Category Archives: The Mortgage Process

Jan 15

Reverse Mortgage or not to Reverse Mortgage?

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1112There’s been a lot of talk about the Reverse Mortgage. I feel it’s a great thing, if you fit the mold. A Reverse Mortgage is a special type of mortgage that enables homeowners 62 years or older to strategically tap into their home equity. There are good and bad reverse mortgages so it’s important that do your homework, work with somebody who you feel is trustworthy and make sure you get into one of the more preferred reverse mortgage products.

Three things are needed to begin, your age(s), current loan(s) balance and the property value. That’s it! One great thing about a reverse mortgage is you no longer will have mortgage payments, you only need enough money to pay property taxes and homeowners/fire insurance and you may be able get those funds from the Reverse too. All funds are tax free.

Yes, you can get into a brand-new home with a reverse mortgage. Yes, a 1 to 4 unit building qualifies if one unit is your primary residence. Yes, a line of credit can be established. Yes, you can receive monthly payments. Yes, you can get funds for a new roof, kitchen remodel, fence or that vacation you’ve been wanting. Seniors need funds to stay in their home (age in place).

I’ve had clients pay off their current loan(s), do needed/wanted home improvements, receive ongoing monthly payments, receive a line of credit(which can grow in value over time) and go on vacation, all with a Reverse Mortgage.

It will probably become a very popular way for many to retire, yes retire! The Journal of Financial Planning suggests using Home Equity to Supplement Retirement Income. Here is the link:http://www.nrmlaonline.org/rms/research_papers.aspx?article_id=1117

You can be late or really late on your current mortgage and still qualify for a Reverse Mortgage. There is no credit score Criteria. One day after a Bankruptcy you may qualify. Get educated. Visit Brokerdavesblog.com or call me direct at 925-360-1222

The mortgage must be repaid in full when the last remaining borrower permanently vacates(industry standard is six months, with 2-3 month extensions as needed) the residence or if/when the Reverse Mortgage is paid off, any remaining equity in the home belongs to your heirs. You make the final decision to proceed with a reverse mortgage or not. You owe it to yourself to check it out. Get educated, a Reverse Mortgage may change your life.

Sep 15

VA Home Buy/REFI, No Down, No MI & Up To $1.5 Million

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DVAMy dad served in the Korean War. I don’t believe he ever used his VA to buy a home. However this market is just a little different from the 1960’s. Purchasing or refinancing real estate today is involved. VA, or the DVA has some great options for veterans. No down payment, no monthly mortgage insurance (MI) premium or upfront MI, sometimes no reserve money requirements, credit scores as low as 620 and loan amounts up to $1,500,000. There are a variety of fixed or adjustable rate options. The seller or the lender may contribute to the veterans closing costs too!

Many in the lending/mortgage business don’t offer or consider a VA purchase or refinance loan. Many veterans did not use their VA when purchasing their homes and sometimes forget it’s a great refinance option. Many veterans did not use their DD 214 or VA eligibility to refinance and are now paying MI. Are you a veteran with less than 20% equity?  Are you a veteran paying monthly MI? You’re not alone. Your loan to value is still over 80%, you have little or no equity and may not be aware or did not consider the fact that a DVA refinance is an excellent option and has no MI.

There are some other non-VA option conventional loans called self-insured or lender-paid MI loans where the MI is incorporated into your interest rate. There are still refinance options when you have 20% or less equity in your home. It’s important to have knowledge of all loan options available to you, whether it’s VA Conventional, Jumbo, FHA or one of the other many loan programs available today, when you’re looking to Refinance or Purchase a primary residence, second home or investment property.

I feel it’s important to use a mortgage broker, typically we have the best loan options available. A mortgage broker can offer a full array of VA, Conventional, Jumbo and other types of financing like Reverse Mortgage and Equity lines. It’s important to use a mortgage broker, like myself, when you’re shopping for your loan because we’re able to offer many more options than a bank or credit union.

Some Veterans may think interest rates are higher for a VA loan and today that’s not the case. It’s important to know all your loan options. Then, the best move will stick out like a sore thumb. I have the same goal as you, the lowest rate, at the lowest cost, for your loan circumstance. 

Contact me anytime.

Aug 06

Buy Real Estate in the current mortgage market?

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cashBuy Real Estate in the current mortgage market? My pat Realtor ® answer, “The good deals are always out there, just got to go find them”. It pays to be persistent and I feel an experienced Realtor ® is a necessity. Having time on your side will allow for better negotiations. If searching for a home is done properly, with persistence, using proven methods, you’ll be able to find your new home then relax, smile and get on with your life.

