Throughout the home buying process, you’ll work with several different professionals who are tasked with helping you get the best deal. However, if you are unfamiliar with this industry, you might be asking yourself, “What’s involved in a mortgage loan officer’s job?”
Continue reading “What to Expect From Your Mortgage Loan Officer”
For months, maybe even years, you’ve dreamed of owning your own home. As you move forward towards that direction your first step should be to determine how much of a home you can comfortably afford. Even if you’ve taken steps to ensure you have a respectable credit score and saved for your initial investment, it’s completely normal to feel anxious about your mortgage application being approved. Use the following as a guide to ensure a smooth loan approval.
Before you start shopping and fall in love with a house you can’t afford, you need to do some math. You know your financial situation and your spending habits better than anyone. What monthly mortgage can you reasonably afford given your current income and debt obligations? After you’ve done your homework, consult with a reputable loan officer and get their opinion on what a lender is likely to loan you. It will generally take about 15-20 minutes over the phone to find out. Having a good understanding of your finances will ensure your success as you shop for your home and apply for your mortgage. As a general rule, your total monthly house payment (PITI and HOA dues if any) should be between 30% – 33% of your gross monthly income. Your house payment plus all of your other debts should not exceed 36% – 42% of your gross monthly income.
As you consider homes to purchase, determine if the potential house payment will be within your budget and check to make sure you have cash on-hand that is necessary for the down payment and closing costs. The larger your down payment, the lower your monthly house payment will be. Most loan programs will require a minimum down payment of 5 percent of the sales price of the home. In addition, you’ll have to plan to pay closing costs and “pre-paid expenses” which usually run between 3% – 4% of the sales price. (There are loan programs available that have a minimum down payment of 3% if you can qualify.)
Lenders examine every aspect of your financial history. From your credit to your income, no stone is left unturned. As you prepare to submit your mortgage application, talk to your loan officer before you do any of the following:
Basically, any unusual financial activity could hinder your chances for mortgage approval.
There are some documents your lender will need to collect from you to submit your mortgage application.
Depending on your particular circumstances the necessary documentation you must provide will vary. Your loan officer will give you a customized list of everything required.
After you’ve done your homework, consult with a reputable loan officer and let her help you put all the pieces together. It will generally take about 20-30 minutes over the phone to give you a good idea of what you can expect to be approved for. (Face-to-face meetings are always a good idea when possible.) She will probably want to check your credit to make sure there aren’t any unforeseen surprises. She’ll review different loan programs which might be a good fit for you and explain the pros and cons of each. She will give you estimates for different loan scenarios so you can see what your monthly payment will be and how much of an initial investment each scenario will require. When you feel comfortable with the loan officer it helps to provide her with the supporting documentation listed above and ask to be formally “pre-qualified”. She will review everything for any potential issues and advise you how to correct them. She will be able to give you a rock solid Pre-Qualification letter so that a seller will consider your offer when you find a home. (If you’re in need of a good Realtor, she’ll be able to refer you to a tried and true professional.)
For over three decades, Dorothy Erminger has been helping Texans buy homes. When you’re ready to get in the game give her a call. She will give you professional, reliable guidance so you can set yourself up for a smooth loan approval. Contact Dorothy today.
Congratulations on beginning the home buying process. You’ve started in the right place by researching how to best prepare yourself for submitting a mortgage application. A major part of that application is the home buyer’s credit score which examines many years of your financial history.
Known as FICO scores, credit scores were developed in the late 1990s to serve as an objective method for assessing an individual’s credit management habits. As a portion of the mortgage application process, your credit score allows lenders to determine which type of loan you are eligible for and the pricing tier you qualify for when searching for a new home. Credit scores range from 300 to a high of 850, with most lenders looking for a median score of at least 640.
There are 40 factor codes divided into five main categories that are used to calculate a credit score:
It might seem like your credit score is chiseled in stone but that’s not true. A credit report (and a credit score) is a snapshot in time. If you are planning on buying a home soon and are concerned with your credit scores, there are steps you can take to ensure they will be better before submitting a mortgage application.
