Register Real Estate Advisors

In today’s real estate market, there are many different mortgages available for you to choose from. If you are thinking about purchasing a home, you can call RREA’s in house lender today to see what type of loan products you qualify for. Our in house lender, Terry Traylor, can help you determine your mortgage limit, interest rate, and what product will best meet your home purchasing needs.

There are a variety of mortgage loans available. There are Jumbos for loans over $417K. There are loans for investors that allow homes to be flipped before the 90 day limit. For first time home buyers, there are Down Payment Assistance Loans that help with closing costs. For Foreign Nationals that are non-U.S. Citizens there are loans that allow them to purchase second homes in the U.S. With the 203K Loan people can make improvements before or after closing. The HomePath Program was designed for Foreclosed Fannie Mae owned properties. The REO Extended Lock Program helps homeowners purchase a short sale or REO property by allowing an extended interest rate lock. The credit 580 Program increases the FHA guidelines to include borrowers with credit scores between 580-639. Dissipating Asset Programs provide asset-rich clients the ability to qualify with no income up to a maximum loan amount of $5 Million while the Pledged Asset Mortgage allows borrowers to pledge eligible assets in lieu of a down payment, second mortgage or a home equity loan to cover normal down payment requirements. And you thought there were only FHA, Conventional, and VA Loans! Today’s lender has lots of options for you to take advantage of. Call today to find out more -281-288-3500.

Sometimes when I get to the closing table clients will tell me, “It’s About Time.”  Especially first time home buyers who are anxious to get into their new homes, but they have to wait on their lenders and the title company to have everything ready for closing.  Then there are those cash buyers that think we should be able to close a home purchase in just three days!

In today’s real estate market it takes a minimum of seven days to close on a home purchase.  That is because a recent Real Estate Settlement Procedure Act disclosed rules stating that lenders cannot close a loan until seven days after they have provided the borrower with the original required RESPA disclosures and application (including the Good Faith Estimate and Truth-In-Lending Disclosure).  This is a consumer-protection measure designed to help ensure that a buyer has enough time to read and understand a loan before the closing.

If there are any last minute changes to the loan amount, purchase price, or seller contributions that will add three extra days to the closing.  RESPA now requires lenders to again provide the Truth-in-Lending Disclosure when the annual percentage rate changes 0.125% or more from the original disclosure of the APR on the Truth-in-Lending Disclosure—every single time.  Some lenders interpret this to mean that a re-disclosure is required only when the APR increases, while others require a re-disclosure when the APR changes 0.125% regardless of the direction of the change.  This is a protection that was put in place to prevent lenders from changing the loan note rate or fees on borrowers at closing without proper disclosure to the borrower.

Something else that slows down closings is when the buyer has not filed their tax returns.  All Self-employed borrowers must provide tax returns to their lender.  Consumers want to know why closings are being pushed back or why they fall through completely.  If you are the seller, you are really angered when the sale falls through and you have to put your house back on the market when you were already preparing to move out.  Below is an example to explain one of the many things that can go wrong…

A couple wants to buy a home.  The wife is a W2 employee and qualifies for the loan on the home.  The husband is self employed.  Under new lender rules, the lender has to request the tax returns for the past two years for the self employed spouse and could even require the financials for his company.  The lender has to then consider his business losses a liability, which affects the amount for which they can qualify.  See where I am going with this?  It is common for self employed people – especially those operating an LLC, LLP, or Subchapter S corp – to run their businesses at a loss.  Sometimes this is the difference between pre-qualified and pre-approved.

All of these new lending regulations can slow down or derail real estate transactions, so understanding the requirements will help you to be better prepared for your mortgage process so that you can close on time.  If you would like to pre-qualify for a mortgage, please contact RREA’s in-house lender at 281.288.3500 to get started on your path to home ownership.  We have Realtors that can provide you with a smooth transaction – from house hunting to the closing table.  Call us for more information.

Some people I talk to want to know if they should have their credit “re-aged” before trying to get pre-approved for a mortgage. That is mainly because late fees cause issues when you apply for a mortgage to purchase a home. So what does it mean to get your credit “re-aged?” “Re-aged” is something your creditors can do to your past due credit card accounts to zap them back to currently due and it raises your credit score…sort of. So for example, if you’re three months late on your credit card payments then the creditor can agree to “re-age” your account and those three months will be erased. Those missed payments are forgiven and you no longer incur late fees. However, it also erases your credit for those accounts back to zero years. So if you “re-age” a credit card account that you have had for ten years, you could actually lower your credit score. On the other hand, it will erase those three months of late payments that also hinder your credit. So you really have to get good advice from a sharp lender before you ask anyone to “re-age” your accounts. When an account is “re-aged” you still owe the creditor the same amount of money, but you stop incurring additional late fees and you’re no longer delinquent on the account. It’s like getting a fresh start, but the down side is you could potentially hinder your credit score while trying to help it.

So the next question is “How do you get a creditor to ‘re-age’ an account?” To be considered for “re-aging” you have to demonstrate a renewed willingness and ability to pay, the credit card should be atleast nine months old, and you should have made atleast three consecutive minimum payments. There are limits on the number of times an account can be “re-aged.” A creditor may only do it once in a 12-month period and twice in a five year period for open-ending accounts. “Re-aging” an account is not a requirement, it is a nice gesture your creditor may do for you. The guidelines for doing such a thing to one’s credit are set up by the Federal Financial Institutions-Examinations Council and is outlined in it’s Uniform Retail Credit Classification and Management Policy.

