fraud alert has been issued.
Here are the three credit bureaus:
Equifax 800-685-1111 www.equifax.com
Experian 888-EXPERIAN www.experian.com
Trans Union 800-916-8800 www.transunion.com
As always, if you need help or advice, just respond . More to follow!
A Quick Recap!
A credit score is a number lenders use to help them decide: If I give this person a loan or credit card, how likely is it that he or she will become 90 days or more late in a 24 month period. A credit score is a snapshot of your credit risk at a particular point in time. It may range from 350 to 850 with the average consumer score being 686. Credit scores are provided to lenders by the three major credit reporting agencies also know as repositories: Equifax, Experian and TransUnion.
Five Factors Determining A Credit Score |
2. Frequency and patterns of credit use.
3. How long credit has been established.
4. The number of times credit has been requested (inquires).
5. The types of credit (i.e. revolving, installment, secured, unsecured.)
How Credit Bureaus Rank your Credit Score |
A recent 30 day late payment is worse than a 90 day late payment that occurred more than 12 months ago. This can lower your score by 60 points or more.
2. 30% is based on existing balances.
Make sure the balances do not exceed 50% of the maximum limit on each card. Over 50% of the credit card limit will have a significant negative effect on your credit score. Distribute existing credit card debt among three to five cards.
3. 15% is based on how long your credit has been established.
Do not close accounts that have a perfect payment history and have been open for at least three years. These cards have a positive effect on your credit score.
4. 10% is based on types of credit.
A combination of credit types is best. For example, a mortgage, an auto loan and three to five revolving credit cards is ideal. Home equity lines of credit are reported as a credit card debt when the amount is less then $30,000. Try to apply for lines of credit for at least $30,000.
5. 10% is based on inquiries.
Credit inquiries from various industries can lower your credit score up to 60 points. If multiple mortgage inquiries are within a 30-day window, they count as one inquiry in total. This is also true for the auto and insurance Industry inquiries. Personal credit and bank account review inquiries do not count.
Tips To Help Protect Your Credit |
2) Use a paper shredder when discarding any personal credit information such as credit solicitations, credit card statements, pay stubs, invoices, bank statements, etc
3) Keep a list of all credit card accounts with their respective customer service phone numbers in a safe place in the event your wallet or purse is lost or stolen.
4) Never use your full name on personal checks, use your initials instead. For example: J. Doe or J.C. Doe. If your checkbook is lost or stolen, no one will know how to sign your check (except for the bank.)
5) When paying your credit card bill, do not put your full credit card number on the memo line of your personal check. Only list the last 4 digits of your account number.
6) It is not wise nor is it necessary to carry your social security card in your wallet or purse. Commit the number to memory and keep the card at home in a safe place.
7) If your wallet or purse is stolen, contact one of the three credit bureausimmediately and have them issue a fraud alert. That credit bureau will notify the other two. This will be done free of charge and you will receive a credit report showing that the fraud alert has been issued.
Here are the three credit bureaus:
Equifax 800-685-1111 www.equifax.com
Experian 888-EXPERIAN www.experian.com
Trans Union 800-916-8800 www.transunion.com
As always, if you need help or advice, just respond . More to follow!
Monday, October 19, 2009
California New Real Estate Laws
While doing home loans in Hemet, California and San Jacinto, California we have discovered that knowledge is imperative. Here are some changes that will affect Van Nuys, CA, Hemet CA, San Jacinto CA and home loans and mortgages in California.
Realtors some of the changes affect you directly.
NEW CALIFORNIA LAWS FOR 2009-10 AFFECTING REALTORS AND LENDERS
The conclusion of the first half of the 2009-10 legislative session has brought many new laws that may affect California REALTORS® and their clients. Not surprisingly in the subprime aftermath, prominently featured among the new laws is stricter regulation of the mortgage lending industry. To view the full text and legislative summary of any of the following new bills, go to www.leginfo.ca.gov.
REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.
No Advance Fee Loan Modifications: Starting October 11, 2009, a new law prohibits anyone from claiming any compensation for negotiating or arranging a loan modification until after that person fully performs each and every service as promised. Aimed at combating loan modification scams, this ban applies to upfront fees collected by real estate agents and attorneys. The ban expires on January 1, 2013. Also effective immediately, anyone who negotiates or arranges a loan modification must give the borrower a specified notice that paying a third-party for loan modification services is unnecessary. These new requirements apply to mortgage loans secured by residential property up to four units, with certain exceptions for lenders and loan servicers acting on their own behalf. Violations can be penalized by, among other things, a $10,000 fine plus one-year imprisonment for individuals, or a $50,000 fine for businesses. Real estate brokers with existing Advance Fee Loan Modification Agreements reviewed by the Department of Real Estate (DRE) can no longer, as of October 11, 2009, enter into these agreements or collect advance fees. Agreements entered into and advance fees collected before October 11, 2009 are not affected. For the DRE announcement, go to http://www.dre.ca.gov/pdf_docs/SB94WebAnnouncement(brokers).pdf. Senate Bill 94.
Advance Fee Redefined: Aside from loan modifications discussed above, Senate Bill 94 also broadens the definition of an advance fee which must be specially handled by real estate agents, such as by submitting an advance fee agreement for DRE review and placing funds received into a broker's trust account. Under the new definition that took effect on October 11, 2009, agents cannot separate advance fees or services into components to avoid the advance fee requirements. More specifically, an advance fee is now defined as "a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed." Exceptions include advertisements in newspapers of general circulation, tenant prescreening fees, and tenant security deposits. Senate Bill 94.
Mortgage Loan Originators Regulated: Beginning in December 2010, a real estate licensee acting as mortgage loan originator must obtain a license endorsement, which entails education, written testing, and reporting requirements. A mortgage loan originator is anyone who, for compensation or gain, takes a mortgage loan application or offers or negotiates terms of a mortgage loan for residential property containing one-to-four units. Exemptions include real estate agents who only engage in selling, buying, or leasing activities, unless compensated by a lender or mortgage loan originator. This license endorsement requirement comports with the creation of a Nationwide Mortgage Licensing System and Registry under recent federal law. Finance lenders and residential mortgage lenders under the Department of Corporation must also register in the nationwide system. Additionally, if a real estate broker or the broker's salesperson makes, arranges, or services loans secured by residential property containing one-to-four units, the broker must notify the DRE by January 31, 2010 or within 30 days of commencing such loan activity, whichever is later. Senate Bill 36.
Mortgage Broker Activities Restricted: Commencing January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower's economic interest above his or her own. This fiduciary duty pertains to a mortgage broker who makes loans secured by residential property of one-to-four units. Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans. Assembly Bill 260.
Appraisal Industry Oversight: The Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC). Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined. On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction. Such prohibited conduct includes withholding or threatening to withhold an appraisal fee, withholding or threatening to withhold future appraisal business, and promising future business, promotions, or compensation. Senate Bill 237.
