Stop what you are doing and be thankful for who you are, where you are and the people around you. I’m not naive enough to think that everyone has a rosy life, but my guess is that you know someone who is not as fortunate as you are. Living in a state of gratitude will change your life. Appreciate the people in your life, whether they seem worthy or not, and here is the key, TELL THEM. It is always possible to find something nice to say, so consider it your personal challenge. When you do this, you will be blessed beyond what you can imagine, and so will those you are in contact with.
On October 3rd the new TRID (Tila-Respa Integrated Disclosure) rules went into effect for all residential loans with application on or after that date. Delayed closings are an imminent reality due to the timing requirements of the new rules. In general the new rules are good for consumers and make the process a bit easier to understand for those that don’t obtain mortgages on a regular basis.
So why the delays? Under TRID the lender is required to issue a closing disclosure once all parties are certain that specified fees will not change. Many lenders won’t issue that closing disclosure prior to the loan being cleared to close. The borrower then has 3 days to review that disclosure prior to closing the loan.
When you add the time to disclose – for non-electronic disclosures – and the time for review, the closing can be pushed as much as 7 business days fromt the clear to close. Prior to this rule, mortgage brokers could close a loan the same day as it was cleared.
At Victory Funding in Malta, NY – Saratgoga County, we are ready for the new disclosures and we are working with several lenders to make sure your mortgages close quickly and painlessly in today’s tough regulatory environment.
The mortgage backed securities markets and the 10 year Treasury Bond Markets shifted gears today on what many believe will be an irreversable track toward higher rates. This isn’t just a small bump in the tight range that things have been trading in, but a fundamental shift toward higher rates.
Federal Chairman Janet Yellen has stated that the data will drive her decision to push rates up, and she has that data.
There will be a bounce off the bottom as there always is, but the trend that started at the beginning of February will continue. Rates are on their way up so get in early, lock your rates quickly because the gravy train has left the station.
In Malta, Saratoga, Albany, Troy, Schenectady and the surrounding Capital District we are seeing a very strong Spring Real Estate Market due to low rates, good employment, low fuel prices and high consumer confidence.
The Realtor that helps you buy your home can make the process fun or they can make the process painful. Here’s what a successful process looks like!
Tim Halladay of Living Well Realty hosts the Mortgage Solutions radio show and shares the Process that his buyers love!
First, your process should start with a buyer broker agreement. If you are working with a professional you should expect to have the parameters of your agreement in writing. Your agent should obligate him or herself to YOU. Don’t expect anything less from a professional.
Next, working with a qualified, knowledgable agent should give you increased access to your local MLS. There are many diffent ways to conduct searches, but the MLS has tools that are not available through other internet resources. In the NY Capital District including Saratoga Springs, Malta, Albany, Troy and Schenectady the agents’ search through the MLS is real time. All other sources sweep through the local MLS and update their web sites periodically. When you want to purchase your home you don’t want periodically, you want NOW.
Your agent should build you a search that generates 30 – 40 listings for you to review. Your job is to comb through those listings to narrow them down to 10-15 listings. Here’s the key, drive by those listings BEFORE you call your agent back. Doing so will further narrow your results to 3-5 homes.
NOW call your agent and have him or her set the appointments up to view these homes. It is highly probable that one of those homes will be the one you want to purchase. Whatever you do, don’t make the mistake of thinking you haven’t seen enough homes! Remember, you have rejected 49 homes to get to this one.
If you don’t find one in this batch, you have to compromise your criteria to find more, or wait until the right home comes on the market. Either way, your Realtor can make the process a pleasure or a pain!
Tim Halladay, the Host of Mortgage Solutions radio show, shares his insights about the most effective ways to narrow your home buying choices in today’s market. Don’t Overthink it!
The largest asset purchase of your life will likely be your home. How do you make this most important decision? What’s the process? How will I know when this is the house?
First of all, you have to trust all of the ingredients that have gone into the soup that is your decision. Half of your brain will make that all important decision instantaneously while the other half of your brain will try to talk you out of it. The first half “decides” based upon all your life experiences, based upon the smell of your grandmother’s oatmeal cookies and your best friend’s awesome house where you played pool as a kid, based upon the grease stain in the garage that reminds you of the cars you worked on with your dad. You may not be able to peg the basis of that decision, but you just KNOW that you KNOW.
The other half of your brain will reason you out of the decision. It sounds like “this paint color is terrible”, “that back yard is too small”, “there is too much maintenance for me”, or any number of reasonable excuses that keep you from pulling the trigger.
I, like most other Realtors, have had some buyers know this is the right house, wait to make a decision while they ponder it, only to lose out on that special home. Inevitabley, this borrower compares every other home to the one they “lost” due to hesitation or analysis paralysis. Preparation and education alone will ready you for the journey of finding your home.
So, what’s the nitty gritty of getting ready? Here are three basic steps to prepare you to make the right decision.
1. Narrow your search to your MOST important five factors. They may be Location, Bedroom Count, Bathroom Count, Storage Space (garage, basement, attic), School district or any other very important criteria.
