The Real Estate Sage at The Real Estate Investment Institute - REII

Easy answer, 60 days.  But I guess that depends on what kind of Pre-Approval you received or want for that matter.  Actually, the answer to such a question depends upon three factors:

-  You, as the consumer. 

-  The Buyer's Agent who is helping you find a home.

-  And the quality of the Pre-Approval you receive in the first place.

Ten Seconds, GO - You're interested in buying a home.  You even find a few that tickle your family bone.  But you need financing because you probably don't have the cash to buy it outright. Which leads to...

Nine Seconds - You're smart and seek out a Buyer's Agent to represent you. This will provide protection in your favor.  They represent you and only you. 

Eight Seconds - That agent may turn you onto a few folks like me who can help you out from the financing end.  And that doesn't mean you shouldn't shop on your own.  But buying a home isn't just about getting the lowest rate with no fees (an oxymoron if I've ever encountered one), it's about trust.  Interview those who express interest in earning your business and keeping it.  If they have the lowest rate with no fees, I can only hope they are in business when you need to do business again.

Seven Seconds- The Pre-Approval is more than just an application and credit check. There's some serious competency going on. They ask for your most recent pay-stubs, W-2's, bank statements, and the last time you had a wet dream about Richard Gere. 

Six Seconds - You find a house that you want to call home and a Sales Agreement has been signed and accepted by all parties. And there you are.

Five Seconds- You're hopefully just padding the documentation that you've already given to the Mortgage Company you choose.  I recommend Sardi Mortgage Inc, who isn't licensed just yet ... but when you hear Sardi, that should mean something. I'm not sure what, but it means something. Maybe it just means that there is an individual who is all over your particular file like white on puss.

Four Seconds - Appraisal is ordered and done. The rest of your file is pretty complete because everyone got along and did what needed to be done.

Three Seconds -  The complete transaction goes into Underwriting, those dastardly folks we think of who hate closing loans.  I'll give you a bit of info here, and I usually don't stick up for Underwriters.  They only get paid when folks close loans.  Without us, there is no them.  So, that's that.  In business, there's more to it than that, but that is a pretty accurate description.

Two Seconds - You are CLEAR TO CLOSE.  If there were three words that were magical in this industry, those are they. 

One Second Left - It's a proclamation of your destination.  You hit home!

And when there's no time left, that's the perfect time to be imperfect.  And that's the perfect way NOT to close.

 

Jason Sardi

Mortgage Consultant

610-653-0317

jsardi@ihmci.com

 

Ancient Mortgage Proverb: No deal is ever 100% certain until the loan is completely paid off.

There exists a chasm in communication, familiarity and point of view between agents and loan officers. Sometimes we try to act like it does not exist and we really wish it was not so. I know this chasm exists, just as you do for many reasons, because I have had real estate agents - very good agents - try to convert to loan officer at my companies and I have seen this chasm immediately appear. Sales are fairly and generally black and white, go or no-go, yea or nay. Either the seller accepts the offer, counters or declines. Every agent I have seen try to become a loan officer has had a difficult time adjusting to the different levels of approval.

There are different levels of approval with virtually every mortgage application to loan process and agents we really need you to do your best accept them even if you don't understand them. Otherwise you're going to continue driving the loan officer (me :) nuts and forcing the weaker ones to lie to you or avoid you. Let me help you not contribute to their delinquency by briefly explaining some of the levels of loan approval and addressing how I handle them individually.

First please recognize the average loan has many human and non-human touch-points. It's not just the loan officer or just the loan officer and the underwriter. There are also as many as dozens of other humans plus automated systems involved. If the loan application is not approved by each and every one of these processes as required by the lending or insurance (mortgage insurance) guidelines the application will be denied and the deal will be done.

I don't care who the loan officer is, where they work or what they say - these are constants and work the same way at every lender/bank/broker unless the person you are talking to has the money in their personal checking account and are personally making the loan - something a loan officer does not have the authority to do for any lender.)