Mortgage Fraud Becomes a State Crime: As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law. A violation of this law is a crime punishable by one-year imprisonment. Under existing federal law, loan fraud against a federally-insured lender is a crime punishable by a $1 million fine, plus one-year imprisonment (18 U.S.C. section 1014). Senate Bill 239.
Increase in Homestead Exemptions: Coming into effect on January 1, 2010, the homestead exemption protecting a homeowner's equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified. Assembly Bill 1046.
60-Day Notice to Terminate Tenants Extended: Existing law generally requiring a 60-day notice to terminate a month-to-month residential tenant, which was originally slated to sunset on January 1, 2010, has been extended indefinitely. A 30-day notice to terminate is sufficient if the tenant has lived in the property for less than one year, or if the landlord has sold the property and certain requirements are met as specified in our standard-form Notice of Termination of Tenancy (C.A.R. Form NTT). The 60-day notice requirement does not apply to fixed-term leases, such as a one-year lease. Other laws address tenants in properties foreclosed upon. Senate Bill 290.
Other Significant Laws: Other new laws that may interest REALTORS® include, without limitation, the following:
Landlord Utilities: Requires certain utility companies to notify residential tenants of landlord's past due accounts and upcoming shutoffs, and allows tenants to begin service in their own names and deduct payment from rent (Senate Bill 120).
Mobilehome Parks: Prohibits management from requiring a homeowner to use a specific broker or dealer when replacing a mobilehome or manufactured home on a space in a mobilehome park (Senate Bill 804).
Swimming Pools: Requires anti-entrapment devices for owners of apartment buildings, condominium complexes, and others, including the filing of compliance statements (Assembly Bill 1020).
Mechanic's Liens: Provides new procedures, including service of a Notice of Mechanic's Lien to the owner and mandatory recording of a lis pendens when enforcing a mechanic's lien (Assembly Bill 457).
Low Water-Using Plants: Renders unenforceable any HOA provision prohibiting landscaping with water-efficient plants in common interest developments (Assembly Bill 1061).
Reverse Mortgages: Provides new disclosure and other requirements under the Reverse Mortgage Elder Protection Act (Assembly Bill 329).
Disposal of Records: Shields from liability businesses that dispose of abandoned records containing personal information by shredding or erasing, and gives a legal presumption that a tenant owns records remaining on the premises after tenancy termination (Assembly Bill 1094).
Plumbing Fixtures: Provides new disclosure and other requirements for water-conserving plumbing fixtures effective on or after January 1, 2014 (Senate Bill 407).
Realtors some of the changes affect you directly.
NEW CALIFORNIA LAWS FOR 2009-10 AFFECTING REALTORS AND LENDERS
The conclusion of the first half of the 2009-10 legislative session has brought many new laws that may affect California REALTORS® and their clients. Not surprisingly in the subprime aftermath, prominently featured among the new laws is stricter regulation of the mortgage lending industry. To view the full text and legislative summary of any of the following new bills, go to www.leginfo.ca.gov.
REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.
No Advance Fee Loan Modifications: Starting October 11, 2009, a new law prohibits anyone from claiming any compensation for negotiating or arranging a loan modification until after that person fully performs each and every service as promised. Aimed at combating loan modification scams, this ban applies to upfront fees collected by real estate agents and attorneys. The ban expires on January 1, 2013. Also effective immediately, anyone who negotiates or arranges a loan modification must give the borrower a specified notice that paying a third-party for loan modification services is unnecessary. These new requirements apply to mortgage loans secured by residential property up to four units, with certain exceptions for lenders and loan servicers acting on their own behalf. Violations can be penalized by, among other things, a $10,000 fine plus one-year imprisonment for individuals, or a $50,000 fine for businesses. Real estate brokers with existing Advance Fee Loan Modification Agreements reviewed by the Department of Real Estate (DRE) can no longer, as of October 11, 2009, enter into these agreements or collect advance fees. Agreements entered into and advance fees collected before October 11, 2009 are not affected. For the DRE announcement, go to http://www.dre.ca.gov/pdf_docs/SB94WebAnnouncement(brokers).pdf. Senate Bill 94.
Advance Fee Redefined: Aside from loan modifications discussed above, Senate Bill 94 also broadens the definition of an advance fee which must be specially handled by real estate agents, such as by submitting an advance fee agreement for DRE review and placing funds received into a broker's trust account. Under the new definition that took effect on October 11, 2009, agents cannot separate advance fees or services into components to avoid the advance fee requirements. More specifically, an advance fee is now defined as "a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed." Exceptions include advertisements in newspapers of general circulation, tenant prescreening fees, and tenant security deposits. Senate Bill 94.
Mortgage Loan Originators Regulated: Beginning in December 2010, a real estate licensee acting as mortgage loan originator must obtain a license endorsement, which entails education, written testing, and reporting requirements. A mortgage loan originator is anyone who, for compensation or gain, takes a mortgage loan application or offers or negotiates terms of a mortgage loan for residential property containing one-to-four units. Exemptions include real estate agents who only engage in selling, buying, or leasing activities, unless compensated by a lender or mortgage loan originator. This license endorsement requirement comports with the creation of a Nationwide Mortgage Licensing System and Registry under recent federal law. Finance lenders and residential mortgage lenders under the Department of Corporation must also register in the nationwide system. Additionally, if a real estate broker or the broker's salesperson makes, arranges, or services loans secured by residential property containing one-to-four units, the broker must notify the DRE by January 31, 2010 or within 30 days of commencing such loan activity, whichever is later. Senate Bill 36.
Mortgage Broker Activities Restricted: Commencing January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower's economic interest above his or her own. This fiduciary duty pertains to a mortgage broker who makes loans secured by residential property of one-to-four units. Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans. Assembly Bill 260.
Appraisal Industry Oversight: The Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC). Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined. On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction. Such prohibited conduct includes withholding or threatening to withhold an appraisal fee, withholding or threatening to withhold future appraisal business, and promising future business, promotions, or compensation. Senate Bill 237.
Mortgage Fraud Becomes a State Crime: As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law. A violation of this law is a crime punishable by one-year imprisonment. Under existing federal law, loan fraud against a federally-insured lender is a crime punishable by a $1 million fine, plus one-year imprisonment (18 U.S.C. section 1014). Senate Bill 239.
Increase in Homestead Exemptions: Coming into effect on January 1, 2010, the homestead exemption protecting a homeowner's equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified. Assembly Bill 1046.
60-Day Notice to Terminate Tenants Extended: Existing law generally requiring a 60-day notice to terminate a month-to-month residential tenant, which was originally slated to sunset on January 1, 2010, has been extended indefinitely. A 30-day notice to terminate is sufficient if the tenant has lived in the property for less than one year, or if the landlord has sold the property and certain requirements are met as specified in our standard-form Notice of Termination of Tenancy (C.A.R. Form NTT). The 60-day notice requirement does not apply to fixed-term leases, such as a one-year lease. Other laws address tenants in properties foreclosed upon. Senate Bill 290.
Other Significant Laws: Other new laws that may interest REALTORS® include, without limitation, the following:
Landlord Utilities: Requires certain utility companies to notify residential tenants of landlord's past due accounts and upcoming shutoffs, and allows tenants to begin service in their own names and deduct payment from rent (Senate Bill 120).
