Best Mortgage and Home Loans » Mortgage Changes

The New GFE

admin — Mon, 28 Dec 2009 22:00:58 +0000

As of January 1, 2010 all mortgage lenders will be required to use the new Good Faith Estimate (GFE) and abide by the new disclosure regulations that accompany the new GFE. While this is different from GFE’s of the past, it is not designed as a user friendly form for the lender but a form that is friendly to the mortgage customer. Because everyone will have to use the same form, it should be easier for the consumer to understand. I certainly hope this eliminates any comparison questions as all fees, though lumped together, are required to be disclosed for the consumer to see.

Once this form has had the chance to be used for a while, I believe it will be a plus for the industry as a whole. And while it odes some really good things it also makes it virtually impossible to close a loan quickly. Appraisals cannot be done quickly and you have to wait at least 3 days and sometimes up to 7 days after the GFE have been released in order to close the loan. This simply means that loan officers, processors, closers and title companies will have to be on top of their game at all times because the process will no longer allow much leeway. It will be more and more important to get it right and get it right the first time. So whether you are a consumer or Realtor, working with an experienced loan officer will be very important from this point forward.

New Rules & Regulations

admin — Fri, 02 Oct 2009 01:11:46 +0000

Though the average person won’t see all the new mortgage rules and regulations that are still taking place behind the scenes, they will be somewhat affected. It is just not as easy as it used to be to get a mortgage and that’s not going to change. If the trend continues the way it has been, it will become even more difficult to get some mortgages such as jumbo or high LTV (loan to value) loans. Mortgages such as 100% loans to purchase a house are quickly becoming a thing of the past.

There are still a few federal and state programs that can help some people who qualify but the best thing to do is to make sure your credit is above 620, you have at least 3.5% to put down for FHA and at least 5% for a conventional loan and you have a good consistent income coming in. The industry as a whole is going back to very basic lending practices and that means you have to show and prove yourself worthy of getting credit extended to you because banks and investors want to make sure they get their money back. May sound harsh but that is the nature of the business.

New Disclosure Rules You Need to Know

admin — Thu, 20 Aug 2009 14:51:53 +0000

This past month has brought with it more changes to the process from approval to closing that are designed to protect the consumer. Most of it has to do with the timeliness of presenting as accurate a Good Faith Estimate as possible before closing to prevent the buyer from those last minute heart attack moments of just seeing the final numbers right before closing. While this is a great thing for the consumer it is a little bit harder for those on the backend of the process.

One of the reasons for this is that, most of the time, we don’t get all the information until the last minute from the closing attorney’s office and the homeowners insurance company’s. This will have to change in order for us to comply with the new rules. The basic thing you need to remember is if the APR is 1/8^th a percentage point higher or lower than the latest GFE disclosed, another GFE has to be disclosed and you must wait 3 days if emailed or 7 days if mailed before you can close the loan. This could be a problem if this all happens right before the loan lock expires so you need to be aware that this is now a variable in the process. Everyone I know who is in the mortgage loan business is doing everything possible to create a succinct process so that we can all benefit from these new rules; especially the buyers.

Use Stimulus Money for Down Payment – New THDA Loan

admin — Thu, 30 Apr 2009 21:46:42 +0000

Between now and November 30^th you may be able to borrow against the first time home owner credit, up to $7,000, and use this money for your down payment and closing costs for a home with the new and limited time frame stimulus loan from THDA. You must be a first time homeowner, which means you are not on any deed to a property and have not owned a home in the past 3 years. There are dome other hoops you must go through and qualifications you must meet.

One of the hoops is to complete the First Time Home Owners Education Class put on by THDA and to sign a second mortgage against the home for the $7,000. This is an interest free loan AS LONG AS YOU PAY IT BACK ONCE YOU GET THE FIRST TIME HOMEOWNERS CREDIT BACK ON YOUR TAXES. If you don’t pay back the loan it is a pretty steep interest rate and payment schedule. You must also meet all the other income requirements and qualify for a Great Rate THDA loan and work with a qualified THDA lender.

It’s a great way to get some down payment money if that is all you lack to making your home ownership dreams come true!

Rates are Down but Some Borrowing Still Tough

admin — Fri, 19 Dec 2008 02:59:06 +0000

This past week has been a rough one for some of the people I have talked to, all of who have multiple houses and are paying their bills and mortgages on time. The issues have to do with being self employed and not showing enough income on taxes and wanting to refinance a second home for cash out.