2. Keep an open mind. Remember, you are buying location, wood, concrete, mechanical systems and land. You are NOT buying paint, furniture, odors, lawn jockeys or tacky decorations. Look at the HOUSE as it CAN be, not necessarily as it IS. Your personal preferences are what make a house a home and they can be added to every home.
3. Be ready to make a decision. When we work with a buyer at Living Well Realty in Saratoga, Malta, Albany, Troy or Schenectady our process is so refined that most buyers find their home the firs or second time out. It frequently comes down to being mentally ready to make that decision.
Prepare by educating yourself and trust your instincts, but listen to the professionals you choose. Happy house hunting!!
Tim Halladay of Victory Funding differentiates between Statutory Costs and Junk Fees on his weekly radio show Mortgage Solutions.
Some costs are statutory and some others are necessary; you will pay these no matter where you go or who your lender is. Some fees, however are pure junk, You have to know what to ignore and what to pay attention to.
Statutory Costs include title insurance, mortgage tax – NY only, and flood insurance where required. They are generally regulated so the actual fees are fixed and regulated by the government so you can rest assured that there is no haggling to be done.
Required fees include things like the bank attorney, your attorney if your loan is to purchase real estate, title search fees, flood certification fees – to determine if you are in a flood zone, appraisal fees and inspection fees if required.
Junk fees are everything else. Application, processing, origination, title close up, wiring, underwriting and dozens of others. Lenders come up with just about anything to make a couple extra bucks so pay attention and ask lots of questions!
At Victory Funding we charge no junk fees and don’t allow our lenders to charge junk fees to our clients. When borrowers come to our Malta, NY office from any of the surrounding communities like Albany, Troy, Schenectady, Saratoga Springs or anywhere in NY State we make sure they don’t pay for services they don’t get and get what they pay for. Call us today at 899-7700! We can do the entire application electronically as well!
Listen to Tim on 96.7 FM “The New Lght” live every Thursday at 3:00pm or online at http://www.newlight967.com/
Tim Halladay of Victory Funding teaches what you need to know about Seller Concessions, including what programs allow them and what the limits are! This dynamic discussion is a must for home buyers! Listen to this from Mortgage Solutions Radio Show!
Seller concessions are allowed by lenders to enable the buyer of a property to finance a portion of their closing costs into the loan. Different loan programs allow different amounts to included in the transaction.
Caution! If you include too much seller concession you could be leaving money on the table for the seller that you paid for!!!
It is important to calculate your seller concessions as accurately as possible so you take full advantage of this financing tool without leaving your borrowed funds in the pocket of seller.
To structure your transaction properly you must be able to roughly calculate the closing costs AND allowed pre-paid items like taxes and insurance required to fund your escrow account and pre-paid interest to the end of the month you close. If you are not sure, it is important to consult your knowledgeable loan officer who should be able to give you a fairly close estimate.
Once you have that estimate in hand I like to shave a bit off of it and use a lower amount, just in case you get a pleasant surprise and your closing costs are lower than you anticipated.
Now you can add the proper amount of concession to the net price you want to give your seller to come up with your accurate purchase price. You need to certain that it does not exceed the allowable concession or your lender could deny the loan for having too much contribution from the seller.
The reason you add the concession to the seller net is because lenders use the lower amount of the purchase price or the appraised value. In order to use the concession, it must be included in the purchase price and the property must appraise for that higher value.
FHA and USDA each allow a 6% seller concession with 3.5% down for Owner Occupied property.
Conventional (Fannie Mae and Freddie Mac) allow up to a 3% seller concession with up to 5% down and up to 6% with 10% down for Owner Occupied and 2% for Non-Owner Occupied property.
VA allows unlimited concessions PLUS 4% for pre-paid costs for Owner Occupied property.
Seller concessions allow you, the borrower, to keep your cash invested while you pay for your closing costs with less expensive funds! Wheather you live in Saratoga Springs, Albany, Schenectady, Troy, Malta or anywhere in the US Seller concessions are a powerful tool for Mortgage Brokers like Victory Funding and Real Estate Agents at Living Well Realty to help buyers and investors buy more property!
Beginning with FHA numbers drawn January 26th of 2015 the Monthly Mortgage Insurance Premium (MIP) will lowered from a factor of 1.35 to a factor of .85. Let’s do the math.
for a $100,000 mortgage the current premium is $1350 per year divided by 12 or $112.50 per month. With the new premium the monthly would be $850 divided by 12 or $70.83 per month. That’s a saving of $41.67 per month. For Upstate NY areas of Albany, Saratoga Springs, Schenectady, Troy and Malta the average home sale is around $200K so the actual savings is double that!
For consumers it puts FHA back in the running as a viable option with monthly payments now compettitive with conventional rates. The down side of an FHA mortgage still remains the fact that the mortgage insuranc is permanent, no matter what you owe!
The bottom line is to choose your Mortgage Professional carefully. The Mortgage Loan Originators at Victory Funding near Saratoga Springs, NY are experts at finding the right loan program for their borrowers!