Mobilehome Parks: Prohibits management from requiring a homeowner to use a specific broker or dealer when replacing a mobilehome or manufactured home on a space in a mobilehome park (Senate Bill 804).
Swimming Pools: Requires anti-entrapment devices for owners of apartment buildings, condominium complexes, and others, including the filing of compliance statements (Assembly Bill 1020).
Mechanic's Liens: Provides new procedures, including service of a Notice of Mechanic's Lien to the owner and mandatory recording of a lis pendens when enforcing a mechanic's lien (Assembly Bill 457).
Low Water-Using Plants: Renders unenforceable any HOA provision prohibiting landscaping with water-efficient plants in common interest developments (Assembly Bill 1061).
Reverse Mortgages: Provides new disclosure and other requirements under the Reverse Mortgage Elder Protection Act (Assembly Bill 329).
Disposal of Records: Shields from liability businesses that dispose of abandoned records containing personal information by shredding or erasing, and gives a legal presumption that a tenant owns records remaining on the premises after tenancy termination (Assembly Bill 1094).
Plumbing Fixtures: Provides new disclosure and other requirements for water-conserving plumbing fixtures effective on or after January 1, 2014 (Senate Bill 407).
Saturday, January 31, 2009
Residential and Commercial Real Estate Financing. Thank you for visiting my site today. While you're here, please take the time to read a little bit about my services and explore the site. From this site you can learn about the mortgage process, get pre-approved for a home loan, or apply for your mortgage online using our secure mortgage network. Trusted. Experienced. Professional.
Welcome.
My name is John Severino. For many years now I have been helping families all over the country purchase and refinance their homes with FHA, Conventional and Jumbo financing. I work closely with my clients and other real estate professionals to ensure that your loan application is completed as expeditiously as possible with frequent informative updates. This process creates trust and understanding, building a long term advisory relationship. Call me today!
Security National Mortgage Company, a Subsidiary of Security National Financial Corporation [Nasdaq:SNFCA] originates real estate loans in 38 states through a network of 35 local branches. Licensing Information available at www.securitynational.com.
What to expect when you apply for a home loan:
What to expect when you apply for a home loan:
The Mortgage application should take approximately 15 - 20 minutes to complete. Once you have submitted your application, one of our mortgage specialists will contact you within one business day to discuss your needs and help you select the mortgage that suits both your budget and lifestyle.
IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account.
What this means for you: If you open a personal account, we will ask for your name, address, taxpayer identification number, date of birth, and other information that will allow us to identify you. Additionally, we will take certain steps to verify your identity, such as asking for your driver's license or other identifying documents or checking other sources. Similar identification requirements apply to non-personal accounts such as corporations and partnerships. Be assured that we recognize the importance of protecting your privacy and safeguarding the confidentiality of the information you provide to us.
What Information You'll Need:
To apply for an SNMC mortgage, please have the following information at hand:
* Social Security Number or Tax Identification Number
* Date of birth
* Mother's maiden name
* Address history for the past two years
* Current e-mail address
* Annual income and employment information
* Current month's paystub(s) for the borrower and co-borrower (if applicable)
* Last two year's W-2 forms
* Monthly costs you pay for current housing, including rent, mortgage(s), taxes, insurance and association dues
* Last two year's tax returns with all schedules and YTD Profit and Loss Statement if you are self-employed or paid on commission, or if more than 25% of your monthly income comes from bonuses or overtime
* Last two month's full bank statements (not just summary pages) as well as any other asset accounts you wish us to consider
* The Deed, if you are refinancing
* The Sales Contract, if you are buying a property
* Outstanding liens, monthly insurance and tax amount, market value and income generated on any other property you may own, such as rental property
As part of the verification process, you may be asked to provide us with copies of the items listed above.
Once the application has been submitted, you may be asked to provide the following additional documents, if applicable:
* Canceled checks showing your mortgage payments over the last 12 months, OR your rent payments over the last 6 months
* If a Veteran, your VA Certificate of Eligibility, or DD214
What You Should Know:
* Fees associated with your application:
Fees associated with closing (or settlement of) your loan will be provided on a Good Faith Estimate which will be sent to you upon receipt of your application
* Once you have submitted your application, we will mail you disclosures and a paper application for signature within 3 business days. You will need to review, sign and return those documents to us to continue processing your application
Questions:
If you need assistance or have questions about the application, please contact us or call 1-888-584-4248.
Security:
Learn more about our site's security features, because securing your information is important to us.
APPLYING FOR A MORTGAGE
With all of the paperwork and questions that you need to answer, applying for a mortgage can be stressful. But knowing what's involved in the process can make things a lot easier. Here's some information to get you started.
Before you apply
Do some homework before you apply for a mortgage. Think about what type of home you want, what your budget will allow, and what type of mortgage you might seek. Get a copy of your credit report, and make sure it's accurate; dispute any erroneous information to get it corrected. Be prepared to answer any questions that a lender might have of you, and be open and straightforward about your circumstances.
What you'll need when you apply
When you apply for a mortgage, the lender will want a lot of information about you (and, at some point, about the house you'll buy) to determine your loan eligibility. Here's what you'll need to provide:
* The name and address of your bank, your account numbers, and statements for the past three months
* Investment statements for the past three months
* Pay stubs, W-2 withholding forms, or other proof of employment and income
* Balance sheets and tax returns, if you're self-employed
* Information on consumer debt (account numbers and amounts due)
* Divorce settlement papers, if applicable
You'll sign authorizations that allow the lender to verify your income and bank accounts, and to obtain a copy of your credit report. If you've already made an offer on a house or condo, you'll need to give the lender a purchase contract and a receipt for any good-faith deposit that you might have given the seller.
Prequalification and preapproval
In many cases, you'll want to know how much mortgage you can get before you look at homes so you won't waste time drooling over places that you can't afford. Your potential lender can either prequalify you or preapprove you for a mortgage.
Lenders use several standard ratios to determine how much mortgage you're eligible for. Generally, your monthly housing expenses (mortgage principal and interest, real estate taxes, and homeowners insurance) should not exceed 25 to 30 percent of your gross monthly income. In addition, your total long-term debt (monthly housing expenses plus other debt payments that won't be repaid within a year) should be no more than 33 to 38 percent of your gross monthly income.
Prequalifying for a mortgage is simply a matter of a lender crunching these numbers to tell you how large a mortgage you'll qualify for based on those ratios. Remember, what you qualify for may not be what you can afford--only you can determine that after examining your own budget and lifestyle. Because the lender has not verified your income or examined your credit report, prequalification promises you nothing; it simply tells you how much mortgage you might get.
Preapproval, however, means that the lender has checked out your income and credit. You'll get a letter of commitment stating that you'll be given a mortgage up to a certain amount. Preapproval lets you know exactly how large a mortgage you can get. In addition, it gives you more credibility as a buyer, since a seller can see in the lender's letter that you're going to get the mortgage if he or she accepts your purchase offer.
