Category: Mortgage and Financing

Quick Tips for Getting Started on Your Home Purchase

Quick Tips for Getting Started on Your Home Purchase

1040 screenshotBuying a home can be a complex process, but it doesn’t have to be. With a little preparation, you can save a lot of time and hassle by having all of your documents ready when your mortgage professional needs them.

To start with, the lender will need personal information to verify employment for you and your co-borrower (if there is one). They will also need information regarding all of your debts and assets.

In order to expedite the paperwork process, start gathering the following items:

– Most recent paystubs for one month.

– W2s from the last two years.

– Signed copies of your last two years’ tax returns, including all schedules that were filed.

– Homeowner’s insurance company name and number.

– Most recent bank statements for two months.

– Most recent statements from any retirement and investment accounts for two months.

What costs are involved?

Within 3 days of your application, your Loan Officer must provide you with a good faith estimate of closing costs. Along with any down payment, you will have to pay closing costs at your closing as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:

– Application/Processing Fee – Charged by the loan officer to process your loan application.

– Appraisal Fee – Charged by the appraiser to determine the current value of the property.

– Closing Fee – Charged by the closing agency (escrow, attorney, title) to ensure the close of your transaction.

– Credit Report Fee – Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.

– Title Search/Title Insurance Fees – Charged by the title company to ensure the property is free from liens or title defects.

– Origination Fee – Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.

– Discount Points – Paid to the lender to secure a lower interest rate.

– Miscellaneous Fees – VA and FHA loans may have other fees associated with them.

– Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.

Let us help you evaluate your personal situation and assist you in finding the loan program that works best to meet your individual goals and needs. This is brought to you by: Pamela Jackson, Mortgage Banker, PHH Home Loans
Phone: (630) 881-4378  Fax: (630) 757-6622  License:NMLS#346456  pamela.jackson@phhonline.com
www.phhonline.com/pamelajackson

Mortgage Rates Below Four Percent

Fixed-rate mortgages fell back near yearly lows again this week, lowering borrowing costs for home buyers and refinancers. The 30-year fixed-rate mortgage averaged 3.99 percent this week, Freddie Mac reports in its weekly mortgage market survey.

“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later,” Frank Nothaft, Freddie Mac’s chief economist, said in the video commentary embedded here.

Freddie Mac reported the following national averages with mortgage rates for the week ending Nov. 20:

  • 30-year fixed-rate mortgages averaged 3.99 percent, with an average 0.5 point, dropping from last week’s 4.01 percent average. The 30-year fixed-rate mortgage dipped to 3.97 percent in mid-October, its lowest average so far this year.
  • 15-year fixed-rate mortgages averaged 3.17 percent, with an average 0.5 point, decreasing from last week’s 3.2 percent average. A year ago, 15-year rates averaged 3.27 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.01 percent, with an average 0.5 point, falling slightly from last week’s 3.02 percent average. A year ago, 5-year ARMs averaged 2.95 percent.
  • 1-year ARMs averaged 2.44 percent, with an average 0.4 point, inching up slightly from last week’s 2.43 percent average. Last year at this time, 1-year ARMs averaged 2.61 percent.

Source: Freddie Mac

Understanding Credit

Of course, credit is important. If you are looking to move, and will be taking out a loan, getting a pre-approval from a lender if the first step in the home buying/viewing process. You will need a pre-approval before you look at homes, so you know your loan amount /how much you’ve been approved for, which depends on different factors, including your credit. Here Credit Karma  debunks some common credit myths.

infographic_CreditMyths_V3

New Credit Scoring and Homeownership

Fair Isaac Corp., or FICO, stated that it will no longer penalize borrowers for certain debt-collection activities when calculating credit scores.

National Association of Realtors® President Steve Brown stated:

“This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates because of flawed credit scores. Since the housing crash, overly restrictive lending has been the greatest obstacle to homeownership.”

“NAR will continue to support efforts to broaden access to credit for qualified homebuyers.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Is it Time to Refinance Your Mortgage?

Guaranteed Rate has listed the five most important questions for you to answer as to whether refinancing is for you.

Time to refinance your mortgage

 

But before you refinance, there are a few important things to think about.
Research and preparation are the keys to a smooth and useful refinancing experience. Guaranteed Rate has put together this short e-book to shine some light on how you can get started now.
The Five Most Important Questions to Answer When Refinancing Your Mortgage are:
– Can you refinance your loan?
– Should you refinance?
– How do you get the best rate?
– What else can you do to lower your monthly payments when refinancing?
– What details can reveal new savings opportunities?

If you have any questions after reading this, you can call Sanette Isa-Bruton, Loan Officer ( at 708-995-3061) or one of Guaranteed Rates other Home Loan Experts at 1-866-934-7283, post your question on their Facebook page (http://facebook.com/guaranteedRate1) or tweet them @GuaranteedRate.

 

Home Loan in Process? Some Things to Know…

 

While your loan is in process there are a few housekeeping tips to remember, from Rebecca, our office PHH/Coldwell Banker Home Loans Mortgage Advisor…

1)Please do not incur any new debt while your loan is in process including increased credit card debt.

2) If you are retaining another home you will need 6 mths reserves for each retained home (these funds can be from your 401k)

3) If you are not retaining a home you will need only 2 mths reserves for conventional financing

4) Any large deposits other than your pay check into your bank account will need to be sourced and documented. Along with a letter of explanation.

5) Gift funds are acceptable as long as you have 5% of your own funds.

If you are buying new construction please send in updated bank statements each month and a updated pay stubs.

6) If there is a change in your job please notify us immediately. (we will need 30 days worth of pay stubs)

7) If you gave earnest money to the builder or agent to purchase a home, please send in the bank statement (s) showing those funds clearing your account.

Housing Affordability Hits Four-Year Low

from …

Need a Real Sponsor here

  • October 12, 2013, 5:00 AM ET

Number of the Week: Housing Affordability Hits Four-Year Low

By Nick Timiraos

16%:The average mortgage payment on the median priced home in August as a share of the median income, according to data compiled by the National Association of Realtors.

Housing affordability hit a four-year low in August amid steady gains in home prices during the spring and higher interest rates during the summer.

While the data released earlier this week show affordability has been dented, homes are still more affordable than any time between 1989 and late 2008, according to the NAR’s figures.

At prevailing interest rates in August, the mortgage payment on the median priced home stood at $851, or around 16% of the median U.S.income. By contrast, the equivalent mortgage payment one year earlier,at $683, accounted for 13.3% of the median income.

The NAR data isn’t adjusted for seasonal factors. Median home prices tend to peak in June, when there are more home transactions,particularly at the more expensive end of the market. Because the affordability figures are pegged to median home prices, the data typically show housing becoming more affordable during the winter and less affordable in the summer.

But the affordability figures show unmistakable evidence of how rising interest rates hurt housing affordability in July and August because median prices didn’t rise in those months, even as the average monthly payment went up due to rising rates. The average monthly payment rose from $787 in June to $851 in August — even though median prices fell slightly from June to August.

Monthly payments last stood above $850 in November 2008, and monthly payments as a share of income last stood at 16% in July 2009.

Mortgage rates have declined modestly since August, which means that the 16% figure could be — for this year, at least—the high watermark for the payment-as-a-share-of-income metric.

Declining affordability is a big reason why the housing market’s frenzied price gains during the first half of the year are likely to  the second half. Home sales data for September won’t be released until Oct. 21, but already there are more signs that competition for homes has eased as buyers digest the impact of higher rates.

Copyright 2013 Dow Jones & Company, Inc. All Rights Reserved