FHA Modernization Act of 2008- What it means to you

As many of you have heard in the news- President Bush sign the bill H.R.3221 into law on July 30, 2008. This bill encompasses many separate Acts and Provisions including: The FHA Modernization Act, The Mortgage Disclosure Improvement Act, The Building American Homeownership Act, so on and so forth.

I offer for you here, some condensed information on what has actually come through and how it will impact us. This is, obviously, still in its infant stage and (as with most of our legislation) still left for interpretation but I will be sure to distinguish here what is said and what is speculation.

What I feel is the most important part of this legislation is The FHA Modernization Act of 2008, if only for the sheer bulk of changes in relation to the rest of the bill.

(Sec. 113) Raises the FHA minimum borrower contribution to 3.5% and officially prohibits the use of any down payment assistance programs. This should be a minimal impact though because the lenders had pretty much done away with this on their own.

(Sec. 115) Makes permanent the ability of HUD to insure Rehabilitation loans- so the 203k is here to stay. I am hoping, again hoping that this means that considerable thought will be put into cleaning up the processing of these loans since rehabilitation is very important to Michigan’s housing market.

(Sec. 122) Will open the Home Equity Conversion Mortgage or “Reverse Mortgage” to be used to purchase a new home. This is also a very important bit because it will allow many seniors that can not sell their current home the chance to purchase a new home using the equity of their current home to cover the payments.

(Sec. 124)Will offer a five-year pilot program to offer mortgages to borrowers that do not have traditional credit as an automated process. So, hopefully the borrowers that only have rent, utilities, insurance and these types of non-traditional credit can enjoy the same streamlines credit rating as borrowers with a normal FICO risk assessment. This, if implemented properly, should really open up FHA mortgages to a lot of new borrowers. 

Those are what I fell will have the biggest impact on our business, specifically in Michigan. Some other notable changes this legislation implements on FHA mortgages include: limiting the increases in risk-based MIP (which has skyrocketed lately for borrowers under 620), Increasing loan limits, tightening down on kickbacks and unearned fees, and introducing further criminal action against fraudulent activity.

I will be writing a separate blog for the remainder of H.R. 3221, the above is strictly about the FHA portion, so check that out too because it has the most exciting piece of news of the entire bill! I hope you find this helpful and if you would like easy access to the actual paperwork I have included a link to the Library of Congress page below.

http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.3221:

For more in-depth help or answers, go to our website: www.iconmortgagelending.com

Michigan Foreclosure Purchase- Surviving a Tough Transaction

Let’s face it, the only properties that are really selling in Michigan, well most of the country actually are foreclosures. While this market does present a unique opportunity for purchasers to end up with a steal, it is also a very tough transaction which will require a lot of patience and savvy on your part. I offer you this Foreclosure Survival Guide now, to hopefully save you some headaches once you are already in the process.

 

1. Patience Really is a Virtue. The first thing to realize is that purchasing a home is in many ways exciting and in even more ways stressful. It used to be, that we could get a purchase mortgage closed in about 2 weeks. With a foreclosure purchase, it could take 2 weeks just to get the bank (meaning the bank that owns the property) to sign a purchase agreement. In general, you should plan on about 25-45 days from start to finish. Most of this depends on the bank and how fast they are to respond.

 

2. Expect the Unexpected…huh? Dealing with a bank as the seller of a property means dealing with the countless attorneys the bank has hired to mitigate the transaction, create lengthy paperwork, and figure out how to get the best of you. To be straight with you…you could hire Columbo, McGuyver, and Chuck Norris as your loan officers and even they would stand no chance of decrypting all of the different things that will transpire during a foreclosure sale. Keep in mind that the most important question is this: Is my reward worth the effort? In most cases it will be, sometimes it will not. Ultimately it is important to keep in mind that things will arise as you move along, not at the beginning so make sure that you agree at the outset of the transaction to be willing to roll with the punches. If you are not willing to fight ‘til the finish, don’t start.

 

3. Ask Questions! Always ask these questions and ask them as early in the transaction as possible-

           To your realtor: If repairs are necessary who will pay for them? Is there anything the bank does not have to disclose about the property upfront? Can I access the property if minor repairs are needed? Do you have a relationship with the listing realtor? Are the taxes disclosed on the listing the same taxes I will be responsible for at closing? *This one often misleads buyers into extra charges at closing. What exactly will the bank cover with concessions? *Often times, the bank will not pay for pro-rated taxes or pre-paids with concessions… which is just silly, but may happen.

          To your loan officer: When will the loan actually fund? *You won’t get your keys until the bank gets their money. Have you done a foreclosure purchase before? How many? What do I need to pay at closing time? If what I need to bring to closing changes, who will be responsible for paying it? Why? When will you lock my rate, how often will you update me? *This is important because a foreclosure purchase will usually take close to or more than 30 days to close and fund. It is generally impractical to lock a rate for more than 30 days, and any good loan officer will update you when rates change and give you the option to chose when to lock while advising you based on market trends. Are you available to me outside of banking hours? Most of you are working people, and the banking system is setup to function 9-5…the same hours that most of you have to work. It is important to have contact info and know that your loan officer is available to answer your questions at any time, otherwise you will end up a very frustrated individual. It is best to test this theory right out of the gate by calling after hours and expect your loan officer to either answer the phone or call you back within an hour or two…which leads into the most important point.

4. Choose your Loan Officer Carefully: The weirdest part, I find, is that people usually are more particular about their Realtor than their Loan Officer. In reality, your Loan Officer is responsible for ten times more than your Realtor, especially in a foreclosure transaction. This is also a good time to realize that cheaper doesn’t always mean better.

 

If you want my honest opinion on how to get the best out of any loan officer here it is: Ask lots of questions upfront, make sure your Loan Officer is making as much as your Realtor, and demand excellence from those you pay good money to.

 

For more in-depth help or answers, go to our website: www.iconmortgagelending.com

Closing Costs and Mortgage Fees: Or how the bad man made me pay too much.

We have all heard horror stories about good folks being buried in surprise fees, or fees being buried so deep in paperwork that nobody could tell who was getting what. Please use this as a common sense approach to making sure you are getting a good deal on your mortgage.

 

I will start by listing the fees that all loans will be charged. These, no matter what someone tells you, will ALWAYS be charged to close a loan.

 

1.      Title Charges:

$350-450 for a closing fee. You pay this to the person that coordinates your closing and goes through the paperwork with you and tells you where to sign. If you have the choice in title company you may get a better price, but with a purchase (particularly a foreclosure purchase) expect $450.

 

$350-$? For title insurance. This is charged based on your loan amount. In general if you take your loan amt. In Thousands multiplied by 3.5, you will get the answer. So for $100,000 loan amount you figure as (100×3.5=$350).

Note: When purchasing a foreclosure, plan on paying for the bank’s title insurance as well. It is required by your lender to have title insurance for the seller, and most banks’ policy is to not pay for this themselves. Not very fair, but that’s what their attorneys came up with to get them more money.

 

2.       “The Man”:

$75-$125 Recording fee. This goes to the register of deeds to record your mortgage with your local government.

 

3.      The Lender:  

Whether you are using a broker or you go directly to a bank, there will be a few charges from whoever it is that is lending you money.

1%-3% Origination Fee. This will typically be 1%, though it may be higher depending on the amount of service your loan will require. Like with any of these fees, don’t be afraid to ask why any certain amount is being charged. Any good loan officer will have a certain amount their services are worth and will unabashedly explain their fee. The folks to watch out for are the ones willing to negotiate their origination or look at this amount as arbitrary. Demand confidence and expect the service to back it up!

$595-$795 as an Underwriting Fee- For the evil people that make a credit decision for you by picking apart the most inane details of your life.

$250-$500 as a Processing Fee- Most lenders have both a person that is your loan officer and a processor that basically sifts through all of the paperwork, making sure every tiny detail is in order.

$40-$60 for a Wire Transfer fee for the people that handle the actual dispersing of money between them and the seller or your current lender if you are refinancing.

                       

So those are the fees you should expect to be charged on any loan. Anyone telling you something different…expect them to explain it to you because chances are they are not being totally honest. Do yourself a favor and avoid any loan officer or bank that provides you a Good Faith Estimate without these charges included, because they will be included eventually! It should also go without saying (now that you are better educated) that you should avoid any loan officer or bank that does not immediately provide you with a Good Faith Estimate at all…mostly because it is required by law that they do.

 

The final math on all of the above comes to about $3000 for a $100,000 loan. This is about what you should expect for your closing costs on a purchase loan no matter where you go. A refinance is a bit cheaper, plan on about $2000-$2500. This does not include any of your “Pre-Paid charges”. Pre-Paids include you tax and insurance escrow, per diem interest, and Pro-rated taxes (on a purchase).  I will explain these in future blogs, but none of these are determined by your loan officer and are non-negotiable.

 

For more in-depth help or answers, go to our website: www.iconmortgagelending.com

Closing Costs: Pre-Paid Items

I have written a few different blogs about closing costs and how to understand where your precious pennies go. This time I am focusing on one of the most misunderstood sections of the Good Faith Estimate (GFE)- The Pre-Paid Items. Don’t worry “pre-paid” simply means paid at the closing, whether paid for by you or by the seller as a part of the seller’s concessions, but nothing is due prior to closing.