Finalizing the application
As your mortgage application is processed and finalized, your lender is required by law to give you several documents. Within three business days of applying for the loan, the lender must inform you of the mortgage's effective rate of interest, or annual percentage rate (APR). If relevant, the lender must also give you consumer information on adjustable rate mortgages. In addition, the lender is required to give you an itemized good-faith estimate of your closing costs and a government publication that explains those costs.
Since the home that you're purchasing will serve as collateral for the loan, the lender will order a market value appraisal of the property. The lender will not lend you more than a certain percentage of the value of the property. If your down payment will be less than 20 percent of the value of the property, your loan will require private mortgage insurance, and the lender will obtain insurer approval. If the lender has not already done so as part of a preapproval process, it will verify your employment and bank accounts as well as obtain and evaluate your credit report.
For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.
It all begins when you find THE house and make a sound offer based on your budget and pre-qualification amount. Once the offer is accepted, the mortgage process begins. To help you understand every step, we'll cover information about the loan application and decision points throughout the entire process.
Gather Your Information
Typically when you apply for a mortgage, you'll be asked to complete a Uniform Residential Loan Application. This standard residential mortgage loan application is a four-page document that asks in-depth questions about you, your income, your assets and liabilities, and your credit as well as a description of the property. Although it can vary slightly depending on the type of loan, lenders usually require the following information and documentation:
* A driver's license or picture ID
* Your Social Security card(s)
* Home and business telephone numbers
* The name and address of your nearest relative (for VA mortgage)
* The name, address and phone number of your current landlord or mortgage company and the amount of monthly payment (if you've been at present address for less than 2 years, you'll also need this for previous landlords and/or lenders)
* Employment information including your employer's name, address, phone number, length of employment, position and salary (if you've been with the same employer for less than two years, you'll need this information from previous employers)
* Current pay stubs (not more than 30 days old) and copies of your W-2 forms for the last 2 years; if self-employed or commissioned, you'll need signed tax returns for the last 2 years plus a year-to-date income statement and balance sheet
* Written verification of other income you need to qualify for the loan (e.g. retirement or rental income); you are not required to reveal alimony, child support, or separate maintenance unless you want it to be considered
* Detailed accounting of your assets
o Cash on hand
o Bank accounts
o Name and address of your financial institution(s), account numbers, balances, name in which the account is listed and the three most recent statements for each deposit account
o Investments (stocks, bonds, annuities, mutual funds, etc.)
o Investment breakdown, values and copies of the last three statements
o Automobile(s) make, model and value
o Estimated household and personal property value
o Real estate description, value, lender's name and address, account number, plus information on any outstanding claim to the property (for example, if it has been used as collateral on another loan, or is currently mortgaged, etc.)
o Life insurance
o Amount of coverage and cash value
o Other assets such as boats, campers, etc. and their value
* Detailed accounting of your liabilities
o Current and recently paid off accounts such as auto loans, loans from banks, finance companies and charge cards; include name, address, account number, monthly payment and balance, or line of credit
o Child support or alimony, if applicable, document the amount and duration of obligation
o Present and previous mortgage loans, including name, address, loan number, type of loan (Conventional, FHA, VA, or FmHA), original loan amount, present balance, monthly payment and intent to sell or rent; if a previous mortgage, date loan was disposed
o Child care expenses (FHA/VA only)
o Bankruptcies, liens and judgements with written explanations and copies of discharges
* A copy of your DD214 or Original Certificate of Eligibility (for VA mortgage)
* Your ratified sales contract
* A legal description of the property you wish to purchase
* Name, address and phone of the title company you wish to use
* Name, address and phone number of the attorney you wish to use for closing
* A voided check or deposit slip if you desire to have your mortgage payment automatically withdrawn from your checking account
Choose a Mortgage
In addition to providing your financial history, you'll also need to tell the lender what type of mortgage loan you're interested in. In addition to conventional, fixed, or adjustable rate (ARM) mortgages; there are also FHA Insured and VA loans, Rural Housing and AHP loans, as well as many others. Learn about the types of mortgages available to you before you apply for your loan or even before you start house-hunting. Your mortgage will directly affect how much house you can afford and the amount of your monthly payments.
Decide How Much to Borrow
Again, this is a decision you most likely will have made before the loan application. Your requested mortgage amount will be based on the purchase price of your new home and the amount of money you will be putting toward a down payment. Before actually applying for a loan, many borrowers find out how much they can afford by getting pre-qualified by a mortgage lender.
Calculate Your Down Payment
Some loan programs offer 3% down payments if you meet certain income standards, and the Veterans Administration (VA) and the Rural Housing Service (RHS) offer no-down-payment loans. Usually home buyers are expected to make a down payment of at least 5-10% of the value of the home. However, if you put down less than 20% on a conventional loan, most lenders will require you to carry private mortgage insurance.
Choose a Closing Date
Your sales contract will specify a time frame in which you wish to close on your new home (usually 30, 45, or 60 days from the time you have a ratified sales contract). When you apply for your loan, be sure and tell your loan officer the approximate date you would like to close so that loan processing can coincide with your wishes. Learn more about what to expect on closing day.
Lock-In an Interest Rate
Interest rates fluctuate frequently, and they may even increase between the day you apply for your mortgage and when you actually close on your home. That's why many lenders offer a rate lock-in, which guarantees a rate for a set period of time. If you opt for a lock-in, make sure the expected closing date is well within the lock-in period. Ask the lender if the rate can be locked in at the time of application or only at loan approval, how long it remains in effect, whether there is an additional charge, and if you can also lock in points.
Get All The Required Information
Legally, your lender is required to furnish you with several types of documents and information in conjunction with your application for a mortgage loan, including:
Truth-in-Lending (TIL) Statement
The lender must provide you with this document within three business days of applying for a home loan. The TIL statement outlines the estimated costs of your loan, including the annual percentage rate (APR) and other terms, including points, any other finance charges, the amount financed, the payment amount and the total payments required. Because it's possible that the APR and closing costs calculated at the time of your loan application will change at the actual closing, your lender is required to give you the final version of your TIL statement at or prior to your closing meeting.
Disclosure About ARMs
Federal law requires your lender to give you disclosure information about an adjustable rate mortgage (ARM) either when you receive an application form or when you pay a non-refundable fee—whichever comes first. Your lender should provide you with a written summary of the important terms and costs of the loan, the past performance of the index to which the interest rate will be tied, and a copy of the booklet “Consumer Handbook on Adjustable-Rate Mortgages,” published by the Federal Reserve Board.
Good-Faith Estimate
Within three days after you have submitted your application, the lender is required by federal law to provide you with an itemized estimate of the costs to close (or settle) the loan. This report is referred to as a "good-faith estimate." It's a ballpark estimate of how much money you will need to pay at the closing along with the seller's costs. Costs can and will vary from the actual amounts indicated, so be sure to take this for what it is—an estimate.