Application Approval - these are generally worthless. These are generally called a pre-approval and sent on a letterhead from the bank, lender or broker. These are often given only after accepting the application and examining the credit history of the applicant(s). At this point nothing has usually been verified or even documented such as income, assets and job history. (I do give these and I explain this is a CREDIT ONLY pre-approval and I have verified nothing except credit and payment history.)

Credit Only Approval - see above.

Automated System Approval (Application Stage) - this is also generally worthless. The loan officer generally has not verified income, assets and job history at this point. This is where most "approval letters" are issued on that official looking FNMA Pre-Approval sheet. (I give these as well and explain I still need all the documentation and several verifications of documenation from the appropriate source.)

Underwriter's Opinion Pre-Approval - again basically worthless for the same reasons. (I give these ocassionally when there is a borderline issue as in tax returns for example.)

Underwriter's Conditional Approval - this is where the loan officer should have a very good idea if this application will be approved. There can be as many as 3 or more weeks between the Application Approval and this date because this is the first time anyone has looked at the complete application package which will include: income documentation (pay stubs, tax returns, etc.), asset documentation (bank statements, retirement account statements, letters of verification), employment verification, rent/mortgage verification, appraisal, insurance documentation, inspection (if required), fully executed and legible purchase agreement, and whatever else is needed. THIS IS STILL NOT AN APPROVAL! There will be conditions and until the conditions are satfisfied this is not a loan.

Clear to Close (or Cleared to Close) - this is it. This is the first time ANYONE can assure this will be a finalized transaction and it does have an expiration - usually 7 to 10 days after the approval.

-Side note about conditions. I had a first time home buyer ask me about "Conditions" the other day. He's a young and single man so I used an illustration I thought he could easily understand. I said, "Suppose you finally get up the courage and ask that pretty girl out on a date. She tells you she will go out with you if you drive a red sports car, pick her up at exactly 7PM and take her to the most expensive restaurant in town." I needed to offer no further explanation of conditions.

The bottom line is this: If you do your job right, the loan officer does their job right, the title/escrow agency does their job right, the appraiser does their job right, the inspector does their job right, the insurance company does their job right, the buyer's employer does their job right, the buyer's current mortgage company or landlord does their job right, the person giving the gift (if there is a down payment gift) does their job right, the IRS does their job right, the borrower's accountant/CPA does their job right, the seller does their job right, the appraiser does their job right, the HOA does their job right, the inspector does their job right, the processor does their job right, the underwriter does their job right, the closing co-ordinator does their job right, the funder does their job right, the seller's agent does their job right ... that's most of them ... then within a few days to a few weeks we'll meet at the closing table. Until then NOTHING is certain.

Now do you still want my opinion or do you want to wait for the truth?

Ken Cook - Nationwide Specialist - Information/Marketing - FHA Home Loans
678-439-8683

 

Law of Mechanical Repair:
After your hands become coated with grease, your nose will begin to itch and you'll have to pee.

Law of Gravity:
Any tool, when dropped, will roll to the least accessible corner.

Law of Probability:
The probability of being watched is directly proportional to the stupidity of your act.

Law of Random Numbers:
If you dial a wrong number, you never get a busy signal and someone always answers.

Law of the Alibi:
If you tell the boss you were late for work because you had a flat tire, the very next morning you will have a flat tire.

Variation Law:
If you change lines in a queue, the one you were in will always move faster than the one you are in now (works every time).

Law of the Bath/Shower:
As soon as the body is fully immersed in water, the telephone rings.

Law of Close Encounters:
The probability of meeting someone you know increases dramatically when you are with someone you don't want to be seen with.

Law of Machination:
When you try to prove to someone that a machine won't work, it will.

Law of Biomechanics:
The severity of the itch is inversely proportional to the reach.

Law of the Theatre:
At any event, the people whose seats are furthest from the aisle arrive last.

The Starbucks Law:
As soon as you sit down to a cup of hot coffee, your boss will ask you to do something which will last until the coffee is cold.

Murphy's Law of Lockers:
If there are only two people in a gym locker room, they will have adjacent lockers.

