There are many new rules and stricter credit guidelines that continue to impact borrowers qualifications. While the borrower’s credit is pulled prior to application, many do not realize that the underwriter can, and in many cases, is re-pulling the credit of the applicant prior to closing.
So, your credit score at application is just as important as your credit score at closing. A change in credit score before closing could ruin or cause major problems or delays to your loan. Here are 8 of the most common items that could negatively impact your credit score during the loan process.
1) Do not apply for new credit
2) Do not pay off collections or charge offs
3) Do not max out or over charge your credit cards
4) Do not consolidate your debt
5) Do not close any credit accounts
6) Do not miss payments or pay late
7) Do not dispute any accounts on your credit report Do not do ANYTHING having to do with your credit without first speaking with your mortgage professional!
Should you have any questions on credit, or on qualifications in general, please contact me today.
With rates as low as they are, and homes being priced so aggressively, please let everyone know that now is the time to buy a home.
Let’s say someone is currently looking at a $200,000 property. If they put 20% down and if interest rates are currently at 4.5%*, their principle and interest payment would be $810.70
If that same borrower told you that they were going to wait for prices to fall further, we know that interest rates have to go up, and even if the market slips another 10%, and rates go to 5.5% (still very low), your new payment would still be $817.62.
If rates go to 6.5% (which they did back in late 2008) then the payment would increase to $910.18 per month. The borrower would be paying $36,000 more for that house over the life of the loan verses what they would pay at 4.5%.
Since rates are at the lowest point ever, and we know that they have to go up, assuming that rates will rise, it may not make mathematical since to wait.
*please note that this is not an advertisement of interest rate. This is for comparison purposes only.
The deadline for “tax credit” homebuyers waiting to close on June 30 has been extended to September 30. Not only is the extension great news, but interest rates have fallen over .375-.50% since the end of April according to Freddie Mac.
This could effectively reduce a buyer’s monthly payment over $600-800 a year on a $200,000 30-year fixed rate loan!
Unfortunately, for the estimated 180,000 homebuyers this extension impacts, their closing was held up by the lender. Some of the reasons may well be legitimate and some unfortunately may not be.
If you know someone who has had difficulty getting a loan closed, call me. Don’t miss this chance to help someone qualify for a tax credit! Just because someone has been unable to get a loan closed so far does not mean that it may not be able to close. What’s more, we closed a lot of loans in May and June for people who submitted their application after the Tax Credit’s April 30th contract deadline.
I’ll review anyone’s situation free of charge and offer my opinion on what I would do were I in that position. Act quickly though so we can address their situation before it’s too late. Contact me today!
It’s important to note that the Homebuyer’s Tax Credit extension only applies to people who were under contract by the initial April 30th deadline. Homebuyers who entered into contracts after April 30th remain ineligible for the tax credit.
The Fourth of July holiday weekend is upon us. Please have a great holiday and be safe while Boating, BBQ’ing, and driving.
The Homebuyer Tax Credit Closing Deadline Finally Extended. While Obama still has to sign this into law, which he is expected to do, those who wrote contracts prior to April 30th, 2010 will have until September 30, 2010 to close on their home purchases and still be eligible for the Tax Credit.
Rates are still at historic lows. If you know of anyone who is thinking about refinancing their current homes, or taking advantage of the combination of low rates and low prices by buying a home, please tell them to give me a call. THank you and have a great holiday weekend!
This is a brief video tutorial of how to submit a loan application on the JoeKnowsMortgages.com website. The loan application is one of the first steps towards Pre-Approval. This video is also a permanent fixture under the “loan application” heading in the toolbar.
Please join us Thursday June 17th in the Grant Valkaria are to view two spectacular properties for this Beatiful Home Showcase .
With one listing from The Waterman Team of National Realty and Shari Ayers from Keller Williams, this is sure to be an event that you will not want to miss!
June is the month of weddings, and to get in the wedding spirit, my June special is geared towards those lovebirds now looking to purchase a home.
If you make application with Joe Harris from Morgan Financial, in the month of June[2], and close your loan with him by September 30, 2010 he will pay $300 of your closing costs at closing[3].
Whether you are already working with a different lender, or have no lender relationship at all, please contact Joe Harris today to see how he can help.
If you do not fit into this special, but know someone who does, please let them know. Contact Joe at Joe@joeKnowsMortgages.com.
Thank you and best wishes!
[1] If you have been married in the last year, you are considered recently married.
[2] For application taken from June 1st 2010 through June 30th 2010
[3] Must mention this promotion, and must close your loan with the services provided by Joe Harris at Morgan Financial.
There’s great news from Fannie Mae for home buyers who have experienced a short sale or deed in lieu of foreclosure. To help the housing market’s continued stability, Fannie Mae is changing the “waiting period” (i.e. the amount of time that must elapse after the preforeclosure or short sale event) before home buyers can qualify for a loan.
Several factors will impact these changes, including the required down payment or loan to value (LTV) for the transaction and whether extenuating circumstances contributed to the individual’s financial hardship (e.g. a job loss). The following chart highlights the new rules:
Preforeclosure Event
Current Waiting Period Requirements
New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure
4 years
Additional requirements apply after 4 years up to 7 years
2 years – 80% maximum LTV ratios
Preforeclosure Sale
2 years
4 years – 90% maximum LTV ratios
Short Sale
No policy currently exists specific to short sales
Exceptions to Waiting Period for Extenuating Circumstances
Preforeclosure Event
Current Waiting Period Requirements
New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure
2 years Additional requirements apply after 2 years up to 7 years
2 years – 90% maximum LTV ratios
Preforeclosure Sale
No exceptions are permitted to the 2-year waiting period
Short Sale
No policy currently exists specific to short sales
(1)The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.
Note that the terms ‘short sale’ and “preforeclosure sale’ are both referenced in Fannie Mae’s announcement and have the same meaning – the sale of a property in lieu of a foreclosure, resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.
The bottom line: Buyers who have experienced a short sale or deed in lieu of foreclosure may be eligible for financing sooner than previously expected…especially if they have 20% to put down. If you have any buyer prospects who may benefit from this change, I’d be happy to help you put them in a home.
The First step in the homebuying process should be your pre-approval. A pre-approval could save you significant time and money, and allow you to make your offer with confidence. Please contact me today for your free, no obligation, pre-approval meeting.
95% LTV on Conventional Loans in Florida! 90% LTV on Second Homes!
It looks like we are starting to see some improved guidelines here in Florida. Up until last week, borrowers could not get better than a 90% (primary residence) loan to value because of the lack of mortgage insurance in the state. That has now officially changed. I have attached the guidelines that are being used for those loans below.
While these are not the only guidelines for these loans, here is the short list:
Primary Residencesmax 95% LTV
Purchase/Rate and Term Refinances only
680 minimum credit score
1-unit only
Up to $417,000 loan amount 41% max DTI
2 months PITI reserves No condos or attached housing in Florida
Full interior/exterior appraisal required
Second Homesmax 90% LTV! Purchase/Rate and Term Refinances only 720 minimum credit score Second Homes must be located in resort or vacation area 1-unit
Up to $417,000 loan amount 41% max DTI
2 months PITI reserves No condos or attached housing in Florida
Full interior/exterior appraisal required
If you know of anyone who may be able to benefit from these new and improved guidelines, please let me know. As always, if you know of anyone looking to buy or refinance their home, please have them give me a call for their free, no cost and no obligation consultation. Thank you and I hope to hear from you.
Joe Harris is a top mortgage professional in Brevard County who's primary concern is making sure his clients experience the most professional and enjoyable loan process possible.
Do not do ANYTHING having to do with your credit without first speaking with your mortgage professional!