At Register Real Estate Advisors we offer an in-house lender for our customers to help them get pre-approved for a mortgage. Please contact our office today to see if Terry Traylor, our in-house lender, recommends your credit be “re-aged” so that you can qualify to buy a new home while interest rates are at all time lows. We have Realtors standing by to show you houses! 281.288.3500.

Lock in Your Interest Rate for 150 Days! Chances are, you have heard this line before. But what you need to know is that if you are going to lock in a rate for that long, you can be sure the lender has added a cushion to that rate so that if rates go up, they don’t lose any money. When you are shopping for a mortgage, you need to compare many things, not just rates. Companies that lock your rate for long periods of time state they can safeguard you from volatility of interest rates while you are shopping for a home. Then they comfort you by adding that you can float down to a lower rate if rates reduce. In order for lenders to guarantee rates for a long length of time, they must be hedging the rate or they would lose money. I have seen some mortgage companies that will guarantee a rate for up to 5 months! The longer you lock into a rate, there is going to be a cost associated with it. Be on the lookout when shopping for your next mortgage!

Ever wanted to understand the difference between an FHA Loan and a Conventional Loan? Watch this video from the Houston Association of Realtors for more details. If you need help finding a reliable mortgage lender, please call me for a referral.

When you start looking for a home, you first need a pre-approval for a mortgage.  Below is a list of things your lender is going to need to process your loan.  They may ask for additional items, but this is a list to get you started.  Make sure you get these items to your lender in a timely manner your home purchase moving along.  This way, you will be able to close when you have planned to close on your new home.

10.  Previous addresses where you have lived over the past 5-7 years.

9.  Payments you are currently making; a list of current lenders and revolving creditors with account numbers.

8.  Credit card numbers with amounts you owe on each credit card.

7.  Verification of all income, including child support and part time jobs.

6.  Documentation on all retirement accounts, like a 401K.

5.  Asset list.  Things on this list would include boats, cars, collectibles, RV, etc.  Also include brokerage account statements for stocks and bonds.

4.  Two to three years of tax returns.

3.  Checking and savings account statements for banks and credit unions.

2.  Current pay stubs.

1.  W-2′s.

Although FHA is the most common loan today, you will want to be sure to find a loan that fits your needs. Use these comprehensive questions to help you determine which loan is right for you.

1. What are the most popular mortgage loans you offer?
2. Which type of mortgage plan do you think would be best for us? Why?
3. Are your rates, terms, fees, and closing costs negotiable?
4. Will I have to buy private mortgage insurance? If so, how much will it cost and how long will it be required? NOTE: Private mortgage insurance usually is required if you make less than a 20% down payment, but most lenders will let you discontinue the policy when you’ve acquired a certain amount of equity by paying down the loan.
5. Who will service the loan? Your bank or another company?
6. What escrow requirements do you have?
7. How long is your loan lock-in period (the time that the quoted interest rate will be honored?) Will I be able to obtain a lower rate if they drop during this period?
8. How long will the loan approval process take?
9. How long will it take to close the loan?
10. Are there any charges or penalties for prepaying the loan?

This information is used with permission from Real Estate Checklists & Systems ( http://www.realestatechecklists.com ) . Reprinted from REALTOR Magazine Online by permission of the National Association of REALTORS, Copyright 2005, All rights reserved.

1. Develop a Family Budget – Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.
2. Reduce your debt – Generally speaking, lenders look for a total debt load of no more than 36% of income. Since this figure includes your mortgage, which typically ranges between 25% and 28% of income, you need to get the rest of installment debt – car loans, student loans, and revolving balances on credit cards – down to between 8% and 10% of your total income.
3. Get a handle on expenses – You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.
4. Increase your income – It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.
5. Save for a down payment – Although it’s possible to get a mortgage with only 5% down – or even less in some cases – you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20% down payment.
6. Create a house fund – Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.
7. Keep your job – While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.
8. Establish a good credit history – Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

Reprinted from REALTOR Magazine Online by permission of the National Association of Realtors, Copyriht 2005, All rights reserved.

The Home Affordable Foreclosure Alternative Program (HAFA) will be providing short sale guidelines for loans not owned or guaranteed by Fannie Mae and or Freddie Mac starting in April 2009.  For the property to be eligible it must be the borrower’s principle residence, first lien mortgage originated on or before January 1, 2009, and the mortgage is delinquent or will be going delinquent in the foreseeable future.  The current unpaid principal balance must be equal to or less than $729,750.  The borrower’s total monthly mortgage payment has to exceed 31% of the borrower’s gross income.  Fannie Mae and Freddie Mac are expected to come up with their own guidelines soon.

 WEST PALM BEACH, Fla. (Cox Newspapers http://www.statesman.com/business/content/business/stories/other/2009/09/30/0930subprime.html ) – As of yesterday, borrowers with bad credit or no verifiable income will not be eligible for a home loan.  The new rule, approved as part of the Housing and Economic Recovery Act of 2008, requires lenders to prove a person’s ability to repay a loan before awarding one.  This guideline mostly concerns subprime or high-interest loans for people with weak credit.