Seven Things Your Agent Should Know About Your Mortgage Approval

Most experienced real-estate agents are aware about all the nitty-gritty’s of the mortgage loan approval process, but there are certain vital details that tend to get overlooked. Eventually, these can result in a delay or denial of the purchase. Some of the aspects that can undergo a change, and can impact your home loan financing are:

  • New regulation

  • Appraisal guidelines

  • Updated disclosures

  • Mortgage rate pricing-premiums

  • Credit score or bad credit rules

  • Rescission deadlines

  • HOA insurance requirements

  • Secondary approval layering

  • Property type

  • Title

  • Property flip rules

  • Others

Seven Important Things

The current-day lending environment is highly volatile and it is crucial for home-buyers to obtain a full mortgage loan approval that very clearly defines all the contingencies related to an individual home buyer’s situation. Ideally, these are the things you should be looking at before you spend time looking for new home with your real estate agent. These are the things your agent should always keep in view while you are being shown new properties, which will help in easy mortgage approval:

  • Property Type- High-Rise, Town House, Condo, Single Family Residence, Shoe House or Dome Home

  • Residence Type- Understanding whether you have to sell your 1st home before buying another
  • Mortgage Rates / Lock-in- Typically, mortgage rates have a 30-day lock-in period. If you are looking for a new mortgage rate, you will have to switch to a new mortgage lender

  • Headline News or Employment- This relates to income security, periods of unemployment and job changes

  • Title or Property Flip- If a property has been bought by an investor and then sold within 30-90 days of the purchase; it’s called a property flip. Some lenders have stringent rules around these kinds of transactions and will take this into consideration in the mortgage loan approval process

  • Homeowner’s Association Insurance- Certain lenders need that Condos & Town House communities have enough insurance & reserves coverage related to specific ratios on the units that are owner-occupied vs. rented ones

  • Appraisal Ordering Procedures- There are frequent changes to appraisal ordering guidelines as regulators implement numerous new consumer-protection laws created in an effort to prevent foreclosure epidemics in the future

Though there are a number of things that your agent will have to look into and keep in view, these 7 points are important to understand. And as a buyer, if you want easy mortgage approval, it becomes all the more important for you to be aware of these things too. Contact ResMac Home Loans for any other mortgage-related information you need.

 

Renting vs Buying A Home

When you are choosing between buying a home and renting, there are a number of things you will have to take into consideration. This debate is a never-ending one and some people will swear that buying a house makes more sense from the perspective of an investment, while there are some who will say that renting is the way to go. There are definitely some tax advantages to owning real estate and you can potentially earn equity/ pay off the mortgage note after a certain number of years. Let’s take a look at the benefits of both:

Benefits of Renting:

  • The costs of acquisition are lower- Unless you are able to qualify for a zero down mortgage loan & the closing costs are paid by the seller, typically, you will invest around 3.5-7% of the purchase-price for the down payment & closing costs if you have an FHA mortgage. In case of a conventional loan that figure will be in the 13%- 23% range, in comparison to the cost of around 1 to 3 months of a rent payment.

  • Lower Qualifying Standards- FHA & some government-insured mortgage programs have much more flexible qualifying guidelines in comparison to most conventional home loan programs. But when it comes to paperwork, property management companies and most landlords do not ask for much

  • Freedom To Move – When you choose to rent, it’s also much easier to move once the contract expires. If you are new to a community, or have a job that requires you to relocate frequently, renting is a much better option

  • Lower Maintenance & Cost – When you live in a rented place the property management company will fix anything that breaks etc within 48-hours or less. You also don’t have to pay any property taxes, carry homeowners insurance or worry about rising interest rates

Benefits of Owning:

  • Dependent on HOA and county rules, you can have pets without paying hefty deposits

  • Choose the color of your walls

  • Have peace of mind security

  • Enjoy certain tax benefits

  • Have stability

  • Property will appreciate

In addition to this, your net worth increases and there is potential for earned equity. And so, both these options have certain advantages. The choice you make will be dependent on your specific situation. Contact ResMac Home Loans for more detailed information.