 

1. Per Diem Interest: A good way to spot a phony loan officer is one that only uses a day or two of per diem on their GFE because it is an easy way to shave off a couple hundred bucks from your bottom line and easily explainable as a last minute change. So what’s this for anyways? It’s your first mortgage payment (but just the interest portion)- calculated from the day of your closing until the end of the month. You won’t have a payment due for the next month. The interest collects through the month and your first principle and interest payment (P&I) is due on the first day of the following month, i.e. you close in August and your first full payment is due the first of October.
2. Escrow Collection: With almost all loans an escrow account is required. Mainly because a tax foreclosure threatens your lender’s ability to ensure you repay them. The amount collected will change slightly depending on the time of year you close, but in general you should plan on 3 months of your Home Owner’s insurance payments and 8 months of your Property Tax payments to be collected at closing. These reserves, while painful at closing, will end up making you very happy in the long run though. When your taxes go up- as they inevitably do- this will cushion the blow to your monthly payment and make the hike a more steady increase and easier to deal with.
3. Pro-Rated Taxes: Oh, the agony! Nothing causes headaches the way pro-rated taxes do. What exactly are they? It’s your tax bills…and yes…it is YOUR tax bills. You see, in most places in Michigan you get two bills for Property Taxes. One for winter and one for summer. In the vast majority of places, you pay these taxes in advance meaning you are paying in July for the tax bill between July of that year and July of next year; same for the winter bill Dec.-Dec. If you buy a house, let’s say in August; the seller has already paid for the taxes through July of next year yet will only own the home for one month of that bill. That means you have to reimburse them for the time that you will own the home- August through July for the summer bill and August through December for the winter bill.

Seems Simple, why all the headaches?:Well, with all of the foreclosure properties being bought now, there is rarely upfront truth about what the Property Taxes for your purchase are. Most times the MLS listing will reflect what the Property Taxes were before the bank took possession. When a bank owns a property they are unable to claim a Homestead Exemption like you and I. Think of the homestead exemption as a discount on taxes for you Primary Residence. The bank is not a resident, so they pay more. This also means that when you buy it from them, you pay more. Ask upfront what the non-homestead tax amount is. This will help eliminate the possibility of a BIG surprise come closing time.

 

 For more in-depth help or answers, go to our website:

 

www.iconmortgagelending.com

 

The Icon Advantage 100: Our Bread and Butter

Come find out how Icon Mortgage Lending empowers Michigan Home Buyers and let us give YOU the ultimate feeling of buying power. We know how important the bottom line is to you. You want to know upfront how much money is required to close on your new home. At Icon, we give YOU the ability to eliminate this worry all together. YOU have the power to chose to pay your costs at closing or to finance them. We think you should keep your money where it belongs- in YOUR POCKET! As always, we give our clients a full look at the numbers before you even start your shopping.

 

Michigan Foreclosure Purchase has a new energy. What kills more loans than anything else when trying to buy a foreclosure property? Minor repairs your lender requires before you can close. Other lenders will tell you to go in and fix these if you want to close. Repair a house you don’t even know will be yours or not??? Don’t listen to them! We can get you the money to make these repairs as an escrow without holding up the closing, or the funding. Now that is true BUYING POWER!

 

Must come at a huge cost, right? No. These loans average $57 cheaper per month than an FHA loan. Icon Mortgage Lending has slowly positioned itself atop the Michigan Mortgage Origination market by focusing on these rural development loans for the last four years, long before they were trendy. That’s why we have such a great relationship with our lenders, because we originate successful government backed loans. It’s also why you should CALL US NOW toll free: 866-342-5966 or local: 810-953-4266 to see how we can help you.

 

For more in-depth help or answers, go to our website:

 www.iconmortgagelending.com

First Time Home Buyers: The Credit Conversation and a Confidence Conundrum

Undoubtedly, one of the first concerns of a first time buyer is their credit. What I see in a lot of first timers is merely a confidence issue. Like I said, this starts with credit but permeates every aspect of the loan process. Much like any good team, confidence in each other is really the fuel that fires success. I have this conversation with all of my first time buyers. If you don’t believe in me, don’t use me. The same way that if I don’t believe in you, I won’t work for you. Especially in this foreclosure driven market, you can’t go half-hearted into a trying transaction. What makes so many first time buyers lack confidence in their credit?

 

1. They have only had a few opportunities to get credit. Most potential first time home buyers that don’t get approved, simply have never had any credit. An old collection from Sprint, will not get it done. However, if you have an auto loan or a credit card (preferably both) we are in business. I know it may not seem like much, but it works. Understand that you are at a disadvantage simply because you have had less time, but if you have repaid a debt on time, be confident that you are building credit up…not letting it slip away. If you have been denied in the past, it is likely a lack of other references. This is not as bad when applying for a mortgage as it is when applying for a credit card.
2. Apply now, Free Money….with crippling fees. When young people get young people credit, it normally comes with high annual fees, application fees, fee fees. This normally leads to a charge off and hit to your score. The main thing is- did you ever get credit after that? The more recent the credit, the more it counts. If you have a blemish, don’t freak out. If you have gotten any new credit after the blemish, a good payment history on the new account will wash out and hopefully overcome the blemish.
3. So close yet, so far. So what if you are close but can’t seem to get approved?  If you are within a few points of being able to get a loan, you may need to just wait a month until some of the inquiries on your credit cease to affect you so heavily. When you apply for a loan, someone pulls your credit. If you are young and trying to obtain credit over a few months, then you have had several people pull your credit, probably multiple times for each time you actually applied for credit. This is the type of thing that can take a 620 FICO (easily qualified) to a 599 FICO (extremely hard to qualify). See, all these applications for credit look to a bank as if you are looking to overextend yourself. You are a much bigger risk if you are applying for a lot of credit very quickly, whether you obtain it or not. However, if you wait a month or two to calm this effect you should be fine.

 

Any final words? The best thing to do is to seek a good loan officer that that can guide you through this process and who is willing to work with you to get you into a home or into a position to buy a home.

For more in-depth help or answers, go to our website:

www.iconmortgagelending.com

Michigan Foreclosure Purchase: The Time Table to the Transaction

We have talked about a lot of different aspects about buying a foreclosure property. I realize now that I have yet to give you the most important overview people want- a timeline expectation. Let me remedy that now by explaining what needs to be done and what the reasonable expectation should be.

You found your dream home, and you made an offer, now what? Well this is the second hardest time of the entire transaction- waiting to hear from the bank. This can take anywhere from a day to a week or two all depending on what bank owns the property. The best thing to do during this time is to talk to your loan officer as much as possible. Make sure you ask to actually submit your loan to the underwriter, rather than rely on a pre-approval. This is precious time to work on clearing conditions that most loan officers will squander if you let them.

Your offer was accepted, what still needs to be done? Assuming you used a good loan officer, underwriting is mostly done. There are still many things that can’t be done until your offer has been accepted. The first thing is to get an inspection by a professional that can assess the structural integrity. This should take about 2-5 days to complete.

Once this is done and you are happy with the results the remainder of tasks should be done during the same period of time: the appraisal, title work, any water tests or pest inspections; and any conditions that come from an underwriter after viewing these items. This should take 10-15 days for a good loan officer, or 16-25 for a mediocre one… anymore than that it might be time to switch.

When can we close, when can we close?!?  So, you’ll notice that you are about 20-25 days in now and a closing seems nowhere in sight. This is the most difficult part… fighting the anticipation and waiting to close. In fact, after you get a clear to close, there is still much work to be done and it is important to let it be done. You have to get a time slot to close, your lender has to get the title company a closing package with all of the documents, and after they get it, the bank will need two days to review the paperwork. Then your loan officer will need a day or two to get a HUD-1 Settlement Statement and review it. I know, at this point you would think everything would be correct, but I always end up yelling at someone right about this point in the transaction over some silly fee that was not disclosed before and working to get it waived. Be patient and plan on 5-7 days after you are cleared to close before you can close.

Well, at least that is finally it. You are right…almost. It is important to realize that when purchasing a foreclosure, you are dealing not with single person trying to sell the home to you, but with a litany of bank personnel trying to protect what little investment they have left. So even after the closing, the bank will most likely want another day to review the final documents. That means, that you will be closed, pumped and ready to move but until the money has been delivered you won’t own the property.

All said and done, a Michigan Foreclosure Purchase can take anywhere from 20-45 days from start to finish. Be willing to roll with the punches and if you are very impatient… make sure you find a great loan officer! 

For more in-depth help or answers, go to our website:

 www.iconmortgagelending.com

Michigan Real Estate Purchase: The Deadly Repair Escrow

Bum Bum Buummm.  Enter scary music and cold sweats, you just fell in love with a home that has a broken furnace and a big orange stain where a bathtub used to be. Chances are your financing is going to resemble that orange gunk on the tile right?

 

There are options. With conventional financing, yes you will be sunk. The bank will only want a safe asset to secure. There are some programs that allow flexibility here like HomePossible, but it is very impractical.

 

The good news is, that with the foreclosure boom, came the need to repair existing homes as production of new homes slowed to a crawl. Government financing fills the void of sensible repair financing. Actually it filled a long time ago before the housing boom started and home construction grew out of control.

 

With FHA there is a possibility for a repair escrow; however the repairs must be minimal. The better option is the 203k loan that will allow a closing to take place like normal but provide you with money for all sorts of repairs including essential appliances.

 

If you are lucky enough to find a good loan officer that knows how to work the USDA repair options, they are far superior. You will need to find a property in an eligible area, but it is a very easy process on the borrower.

 

No matter what, be prepared for a little extra time and effort by both you and your purchase team. Always shop around for your repair quotes and check the reputation of any contractors with resources like the Better Business Bureau before making any decision.

 

For more in-depth answers or help go to our website:

www.iconmortgagelending.com

Michigan Real Estate Purchase: Credit Scores and What to Think about Your Score

I know it is hard to understand exactly what your credit score is, how it is calculated, and especially how it affects you when you want to buy a home. Here is a general, and easy to understand guide to your score in reference to obtaining a mortgage.