Guide to Settlement Costs
The lender must also give you a copy of the government publication, “Settlement Costs: A HUD Guide.” This publication describes the settlement process, the nature of charges and your rights, and it also includes an item-by-item explanation of settlement services and costs. The lender has three business days after receiving your written application to give you this guide.
Understand Your Legal Rights
You may be asked to sign several authorization forms that will allow your lender to verify the information on your application. These include the authorization to investigate credit, verify your employment, look into your past rental or mortgage payment history, even review bank deposits.
When compiling a credit profile of you, your lender must certify that the credit report will only be used for the purpose of qualifying you for a mortgage loan. As part of the credit evaluation process, your lender cannot seek any subjective information from your neighbors or co-workers concerning your character, reputation, or other personal aspects unless you receive notice. These limitations are set by the Fair Credit Reporting Act.
Under the Equal Credit Opportunity Act, a lender cannot discriminate based on race, color, national origin, sex, marital status, age, religion, and the fact that all or part of your income comes from a public assistance program, and your exercise of any rights under the Consumer Credit Protection Act. Your lender also cannot ask questions about your future parenting plans, although the lender may ask about the current number of children you have and their ages. In addition, a lender is prohibited by law from asking questions concerning the applicant's spouse unless the spouse is contractually liable, the spouse's income will be relied on to repay the debt, the applicants live in a community property state or the applicant plans to use child support, alimony or separate maintenance payments from a spouse or former spouse to repay the debt.
The Mortgage application should take approximately 15 - 20 minutes to complete. Once you have submitted your application, one of our mortgage specialists will contact you within one business day to discuss your needs and help you select the mortgage that suits both your budget and lifestyle.
IMPORTANT INFORMATION ABOUT PROCEDURES
FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account.
What this means for you: If you open a personal account, we will ask for your name, address, taxpayer identification number, date of birth, and other information that will allow us to identify you. Additionally, we will take certain steps to verify your identity, such as asking for your driver's license or other identifying documents or checking other sources. Similar identification requirements apply to non-personal accounts such as corporations and partnerships. Be assured that we recognize the importance of protecting your privacy and safeguarding the confidentiality of the information you provide to us.
What Information You'll Need:
To apply for an SNMC mortgage, please have the following information at hand:
* Social Security Number or Tax Identification Number
* Date of birth
* Mother's maiden name
* Address history for the past two years
* Current e-mail address
* Annual income and employment information
* Current month's paystub(s) for the borrower and co-borrower (if applicable)
* Last two year's W-2 forms
* Monthly costs you pay for current housing, including rent, mortgage(s), taxes, insurance and association dues
* Last two year's tax returns with all schedules and YTD Profit and Loss Statement if you are self-employed or paid on commission, or if more than 25% of your monthly income comes from bonuses or overtime
* Last two month's full bank statements (not just summary pages) as well as any other asset accounts you wish us to consider
* The Deed, if you are refinancing
* The Sales Contract, if you are buying a property
* Outstanding liens, monthly insurance and tax amount, market value and income generated on any other property you may own, such as rental property
As part of the verification process, you may be asked to provide us with copies of the items listed above.
Once the application has been submitted, you may be asked to provide the following additional documents, if applicable:
* Canceled checks showing your mortgage payments over the last 12 months, OR your rent payments over the last 6 months
* If a Veteran, your VA Certificate of Eligibility, or DD214
What You Should Know:
* Fees associated with your application:
Fees associated with closing (or settlement of) your loan will be provided on a Good Faith Estimate which will be sent to you upon receipt of your application
* Once you have submitted your application, we will mail you disclosures and a paper application for signature within 3 business days. You will need to review, sign and return those documents to us to continue processing your application
Questions:
If you need assistance or have questions about the application, please contact us or call 1-888-584-4248.
Security:
Learn more about our site's security features, because securing your information is important to us.
APPLYING FOR A MORTGAGE
With all of the paperwork and questions that you need to answer, applying for a mortgage can be stressful. But knowing what's involved in the process can make things a lot easier. Here's some information to get you started.
Before you apply
Do some homework before you apply for a mortgage. Think about what type of home you want, what your budget will allow, and what type of mortgage you might seek. Get a copy of your credit report, and make sure it's accurate; dispute any erroneous information to get it corrected. Be prepared to answer any questions that a lender might have of you, and be open and straightforward about your circumstances.
What you'll need when you apply
When you apply for a mortgage, the lender will want a lot of information about you (and, at some point, about the house you'll buy) to determine your loan eligibility. Here's what you'll need to provide:
* The name and address of your bank, your account numbers, and statements for the past three months
* Investment statements for the past three months
* Pay stubs, W-2 withholding forms, or other proof of employment and income
* Balance sheets and tax returns, if you're self-employed
* Information on consumer debt (account numbers and amounts due)
* Divorce settlement papers, if applicable
You'll sign authorizations that allow the lender to verify your income and bank accounts, and to obtain a copy of your credit report. If you've already made an offer on a house or condo, you'll need to give the lender a purchase contract and a receipt for any good-faith deposit that you might have given the seller.
Prequalification and preapproval
In many cases, you'll want to know how much mortgage you can get before you look at homes so you won't waste time drooling over places that you can't afford. Your potential lender can either prequalify you or preapprove you for a mortgage.
Lenders use several standard ratios to determine how much mortgage you're eligible for. Generally, your monthly housing expenses (mortgage principal and interest, real estate taxes, and homeowners insurance) should not exceed 25 to 30 percent of your gross monthly income. In addition, your total long-term debt (monthly housing expenses plus other debt payments that won't be repaid within a year) should be no more than 33 to 38 percent of your gross monthly income.
Prequalifying for a mortgage is simply a matter of a lender crunching these numbers to tell you how large a mortgage you'll qualify for based on those ratios. Remember, what you qualify for may not be what you can afford--only you can determine that after examining your own budget and lifestyle. Because the lender has not verified your income or examined your credit report, prequalification promises you nothing; it simply tells you how much mortgage you might get.
Preapproval, however, means that the lender has checked out your income and credit. You'll get a letter of commitment stating that you'll be given a mortgage up to a certain amount. Preapproval lets you know exactly how large a mortgage you can get. In addition, it gives you more credibility as a buyer, since a seller can see in the lender's letter that you're going to get the mortgage if he or she accepts your purchase offer.
Finalizing the application
As your mortgage application is processed and finalized, your lender is required by law to give you several documents. Within three business days of applying for the loan, the lender must inform you of the mortgage's effective rate of interest, or annual percentage rate (APR). If relevant, the lender must also give you consumer information on adjustable rate mortgages. In addition, the lender is required to give you an itemized good-faith estimate of your closing costs and a government publication that explains those costs.
Since the home that you're purchasing will serve as collateral for the loan, the lender will order a market value appraisal of the property. The lender will not lend you more than a certain percentage of the value of the property. If your down payment will be less than 20 percent of the value of the property, your loan will require private mortgage insurance, and the lender will obtain insurer approval. If the lender has not already done so as part of a preapproval process, it will verify your employment and bank accounts as well as obtain and evaluate your credit report.
For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.
