Register Real Estate Advisors

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.

WASHINGTON (National Association of Realtors) – Lenders will soon be subject to new disclosure requirements for mortgage loans.

Among the new requirements, which will apply to all mortgages secured by a borrower’s home:

• Lenders must give good faith estimates of mortgage loan costs within three business days after the consumer applies for a loan. The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
• The closing may not take place until expiration of a seven-day waiting period after the consumer receives the early disclosure.
• If the annual percentage rate (APR) increases by more than 0.125 percent, the lender must provide a corrected disclosure to the borrower and wait an additional three business days before closing the loan.
• The consumer may modify or waive both waiting periods for a documented personal financial emergency, but must receive the disclosures no later than the time of the modification or waiver.

The new requirements will apply to loan applications filed on or after July 30, 2009.