Law of Physical Surfaces:
The chances of an open-faced sandwich landing face down on a floor covering are directly correlated to the newness and cost of the carpet/rug.

Law of Logical Argument:
Anything is possible if you don't know what you are talking about.

Brown's Law of Physical Appearance:
If the shoe fits, it's ugly.

Oliver's Law of Public Speaking:
A closed mouth gathers no feet.

Wilson's Law of Commercial Marketing Strategy:
As soon as you find a product you really like, they will stop making it.

Consider the ballot, the power of your vote. Just because this is not a big Presidential year or even election of Congress does not mean you should forget to do your civic duty. This year in Texas there are a number of Constitutional Amendments very important to Texas real estate.

　

Proposition 1

HJR 132 (History of HJR 132)

"The constitutional amendment authorizing the financing, including through tax increment financing, of the acquisition by municipalities and counties of buffer areas or open spaces adjacent to a military installation for the prevention of encroachment or for the construction of roadways, utilities, or other infrastructure to protect or promote the mission of the military installation."

　

　

Proposition 2

HJR 36-1 (History of HJR 36-1)

"The constitutional amendment authorizing the legislature to provide for the ad valorem taxation of a residence homestead solely on the basis of the property's value as a residence homestead."

　

　

Proposition 3

HJR 36-3 (History of HJR 36-3)

"The constitutional amendment providing for uniform standards and procedures for the appraisal of property for ad valorem tax purposes."

　

Proposition 5

HJR 36-2 (History of HJR 36-2)

"The constitutional amendment authorizing the legislature to authorize a single board of equalization for two or more adjoining appraisal entities that elect to provide for consolidated equalizations."

　

Proposition 6

HJR 116 (History of HJR 116)

"The constitutional amendment authorizing the Veterans' Land Board to issue general obligation bonds in amounts equal to or less than amounts previously authorized."

　

　

Proposition 11

HJR 14-1 (History of HJR 14-1)

"The constitutional amendment to prohibit the taking, damaging, or destroying of private property for public use unless the action is for the ownership, use, and enjoyment of the property by the State, a political subdivision of the State, the public at large, or entities granted the power of eminent domain under law or for the elimination of urban blight on a particular parcel of property, but not for certain economic development or enhancement of tax revenue purposes, and to limit the legislature's authority to grant the power of eminent domain to an entity."

　

　

Make your choices be informed Vote November 3 in Texas. As for the rest of ya'll check to see what is happening in your state.

 

Brenda

Brenda C Archambault

Kalamazoo, Paw Paw, Incline Village, Boulder City, Las Vegas, Houston

     

By NOW! I mean if you have not called a loan officer to get qualified, found a property and made an offer you're dangerously close to missing the First Time Home Buyer's Tax Credit. I know what you hear in your mind, "it's good through the end of November." You would, of course, be correct in so saying. Your correctness would be equivalent to leaving New York City for a trip to Tokyo to see your best friend's wedding which happens at 5PM your time and you are getting on a jet at Noon your time the day of the event. In other words it's "possible" you can make it on time but not very likely with the available equipment.

I know there will be loan officers and others reading this who will say, "shoot man I can close a loan in 8 days". Well, so can I. But it's by far the exception and not the rule. If you are a first time home shopper and you are reading this pick up the phone right now and call your local loan officer. If you just have questions feel free to phone me at 678-439-8683 and I can answer some questions for you.

Here are some pointers to speed the process and hopefully close before the end of November:

• Get prequalified right now, today. Not in a minute RIGHT NOW.
• Once you are prequalified ask your loan officer for a list of "findings" this will likely include:
  • Last two years of tax returns all pages all schedules
  • Last two months of bank statements on all accounts all pages (ALL pages)
  • One month's worth of pays stubs (if you get paid weekly that's FOUR)
  • Name of your landlord and their contact information for rent verification
  • Explanation of any credit checks that have been done on you in the last 90 days
  • A clear (CLEAR) copy of your driver's license (photo ID) and Social Security Card
  • If your down payment is a gift a GIFT LETTER and supporting documentation (the giver's paper trail from their bank to you)
  • Name and contact information for your preferred home owner's insurance agent
• Be prepared to get more stuff and don't argue with the loan officer or processor - JUST GET IT

If your home purchase closes on or after December 1st, as it stands today and there is no reason to believe it is going to change, you will NOT be eligible for the tax credit. Trust me, there will be hundreds, if not thousands, of people nationwide who think they are going to qualify for the tax credit who do not get it because they started too late. Today is getting just about too late.