It all begins when you find THE house and make a sound offer based on your budget and pre-qualification amount. Once the offer is accepted, the mortgage process begins. To help you understand every step, we'll cover information about the loan application and decision points throughout the entire process.
Gather Your Information
Typically when you apply for a mortgage, you'll be asked to complete a Uniform Residential Loan Application. This standard residential mortgage loan application is a four-page document that asks in-depth questions about you, your income, your assets and liabilities, and your credit as well as a description of the property. Although it can vary slightly depending on the type of loan, lenders usually require the following information and documentation:
* A driver's license or picture ID
* Your Social Security card(s)
* Home and business telephone numbers
* The name and address of your nearest relative (for VA mortgage)
* The name, address and phone number of your current landlord or mortgage company and the amount of monthly payment (if you've been at present address for less than 2 years, you'll also need this for previous landlords and/or lenders)
* Employment information including your employer's name, address, phone number, length of employment, position and salary (if you've been with the same employer for less than two years, you'll need this information from previous employers)
* Current pay stubs (not more than 30 days old) and copies of your W-2 forms for the last 2 years; if self-employed or commissioned, you'll need signed tax returns for the last 2 years plus a year-to-date income statement and balance sheet
* Written verification of other income you need to qualify for the loan (e.g. retirement or rental income); you are not required to reveal alimony, child support, or separate maintenance unless you want it to be considered
* Detailed accounting of your assets
o Cash on hand
o Bank accounts
o Name and address of your financial institution(s), account numbers, balances, name in which the account is listed and the three most recent statements for each deposit account
o Investments (stocks, bonds, annuities, mutual funds, etc.)
o Investment breakdown, values and copies of the last three statements
o Automobile(s) make, model and value
o Estimated household and personal property value
o Real estate description, value, lender's name and address, account number, plus information on any outstanding claim to the property (for example, if it has been used as collateral on another loan, or is currently mortgaged, etc.)
o Life insurance
o Amount of coverage and cash value
o Other assets such as boats, campers, etc. and their value
* Detailed accounting of your liabilities
o Current and recently paid off accounts such as auto loans, loans from banks, finance companies and charge cards; include name, address, account number, monthly payment and balance, or line of credit
o Child support or alimony, if applicable, document the amount and duration of obligation
o Present and previous mortgage loans, including name, address, loan number, type of loan (Conventional, FHA, VA, or FmHA), original loan amount, present balance, monthly payment and intent to sell or rent; if a previous mortgage, date loan was disposed
o Child care expenses (FHA/VA only)
o Bankruptcies, liens and judgements with written explanations and copies of discharges
* A copy of your DD214 or Original Certificate of Eligibility (for VA mortgage)
* Your ratified sales contract
* A legal description of the property you wish to purchase
* Name, address and phone of the title company you wish to use
* Name, address and phone number of the attorney you wish to use for closing
* A voided check or deposit slip if you desire to have your mortgage payment automatically withdrawn from your checking account
Choose a Mortgage
In addition to providing your financial history, you'll also need to tell the lender what type of mortgage loan you're interested in. In addition to conventional, fixed, or adjustable rate (ARM) mortgages; there are also FHA Insured and VA loans, Rural Housing and AHP loans, as well as many others. Learn about the types of mortgages available to you before you apply for your loan or even before you start house-hunting. Your mortgage will directly affect how much house you can afford and the amount of your monthly payments.
Decide How Much to Borrow
Again, this is a decision you most likely will have made before the loan application. Your requested mortgage amount will be based on the purchase price of your new home and the amount of money you will be putting toward a down payment. Before actually applying for a loan, many borrowers find out how much they can afford by getting pre-qualified by a mortgage lender.
Calculate Your Down Payment
Some loan programs offer 3% down payments if you meet certain income standards, and the Veterans Administration (VA) and the Rural Housing Service (RHS) offer no-down-payment loans. Usually home buyers are expected to make a down payment of at least 5-10% of the value of the home. However, if you put down less than 20% on a conventional loan, most lenders will require you to carry private mortgage insurance.
Choose a Closing Date
Your sales contract will specify a time frame in which you wish to close on your new home (usually 30, 45, or 60 days from the time you have a ratified sales contract). When you apply for your loan, be sure and tell your loan officer the approximate date you would like to close so that loan processing can coincide with your wishes. Learn more about what to expect on closing day.
Lock-In an Interest Rate
Interest rates fluctuate frequently, and they may even increase between the day you apply for your mortgage and when you actually close on your home. That's why many lenders offer a rate lock-in, which guarantees a rate for a set period of time. If you opt for a lock-in, make sure the expected closing date is well within the lock-in period. Ask the lender if the rate can be locked in at the time of application or only at loan approval, how long it remains in effect, whether there is an additional charge, and if you can also lock in points.
Get All The Required Information
Legally, your lender is required to furnish you with several types of documents and information in conjunction with your application for a mortgage loan, including:
Truth-in-Lending (TIL) Statement
The lender must provide you with this document within three business days of applying for a home loan. The TIL statement outlines the estimated costs of your loan, including the annual percentage rate (APR) and other terms, including points, any other finance charges, the amount financed, the payment amount and the total payments required. Because it's possible that the APR and closing costs calculated at the time of your loan application will change at the actual closing, your lender is required to give you the final version of your TIL statement at or prior to your closing meeting.
Disclosure About ARMs
Federal law requires your lender to give you disclosure information about an adjustable rate mortgage (ARM) either when you receive an application form or when you pay a non-refundable fee—whichever comes first. Your lender should provide you with a written summary of the important terms and costs of the loan, the past performance of the index to which the interest rate will be tied, and a copy of the booklet “Consumer Handbook on Adjustable-Rate Mortgages,” published by the Federal Reserve Board.
Good-Faith Estimate
Within three days after you have submitted your application, the lender is required by federal law to provide you with an itemized estimate of the costs to close (or settle) the loan. This report is referred to as a "good-faith estimate." It's a ballpark estimate of how much money you will need to pay at the closing along with the seller's costs. Costs can and will vary from the actual amounts indicated, so be sure to take this for what it is—an estimate.
Guide to Settlement Costs
The lender must also give you a copy of the government publication, “Settlement Costs: A HUD Guide.” This publication describes the settlement process, the nature of charges and your rights, and it also includes an item-by-item explanation of settlement services and costs. The lender has three business days after receiving your written application to give you this guide.
Understand Your Legal Rights
You may be asked to sign several authorization forms that will allow your lender to verify the information on your application. These include the authorization to investigate credit, verify your employment, look into your past rental or mortgage payment history, even review bank deposits.
When compiling a credit profile of you, your lender must certify that the credit report will only be used for the purpose of qualifying you for a mortgage loan. As part of the credit evaluation process, your lender cannot seek any subjective information from your neighbors or co-workers concerning your character, reputation, or other personal aspects unless you receive notice. These limitations are set by the Fair Credit Reporting Act.