Buying a home is an exciting yet nuanced process, with many moving parts. To make sure you move into the home of your dreams, you want to work with a trusted and tested expert who will walk you through the process and answer each and every one of your questions. With 24 years of experience as a loan officer and 10 years of experience as a realtor, Dorothy Erminger has the expertise every homebuyer needs to successfully submit a mortgage application. Contact Dorothy today to start taking steps to improve your credit score.
Throughout his campaign and following his win in the November election, President-elect Donald Trump has had a massive impact on our nation and around the world. Once he is sworn is as Commander-in-chief, President-elect Trump will continue to influence many aspects of everyday life, including buying and selling real estate. As we look ahead to what the next four years of a Trump presidency holds, our nation is pondering what to expect from his administration.
A few weeks after the November election, the Los Angeles Times reported that, “Long-term U.S. mortgage rates continued to surge this week in the aftermath of the election of Donald Trump as president.” Rates increased by approximately .25% after the election.
Put in proper perspective, it’s important to understand that the Fed has kept rates artificially low for many years in an effort to keep our fragile economy from imploding. As we finally move forward into a more healthy economy it’s only fair to expect these controls to give way to a normal market and a more sound fiscal policy. (You can’t kick the can down the road forever!) Even though mortgage rates have increased, they are still very close to historical lows and they are not expected to increase much more in the near future.
Admittedly, the prospect of higher interest rates isn’t what one wants to hear if they are considering buying a new home. Higher interest rates have a negative impact on the amount a home a person can qualify for but at the same time, an increase in interest rates could potentially drive down the overall price of homes. Higher interest rates can make refinancing less feasible for homeowners who are looking to refinance their homes because the savings won’t be as great and as home values decline, so does their equity.
The silver lining is that the prospects of a Trump presidency is having a significant >positive effect on our economy. More jobs and higher paying jobs that are expected from a Trump presidency will almost certainly bode well for would-be homebuyers and home sellers.
In anticipation of Trump’s ascension to the most powerful job in the world, investors have been putting as much capital as possible into the US stock market in hopes that Trump’s presidency will yield the economic boom that analysts are predicting. In order to put their put their funds into stocks, a lot of investors have withdrawn money from the US bond market.
As the strength of Treasury bonds decreases, the interest rates that accompany mortgages rise in comparison. As the stock market rises, the mortgage bond market dips which causes mortgage rates to rise. This is normal. There have always been and will always be ups and downs in both markets.
Either way, the result is the same. Whether investors are excited or downtrodden about a Trump victory, it’s a given that the housing market – as well as other segments of our economy – will feel some repercussions while we adjust to the policies of the new Administration.
The ability for an average person to buy a home is slightly more difficult than it was a few months ago. However, a new home is not out of reach for most prospective home buyers. It might take a little more time and patience but in most cases your efforts will be rewarded. Home buyers might need to expand the scope of their search parameters. Keep in mind that your first home is not likely to be your forever home. It may not be exactly where you want it to be and it may not the home of your dreams – it’s a stepping stone.
The key is to get into the home as soon as you can. Chances are that you’ll be able to earn some equity and sell for a profit in a few years. The money you earn from appreciation on your first home is what you will use to buy your second home and you will get closer to meeting your ultimate housing goals then.
In today’s environment, it’s more important than ever to work with a knowledgeable, dedicated loan officer to help you navigate through the home buying process. If you live anywhere in Texas, Dorothy Erminger is a great resource for potential homebuyers. Dorothy will guide you through the loan process and you can rest assured that your home buying experience will be straightforward, pleasant and easy-to-follow.
Dorothy and her colleagues work tirelessly to ensure their clients lock down the best loan program for their unique needs at very competitive interest rates while minimizing unnecessary costs. She is known by her clients as well as industry professionals as a stickler for detail – which translates to smooth closings – on time, every time! Owning a home is part of the American Dream, and it’s Dorothy’s goal to help you turn your dream into a reality.
Accounts: All 4 Types of Inquiries
Inquiry—is the common term that is used to describe someone who is checking into and/or viewing your credit. Basically they’re inquiring about someone’s track record and payment history to creditors.
Many experts in the industry rate the inquiries down to a two part description. The two part description is usually labeled “hard pull” or “soft pull” inquiries. Most people who refer to these two terms lack the over all understanding that there are actually 4 types of inquiries. The four different types of inquiries are used for different purposes and can either affect your score or not affect your score.
The four different types of credit inquiries are labeled as: account review inquiries, promotional inquiries, standard inquiries, and self pull inquiries. It’s easier to just use the first part of the term rather than having to verbally state all the words attached to inquiry with every description.
An “Account review inquiry” is when a potential creditor requests from the bureaus, permission, to review your account for only negative information within a certain time frame. This potential creditor does not receive good information about your credit and does not receive your credit scores (only information on recent delinquencies). An example would be if your ALLSTATE INSURANCE desires to request an account review on your negative payment history over the last 12 months. This information could be very valuable in determining your financial strength, financial reliability and responsibility, and in determining if there may be a common sense reason that you are now a higher insurance risk and are more prone to be in an accident and cost ALLSTATE INSURANCE more money.
This type of inquiry would be labeled a “soft pull”, because it is not factored into the credit risk scoring formula to remove points off your credit score. One of the major flaws with the account review inquiry is that it does not take into detail or exception if an individual has earned a lot more money, opened a lot of new accounts, mistaken or misapplied payments or, had lates that another creditor should’ve paid off to another creditor in the transfer and pay off of prior loans. This unfortunate example could lead to increased insurance rates to a prospering and responsible individual which is completely unfair.
“Promotional inquiries” are requested with the sole purpose of just receiving a credit score only. A promotional inquiry will not include information on recent lates, collections, public records, information on types of accounts, and who your creditors may be. Once again the only information that is provided to your requested potential creditor is simply a credit score. Promotional inquiries are usually distributed for the sole purpose of deciphering statistically who would be the best candidates to send credit promotions. The most common type of credit promotion is mailing offers with applications for credit cards. The credit card companies save time and money by narrowing their targeted audience to people who they feel would qualify for their credit offer. This saves them time, money, and makes the credit card companies way more money. Promotional Inquiries do not hurt your credit score and just like Account Review Inquiries, they are not even seen by your future potential creditors when they view your credit history.
“Standard Inquiries” are requested by your creditors when you are applying for a loan, money, line of credit, or extension of credit. You may be shopping for a car, boat, applying for a mortgage, applying to rent an apartment, leasing a tractor or construction equipment, buying/leasing furniture, or
computer equipment etc. These loans are very important to you because you want the best deal
knowing you can save thousands of dollars on interest by purchasing from a lender that gives you the best interest rate. The problem is the more you shop around the more potential risk you have of continually lowering your credit score. The scoring model has attempted to make changes so they don’t continually brutalize the savvy and thrifty shopper that is trying to get the best deal.
Copyright © 2016 Credit CRB, All rights reserved.
This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval.
If you are a first time homebuyer and are looking for a homebuyer education course to help you achieve your homeownership goals and possibly help you qualify for a special first time homebuyer program that offers a lower interest rate and/or lower mortgage insurance rate- try this free, interactive course at http://www.freddiemac.com/creditsmart/tutorial.html
For more information about qualification, please call Todd Kurio, Residential Mortgage Loan Originator, at 512 459 2405. NMLS #214411/216616, todd.kurio@capstarlending.com. Capstar Lending, Equal Housing Lender.
This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval.
It is that time of year again and I’ve been fielding questions about property taxes. There has definitely been an increase in values in Texas cities, but that doesn’t mean the value the county appraisal district has for your home is correct. Below is the information I posted last year, which outlines the steps to protest the value. The most important thing to take is data and documentation. Good luck, Adam
Are you one of everybody in Travis County who received a notice this week that your home’s appraised value is higher than last year? I usually protest appraised value on at least one of my properties every year, and I’m generally successful. The steps included in how to protest property taxes are:
My opinion is generally that you know your neighborhood and property better than anyone else, and generally you will make your own best advocate. Good luck, Adam Stephens NMLS 216606
No one wants to get a divorce. However, if it is inevitable, there are ways for partners to make a clean break and get their fair share of the property in question by getting an Owelty lien.
Since Texas is a community property state, if you are married, and you own a primary residence with a homestead exemption, both spouses have equal rights to the equity in their home.
If Your Name is On the Mortgage, You Are Still Responsible For Payments After A Divorce. Most spouses think the divorce decree releases them from obligation to the lender. That is not the case. Even if the decree awards the property and the debt to one spouse, if the other spouse is on the mortgage, they are still responsible for the debt. Any late payments or other derogatory reporting will be reflected on both spouse’s credit report and would negatively affect each spouse’s credit score.
An Owelty Lien is a way to give each spouse what is owed to them as detailed in the divorce decree without having to sell the house. You don’t have to have the required 20% equity which would be required on a Texas Cash Out Refinance.
For more information on Owelty Liens, please call Todd Kurio, Residential Mortgage Loan Originator. 512 459 2405, NMLS #214411/216616, todd.kurio@capstarlending.com. Capstar Lending, Equal Housing Lender.
Capstar Lending is pleased to offer the Travis County HFC Hill Country Home Down Payment Mortgage Assistance Program. This program is for properties located anywhere in Travis County including anywhere within the City of Austin. This is a grant for up to 5% of the loan amount. This assistance can be used for down payment, closing costs and prepaids.
This program is for new or existing homes, 1-4 units detached or attached, condos or townhomes that meet the lender’s requirements. Borrowers must occupy the home as their primary residence.
There is no first time homebuyer requirement for this program and there are no purchase price limits. The loan amount maximum is set by the type of loan program you are applying for. For example, the FHA loan limit for a single family home in Travis County is $305,900.
The maximum income limit for this program is $105,560. This is based on the qualifying income used on the loan application. There is no recapture tax on this program.
Borrowers must have a minimum, middle credit score of 640.
For more information or to apply,please call Todd Kurio, Residential Mortgage Loan Originator. 512 459 2405, NMLS #214411/216616, todd.kurio@capstarlending.com. Capstar Lending, Equal Housing Lender.
This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval.
IRA’s consist of two types- Traditional and Roth. Funds contributed to traditional IRAs are “before-tax” contributions because they are made and, thus, lower taxable income and tax liability.
However, when traditional IRA funds are withdrawn (and not rolled over to another pension- type account), the funds are fully taxable regardless of the age or other circumstances of the taxpayer.
If the IRA is Roth, IRA withdrawal for home purchase of up to $10,000 for a “first home” are completely free of tax and penalty (as long as the funds have been in the IRA for five years or more).
The 1997 Taxpayer Relief Act changed some IRA rules to allow certain types of IRA withdrawals early, without penalty, in some circumstances.
The rules for taking a distribution from a Roth IRA to finance a first time home purchase are slightly different than those for a traditional IRA. The law defines a ‘first time home buyer” as someone who has not owned for 2 years. So the law helps even newer home buyers.
If you are a first time homebuyer and you meet the Roth IRA rules as a qualified distribution (after the account has been open for 5 yrs)you can withdraw $10,000 or less to purchase a home (if the funds are used directly toward the home acquisition-which includes down payment, closing costs, etc).
If the withdrawal counts as a qualified distribution you will avoid paying income taxes and early withdrawal fees. If you are married, and you and your spouse are first time homebuyers, you can each pull from retirement accounts, giving you $20,000 to use for a home purchase.
If you have not set money aside for your home purchase or don’t have a Roth IRA to tap- then you might want to consider other down payment options. Capstar Lending offers Mortgage Assistance Programs and other grant programs that will provide the funds for your down payment and closing costs.
Please consult your financial/tax advisor for more detailed information.
This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval.
Please call Todd Kurio, Residential Mortgage Loan Originator for more details. 512 459 2405, NMLS #214411/216616, todd.kurio@capstarlending.com. Capstar Lending, Equal Housing Lender.