 

Below 500: Well I can’t sugar coat it, you are in pretty deep. This is where it may be a good option to seek consultation from a good attorney or a non-profit credit repair service (emphasis on non-profit).

 

501-560: You score is pretty low, but not beyond repair. You will not be able to qualify for a mortgage while your score is in this range. However, if you struggle through some high interest credit cards, maybe a secured card or two, you can bring it up.

 

561-619: You can probably obtain a mortgage, but it will be a very trying experience. You may be better served by simply waiting a month or two, trying to pay down some credit card balances, whatever you can do to optimize your score.

 

620-680: It may still seem just average, but in mortgage terms life is much peachier about the 620 mark. There are some things you won’t be able to do. You may find it difficult to purchase with no money down. But as long as there isn’t something odd about your application keeping you from obtaining a government backed loan, you are golden.

 

680 and up: Yes I realize that your score can get much higher from a 680, but for mortgage purposes there is really not much difference once you are above a 680. Once you get over 720 you may get a very slight rate discount, but nothing noticeable. Today is November 18, 2008 and this breakdown may change as the lending business tightens even more but for now, that’s what it is.

 

I hope this helps, and good luck on all of your financial endeavors.

 

For more in-depth answers or help go to our website:

www.iconmortgagelending.com

Michigan Foreclosure Purchase: What can the selling banks do or not do?

I have close a lot of foreclosure purchases over the last two years and have ran into some very odd demands from the selling banks. I would like to provide you with some of this information now on what these banks can and can not do that might help you in your own pursuit.

They can demand that you provide them with a pre-approval letter.
They can not demand that you obtain a pre-approval letter from any specific lender or broker. The doesn’t mean you won’t be told otherwise, but RESPA prohibits a seller, real estate agent, insurance agent, or anyone else from demanding an individual use any specific lender.

They can demand that your lender’s pre-approval letter states that you are credit worthy.
They can not demand to have your credit report or credit scores be provided to them. The Gramm-Leach-Bliley Act protects your privacy from any entity involved in the transaction that is not your financial service provider. You can give written permission for the selling bank to see these, but I certainly would advise against it.

They can write purchase agreement addendums that supersede any original terms of the purchase agreement you signed with your Realtor and submitted to them.
They can not hold you to any terms that you do not agree to in writing. Though you may be excited to hear that your offer was accepted, I urge you to sit down with our Realtor and Loan Officer before signing the addendums that come back from the bank.

They can refuse to pay for a title insurance policy and pass the cost on to you.
They can not force any of their closing costs on you without disclosure in the purchase agreement. Seems like more and more we find extra little charges being slipped into transactions. If you didn’t agree to pay it, you don’t have to- just be sure to review your HUD-1 Statement with your loan officer.

I hope this helps some of you out. I am sure more will pop up in the future. If you have any requests for info, just email me matt@iconmortgagelending.com or go to our website: www.iconmortgagelending.com

Michigan Real Estate Purchase: Credit, or Reaching for Perfection

I know, seems so simple. Pay your bills on time, don’t claim bankruptcy, but there is a lot more to it than that. So, what goes into a good credit score?

 

Good Payment History: Obviously.

 

Length of Payment History: One of the distinct disadvantages of a younger person.

 

Balance to Limit Ratio: For your credit cards it is essential to keep the balance below 50 percent. If you really want to have great credit, 30% is even better. The dollar amount is not important, it’s the percentage.

 

Diversity of Accounts: Mortages, car loans, installment loans, student loans, credit cards, and charge cards they all help to show the variety of debt that you can properly manage.

 

Manageable Inquiries: No more than one per month. This will show that you are not trying to obtain new debt at a rate faster than you can handle.

 

Solely Owned Debt: Fairly new to the credit factor, but it is essential to have debt you obtained on your own rather than cosigned accounts.

 

Take all of these into consideration when trying to perfect your credit and make sure that you can make the payment before obtaining any new debt.

Michigan Real Estate Purchase: Assembling Your Purchase Team

If you are going to buy a home in Michigan, especially in this foreclosure driven market, nothing is more important than the team of professionals you choose to represent you. Consider these points in your search.

 

Rome wasn’t built in a day. Do you not rush into any situation. Take at least a week to look around for reputable companies to deal with. Talk to friends and family, do some research on a few companies you target, and never consider only one source for information.

 

Your loan officer is the first step and most important step. This person will be digging through all of your most personal documents, and trust is necessary. It should probably be an actual person that you actually meet and actually believe in.

 

The biggest mistake is to judge just by numbers and promises, which are easily fabricated.  Judge their willingness to provide written estimates of their services. Sit back, and listen…are they mentioning a Good Faith Estimate? If they don’t chances are they want to tell you about how great everything will be without any type of proof to their promises. If it is not offered…walk.

 

What about the reputation of the company itself? Do they keep a neat office, offer you a warm environment, are they licensed in any way or any formal training? I always look for a decent website too. I figure if they can’t at least be found on the Internet…yikes.

 

Now for a Realtor. I think one important thing to know is how Realtor’s get paid. If you find a house you like and call the Realtor that has listed that home for sale- that Realtor works for the seller. If it is a foreclosure property, that Realtor works for the bank and gets paid from the bank. So…I guess just consider that in your decision.

 

So what makes a good Realtor? Some questions to ask yourself are: Are they listening more or talking more. You want someone to find your dream home not sell you on one. Are they pushing you to sign a contract to work with only them? It’s only my opinion, but good Realtors do not do this. Do they have the resources you need? Can they email you properties rather than having you drive to their office to discuss each one.

 

Your loan officer might recommend someone, but I would take their person and interview them along with others. Much like when a Realtor recommends a lender, you never know exactly why they are referring business to anyone and it may not be so noble. It may be though, so consider them but put them through the same process as anyone.

 

A good insurance agent and you’re set. Again, interview the agent just like you are interviewing them for when something goes wrong. Like with all of these service providers, it is easy to look impressive when things are peachy. Try to find out how they are when things aren’t.

 

Again, be weary of referrals. And again, don’t do the “bottom line” judgement. With all of these services, its much more about the value in the service than just the price of the service. I mean, you can get your hair cut at a barber college for a third of the price, but people who get cut there typically spend a lot of time being lonely.

For more in-depth information visit our website:

www.iconmortgagelending.com

 

Michigan Real Estate Purchase: First Time Home Buyer Tax Credit

There is a whole bunch of confusion concerning this new First Time Home Buyer Tax Credit and I am looking to simplify things for you like I have been trying to do with all of my blogs.

 

I think that the most important thing to realize here is that it is not free money! It is not. It is in effect a no-interest loan from the government. It is to be repaid over a 15 year period. You won’t be able to default because it will be taken out of your income tax refund of added to your charge every year.

 

So, I shouldn’t take it? Of course you should take it! If you aren’t sure why you should, call up Citibank and try to get a 0% loan from them with a 15-year term. Unless you are complexly set credit and savings wise…which I think it pretty much NOBODY in Michigan, you should take advantage of this.

 

What you have to be careful of is blowing this money on useless stuff and then ending up owing it back to government.

 

There are many good ways to use this money, here are a few examples:

 

Pay down the principle balance of your mortgage. In fact, if you get $7500 and put it directly on your principle balance of a $100,000 mortgage, that one payment will cut 4 years and $60,000 in interest payments right off of your mortgage! Even when you repay the loan, it will still end in an overall savings of $46,000.

 

Pay down high interest credit cards. In effect, this tax credit allows you to do a completely risk free debt consolidation loan. Pay that high credit card loan off, use the boost in credit score to get a better credit card at a lower interest rate, let the paid off card sit there open with no balance and enjoy a great credit score for quite some time and save thousand on future mortgages, credit cards, car insurance…you name it.

 

Invest it. Ok, so maybe the stock market isn’t so hot now, but if you can find something safe that it sure to yield, it is a win-win for you my friend. Heck, even a high yielding savings account or a 2-year CD will make you great money.

 

Take advantage now, because the tax credit goes away if you close on your new home after July 1, 2009. Happy Home Hunting to you all!

 

For more in-depth help, go to our website:

www.iconmortgagelending.com

Michigan First Time Home Buyer: How to Prepare.

I talk to hundreds of first time buyers year after year and there are hundreds that don’t qualify by just a bit. They are so close but can’t get it done. I explain to them how close they are and offer direct advice on how just a month or two of fixing their issues will get them where they want.

I go through the trouble to give them the advice they need knowing full well that they will not follow up. Whether it is the lack of confidence to overcome or just plain laziness, so many of them give up and never come back.

 

So if you are just dipping your feet in the water and thinking about buying in the near future, let this help you prepare now to never have to feel the sting of denial.

 

Your Income: I know a lot of you work jobs where you get tips, or you are just now getting raises, or are new on the job. If you are in any type of training period you will not be able to get a mortgage, but don’t worry as soon are that’s done, you are qualified. If you have gotten tips and never claimed much of them, it is essential that you spend 6 months claiming even more than you are actually earning. Even though it will mean less money in your pocket during this time, it will do wonders to raise the 2-year average of you income and increase your ability to qualify.

 

Your Credit: If you don’t have any, get some immediately. I know you may think that not having any debt may be good, but you are wrong. The bank needs something to judge you on and credit cards are essential. They show your ability to repay a mortgage while not adding a lot of monthly payments to your debt ratio. If you have a boyfriend/girlfriend, mom/dad, sister/brother that are willing to add you on their current credit card accounts do so immediately. Try to get one on your own too. This is the type of thing that if your score is slightly low just a month of obtaining credit can make the difference of qualifying or not.