Under the Equal Credit Opportunity Act, a lender cannot discriminate based on race, color, national origin, sex, marital status, age, religion, and the fact that all or part of your income comes from a public assistance program, and your exercise of any rights under the Consumer Credit Protection Act. Your lender also cannot ask questions about your future parenting plans, although the lender may ask about the current number of children you have and their ages. In addition, a lender is prohibited by law from asking questions concerning the applicant's spouse unless the spouse is contractually liable, the spouse's income will be relied on to repay the debt, the applicants live in a community property state or the applicant plans to use child support, alimony or separate maintenance payments from a spouse or former spouse to repay the debt.
John Severino - Profile
John Severino
John will be happy to help you with any of your lending needs. If you are a real estate professional, please contact him for job opportunities.
Direct:818-621-2321
John will be happy to help you with any of your lending needs. If you are a real estate professional, please contact him for job opportunities.
Direct:818-621-2321
Friday, January 30, 2009
Mortgage Programs
Mortgages
Security National Mortgage Company offers several loan programs. Most loan programs contain different features that can be confusing for even experienced homeowners. The most common loan programs include:
| FHA Loans | VA Loans | Conforming | Jumbo | Second Mortgages | Equity Lines |
| Reverse Mortgages |
Federal Housing Administration (FHA)
The Federal Housing Administration is a division of the U.S. Department of Housing and Urban Development, commonly referred to as HUD. FHA loans were created to provide affordable mortgages to the average homebuyer. The federal government insures FHA loans, or guarantees participating lending institutions against loss from default on qualifying loans.
- Fixed Rate Loans, Temporary Buy-Downs and ARMS
- Available for detached 1 to 4 unit dwellings, eligible condos and PUD's
- Properties must meet HUD guidelines and be inspected by HUD-approved appraisers
- Subject to loan limits set by HUD (see HUD web site for loan limits)
- Mortgage insurance of .55% due annually and paid monthly
- One time mortgage insurance fee of 1.75% charged on detached dwellings and PUD's, which may be financed
- Non-occupant co-borrowers allowed
- No reserve requirements at closing
- 100% of down payment and closing costs may be a “gift”
- Fully assumable by a qualified borrower
- Seller may contribute a maximum of 6% of the lower of the sales price or the appraised value
- Streamline Refinances - The mortgage term “streamline” refers only to the amount of underwriting & documentation required by the FHA and Security National Mortgage Company.
There are 3 basic requirements to qualify for an FHA streamline refinance:
1) Your home loan to be refinanced must already be FHA insured.
2) Your home loan to be refinanced should be in a current status, and not delinquent.
3) Your new mortgage is to result in a lowering of your monthly P&I payments.
Cash out is not allowed on mortgages refinanced using the FHA streamline refinance process. If you are looking for cash out, we may be able to accommodate your request with a traditional FHA or Conventional refinance.
Programs and Features:
Veterans Administration loans were created to help veterans finance the purchase of their homes with favorable loan terms. For the purpose of the VA program, “veteran” includes active duty service personnel and certain categories of spouses. Like FHA loans, the federal government insures VA loans, or guarantees VA approved lending institutions against loss from default on qualifying loans.
Programs and Features:
- Fixed Rate Loans and Temporary Buy-downs
- Available for detached 1-unit dwellings, eligible condos and PUD's
- Properties must meet VA guidelines and be inspected by VA-approved appraisers
- Subject to loan limit set by VA, currently $240,000
- One time mortgage insurance fee of 2% is typically charged, which may be financed if the total loan amount does not exceed $240,000
- No prepayment penalty
- No reserve requirements at closing
- No down payment required
- Out-of-pocket expenses may be gifted, typically from relatives
- Only eligible veterans and their spouses occupying the subject property may be co-borrowers or co-signers
- Seller may contribute a maximum of 6% of the lower of the sales price or the appraised value
Conforming Loans are those that meet Fannie Mae and or Freddie Mac underwriting requirements. In other words, income, credit, and property requirements must meet nationally standardized guidelines. Conforming loans are subject to loan amount limits that are set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These limits vary based on the region in which the subject property is located as well as the number of legal units contained in the subject property.
Jumbo and Non Conforming LoansJumbo loans are those that exceed the loan amounts allowed by FNMA and FHLMC.
Programs:
- No Income/No Asset Verification Loans
- ARMs
- Fixed Rates
- Credit History Less than perfect
- Options Available
A close-ended loan is one where a set amount of money is borrowed and repaid within a specific period of time. There are a multitude of second mortgage products available and lender guidelines vary widely. Generally, loan amounts, interest rates and fees are tied closely to equity in the property and credit scores. Whether to do a first or second mortgage or whether to take a line of credit or closed-end loan depends largely on the purpose of the loan.
Second mortgages are ideal products for the following situations:
- Debt Consolidation: This is the most common purpose for acquiring a second mortgage. Typically, a second mortgage is paid off in a shorter period of time than a first.
- Home Improvements: The greater the equity in a property, the better the deal on a mortgage. Often, a borrower will take second mortgage to complete improvement projects. After the improvements are completed, the borrower refinances the first mortgage.
- Cash Out: Many borrowers use the equity in their properties to obtain cash to pay for college expenses, vacations, or any other purpose that requires a fairly sizable amount of cash.
- Eliminate the requirement for Mortgage Insurance.
Home Equity Closed-End Loans
A home equity line of credit loan is a line of credit that is secured against real estate. The amount of the credit line is dependent upon the amount of equity in the subject property and the lender's guidelines. Each lender has its own specific guidelines and limitations. Lines of credit are typically designed for borrowers who intend to pay back the borrowed funds within a short period of time. Equity lines of credit are processed and underwritten similar to traditional mortgages; however, lender guidelines vary widely.
Home equity lines differ from traditional mortgages that provide funds up front, then require repayments of principal and interest each month. With a home equity line, a borrower may draw against any available credit on the line while continuing to make monthly payments during the "draw period." The draw period usually lasts 15 years. At the end of that time, the borrower has a set number of years to repay the remaining balance in full without further draws. The "repayment period" is typically 15 years.
Interest on home equity lines accrues similar to interest on credit cards and payments are based on payment factors.
Reverse Mortgages Homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining are eligible to participate in HUD's reverse mortgage program. The program allows homeowners to borrow against the equity in their homes. Homeowners can receive payments in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options. Unlike ordinary home equity loans, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Lenders recover their principal, plus interest, when the home is sold. The remaining value of the home goes to the homeowner or to his or her survivors. If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage. The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed. For example, based on a loan at today's interest rates of approximately 9 percent, a 65-year-old could borrow up to 26 percent of the home's value, a 75-year-old could borrow up to 39 percent of the home's value, and an 85-year-old could borrow up to 56 percent of the home's value. There are no asset or income limitations on borrowers receiving HUD's reverse mortgages. There are also no limits on the value of homes qualifying for a HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA mortgage limit for the area, which varies from $81,548 to $160,950, depending on local housing costs. As a result, owners of higher-priced homes can't borrow any more than owners of homes valued at the FHA limit. HUD's reverse mortgage program collects funds from insurance premiums charged to borrowers. Senior citizens are charged 2 percent of the home's value as an up-front payment plus one-half percent on the loan balance each year. These amounts are usually paid by the lender and charged to the borrower's principal balance. FHA's reverse mortgage insurance makes HUD's program less expensive to borrowers than the smaller reverse mortgage programs run by private lenders without FHA insurance.