Since every loan is basically a full documented loan these days it means that you have to prove your income. There is no more stating an income or doing a no-doc loan. These loans, at least for now, are a thing of the past and no one expects them to come back any time soon, if ever again. Lenders want to see income and it needs to be income that has come in over the last 2 years, or capital gains income that has been consistent for 3 years.

The other restrictions have to do with cash out refinances. There are no cash out refinances for second homes, period. The only loans that you can get above 85% cash out are through FHA and they are still at 95% though we have heard that they are lowering it to 85% as well. We just don’t know when. So if you think you are going to take advantage of this low interest rate, you may want to think again if you can’t prove your income, meet the debt to income ratio or try to get cash out with little or no equity in your home. It can be a tough row to hoe and the only way to see if you can qualify is contact your lender and go through the motions.

THDA Rates Change

admin — Fri, 14 Nov 2008 17:20:42 +0000

Tennessee Housing Development Agency has announced new rates for its first time homeowner programs as well as its new refinance program for those who are in danger of foreclosure due to sub-prime mortgages. Here are the new rates.

Great Rate Program 6.10%

Great Save Program 6.10

Great Advantage 6.60

Great Start Program 7.10

These and many other programs are available to you if you are currently in the market to purchase a home.

More FHA Changes Coming

admin — Sun, 02 Nov 2008 23:35:55 +0000

The government continues to make changes to the FHA program and the people I have talked to don’t think the changes are over with as of yet. Though these changes are supposed to help people continue to get into homes and to protect them, I’m not sure there are any changes that can protect you more than good basic knowledge of how to purchase a house.

I met a young lady today that has a good deal of knowledge because she took the time to attend a first time home buyer’s class. Though it was on a day that she had many other things that she would have rather done, she took the class. I asked her if there was anyone in the class that she felt didn’t need the class and after pausing and thinking about her fellow students told me every one of the people needed the class.

Please, whether you are a first time home buyer or not, if you have never set in on one of these classes and are looking to purchase a home over the next year or so, find a class and attend. You may know some of it and get a little bored but overall, you will not regret it. Untimely, it is up to you to protect yourself from the unscrupulous that still exist in the real estate business.

The Predators Are Out Again

admin — Fri, 17 Oct 2008 18:21:51 +0000

In the last week I have had three of my past clients call me because they had received either a letter in the mail or a phone call from someone promising them to better their interest rate and payment through a refinancing their current home loan. Each one of these families have either purchased or refinanced a home within the last 18 months and all of them have good, high 700 credit scores and 15 year or 30 year fixed mortgages. Two have FHA and the third a conventional without MI (Mortgage Insurance) because they put 20% down on their loan.

None of these families fall into the sub-prime category; none of these families have ARM loans that will readjust and none of these families have been in their homes long enough under the current economic situation to have acquired enough equity to compensate for the fees associated with a refinance, even a streamline FHA. So why are these families getting called?

Because they have good credit, a good job and they are perceived to be uneducated with the process. What the lenders didn’t know about these three families is they have me for a lender. That’s not to say that I’m the only lender that looks out for my current and past clients because there are many loan officers like me, we just get overlooked because of the bad seeds in our industry.

The problem is they are not doing anything that is illegal. A lender can talk to anyone and if they get your permission to refinance your loan, no matter how much it costs you, they can do it. It is up to you to protect yourself and understand that the interest rate is not the only thing to look at when getting a loan. You need to look at the fees and the overall cost versus the time it will take you to recuperate them at the rate that is quoted. If you don’t understand this, do not do anything until you do.

Underwriter Hell

admin — Sat, 11 Oct 2008 15:53:58 +0000

It has been a difficult year in the mortgage business trying to keep up with all of the changes that keep coming down in droves. I give kudos to all who have half way stayed on top of the situation.

Today, however, I want to publicly thank all the underwriters and processors who have been bombarded, sometimes on a daily basis, with changes in every one of the loans programs. I have no idea how you guys have done it and continue to do it each and every day.

The fact that you have to learn the changes and make all the loan officers abide by the changes is a daunting task. Add to that the fact that you constantly deal with our customers and calmly explain what is happening and why makes you close to saints in this crazy market of today. We may not ever tell you, but we do appreciate all you do, more than you know.