 

Other factors: If you are on the edge of qualifying or not, the best thing you can do is to add any type of factors that can compensate for the areas you lack. If you pay rent in cash, get a checking account and start writing checks. Showing 6 rent payments made on time will do wonders at improving your qualifications, but cash just doesn’t count. Money orders may work if you pay to an apartment complex but if you are renting a house, only checks will do it.

 

Start saving money. People always feel like it does not count, but even $500 will definitely increase your chances of qualifying.

 

Good Luck to you all.

 

For more in-depth information, go to our website:

 

www.iconmortgagelending.com

Michigan Mortgages: Hope for Homeowners? This time it just may be true.

Call me a softy and a nerd. It’s hard to believe, but yes I was one of the few that sat and watched Steve Preston’s address to the National Press Club this past Wednesday. Many of you may not know who that is, but he is one of the most powerful people in the nation right now because he is the Secretary of the U.S Department of Housing and Urban Development (HUD) and he is trying to create hope for thousands of Americans that are currently facing foreclosure, or are soon to be facing foreclosure.

 

Unfortunately, as powerful as he may be, he is still all but hog tied by private industry and private industry is not budging. How bad is it? It was said that in the first two weeks of October 42 people applied for the Hope for Homeowners and all 42 were denied. First of all…42? Nationwide 42??? That’s a joke. A joke that Steve Preston did not find funny.

 

Why has it failed? Simple, the private markets are already strapped for cash and not looking to spend more. FHA’s flaw is that it cannot move without lenders to make the loan that they will insure. Lender participation has been non-existent and has crippled the legislation set forth to help “Main Street.”

 

So, what’s going to be done? There are two important things to remember. FHA will be raising the LTV cram-down from 90% to 96.5%. FHA will be providing up front payment to second liens holders for immediate release of these liens. Both of these actions should provide enough incentive for current lien holders to chose negotiation over foreclosure.

 

Debt ratios are normally strictly 31% for your housing payment and 43% for your total debt with FHA. The Hope for Homeowners program will open up to 38% and 50% for those that can get down to 90%, again adding more qualifying applicants to the pool.

 

They also will open the program to longer loan terms. If your debt ratios don’t quite qualify at a 30 year term, you can also use a 40 year term to qualify. I suspect this is something that will come to the normal FHA loan soon. 40 and 50 year terms have successfully brought homeownership to thousands of Europeans over the past three decades and it’s very long overdue in America.

 

Lender participation will still dictate the effectiveness of FHA’s proposed help, but hearing these changes delivered from a very poised and positive Steve Preston finally brought me hope for the Hope for Homeowners program.

 

At least now we will see once and for all which is the proper method for dealing with this crisis- government intervention or capitalizing private market. Let me assure you, this is the final straw. If banks do not take to these changes and start making new loans….your tax dollars for the “bailout” will have been COMPLETELY WASTED. These banks have made billions, the CEOs have made millions at least one of them needs to step up now and join the club in trying to actually help people…I’m looking at you Chase.

 

For more in-depth help, visit our website:

 

www.iconmortgagelending.com

Michigan Real Estate Purchase: Don’t Get Taken Advantage Of.

It’s so odd to me that so many people claim to have been mistreated by their mortgage lender. There is a litany of paperwork we are required to provide to you when you apply. I am sure there were plenty of less than reputable loan officers out there that didn’t care to go through the numbers, but an even slightly educated borrower can’t be taken advantage of. So, here’s how to become an educated borrower.

 

The Good Faith Estimate. Make sure you get one, make sure you get one from several lenders, make sure you compare them row by row and not the bottom line. Some lenders may trick you by not providing certain numbers that will pop up later (read my other blogs), make sure you don’t use anyone that leaves numbers off.

 

The Borrower’s Bill of Rights. Make sure you get one, make sure you understand it. You can get it right here: Borrower’s Bill of Rights, but don’t trust anyone that doesn’t give you one- you know since it’s required by law and all. They are easily understandable, just actually read it.

 

You have the right to shop around, you have the right to know how much the lender is making. This doesn’t just mean the fees, but how much they are making from the interest rate. Also, most people think only a broker makes money from the interest rate…and they are wrong. Banks make yield spread too, even when they fund the loan, so make sure to get IN WRITING how much they are making.

 

The HUD-1 Settlement Statement. This has all of the details of your loan, save the interest rate. All fees will be lined up for you and this is the FINAL document to calculate these costs. A major mistake most borrowers make is to wait until closing to see this. You have the right to see this before you sit down to close. Demand your loan officer provide it a day before closing.

 

Most importantly, don’t accept the run around. There are a million and one excuses a lender can use to get around providing these documents in a timely manner. Unfortunately for them, you now know that they are required to do so.

 

Simply don’t accept it. Look at more than the bottom line. Look at the integrity of the individual you are working with. If you can have faith in that person, you should do fine.

 

For More Information Go To Our Website:

www.iconmortgagelending.com

Michigan Real Estate Purchase: Pro-Rated Taxes.

Pro-Rated Taxes: Oh, the agony! Nothing causes headaches the way pro-rated taxes do. What exactly are they? It’s your tax bill…and yes…it is YOUR tax bill. In most places in Michigan you get two bills for Property Taxes. One for winter and one for summer. In the vast majority of places, you pay these taxes in advance meaning you are paying in July for the tax bill between July of that year and July of next year; same for the winter bill Dec.-Dec. If you buy a house, let’s say in August, the seller has already paid for the taxes through July of next year. Even though they have paid through July, they will only own the home for one month covered under that bill and you will own it for the remainder of time covered by that bill. You will be required to reimburse them for the time that you will own the home- August through July for the summer bill and August through December for the winter bill.

 

How to calculate what you will have to pay. It’s no secret; you can calculate this yourself to check it. Take your closing date. Count the number of days from that day until December 1^st. call this (a). Count the number of days from the closing day until July 1^st. call this (b).

Now take your winter tax bill and divide by 365, take your summer tax bill and divide by 365. Then you have the daily amount of each tax bill. Multiply the days you have by the daily amount and you can come up with the two amounts. Add them together and this is the amount of pro-rated taxes you will have to pay.

 

EXAMPLE: You close January 15th. So you have 320 days until Dec. 1 and 166 days until July 1^st.

The tax bills are winter: $565 divided by 365=$1.55 and summer: $1786 divided by 365=$4.89

320 days (a) x $1.55 = $496 and 166 days (b) x $4.89 = $811.74

$496+$811.74 = $1307.74 is your pro-rated tax bill.

 

Seems simple, why all the headaches? Well, with all of the foreclosure properties being bought now, there is rarely upfront truth about what the Property Taxes for your purchase are. Most times the MLS listing will reflect what the Property Taxes were before the bank took possession. When a bank owns a property they are unable to claim a Homestead Exemption like you and I. Think of the homestead exemption as a discount on taxes for you Primary Residence. The bank is not a resident, so they pay more. This also means that when you buy it from them, you pay more. Ask your Realtor upfront what the non-homestead tax amount is. This will help eliminate the possibility of a BIG surprise come closing time.

 

If you are still uneasy about whether the tax information provided is accurate or not, call the county tax assessor about the true tax amount you will be paying at closing time. Google: “county name” tax assessor to find the correct phone number.

 

For more information, visit our website:

www.iconmortgagelending.com or call us at 810-953-4266

Michigan Real Estate Purchase: Escrow Account

What is it? An escrow account is basically a mandatory savings account to pay your taxes and insurance from. Every month you will pay your mortgage payment and a portion of that payment will go to the mortgage and a portion will go to the escrow account. When your tax and insurance bills come due, they will be paid from your escrow account company automatically. You will never see a tax or insurance bill, yet they will get paid.

 

Why do you need it? With almost all loans an escrow account is required by the lender you are getting your loan from. The same as with your mortgage payment, if you do not pay your taxes, you will face foreclosure. Instead of being foreclosed on by your lender, you will be foreclosed on by Uncle Same.  The possibility of tax foreclosure threatens your lender’s ability to ensure you repay them. Hence, they require that you have an escrow account so that you can’t simply stop paying your taxes.

 

How will this affect your closing? You will need to fund the escrow account with enough money to make not only the next upcoming payment, but enough to make sure you never get behind on future payments. The amount collected will change slightly depending on the time of year you close, but in general you should plan on 3 months of your monthly Home Owner’s insurance payments and 8 months of your monthly Property Tax payments to be collected at closing.

 

These reserves, while painful at closing, will end up making you very happy in the long run though. When your taxes go up- as they inevitably do- this will cushion the blow to your monthly payment and make the hike a more steady increase and easier to deal with.

 

For more information, go to our website:

www.iconmortgagelending.com or call us at 810-953-4266

Michigan Real Estate Purchase: Choosing a Loan Officer

Proceed with Caution: The weirdest part of talking to people about their loan experiences is that people usually are more particular about their Realtor than their Loan Officer. In reality, your Loan Officer is responsible for ten times more than your Realtor, especially in a foreclosure transaction.

 

They will be digging through every aspect of your life; they are exposed to some of your most sensitive information. They are responsible for organizing the entire transaction from open until close. Most importantly, this is the person that represents you, and your application to the powers that be, so you need to believe in them to portray your strengths and represent you well.

 

This is also a good time to realize that cheaper rarely means better. A good bit of advice I would give anyone…choose wisely, make sure your Loan Officer is making as much as your Realtor, and demand excellence.

 

Interview with a Vampire.  No, it’s not that bad. Actually the vast majority of bad loan officers and bad lenders are out of business or are being sued, but you need to do a thorough interview with anyone you may hire to represent you. Always ask the following questions.

 

How long have you been in business?

How many loans do you close each month?

Have you done a foreclosure purchase before? How many?

What type of loan is your specialty? This should be one or two, not many.

Where do you get your clients from? Someone that gets referrals from Realtors and other professionals, may be better than someone that just answers the phone at a bank…just and opinion.

How do you get paid? How much will you get paid? Someone that dances around this…whew you’d be hard pressed to convince me to use them for anything.

What do I need to pay at closing time?

If what I need to bring to closing changes, who will be responsible for paying it? Why?

When will you lock my rate, how often will you update me? *This is important because a foreclosure purchase will usually take close to or more than 30 days to close and fund. It is generally impractical to lock a rate for more than 30 days, and any good loan officer will update you when rates change and give you the option to chose when to lock while advising you based on market trends.

Are you available to me outside of banking hours? Most of you are working people, and the banking system is setup during to function 9-5. It is important to have contact info and know that your loan officer is available to answer your questions at any time, otherwise you will end up a very frustrated individual. It is best to test this theory right out of the gate by calling after hours and expect your loan officer to either answer the phone or call you back within an hour or two.

 

The final word is to keep a positive attitude, recognize that most likely the effort is worth the reward, demand excellence from those you pay and pay those you demand excellence from.

 

For more information, go to our website or call us today:

www.iconmortgagelending.com or 810-953-4266

Michigan Realtors: Why explore Rural Development loans?

You’ve probably met me face to face and don’t even realize it. If not, you’ve certainly seen my cards pass through your office in the last six years. I’m the guy that was in your office with a smile, a free pen, and a Rural Development (RD) loan flyer. I’m here again to tell you why you need to find yourself a great RD loan officer to refer client to.

 

RD eliminates the most common deal killer. “Cash to close” kills more deals than anything, I am certain of that. Whether it kills deals in process or stops potential buyers from proceeding, the money a buyer has to bring to the closing table is the biggest obstacle in Michigan. RD eliminates this by allowing your borrowers to finance closing costs even above normal LTV guidelines. We don’t need concessions to achieve stress-free financing for buyers.

RD has no down payment requirements. RD sees other ways to protect their own investment, but for most Michigan borrowers these requirements are not an issue. The last 100% financing available is Rural Development.

RD is set up for a first time home buyer. First time buyers ARE our market right now. They control our business, or at least mine. RD truly is for first timers. RD understands limited credit history- something FHA and Conforming just don’t seem to get. Fannie loves someone overextended to the max that has never really paid a bill. TONS of credit elicits approvals with other financing. Why do we have a crisis again? Oh, yeah

RD would rather see someone that isn’t in a position of failure. Buyers that can’t seem to qualify elsewhere because of this, but want to own a home…they will fit with RD

RD is available in far more areas than you realize. I know it seems weird but look at Fenton. Fenton is a huge town with far more “metropolitan” area than Flint, yet everything in the 48430 qualifies. Go Fig!

RD has the absolute best interest rates.  I’ve had Realtors tell my buyers that I could not deliver on the rate I quoted; only to have the buyer laugh all the way to the bank. I’ve had to show Realtors how I could deliver and end up with undying allegiance.

This is about the buyers, thought. FHA, Fannie, Freddie, MSHDA are like jokes next to RD. Granted, RD only finances certain geographical areas, but they dominate the areas they finance.

The final word. Try it once and you won’t go back. Non-believers become believers. Find yourself a good RD loan officer and try them out. Your clients deserve to know what a great deal they can get, and MORE IMPORTANTLY those buyers that got turned down by Dort Federal, Citizens, and Mclair deserve to have a chance at financing that doesn’t rely on their archaic guidelines

For more information: Call Today or visit our website:

810-953-4266 or www.iconmortgagelending.com

Michigan Realtors: Writing a Great PA; or, Being your LO’s Best Friend

 

Occasionally, frustrations build as a file in processing begins to struggle a bit and the question may occur to you, “Why are these things arising now, when they seem like they should have been settled so long ago?” And as a good professional it will probably lead you to the next question, “What can I do to help prevent this with my future transactions?”

 

I would like to examine a few simple things that you as a Realtor can do to become your Loan Officer’s best friend and subsequently write a Purchase Agreement that will be well appreciated by all involved.

 

Timeline. Obviously it will always be frustrating when files run into turn-time troubles and it begins to seem like it may never close. You end up feeling like you have heard the same response from the LO a dozen times, and you just want to know what to do.

 

We can prevent a lot of these headaches by having realistic and achievable expectations at the time the PA is set in motion. Obviously, this is mainly reliant on the communication with the LO, but in general you are going to need between 30-40 days to close a loan. It would, however, be extremely unrealistic to just blindly expect 30 days as an appropriate time frame on each and every PA. If you make adjustments for the specific factors involved in each individual file, you will greatly improve the chances of setting a proper expectation for your client. This may mean more work up front, but way less work down the road when it is more important.

 

Your clock starts ticking when the buyer signs the PA but for a Loan Officer we are very limited in what we can do until we receive the seller signed PA. For instance, I NEVER order an appraisal until there is a written agreement allowing the client to purchase the home. Doing otherwise is asking for trouble, no matter what someone may have told someone about how this certain bank responds quickly or how the listing agent said that they have all of the short sale terms are already agreed upon, or how you have a “verbal agreement”. That means nothing until the signed PA is in my hand. So, if you write a PA dated July 1^st to close in 30 days and the bank takes until July 15^th to send it back approved, we will immediately be asking for a 15 day extension and the frustrations will begin. Simply compensate for this at the beginning if you are submitting an offer to a notoriously slow responding bank, or if it is a short sale, or any other complications you may think of. I personally put right on my Approval Letter that we need 30 days for underwriting from the day that a seller signed PA is delivered to our office. All loan officers may not do this but I can assure you that this is the case. No lender will be able to do anything other than a basic underwriting until they have a signed agreement between both parties.

 

Inspection Reports. I know there are a lot of people that are running into this for the first time now, but Lenders are scrutinizing the relationship between LO and Appraiser very carefully now at the behest of the Federal Government. A Home Inspection performed by a third party adds another layer of protection for the Lender to ensure that the Appraiser is not looking the other way on Property Standards in order to continue a relationship with the LO. Since you as a Realtor are typically present for the inspection or at least more aware of the scheduling, it is essential to communicate this with the LO.

 

If you really want to be “super agent” you can be present for the inspection and communicate to the inspector and client what should be for the buyer’s information only and what should be included in the inspection report. Things that are not even an issue to the HUD Handbook or normal property standards WILL become issues if an inspector flags them. A perfect example: Inspector, in trying to provide good service, writes in his/her report that the buyer should probably have a radon test. The buyer says, yeah that’s useful; we will do it after we close but before we move. NOPE! The buyer will now have to do it before they close. It may seem like this should be the buyer’s prerogative, but if a Lender sees that an Inspector flagged a radon test as needed…it WILL be needed. Now just tack that on to your turn times and before you know it it’s time for an argument over PA extensions and $100 Per Diem.

 

It is also important to discuss with the buyer whether or not they are actually going to have an inspection or not and to properly mark the PA. If you mark that the buyer will be having an inspection and they do not, then a couple of weeks into the transaction the Lender will be asking for a copy of the non-existent inspection and will require that the PA be amended to state that the buyer has waived their right to an inspection. This is just add another few days in tracking down the seller to sign the addendum, faxing it back to the LO…and so on. It may not seem like much, but that is still another two days to tack on to an already intense process.

 

 

Property Standards. We know that you are not an Appraiser, or an Inspector, but there are some obvious things that we all realize are going to be an issue when financing a home. Communicating these to your LO will not only make their day, but it will help them get you money faster.

 

A few of these things that I find astonishing that I have to wait until the appraisal comes back to find out about include: broken windows, busted locks, holes in walls/ceiling, unfinished flooring, missing toilets/sinks, broken plumbing, rusted out furnaces, missing siding on house/garage, missing handrails on stairways and a multitude of other visually obvious items. I’ll address these things two paragraphs below, but for now let’s look at the essentials in the not below.

 

***Special Note*** I hear this phrase all the time: “The bank will only accept Conventional Financing because (insert problem here) is wrong with the home.” I, again, understand that you are not Lenders and do not know the guidelines but let me assure  you, as a Lender that does mostly Rural Development and Conventional loans through Fannie and Freddie, that most problems with a Government loan are also true for a Conventional loan. So please stop the argument over the fact that you can close a home with no running water with a conventional offer. Cash offer yes, but any…repeat ANY financing will need the home to have the bare essentials. Government loans are in fact more particular, but most of the differences are easily fixable problems.

 

That’s why I just forewarn you now- if you want to keep your Asset Managers happy- alert them to the fact that the basic utilities will have to be working if they expect to have financing on the property. It does none of us any good to argue for three weeks over how to get the power on in the property or who has to pay for it. If you want to take a financing offer for more money, you will HAVE to provide working utilities for an inspection of any sort. If you are a selling agent, eliminate the headache and note it right in the purchase agreement that the buyer will need these on to agree to purchase the property. Again, I personally put this right in my Approval Letter, but either way it will need to be done!

 

Now, as for the little things, I mainly do RD financing so it is much easier to deal with any other issues, because the buyer can do a post-closing repair escrow to fix them. This does require quite a bit of extra work and buyer preparation so it is best to alert your loan officer of the issues noted two paragraphs above before you write an agreement. If we have to wait until the appraisal comes back we are already 5-7 days in and just now finding out that the buyer has to make a bunch of repairs. We tell the buyer, the buyer plans on doing it that weekend since most folks work during the week, the buyers fixes everything, the appraiser goes back out to re-inspect the property and now we are 14-16 days in and we are just getting the appraisal back. Now underwrite the appraisal and the conditions that can’t be submitted until the appraisal is done, wait until any further conditions come back and are then cleared, send to RD for a certificate, let the bank have 48 hours to approve a closing, and guess what we need… an extension on the PA.

 

Appropriate Documents. Specifically, if the buyer is applying for FHA financing, an FHA Amendatory Clause will be required so contact your loan officer for the form ahead of time. Having the document that you can find – Here – signed right up front can eliminate another step down the line. There may be others for certain loans but this is the most common. Again, a 1-minute phone call can save 2 days later on.

 

My Final Word. Teamwork is more essential now than it has ever been. If we are all honest with each other in the beginning we can set a realistic expectation for everyone involved and proved a rewarding experience for all. I hope I have helped, and Good Luck with your future transactions!

 

For more information, Call Today or Visit our website:

810-953-4266 or www.iconmortgagelending.com

Michigan First Time Home Buyer: An Overall Guide

Michigan First Time Home Buyer: An Overall Guide

 For a first time buyer, there is so much to worry about and so many levels of details to address, that I just want to provide a good general guide to how to start the process. You can refer to my other blogs for more detail, but I think this is a great overview.

 

Purchasing anything, will cost you money. A home is the biggest purchase you will ever make, but most people expect to spend less than when getting an apartment. Any decent complex will want first, last, and possibly a security deposit. That’s at the very least $1000. Have this much at the very least before you consider buying a home, otherwise you really are setting yourself up for failure.

 

Now, Before you do anything else, find a loan officer.  Before you contact a Realtor, before you look at homes, you have to qualify. In today’s market there are so many intricacies to qualifying that the first thing you need is to get approved. Approved, not pre-approved like so many tell you. Finding a good loan officer is finding someone that doesn’t talk about pre-approval. Find one that runs Underwriting and approves you upfront. And do I really have to warn you about using 800 numbers in California or New York to get a loan? FIND HELP AT LEAST FROM THE SAME STATE!

 

Ok, now you can get excited and look for homes.  Get a good Realtor, find what you want, and don’t be afraid to pull the trigger. At the same time, don’t over look the structural integrity of the home, just remember that you will ALWAYS have to paint a room or two to make it yours. Get a home inspection and listen.

 

Getting your loan will take time. Depending on your situation it can be anywhere from 20-40 days. Anything longer is too much, and you should start to ask serious questions around the 35^th day.

 

Don’t be afraid to ask questions. Simple but rarely used. Just ask any question at any time and if your loan officer or realtor seem to never be available, ditch them. Ditch Them! Don’t feel imposed upon or that you aren’t being taken care of, a lot of sales people are taught to show you how complex everything is to sell you on themselves. Really their job, THEIR RESPONSIBILITY, is to simplify things for you.

 

Closing will never be simple. Hopefully you have a good loan officer that will explain this to you upfront, but be patient and let those doing the work have time to do the work. If it was simple, you could do it yourself.

 

The final word: work hard to find people you can have complete face to face confidence in and have confidence in them. This is the most important part of anything you do. Assemble a good team of professionals that can put everything into perspective for you and will have YOUR best interests at heart.

 

For more information Call Today or visit our website:

810-953-4266 or www.iconmortgagelending.com

First Time Home Buyer: Conforming at a glance

First Time Home Buyer: Conforming at a glance

 

The following was a general overview of the Conforming loan programs such as those offered by Fannie Mae or Freddie Mac and a guide to figure out if this is the loan program for you.

 

Availability: Available in all areas.

 

Type of Homes they finance: Single Family Properties and Multi-Family Properties will qualify. Site Condos are viewed the same as Attached Condominium Properties and are acceptable if they are approved condominium projects. You can search approved projects here: ******. Manufactured properties, Modular, Stick-Built, or BOCA-code properties are acceptable in some circumstances but not likely to be accepted. Working Farms, unique properties, and dome-homes will not qualify.

 

Down Payment Required: 10% or greater in conjunction with Private Mortgage Insurance. 20% to meet conforming loan standards. In general, funds for down payment can be a gift from family.

 

Private Mortgage Insurance: Emphasis on the “Private” since it is obtained through a private asset insurance company such as MGIC, PMI, RMIC, or RADIAN. Generally 1% is billed monthly, though some discounts can apply. No PMI is required with 20% down.

 

Interest Rates: Vary greatly between lenders. Careful shopping will be required in obtaining the best interest rates. With a 20% down payment, rates are generally lower than FHA or RD financing.

 

Maximum Loan Amount: $417,000.

 

Income Limits: No income limits apply.

 

Credit Requirement: Varies from lender to lender. In general, a 720 FICO and 3 credit references at least 24 months old with no late payments is required, though a lower FICO is required with a down payment of 20% or greater. 36 months from Bankruptcy or Foreclosure with 3 credit references established after the discretion.

 

Reserves: Varies between lenders, but in general, 2 months or greater of mortgage payments are required. Can come from retirement savings, checking or savings account.

 

Repair Escrow: Acceptable with certain programs, but good luck finding a lender that accepts them.

 

General Overview: For borrowers with great credit history and available down payment sources. Interest Rates will blow away government financing if you have the means to qualify.

First Time Home Buyer: FHA at a glance

First Time Home Buyer: FHA at a glance

 

The following was a general overview of the FHA loan program and a guide to figure out if this is the loan program for you.

 

Availability: Available in all areas.

 

Type of Homes they finance: Most property types. Single Family Properties and Multi-Family Properties will qualify. Site Condos are viewed the same as Attached Condominium Properties and are acceptable if they are approved condominium projects. You can search approved projects here: ******. Manufactured properties are acceptable if they meet individual lender requirements. Modular, Stick-Built, or BOCA-code properties are acceptable. Working Farms, unique properties, and dome-homes will not qualify.

 

Down Payment Required: 3.5%. Can be a gift from family, friend, or employer. Down payment assistance is only available from grant programs.

 

Mortgage Insurance: 1.75% financed into your loan and and .55% is billed monthly.

 

Interest Rates: Vary greatly because of the great variance between lenders offering FHA financing and the Yields paid to those making the loan for you. Careful shopping will be required in obtaining the best interest rates.

 

Maximum Loan Amount: Varies by county. Most counties in Michigan fall at $278,000 or lower.

 

Income Limits: No income limits apply.

 

Credit Requirement: Varies from lender to lender. In general, a 620 FICO and 2 credit references at least 12 months old with no late payments is required. 36 months from Bankruptcy or Foreclosure.

 

Reserves: Varies between lenders, but in general, 2 months of mortgage payments are required. Can come from retirement savings, checking or savings account, or as a gift.

 

Repair Escrow: Available on HUD-owned properties with no contingency plan.

 

General Overview: Available to all borrowers meeting credit standards, emphasis on credit requirements in regards to payment history within 12 months, credit discretions explainable to underwriter are acceptable, easy qualifying with acceptable credit references.

First Time Home Buyer: Rural Development at a glance

First Time Home Buyer: Rural Development at a glance

The following was a general overview of the Rural Development loan program and a guide to figure out if this is the loan program for you.

Availability: Available outside of high-density urban areas. For a more detailed area of qualification contact your lender or view our website: www.iconmortgagelending.com

Type of Homes they finance: Most property types. Single Family Properties, Site Condos, Multi-Family Properties, Modular, Stick-Built, BOCA-Code, large parcels, and some unique properties will qualify. Attached Condominium Properties are acceptable if they are approved condominium projects, you can contact your lender to check on approved condominiums. Manufactured properties will NOT qualify unless they are newly built and permanently attached to a property. *Properties with in-ground pools will come under added scrutiny.

Down Payment Required: No down payment is required. Any down payment can be a gift from family, friend, or employer.

Mortgage Insurance: 2.04% financed into your loan, no monthly mortgage insurance is required.

Interest Rates: Little variance between lenders, though some shopping may still be required.

Maximum Loan Amount: No maximum loan amount.

Income Limits: Income limits vary by County. You can view income limits for Michigan Counties here: *********.

Credit Requirement: 620 FICO with no minimum credit requirements, though this may vary by lender. 12 months from Bankruptcy or Foreclosure.

Reserves: No reserves required.

Repair Escrow: Available on all properties with contingency plan.

General Overview: For moderate income borrowers, easy qualifying with 620 FICO score, $0 down, Repairs can be included.

First Time Home Buyer Tax Credit as Down Payment or: Dirty Deeds Done Dirt Cheap

First Time Home Buyer Tax Credit as Down Payment or: Dirty Deeds Done Dirt Cheap

I think this is an important discussion to have so I am going to post this blog a few days in a row to make sure it gets out. There is a lot of confusion concerning the First Time Home Buyer Tax Credit especially now that FHA has approved the funds to be used towards down payment and I am looking to simplify things for you like I have been trying to do with all of my blogs.

This one, I feel is of great importance because I hate to be the one to you know: burst the bubble, but as I hear folks industry wide rejoice at the possibilities of borrowers being able to use their tax credit as a down payment for their new home I would like at least make a few points to the contrary.

1. Premature Jubilation: Everyone right now is scrambling to get the info to you that you can now use your tax credit as a down payment for an FHA loan. The thing they don’t realize is that until lenders roll out a program which allows you to use your tax credit in such a way, it makes NO difference whatsoever. So before you get yourself all worked up, we first have to actually have it available for you.

This is most easily show with this example- in July of last year FHA approved funding for the Hope fro Homeowner program in which they were going to refinance people that were having trouble making their mortgage payments. This was the program that was supposed to stabilize our housing market. Instead, no Lender ever even touched the program, and it was ultimately just discontinued in January 2009.

2. There’s a Snake in that Grass. Please also understand that they are not just letting you use your money for your down payment. What they want to do is give you a loan that you can in turn pay back. Now, if that suits you, then fine. But understand that this is not the same as the free stimulus that it is meant to be. Ultimately you allowing someone to give you a loan on that money it is going to benefit you, not them. Just understand that it is NOT in your best interest to take free money and turn it into a loan. DON’T LET THE VULTURES GET TO YOUR MONEY!!!

So, I shouldn’t take it? I am not saying that it can’t help anyone…but use your head, weigh your options, ask more than one person, and always read the fine print. If you don not absolutely NEED to use the money as a down payment…DON’T.

You may not even be thinking about it now, but there are so many good ways to use this money, please do not get ripped off before you even have the chance! Here are just a few examples of what to do:

Pay down the principle balance of your mortgage. In fact, if you get $7500 and put it directly on your principle balance of a $100,000 mortgage, that one payment will cut 4 years and $60,000 in interest payments right off of your mortgage!

Pay down high interest credit cards. Pay that high credit card loan off, use the boost in credit score to get a better credit card at a lower interest rate, let the paid off card sit there open with no balance and enjoy a great credit score for quite some time and save thousand on future mortgages, credit cards, car insurance…you name it.

Invest it. Ok, so maybe the stock market isn’t so hot now, but if you can find something safe that it sure to yield, it is a win-win for you my friend. Heck, even a high yielding savings account or a 2-year CD will make you great money.

Take advantage now, because the tax credit goes away if you close on your new home after December 31st, 2009. Happy Home Hunting to you all!

For more in-depth help, go to our website:
www.iconmortgagelending.com

Michigan Real Estate Purchase: Lending Update

So, regardless all of the jibber-jabber out of Washington lending is continuing to tighten. I figured I would write just a general overview of some of the significant changes or non-changes here in my blog in case any of these issues may affect you.

First Time Home Buyers: Most of the news for you is good. So much is aimed at finding you and inspiring you to help get the economy moving again, that your business is still in demand. The current change is that banks are looking for a little more investment on your part to ensure that they are making a good investment with you. This doesn’t necessarily mean a down payment, but do expect to be accountable for past credit discretions and to able to show paperwork on where you are getting the money to pay for your appraisal, down payment, or other requirements. This can still be a gift from family, but expect to show proof of where you are getting it. More emphasis if being put on the 620 FICO phenomenon on a daily basis. Those borrowers over 620 will succeed on those under will continue to face more and more hardships as time passes. Open new credit…first and foremost. Always continue to strive to a higher FICO by managing current credit properly and you will be fine.

Buying a Home when you already own one: This is where some of the more significant changes have been made over the last year. If you want to move into a new home as your Primary Residence and already own a home, you will come into a lot of restriction. Even if you have a good reason- such as job transfer, more space, or just want better home at a better price. The banks see you as a huge risk of buying a new home and letting the other home go into foreclosure…and rightfully so. This doesn’t mean that it can’t be done; you will just need to meet the extra requirements. You will need to be able to afford to make the payment on both houses and the rest of your bills within the normal guidelines of 41% of your gross income. You will also need to have 6-12 months of both payments in savings (this can include 401k accounts too, so if you have one that hasn’t been raided by AIG or Countrywide you are in a decent position to obtain financing).

Buying and Investment Property: Ah the Catch 22. Affordable prices driving investors to the market and tightening credit restriction driving them away. Well, let’s face it, if you do not have some cash to work with you are not in a position to invest anyways. The good news is that prices have gotten so low that putting 25% down on a $30,000 property only means about $10,000 out of pocket including closing costs. If you have taken care of your credit over the years you can borrow most of that from sources outside of the mortgage and still leverage the majority of your investment as long as you can show your invest as liquid for two months prior to the purchase- meaning you can get a loan but have to deposit the cash for a few weeks before you find your property. I understand that Michigan is a down economy but I can’t express to you how much I hate seeing Californians being the ones gobbling up our properties when buying the home next door is so much better of an investment for our own neighbors that have the means. Maybe it’s time to weigh how much you are losing in your 401k or stock investments against how much risk you are willing to take…think about it people, you are losing cash hand over fist where it is now.

Buying a Second Home: Well, chances are if you are buying a Vacation Home, you have the resources to do so. You will certainly find that it takes a little extra down payment now, but any changes will not be significant enough to dissuade you.

Overall: Things are continuing to tighten, and they will follow this trend for a while. Don’t believe everything you hear on CNN, it will not serve you well. Most serious buyers will not feel the crunch anymore than has been happening over the last two years, but those that are getting into the market with timid steps will not succeed. You need to have money down, proof of your benefactors, and as always a steady income. Borrowers that do have the means to repay will continue to qualify.

For more in-depth information call or visit our website today
810-953-4266 or www.iconmortgagelending.com

(First Time) Home Buyer’s Frequently Asked Questions

I will be adding to this list as I go along, but I wanted to start a nice comprehensive FAQ for homebuyers. I put “first time” in parenthesis because really this can apply to anyone buying a home, but this will apply mainly to the questions I get from first time homebuyers.

Q: Why buy instead of rent?
A: Well, pride of ownership and having something that is yours to do with what you want. A home is also a long-term investment for your future. Don’t let all of the exploding market talk scare you. Real Estate prices go up and down, but just like investing in stocks, you buy low and sell high based on when you enter the market. If you put yourself in a position where you have to sell within a very short period of time you had better make a sound investment or you will fail as many are now failing because they relied on an implied return without realizing preparing for a long-term goal. In addition to the equity investment, a home is also a valuable tax incentive. You can deduct your mortgage costs and property tax costs from your income taxes that you file each year whereas your rent is simply paid and gone forever rather than reinvested.

Q: What documents will I need when applying for a mortgage?
A: You can follow our guidelines laid out here: Documents for any documents needed to apply for a loan. A quick synopsis would be: 2 years w2s, 1 month of pay stubs, 2 months of banks statements, 401k/Retirement savings statements, driver’s license, and social security card.

Q: What is my interest rate going to be?
A: A loan officer should never quote you an interest rate before they take all of your pertinent information. Beware of loan officers that do this, because they have no reason to keep their promise and all the reasons in the world to change it before closing. For more info read this blog: Deciphering Interest Rates.
Once you have given all of your information, and a loan program can be chosen, you should then demand some type of rate lock agreement. Even if it is in your best interest to float at the time of application, it is something that should be discussed with your loan officer as to when you will be locked in.

Q: What are the closing costs?
A: Any loan officer worth their salt and offering the truth to you, will offer a Good Faith Estimate of all closing costs. In fact they are legally required to, but the oversight of such practices is pretty light so many just don’t even bother. For more info on what the GFE should look like, check out this blog: Closing Costs

Q: Once I am pre-approved will something go wrong?
A: There will always be the possibility of something going wrong after a pre-approval. If you are smart you will ask to be approved through AU before you actually make an offer on a property. AU or Automated Underwriting will render a pretty solid decision on your loan, and will give you added security but most loan officers will not offer this service to you because of the cost to them. If you have a less than perfect situation, it will be worth your time to find a loan officer that will offer you an AU decision before you get too far into the process only to be let down. AU is not the end all though because it will not be able to make any decisions about the property such as the title situation, the value of the home, or the validity of the collateral at all; but AU will ask all of the questions needed to close your loan in regards to your credit and ability to qualify for the loan.

Q: What is the best loan program for me?
A: Lots of options still exist to this day even though there has been a major credit crunch. The three main options that every loan officer should discuss with you regardless of any other factors are Conforming- though they require more down payment, it may be worth it to get the drastically smaller interest rates; FHA which has lower down payment requirements and greater qualification flexibility and is available in all areas; and RD (Rural Development) which is not available everywhere but requires even less down payment than FHA and has no monthly mortgage insurance. If a loan officer does not offer you all three of these options and describes the differences in detail, they are not the loan officer for you because they are either unaware or uneducated in all loan types available, or are simply steering you away from a loan that they can not offer. ALWAYS beware of a loan officer that says something like, “Oh that isn’t even worth talking about.” That is just a way for them to deflect a question about a loan they are uneducated about. If they say that, THEY aren’t even worth talking about as an option for your financing. You can read more about each loan program here in my blog.

Q: My uncle told me that he got 4%, why am I hearing something different?
A: People love to give advice and share opinions we all know this. Generally when people talk about something that they are not trained in providing, they are only offering opinion and not fact. Once you have found your mortgage professional, it is important to listen carefully to what they tell you and look for some of the warning signs I point out in my various blogs. But once you feel comfortable with that person, you should be aware that many many people will offer random opinions based on their own experiences that may of may not have anything relevant to your situation. Bring these up to your loan officer but I do caution you against taking too seriously what someone that does not work in the business says about your mortgage. Take in into consideration, but listen to professionals that you choose to serve you for the answers. If the answers they give make you feel uncomfortable, then you can make your choice accordingly.

Q: What about this tax credit I heard about?
A: Well there are many situations arising that are less than clear in regards to the tax credit. For the simple questions though, you can check out this website for the answers: www.federalhousingtaxcredit.com

Q: How long does this take?
A: The simple answer is 30 days from the time a signed purchase agreement is delivered to your loan officer. Any longer than that and you are probably doing something wrong, however there are certain situations that will take longer. Discuss this with your loan officer before you apply and if things are taking longer without a decent explanation, it may be time to switch. For a more detailed answer, read this blog: Time Table

Q: What is closing a loan like?
A: Whew, unlike anything you will ever do. Basically it is 30 minutes of signing your name. You will be seated with your loan officer, real estate agent, and a closing agent and going through many important documents. It is a good idea to go through and read each document, and consult your loan officer and real estate agent for any questions you may have.

Q: What if I have trouble paying my mortgage payment?
A: I always tell my clients to contact me directly if this happens so that we may point them to the proper channels, however you may not get that answer from everyone. If not, there is always help available. Some important resources can be found in this blog of mine: Help for Homeowners

For more information you can call or visit our website:

810-953-4266 or www.iconmortgagelending.com

Where to go when you can’t make your mortgage payment.

Life happens and along with it comes many challenges that we all face. These normal challenges can sometimes be magnified when you have a mortgage payment bearing down on you each and every month. There is always help available for you, but it is essential to remember a few things when you are having trouble making your monthly payment.

1. Never Wait!!! Simply missing payments is the worst thing you can do. It is important to be as on top of you payments as you can be, and that does not always mean making the payment. Recognize as early as possible when you know you will not be able to make your payment and contact your lender to let them know that you are having trouble. Often times they will have a solution for you. Simply waiting and waiting and missing payments and avoiding the situation will only further the difficulty in helping you out of your current situation.
2. Never purposely miss a payment. Many times you will hear advice from friends, family, your lender, or from advertisements from companies that claim to help you out of your current situation, or just out of your own anger over a certain situation with your lender. No matter what ANYBODY tells you, if you have the means to make your mortgage payment, the best course of action is to make the payment. Missing a payment will wreck your credit standing and force extreme difficulty on you including other creditors using your lowered credit score as an excuse to raise your interest rates on installment loans or credit card payments only furthering your troubles. Any program designed to help you out of a bad situation will not require you to purposely miss a mortgage payment.
3. Do not refinance your loan simply because you can not afford a singly monthly payment. Now if your monthly payment is too high and you need to lower it, it is a good idea to explore the option of refinancing. But if you can not lower your interest rate and you simply need to pay back taxes or get a month off from a mortgage payment because you are in a bind is not a good reason to refinance. In most cases you will end up with a lot of undue stress and extending your loan balance and term only to end up in the same situation down the line.
4. Read, review, review again, ask questions, and make sure that you FULLY understand the implications of any program your lender offers you that is based on missing a payment or rolling a payment in to the back end of your loan. Most lenders will fail to tell you that they will be marking your payments as late until you make up the missed payment. Meanwhile you are relieved from the payment you didn’t have to make and your lender has ruined your credit and any chance of refinancing. Why would they do that? Duh, because if you can’t refinance then you are forced to keep paying them interest every month!
5. If your lender can not help you, contact a HUD-approved debt counseling agency which are easy found here:
6. Be smart about it. If something seems too good to be true it probably is. If you do get yourself into a situation where you feel taken advantage of, tell your lender about it- you will be surprised how powerful your own words can be if you express yourself to your lender in a calm and confused fashion. If they seem to just run over your concerns with no resolution, don’t be afraid to contact an attorney about the matter. Many attorneys will consult you on the matter without an up-front charge.

If you need further information check out some of these websites:

www.hud.gov
www.hopenow.com
www.greenpath.com
www.fha.gov

First Time Home Buyer: How to Demand Transparency from your Loan Officer

There are so many ways for a loan officer to fool you and I have heard them all in my time in the business. Now I bring this knowledge to you in how to demand that your loan officer never fools you. I will also cite all of the documents that your loan officer is legally required to show you yet rarely will. I will make you as close to impenetrable as possible.

Interest Rate: Ah the interest rate. As a consumer it is always the first thing on your mind, and always the first tool you use to shop for the best deal possible on a mortgage. Of course, us in the “know” realize that there the interest rate alone rarely dictates a good deal on a mortgage. So how do you decode what your interest rate will be and if it is in fact a good value when a loan officer is so well equipped to talk his or her way around this subject? Well the value part will be covered under the APR heading below, but first let’s talk about how to know what your interest rate is and what it will be at the time you close.

The Rate Lock Agreement: The rate lock agreement sounds like a form that you would have to sign and consent to. In fact most companies will have you sign a rate lock agreement, but this does not have to be a form according to Michigan law (MCMPA). In fact it can also be a verbal agreement between you and your lender. If a loan officer promises you a certain interest rate, it is literally against the law to change it. You can in fact, sue your loan officer if they made a verbal promise to deliver a certain interest rate and then changed it unless you yourself have provided misinformation or request changes to your loan program. Most people don’t realize this. Just always require that your loan officer is honest with you, even if that means they tell you that they don’t know what your rate will be. In most instances, the most honest loan officer will give you a fair range of current rates

Key phrases a loan officer will use in deceiving you about your interest rate:

Well we can’t lock your rate because they change so often. (They change often but a loan officer should still be able to offer you a lock based on when you qualify)
I can get you that rate, for sure, but we need to see if you qualify first (a loan officer should never say for fact they can get you any rate until they know you qualify and if they do they are breaking the law and breaking your trust).
Oh yeah, like 6% (before they even know your name).
And ALWAYS be aware of any advertisements that come with an interest rate printed on them, no matter what the form they use. Any advertisement with an interest rate contains so many opportunities for a loan officer to lie to you that it is NEVER worth it in the end.

APR or Annual Percentage Rate: This is one of the most confusing numbers in all of mortgage lending and is even confusing for the very person that is meant to teach you about it if they are not properly trained. The APR is an expression of the “cost of your credit” as a percentage. In other words it takes in account all of the “cost of your credit” or fees you will pay in connection with getting a loan and breaks it down into a percentage. A lender is legally required to provide you with this figure in accordance to the Truth-in-Lending Act (TILA) within three days of applying for a loan. They come on a form referred to as the T.I.L. that features other important information as well, but the APR is the most prevalent feature.

Key phrases a loan officer will use if they are trying to confuse you when explaining this to you:

Nobody even really understands how this APR thingy works.
It’s an awful government form, you know government, everything they do is stupid.
Don’t worry about that APR it is not your interest rate and doesn’t affect your loan.

In fact the APR is a useful tool in comparing one loan to another. It is certainly not the end all to loan shopping, but it is useful because it breaks down all of the charges that you do not carry from one lender to the next. So things like a credit report fee or an appraisal fee are not used in the calculation because they will be a part of your loan costs no matter what. The APR does use fees like origination charges, broker fees, and. The important things to remember her are: make sure your loan officer offers you a “TIL”, make sure they explain the APR the way I explained it, and make sure they show you the charges that figure it.

The Broker Fee: This is important whether you are being charged one or not. The important thing to remember is that the reason a Mortgage Broker exists in the first place is that a broker does not need the mortgage lender to pay them to sit at a desk all day even when they are not originating loans. The broker does, however, have to pay to advertise or maintain an office of their own in order to get to you in the first place. So the ultimate end game is to compare if the broker fee is cheaper than what the bank will charge you. Again this is not the only factor to consider but it is useful because if your concern is upfront fees as opposed to monthly payment, you will want to compare the broker fee as opposed to the interest rate that your payment is based on. Any broker is required to explain this to you as mandated by the Michigan Consumer Mortgage Protection Act (MCMPA) via the Borrower’s Bill of Rights. You have the right to know what your loan officer is making as a result of originating your loan the same way that your bank is required to give you this document and explain this to you as well. The problems mostly arise by the fact that a bank loan officer is not required to explain exactly how much they are making by originating your loan because they are considered an hourly employee of the bank. Obviously a bank loan officer will always be able to present their origination fee as cheaper than a broker. This is where the APR can be compared to your interest rate and used a tool to distinct which is a better value.

Whether or not you are qualified. This is the tough one to decipher. By law any lender is required to give you a credit decision within 30 days. Obviously, the process gets a bit muddier once the term pre-approval comes into play and even more so when you have a less than perfect credit or employment situation that makes qualifying difficult. The important thing to remember is that if someone is telling you that you qualify before they have seen a credit score, employment information, asset information, or heard your entire story- they are lying. It is impossible for someone to tell you what you qualify for without having taken a full application so be leery of anyone that does.

The Good Faith Estimate (GFE): This is a breakdown of all the fees involved in acquiring your loan. If you look carefully, you will see on the GFE which fees are used in calculating your APR. This will further your shopping power by realizing what will be charged by anyone and what will only be charged by a bank or what will only be charged by a broker. The big thing I feel is to be aware of things that are conveniently left off of a GFE but will be added later. Specifically those charges that are used to calculate your APR that some loan officers like to leave off of a GFE, or grossly under estimate in order to make the bottom line look better. These include Tax Escrows, Pro-Rated taxes(only on purchases), title insurance, title closing fee, days of interest, and processing fees. These will all always be charged regardless of lender and will always be able to be properly estimated (with reason) at time of application. So if you are comparing GFEs and you notice a large difference between these charges or that one has been omitted, it should immediately send up a red flag that one of your loan officers is not being honest with you.

Basic Legal Forms: There are a few basic forms that you are required by law to receive within 3 days of applying for a mortgage, so be leery of anyone that does not provide them. Good Faith Estimate, Truth-in-Lending, Borrower’s Bill of Rights, Servicing Disclosure, Consumer Caution Disclosure, and the Closing Costs booklet.

If you follow these guidelines and are not afraid to walk away from a loan officer that does not comply with these guidelines, you will make the loan process much simpler for you.

For more information you can call or check out our website:
810-953-4266 or www.iconmortgagelending.com