Keyword searching the confidential or public property remarks section on the MLS (Multiple Listing Service) is one method of hunting for the handy buyer. Keywords like Hammer, TLC or Needs. I have some great keywords, they all help assist with your hunt. Another very helpful function with the MLS is instant automatic notification. I may have several notifications per client, when a home is listed for sale within a predetermined boundary or if a home meets a particular word search or a certain bedroom, bath and price. Upon listing input, I receive an instant Email notification. If the home looks like a maybe, I’ll physically tour the property, and then call you if I think you should come take a look.

Please read on…

Don’t let the current market scare you. If you’re a first time buyer the benefits of investing in a principle residence typically outweigh most “seller’s market” concerns. If you’re selling then buying within the same marketplace, the additional cost on the buying end will be offset with the property you sell, the opposite is true in a “buyer’s market”. My goal for you, spend the least amount of time possible with the entire home buying or selling process. I preview every home I show before taking you to the property, you just never know what you’re going to find and I don’t like surprises.

Tell me your “wish list” and I’ll begin. The first time out allows us to learn exactly what your likes and dislikes are in a home. Because I preview every home your potential hit ratio is very high, there’s a great chance you’re going to like or love the properties you see. I exclude properties backing to busy roads, freeways or have other location issues, not ideal for re-sale.

Being able to respond quickly is very important. Electronic communication has become almost mandatory. Contracts are most times sent via e-mail in the form of a PDF, printed and then scanned back via PDF, typically preferred over a fax. There are now simple methods of sending secure or encrypted PDF’s.

Writing a strong, clean and complete offer is very important. The deposit amount, contingencies and close of escrow are all chosen carefully. I’ve gotten to know many of the real estate professionals in this county and beyond over the last 26 years, this helps tremendously when getting your offer signed. Most times I know the Realtor, Broker, Agent or have worked together in the past with someone else in their office. I take everything into consideration to get your offer picked and then signed by the seller. Let me help you write a winning bid.

Jul 30

Do’s And Don’ts For Mortgage Applicants

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118Being a Mortgage Broker enables me to shop your loan scenario with many Lenders/Investors, not just one bank or a Credit Union. My goal is the same as your goal; obtain the lowest price and interest rate available for your scenario. Below is a top-ten Do’s and Don’ts list from Julie Gregory, one of the many Lender Representatives we do business with. It’s a straight forward and to-the-point list. If you’ve broken one or more of the rules listed below, don’t panic, just contact me and we’ll come up with a solution.

The following has been provided by one of our Lender Representatives:

Part of providing excellent service is educating our borrowers. A lot of people don’t know the simple rules that we industry professionals do.

There is no “complete list” of Do’s and Don’ts for mortgage applicants, but there are 10 “no-no’s” which stand out, and which continue to ensnare mortgage applicants nationwide. Keep this list below handy. It will help ensure that your mortgage application process goes faster, more smoothly, and with a lot less stress.

10 TIPS for borrowers: 

Do NOT quit your job or change jobs. Employment stability is a major factor in the underwriting process. Quitting or changing jobs, or even positions within the same company can greatly endanger your loan approval. If you are likely to quit or change jobs during your application process — even for a promotion —  consult your loan officer immediately.

Do NOT make any large purchases immediately before, or during, the loan approval process, either with cash or credit. In addition to cutting into the money available for your down payment, you may add to your monthly expenses and underwriters don’t want to see an increase in your debt-to-income ratios.

Do NOT have your credit pulled. Too many inquiries during a certain time period can negatively impact your credit score. Additionally, you’ll create extra work for yourself. Most underwriters will ask for a letter of explanation about the inquiries made.

Do NOT obtain and/or deposit unusually large sums of money without notifying your loan officer. Remember “cash” is looked at very closely by an underwriter. Unusual deposits outside of normal payroll deposits are often required to be documented and sourced.

Do NOT open, close or transfer any asset accounts without first consulting your loan officer. Similar to your employment history, it’s better when your banking history shows stability.

Do NOT open, abnormally increase nor abnormally decrease your credit balances. Although it may seem ridiculous, paying off an account can actually do more harm than good.

Do NOT stop making payments on anything. For various reasons, some people “skip” their mortgage payment while in the process of refinancing; or otherwise choose to dispute a bill. Be very careful about intentionally withholding payments to creditors. Continuing to pay every obligation is critical.

Do NOT start that long overdue home improvement project you’ve been thinking about for a few years. This is especially important when the home improvement project requires you to take out a loan.

Do NOT co-sign on a loan for anyone. Even if you’re not supposed to be responsible for monthly payments, co-signing on a loan can increase debt-to-income ratio and reverse a mortgage approval.