Tuesday, January 20, 2009
Partners
Partners
If you are a real estate professional, I have opportunities for you!
Pre-Approvals
We are happy to pre-approve your borrowers at any time.
As a nationwide mortgage banker backed by a publically traded insurance company, we have the resources to quickly convert your prospects to buyers within a very short period of time.
Residential? Sure.
Commercial? Sure.
Conforming, FHA, VA or Jumbos? Sure.
Give us a try and find out what experience, strength and integrity means in today’s uncertain market.
Co-Branded Marketing Materials
Need fliers for open houses? All we need is your listing description and digital photos along with your photo and contact information and we can produce high quality fliers for your next showing.
Open House Time
For selected partners. We provide you with mortgage professionals to help you show your properties. Out of town? Too many properties? We are happy to help you out.
Cross Marketing
There are many professions that allow the cross selling of products that have value for your clients and mine. Need a good pool man? What about an experienced contractor to upgrade the property? We have deep seated relationships in our local community that can help you look…well extraordinary.
If there is something that you do not see listed here, please feel free to contact me. Our services and ideas are proven to produce greater sales with less effort.
Careers
Looking for a career in the lending industry? Please feel free to contact me.
If you are a real estate professional, I have opportunities for you!
Pre-Approvals
We are happy to pre-approve your borrowers at any time.
As a nationwide mortgage banker backed by a publically traded insurance company, we have the resources to quickly convert your prospects to buyers within a very short period of time.
Residential? Sure.
Commercial? Sure.
Conforming, FHA, VA or Jumbos? Sure.
Give us a try and find out what experience, strength and integrity means in today’s uncertain market.
Co-Branded Marketing Materials
Need fliers for open houses? All we need is your listing description and digital photos along with your photo and contact information and we can produce high quality fliers for your next showing.
Open House Time
For selected partners. We provide you with mortgage professionals to help you show your properties. Out of town? Too many properties? We are happy to help you out.
Cross Marketing
There are many professions that allow the cross selling of products that have value for your clients and mine. Need a good pool man? What about an experienced contractor to upgrade the property? We have deep seated relationships in our local community that can help you look…well extraordinary.
If there is something that you do not see listed here, please feel free to contact me. Our services and ideas are proven to produce greater sales with less effort.
Careers
Looking for a career in the lending industry? Please feel free to contact me.
Buying Bank Owned Properties (REO)
Buying Bank Owned Properties (REO)
So you’d like to buy a bank owned property?
You’ve watched the late-night infomercials and you’re ready to do the bank “a favor” and take a problem off their hands. Plus, you expect to make "a killing" in the process. Sounds great and it might just happen, but first you should take a look at some facts and get prepared.
REO vs. Foreclosure
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. After all, if there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. That is why the property ends up at a foreclosure or trustee sale.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the full amount of your bid.
If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property. Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale.
Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property.
REO Properties For Sale
The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues.
As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property. A bank owned property might not be a great bargain.
Do your homework before making an offer. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them.
Don’t get caught up in a ‘bidding war’ and pay over market value.
How Banks Sell REO's
Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible and have no interest in "dumping" real estate cheaply. Generally, banks have an entire department set up to manage their REO inventory.
Once you make an offer to purchase, banks generally present a "counter-offer." It may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible.
You should plan to counter the counter-offer. Your offer or counter-offer will probably have to be reviewed and approved by several individuals and companies. Even once an offer is accepted, the bank may insert wording like “..subject to corporate approval with 5 days."
Property Condition
Banks always want to sell a property in "as is" condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.
Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. Even though you agreed to “as is," always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted.
Banks do not want to see a lot of proprietary disclosures; they are exempt from the California Seller’s Transfer Disclosure Statement (TDS-14). If there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements.
Most banks will not provide financing on their REOs but it doesn’t hurt to ask. Especially if the property has extensive damage and you are purchasing it "as is."
Making an Offer
Before making an offer, have your agent contact the the listing agent and ask the following:
Keep in mind: nothing happens evenings and weekends (banks are closed). Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter and buyer biography.
Make your offer easy to accept. Hopefully these tips will manage your expectations. Remember that REO's sell at pretty close to full market value and are not the deals presented on late night television.
Need pre-approval? Submit your information on line!
So you’d like to buy a bank owned property?
You’ve watched the late-night infomercials and you’re ready to do the bank “a favor” and take a problem off their hands. Plus, you expect to make "a killing" in the process. Sounds great and it might just happen, but first you should take a look at some facts and get prepared.
REO vs. Foreclosure
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. After all, if there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. That is why the property ends up at a foreclosure or trustee sale.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the full amount of your bid.
If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property. Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale.
Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property.
REO Properties For Sale
The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues.
As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property. A bank owned property might not be a great bargain.
Do your homework before making an offer. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them.
Don’t get caught up in a ‘bidding war’ and pay over market value.
How Banks Sell REO's
Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible and have no interest in "dumping" real estate cheaply. Generally, banks have an entire department set up to manage their REO inventory.
Once you make an offer to purchase, banks generally present a "counter-offer." It may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible.
You should plan to counter the counter-offer. Your offer or counter-offer will probably have to be reviewed and approved by several individuals and companies. Even once an offer is accepted, the bank may insert wording like “..subject to corporate approval with 5 days."
Property Condition
Banks always want to sell a property in "as is" condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.
Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. Even though you agreed to “as is," always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted.
Banks do not want to see a lot of proprietary disclosures; they are exempt from the California Seller’s Transfer Disclosure Statement (TDS-14). If there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements.
Most banks will not provide financing on their REOs but it doesn’t hurt to ask. Especially if the property has extensive damage and you are purchasing it "as is."
Making an Offer
Before making an offer, have your agent contact the the listing agent and ask the following:
- Are there any inspection reports?
- What work has the bank agreed to?
- Is there a special "as is" form?
- How long does it take the bank to accept an offer?
- How does your agent deliver the offer?
Keep in mind: nothing happens evenings and weekends (banks are closed). Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter and buyer biography.
Make your offer easy to accept. Hopefully these tips will manage your expectations. Remember that REO's sell at pretty close to full market value and are not the deals presented on late night television.
Need pre-approval? Submit your information on line!
Buying or selling real estate? Let me help you.
Buying or selling real estate? Let me help you.
Purchasing or investing in real estate is an exciting time in life, whether it is your first time or you are a seasoned veteran.
Let me help you find the perfect real estate partner for you, regardless of where you call home.
With many years in the business I have deep relationships that can make your next transaction easy and simple.
First time home buyer?
Moving up?
Investing?
Commercial properties?
I can recommend the perfect partner for you who will work with you your way. As always, I am happy to provide the right financing that you will need to complete your transaction.
Fast. Simple. Experienced. I am here to help!
T: 818-621-2321
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