For the FHA letter click here. http://portal.hud.gov/hudportal/documents/huddoc?id=15-01ml.pdf
Tim Halladay talks about major mistakes borrowers make that can stop them in their tracks!
Part 1 – 28 minutes
Part 2 28 Minutes
Every lender needs to know you are qualified. Underwriting guidelines are designed to verify your Credit, Income, Assets and the Collateral the lender will lien. If you are not prepared and don’t have the information the lender needs, you could find yourself stopped dead in your tracks!
Credit – Know what your scores are AND how they are determined. Mistake – bad credit!
35% of your score is your payment history. Are you ontime?
30% is your credit use. What percentage of available credit have you used? Have you maxed out any credit cards? Even if you have a card with small balance, if it is close to the limit you could be damaging your scores!
15% Time accounts open shows the depth of your credit experience. If you have managed your finances properly for ten years you will be more attractive than a borrower with only 12 or 24 months of experience
10% Credit mix or Account Diversity – Installment payments like auto loans or student loans plus some revolving credit like credit cards will show a more diverse experience with credit and improve your score.
10% Search for New Credit or Inquiries – Who are you seeking credit from and how often. The more you shop for credit the lower your score will be. However, every industry and every credit bureau has windows of time when you can shop for services without be penalized multiple times. For example, if your shop for an auto loan from 3 different lenders within a week you will lilely only be hit for that credit pull one time. The bottom line is only apply for new credit when you need it, not for 5% off a $50 purchase!
Income
If you receive wages and get a W-2 at the end of the year – this part is easy! If not, you need to understand how the underwriter is going to calculate your income. There are literally hundreds of permutations of income types and documentation rules, but if you follow these guidelines you should be okay. To use the income you need a two year history of receiving it and three year liklihood of continuance. The underwriter is looking for your Adjusted Gross Income. Mistake – not understanding how much you make or over calculating it!
Assets – This is the category that has become the most difficult to deal with, when it should be the simplest! Depending upon the loan program you will need to prove that you have the right amount of money AND where it came from. The lender needs to see a 60 day history of your bank account. EVERY deposit that is larger than 50% of your normal paycheck must be verified. If you are not prepared the money in your account could be ignored by the bank!
Mistake – Not documenting EVERY deposit from an allowable source. Unacceptable sources include CASH, gifts from friends, sale of any property that you cannot document ownership, value and sale of property, unsecured loans. The bottom line is ASK your lender!
Mistake – Not correctly documenting your gift from an allowable source. The lender will ask the gift donor to prove they had the ability to give the gift. That means your parent, aunt, grandparent or other closely related gift donor must show YOUR lender a one day “snapshot” of their account including their balance. Some donors feel this is a violation of their privacy, but it’s the rule!
Mistake – Providing transaction history printouts from your home computer. The ONLY acceptable bank account documentation is a full bank statement with all pages, OR a printout from your bank that has been signed and stamped by your bank. A printout from your computer at home will not include any identifying information and will not be accepted.
Mistake – For those embarking on a lease with option or land contract these asset rules can make or break the whole deal!!!
Listen to Tim’s broadcast for all the details! If you live in Malta, Saratoga Springs, Albany, Troy Schenectady or anywhere in NY State Tim Halladay of Victory Funding can help you get the right mortgage at the right rate with low fees! Contact Tim Halladay for more info!
Your lender will need some basic documents to begin the process. Do your best to provide these and your process will be smooth. All the documents fall into three basic categories; income, assets and credit.
Income documents
1. Most recent 4 weeks of pay stubs
2. Last 2 Years of w-2s
3. Award letters for retirement, social security or disability income.
4. Last 2 Years of IRS 1040 Tax returns if you have ANY income other than w-2 income including all schedules.
5. Corporate Tax returns if K-1 income is on your 1040
6. Mortgage Statements from each open mortgage
7. Tax bills and Insurance bills for each property where the taxes and insurance are not escrowed by the bank.
Asset Documents
1. Most recent 2 months of banks statements from your bank – ALL pages please – OR bank generated print out that are stamped and signed by your bank. You CANNOT use a transaction history printed from home. It will not contain any identifying information.
2. Most recent 2 401K, Stock, IRA or other asset statements.
3. Copy of your deposit check (front and back) and copy of your bank statement showing the funds exiting your account.
Credit
1. Complete set of bankruptcy documents with all schedules (if applicable)
2. Proof all collections, judgments, and credit disputes have been resolved
3. Letter of explanation for every credit inquiry on your report within the last 120 days
4. Letter of explanation for any derogatory information on your credit report
Ancillary items
1. Copy of your Driver’s License
2. Contact info for your home owner’s insurance agent
3. Copy of the fully executed contract for purchases
Reach out to Tim if you have something add to the list that your Mortgage Loan Originator forgot to ask you for in advance. If you are driving to Tim’s Office in Malta, NY from Saratoga Springs, Albany, Troy, Schenectady or any surrounding towns or cities in the Capital District make sure you bring as many of the above documents as possible. Your loan should be smooth, simple and relatively quick. Don’t get frustrated with endless requests for documentation, be prepared!