Do NOT fudge any of the facts on your application. Underwriters live in a world that’s black or white. They don’t take application errors lightly, even the unintentional ones.

In addition, here are some bonus tips:

Do NOT finance cosmetic or elective medical procedures. Delay such work until after your closing.

Do NOT solicit mortgage advice from people who aren’t actual loan officers. Your friend who had her real estate license in 2001 is not a mortgage market expert.

Do NOT start a loan just before leaving the country unless you will be reachable by phone and email.

Do NOT become obsessive about how the credit card balances on your mortgage application fail to line up exactly with the actual, living balances on those accounts.

Relax; I’m always available to help.

Jun 25

I’m Dreading the Loan Application!

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120Conditional Loan Approval in 72 hours is typical and process not too dreadful. My goal for you: Spend as little time as possible gathering, completing and signing all the documents. Typically I’ll give a list of items needed then pick-up the items during an appointment which is normally about 45 minutes or all can be submitted via secure e-mail, whichever is most convenient for you.I’ll need the majority of requested documents to get the ball rolling. Missing documents can be faxed, submitted via secure e-mail or dropped by the office. All hand delivered documents are returned promptly.Sign all forms/disclosures where indicated, complete and sign/initial the Uniform Residential Loan Application where indicated on pages 1, 2, 3 and 4. The Uniform Residential Loan Application or 1003 is pretty straight forward. We can Skype, use the phone or text to answer any questions.

There’re several other disclosure documents which accompany the loan application and will require your signatures at the time of application. Examples: Social security number verification, federal tax return verification information (form 4506-T), transfer of servicing, interest rate lock, request for copy of appraisal, equal credit opportunity act and Authorization to Disclose.

Some additional items may be necessary at the time of application, for example a credit related explanation letter, copy of your driver’s license, social security card or credit card information to order your appraisal. Special disclosures may be required if you’re applying for one of these types of loans: FHA, DVA (VA), CAL-VET, PERS, USDA, ARM (Adjustable Rate Mortgage), HARP, HOMEPATH, MAMMOTH JUMBO

Let’s begin today. Call, text or email me anytime.

Jun 11

Rent vs Own…

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109Rent vs Own, run the numbers and see the light. Is it cheaper for you to rent than own or own than rent? Many who buy a home are never shown one of the most important numbers. I call it the “free money”, the tax benefit. The free money is money you don’t have now but do have once you’ve paid 1 mortgage payment. Most know this benefit exists and that’s about it. I feel it’s important you are shown an apple-n-apple comparison between renting and owning a home before you buy a home, or rent one for that matter.I speak to renters on a regular basis. I met a gentleman, his family was renting, he explained the rent was just increased and was a little upset about it. He wanted his own home but figured he did not have enough money and would have a hard time qualifying for a loan. I opened my laptop and proceeded to “buy a home on paper”. To his amazement he had enough down payment money, adequate credit and a little cushion money to boot. I helped him apply and get approved for a loan, then find a home. Him and his family closed escrow and moved into their own place less than 45 days after our first meeting. He was upset no more.Typically I’ll begin by pulling your credit report and help to clean it up if needed. Then together we’ll buy a home on paper to estimate principal, interest, taxes, insurance and monthly mortgage insurance or MI if required (The PITI and MI). The interest, taxes and MI are typically tax deductible. To estimate I take the annual totals and simply multiply by 25%, (the approximate state and federal deductible amount is typically more than 25%). The remaining figure is your “Free Money”, divide by twelve months and subtract it from your estimated PITI and MI then compare to your current monthly rent. Remember, you qualify for this tax benefit as soon as you have paid one mortgage payment, not when you file your taxes. Have you heard someone say, “It’s cheaper to own than rent”? This is what they’re talking about. It’s important to verify your “free money” figure with your tax person or whomever coaches you financially because then you’ll have the “piece of mind” that it’s real. You’ll be excited!

Once you have made one mortgage payment (some of my clients do it earlier) you’ll want to adjust your state and federal deductions listed on your pay stub so as you pay less state and federal tax by an amount equal to the “free money” figure you verified. Your next paycheck will reflect your increased take home pay. It’s not magic, but it feels like magic.

The benefits of home ownership are vast and for this reason not everyone’s PITI/MI less their tax benefit is less than their rent. Some choose to pay less, for some it’s about the same and some choose to pay more. Everyone’s a little different, but it sure makes “signing on the line” much easier when you know where you stand. The example I’ve just explained is only one of the benefits of owning your own home. Stability, Freedom and Appreciation are a few others, there are more. With your permission I can pull your credit, buy a home on paper and you can let me know what you’d like to do next.