 

First-Time Home Buyer Credit Checklist

For a first-time home buyer, the entire process of acquiring a new mortgage can be quite overwhelming. There are a hundred details to keep in mind, various guidelines and some unavoidable hurdles that you will encounter. Since there are so many considerations, take a look at these buying first home tips and list of Do’s & Don’ts you can follow right through the mortgage approval process and it might help in easing smoothening the path a bit:

 

DO:

  • Continue working at the job you are at

  • Keep all your accounts updated

  • Ensure that you make all your house/rent payments on schedule

  • Ensure that your insurance payments are current

  • Maintain a steady credit – bad credit negatively impacts a loan approval

  • Call Res Mac Home Loans if you need any questions answered

DON’T:

  • Make any major purchases such as a boat, car, home theatre, jet ski etc

  • Open any new credit cards

  • Apply for additional credit

  • Transfer balances from 1 bank account to any other

  • Take out loans for furniture

  • Pay off any collections or charge-off accounts

  • Close any of your credit cards

  • Max-out on credit cards

  • Consolidate your credit debt

Maintain Your Credit- worthiness

One of the most important buying first home tips is that when you are in the midst of applying for a new mortgage, your financial status should be stable till the point your loan gets funded & recorded. Any bad credit/ the inability to make the required down payment can put a damper on your home buying plans. Looking at your credit-worthiness and ensuring that it stays that way is the best way to eliminate some of the uncertainty surrounding the approval of your loan.

There could be instances where even certain minor changes can have a negative impact on your credit rating which could lead to your loan being denied. It’s also important that you get the smallest of doubts about the loan process cleared with your loan officer and maintain a simple buying first home guide. This will go a long way in making your loan approval successful. Speak with experts at ResMac Home Loans for any other information you need.

 

HOA Hurdles to be Aware of When Looking at New Properties

A HOA can have a significant impact on your decision to purchase a new home in a Condominium Project or a Planned Unit Development (PUD). When you plan on moving into a new housing development or a condo, you are required to sign-off the required HOA agreement that specifies all the rules of that development. When you are purchasing a home, the HOA is something that gets a little sidelined.

Its only when you actually move into your new home and settle in comfortably that you realize, a number of rules and regulations laid out by the HOA can be very restrictive. You might find that there are a rules you might not be able to adhere to. These are 7 things you should watch out for in the HOA agreement:

  • Home Businesses- If you plan on the working from home – maybe run a daycare center or your law office, if the HOA does not permit any kind of commercial activity in your residence, you will be compelled to look for office space outside

  • Restrictions on Animals- Some homeowners associations have a restriction on the number of pets you can have in your home, as well as the kind of pets you can keep

  • Clothes Lines- This seems like a very unlikely one. If you prefer to sun-dry your clothes, you will have to ensure that the place you live in has no restrictions around having clothes lines strung in the yard.

  • Nighttime noise or Nuisance Rules- Regardless of the lifestyle you follow, if you live in a place where there are time restrictions on playing loud music, you will have to fall in line with the rules

  • Limitation on Leasing-out your Home- A number of HOA’s requires that the units on the premises be owner-occupied. If you have acquired that particular home specifically as an investment, this will pose a problem for you

  • Patio Prohibitions- Some HOA’s also prohibit you from using patios to store boxes and bikes and you might also be required to dispose of any dead plants

  • Carpeting- Hardwood floors tend to carry sounds and a number of HOA’s require that home owners carpet a certain percentage of their floors. You will have to ensure that the carpeting is in all the right places

It is up to you to decide whether the terms that have been laid out in the HOA work for you or not. But it is important that you be aware of these restrictions before you buy any property. For more information, contact ResMac Home Loans.

 

Assembling Your Home Buying Team – Knowing The Players

Choosing a Home-buying Team

Buying a first home can be a complex process and there are a number of steps involved. The good news is that there are many professionals who can help and guide you through the mortgage approval process. These are the different professionals who will play a role in the home buying process. But it has to be understood all of them will not be involved in every stage. Your home buying team may include:

  • Real estate professional

  • Housing counselor

  • Attorney

  • Lender

  • Escrow officer

  • Housing inspector

  • Title insurance officer

  • Insurance agent

  • Surveyor

  • Appraiser

Important Functions

These are the different professionals you may have to deal with in the mortgage approval process. There will always be situations in which you will need and seek some impartial advice. This is where a housing counselor comes into the picture. These counselors work with nonprofit organizations and can provide one-on-one counseling sessions as required. They may also be able to provide you with information about the process involved in buying a home online.

Getting the Right Advice

There are so many different professionals that you will be hiring & working with right through the home-buying process that you will definitely want someone to support you and provide you with some sound and impartial advice. The real-estate agent plays a very crucial role in the entire process and he/she is trained to sell properties. The person will provide you complete information about the type of properties that are available and will look for something that falls within your budget.

Legal and Insurance Professionals

If you are getting a mortgage loan, you will go to a lender, complete the application form and give the lender all the information and paperwork they require. The lender will then check all the documentation and decide whether you are a good credit-risk. In certain states, it is a legal requirement that the real estate contract be written by a lawyer.

Attorneys will also review the terms of the documents that are being signed or help in settling disputes, if any. In addition to all these professionals, the escrow officer, the Title Insurance Officer, the housing inspector, Appraiser, Surveyor and the Insurance Agent will have a role to play at some point of the mortgage approval process. You should get all the information you can from them and understand the scope of their job while you are buying a first home. Call ResMac Home Loans for knowing more about how to get the best home buying team.

 

What You Need To Know About The Home Inspection Process

So you have finally identified the house you want to buy and you have but a few days left before the home inspection takes place. In most cases, when the real estate agent makes the offer, it is contingent upon a satisfactory home inspection & obtaining mortgage financing.

Home Inspection- What is it?

The home inspection process is a non-invasive and limited examination of the current condition of the home- in most cases; this is conducted when that home is being put up for sale. The home inspector handles the home inspection process and this person has the necessary training & certifications to conduct these inspections. Once the inspection has been completed, the inspector uses home inspection software to create a written report that is given to the home buyer.

The buyer then uses the information from this report to make an informed decision about buying that property. The report will make note of the condition of that property at the time of the inspection, however it does not guarantee its future efficiency and condition or even the expectancy of the components and systems in it. The home inspector’s sole job is to evaluate the condition of the house and if you need a market value estimate, an appraiser will handle that for you.

Home Inspection Checklist

The home inspection checklist should include:

  • Heating

  • Air conditioning

  • Plumbing

  • Electrical

  • Appliance systems

  • Basement

  • roof

  • Exterior & interior walls

  • Doors and windows

  • Chimney

In addition the basic components of the home inspection checklist, you can also request for some optional services such as wood destroying pests, asbestos septic etc.

Home Inspection- The Cost

Generally, the home buyer has to make an up-front payment for the inspection. At times the purchase contract may have an agreement which states that the seller will have to reimburse the home inspection cost at the time of closure. The home inspection cost varies from one state to the next but can be in the $250-$400 range based on the services that the home buyer has opted for and the location of the house.

As a buyer, it is important for you go through the purchase & sales contract very carefully to ensure that the agreement doesn’t state that the house may be sold-off in an “as-is” condition and that the seller takes care of the requested repairs before the sale is finalized. To learn more about the home inspection process, contact ResMac Home Loans.

 

Important Factors To Consider When Getting Financing On A Foreclosure, Short Sale or New Construction

There are a number of foreclosures and short sales in the market and when you are planning on buying a home, they may present a lot of value. But there are certain problems associated with them that homeowners should be aware of before applying for foreclosure sale financing:

  • Property Condition- Homeowners who are facing a foreclosure or want to short sell their house generally do not have the money to maintain the property well or pay for the mortgage. This can cause problems for you, if you are planning on getting an FHA loan. These require that the property should be ready to move into

  • Timing Challenges- Typically, a short sale process has very awkward timeframes for approval of the purchase contract and loan closing. Every bank has different rules; however the approval can take 7-120 days. Since there is no fixed timeframe for approval of a short sale, timing of the loan submission, rate locks & the closing can become very challenging. When you are buying a short-sale property, you should be prepared for loads of paperwork

  • New Construction- If you want to make use of FHA financing to buy new construction – there are a number of different issues that might crop up. You must have a CO- Certificate of Occupancy and if this is not available, you will not be able to go to the FHA and may have to opt for a renovation loan

  • Builder’s Certification- You might need a 10-year warranty, termite inspection, well test and septic inspection, when applicable while buying a home

  • Construction Permits- You will require specific documentation (in a certain combination), to satisfy the lender and the FHA. It is important that you work with a knowledgeable loan officer while buying any new construction with financing from the FHA

The Right Support

If you decide to use conventional Freddie Mac/ Fannie Mae financing you will still have some hurdles to navigate, but they will be a little less than the ones you encounter with the FHA. But the down payment will be higher and there are more stringent credit qualification guidelines.

Regardless of whether you plan on a FHA loan, renovation financing or conventional financing, it is crucial that you have a strong home-buying team who can help and support you through the negotiations and tons of paperwork. For more information on financing for foreclosures, contact ResMac Home Loans.