So what are you going to do right now? Right CALL A PROFESSIONAL, EXPERIENCED LOAN OFFICER!

Ken Cook - Nationwide Specialist - Information/Marketing - FHA Home Loans
678-439-8683

 

 

FHA streamline loans are very beneficial in many ways. A few things to keep in mind. FHA streamlines don't take that long, up to 10 days, and the FHA streamline rates are the same as regular FHA loans.

When comparing FHA streamlines to conventional refinances, depending on your credit score, the FHA rate in many cases will be much better.  Keeping this in mind, use a loan officer that is very familiar on how these types of refinances work. Just because it's easy to the naked eye, one still needs knowledge of how to make this work for you.

 

 

 

There are two types of FHA streamlines :

 

1. Streamline refinance with an appraisal : This is where you can include your closing costs within the loan amount.  The lower of the two below would be used.

• Outstanding principal balance(a) minus the applicable refund of UFMIP, plus closing costs, prepaid items to establish the escrow account and  the new UFMIP that will be charge on the refinance 

OR

• 97.75 percent of the appraised value of the property plus the new UFMIP that will be charged on the refinance..

 

*** Important - Discount points may not be included in the refinance now. If the borrower does agree to these points, the lender must verify that the borrower does have the assets to cover such points. ***

 

 

2. Streamline refinance without an appraisal : The calculation for this is the original principal balance(a) of an existing FHA mortgage minus the original UFMIP (upfront mortgage insurance) that is left over plus the new UFMIP that is added to the loan amount.

 

Key Reminder -  The outstanding principal balance(a) may include interest charged by the servicing lender when the payoff is not received on the first day of the month but may not include delinquent interest, late charges or escrow shortages.

 

 

These 2 types of refinancing are only for primary residences only. Investment properties that were originally bought as a primary residence, may only be refinanced without an appraisal to only include the outstanding principal and nothing more. Listed here : 4155.1 3.C.2.d and e

If you have a 2nd mortgage or any junior liens older than twelve months old, then this would be considered a regular refinance and could not be done as a streamline refinance. And then you would have to qualify with income and credit.

 

 

Some Key FHA streamline changes :

• Seasoning : The borrower must have made 6 months of mortgage payments at the time of application.

 

• Payment History : Greater than 12 months or less than 12 months of mortgage payments.

A. Less than 12 months - no lates allowed

B. Greater than 12 months - allowed one 30 days late in the 12 months, but no lates allowed in the last 3 months prior to the date of the new application.

 

• Net Tangible Benefit : The lender must determine a net tangible benefit to the borrower, no matter if it's with or without an appraisal. The NTB (net tangible benefit) must benefit the borrower by :

the reduction in the new mortgage payment to include taxes & homeowners

refinancing from an adjustable rate (arm) to a fixed rate

(or) reducing the term of the mortgage

Keep in mind, that the new mortgage payment must be 5 percent lower than the old payment. This is the requirement when going from a fixed rate to a fixed rate. There are different requirements when going from an arm to a fixed rate or from a fixed rate to an arm. Please read the mortgagee letter, ML 2009-32.

 

• Maximum Combined loan to value : If subordinate financing is in place, the maximum combined loan to value, which is CLTV, can't exceed 125%.

For streamlines with an appraisal, it's determined off the new appraisal.

For streamlines without an appraisal, you use the original appraised value.

 

 

*** there are a few more changes, when it comes to the FHA streamlines, yet very minor. All of these changes can be read in Mortgagee Letter 2009-32 ***

 

 

 

                    

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Experience & Knowledge at its BEST !!!

 

 

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

 

 

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc