Saturday, December 23, 2017

Changes Coming to Lending and How It Will Affect You

We have all seen many changes in the mortgage industry over the past several years. More regulations and more disclosures to meet CFPB’s requirements for lenders and everyone that works for them.
For more then 20 years we have been using the same Uniform Residential Loan Application = URLA or 1003 for short. During our CE training this year we were all introduced to a NEW and improved URLA. We are going from a 4 to 5-page application to a 8-page application. The new form is more in depth and has an extensively enhanced Home Mortgage Disclosure Act = HMDA section for government monitoring. I’ve listed the changes below. It should be very interesting to see everyone's reaction when they complete this new form. I am going to keep an open mind to change and hope others will do the same.
This new form was reported to be available to use Jan 2018, but it doesn’t look like Fannie or Freddie will have their automatic underwriting systems ready for this start date. Looks like we will have a brief reprieve on the start date 7-2019. The borrower will only realize some minor changes in documentation and if you have a good loan officer they will help you complete this form and explain any changes. 
Here are some changes on the new form; 
·       Updated borrower contact information, such as cell phone number and email address.
·       Added a new military service section to assist veterans seeking and qualifying for VA loan opportunities.
·       Made it easier to identify employer and self-employment information.
·       Included fields to collect more detailed information about the property and loan purpose, including refinance types, energy improvements, and project types.
·       Added amortization types and loan features describing the mortgage and loan terms.
·       Updated the acknowledgement, agreement, and authorization sections to benefit the consumer and industry participants who use the loan application (e.g., mortgage insurers).
·       Revised government monitoring information (ethnicity and race) in accordance with the new Home Mortgage Disclosure Act requirements issued by CFPB.

The next change will be the increase loan limits for a conforming loan. In 2017 the loan limit has been $424,100 but starting on Jan 1, 2018 this will increase to $453,100 and increase of 6.8%. 
I’ve never been sure what the $100 is about as it’s much easier to have round numbers.
I think someone likes messing with us! 😊
The best part about this change, it will allow for more people to obtain cheaper financing on their conforming loans. Rates are lower then loan over this amount that are considered High Balance or Jumbo loans.

With the passing of the NEW Tax bill a couple BIG changes involved our home loans and the interest we get to deduct each year. This will now be limited to $750,000 per year. 
In addition, you will no longer be allowed to deduct the interest on your equity loan or line of credit. 

If you have one of those equity loans, line of credit etc. you will want to see about refinancing to include that equity line of credit in with your regular mortgage. Chances are you will save money with a better rate and you will be able to continue to deduct the interest on the same borrowed money! 

Getting a free mortgage analysis would be beneficial if you have this type of loan.  I can do this very quickly with just a copy of your mortgage statement on both your 1st lien and your second lien, or line of credit. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Wednesday, December 20, 2017

15 Year Mortgage vs 30 Year Mortgage

As a mortgage broker I get this question all the time. Here’s how I see it and for the most part it’s an individual decision each borrower must make based on their personal situation. What I do is educate my borrowers and give them the numbers to make their own conclusion.
When you are purchasing or refinancing it is wise to look at the 15-year mortgage. Advantages are many but primary it will save you thousand with a lower interest rate for the term of the loan. However, your payment is going to be higher than a 30-year mortgage because you are paying off the principal in half the time. If your goal is to pay off your mortgage and be mortgage free then this loan is a very attractive vehicle to get the job done.

Let me give you a common situation I come across quite a lot.  Say you are a thinking about retirement and you are about 15 to 20 years from retiring, you are in the highest earning period of your life. You have a retirement plan you are contributing to each month and the only thing you are not sure about, is how to pay your mortgage after retirement, because it won’t be paid off until long after you retire. You may have to sell your home… I say no way! Unless you want to of course but for many, staying in their home is a top priority. This is a perfect situation for a 15-year mortgage. To help you make the higher payment to get this accomplished you may need to see if you are 
over-funding your 401K or other retirement plan, you might be able to reduce it some to make up the difference. I am not advising you forgo your retirement plan or monthly contribution to do this. Just take a look at it and see if there is room for adjustments. You may find the money there. 
Planning for your housing during retirement is equally important and certainly paying off your mortgage sooner or by retirement age is going to be beneficial even if you decide later to sell.

There are many good reasons to refinance into a 15-year mortgage but the best one is savings by the thousands. It’s quite exciting to see that principal balance reducing very quickly.
Some people are fearful of the higher monthly obligation and tend to go with the 30-year mortgage. 
I can certainly understand this way of thinking. For this borrower I offer them a 15 or 20-year amortization table based on their 30-year rate and if they choose, they can make the payment each month that gets their mortgage paid in 15 or 20 years, but if something happens and they cannot make this payment they can always go back to the 30-year payment without any consequences from their lender. Most loans do not have a prepayment penalty. At least none I originate have a prepayment penalty. You are free to pay your balance down as you wish. This is a great alternative and for some a safer way to pay off your mortgage sooner. 

The national average and current rate for both the 15 and 30-year mortgage is;

Mtg Loan
30-yr Fixed
15-yr Fixed

Let me show you the difference in monthly payment based on a loan of $400,000 at the current rates and then I'll show you the amount of interest you will save over the term of the loan. 

30 Year Mortgage 
$400,000 @ 3.9% rate/4.03 APR = $1919.69 Monthly Principal/Interest Payment
Total Finance Charge for the term of the loan = $293,448.22 i.e interest you will pay on the loan over the life of the loan. 

15 Year Mortgage 
$400,000 @ 3.3%/3.47% APR = $2869.76 Monthly Principal/Interest Payment
Total Finance Charge for the term of the loan = $118,917.50 i.e. interest you will pay on the loan over the life of the loan. 

Total savings for 15 year vs 30 year = $174,530.72 

In my view I think it is almost always worth considering. Yes the payment is higher but the savings is real. Maybe consider how important it is for you and your family to cut back on your spending so you can manage the higher payment allowing you to save almost $175,000.. finding places where you can save is key and a strong look at your budget is well worth your time and effort. 

For anyone who would like a free analysis on your current mortgage or if you would like me to work up an amortization table on your current mortgage to pay it off sooner, please give me a call. 
808-457-2455 ...I will only need to current mortgage statement to do this. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Friday, December 8, 2017

Loan Scams and What To Watch Out For

Many loan officers are going through continuing education this time of year to renew their license for 2018. The educator's in our industry are expressing the need for all of us in finance to be more vigilant when it comes to recognizing fraud when we come across it. 
It’s interesting to me some of the things STILL happening in our industry that are fraudulent and harmful to consumers, the mortgage and real estate industies and ultimately the economic health of our country.
I guess I am naive to think because of all the new regulations there would be less fraud happening. Unfortunately, all of us need to be more aware because there are many criminals committing fraud and stealing our identities, our homes and our equity. 
We all need to educate ourselves and do our homework. Researching companies and individuals before we provide any personal information to anyone, we need to have our guard up always. I’ve listed some information in this post that will hopefully help you to better recognize and avoid being a victim of mortgage loan scams, fraud and ID theft.

Foreclosure Rescue and Mortgage Reduction or Refinancing Scams
The scammer will contact a distress homeowner by phone or by a knock on their door. They will make all kinds of promises to get you to allow them to work with your lender on your behalf to adjust your loan by reducing payments, even promising principal reduction. Some will even claim to be a government agency. They will charge the homeowner a large upfront fee for their services and then do nothing for the distress homeowners, leaving them in worse financial condition then when they found them.
There are many companies mostly non-profits that do help distress homeowners. But you won’t get a call from them without you first calling them. Look up any company claiming to perform mortgage relief services with the BBB and your states Attorney General to see if they have complaints or they are a real company. Look up their licenses to get information about them and their services. Be careful and just because they state they work for an attorney doesn't mean what they are are doing is legal. 

Predatory Lending comes in many different forms. A lender using hard selling tactics and not providing all the information about the loan. Including not telling you the rate and term, telling you one thing and then changing the loan type, rate or term, that's called a bait and switch sells tactic. Maybe they do give you a few days to think it over, but you have already spent money on appraisal etc. so you move forward because you don’t want to hold up closing. Then months later after you close you find out your rate is about to change or you have a balloon payment you didn't know about. Within your loan documents the most important document is your Note, Deed of Trust or Mortgage Deed, READ them make sure the match your original loan estimate or loan disclosure. The information on your Note will be what you have to pay for the term of your loan. Any changes to rate or term will be listed in your Note with the date of change.
Most lenders who do this come from unsolicited phone call or telemarketer. Before you start a loan with a lender do your homework, find out about the company you are considering, check out their licensing. National Mortgage Licensing System NMLS keeps track of lenders and the people or loan officers that work for them.  
NMLS Consumer Access  Then check with the Better Business Bureau (BBB) Check your states Attorney General Office and see if that company is in good standings. 

Equity Stripping is another horrible way a lender can assist you into defaulting your home loan.  You decide to refinance because rates have dropped but you may not qualify for a normal refinance. A lender gives you a loan based on the equity in your home NOT your ability to repay. These lenders are hoping you default because they are lending based on your equity. They want your home!

Loan Flipping is another way a lender is after your equity. You refinance your loan adding all the loan fees to your principal. This is normal practice when you refinance so you don’t always see this coming. Then 12 months goes by and that same lender contacts you and says rates have gone down even more and offers to refinance and reduce your payment even more. Again, adding loan fees onto your principal.
This is done repeatedly, and they may even offer to let you take cash out for a vacation or to consolidate your other debts increasing the loan amount each time and adding onto your principal with each refinance, before you know it you are upside down in your mortgage and in jeopardy of foreclosure.
There are many good reasons to refinance your home just be aware of your situation and know the amount of your equity. Don’t be blindsided and end up with a home that you owe more then it’s worth.

Upfront Fee Scams, lenders that require upfront fees for processing or an application fee. These can be substantial fees of $500 to $1000 or more and non-refundable. Lenders will target people with bad credit and tell them that their credit will not prevent them from getting a loan. They collect these fees and nothing else happens, the borrower never gets a loan and because it’s non-refundable you lose your money.
The only fees a lender can charge is for your credit report. This fee is normally paid to a 3rd party credit bureau and the lender is not allowed to charge a penny over the fee.
The other fee is for your appraisal this is also paid to a 3rd party appraisal vendor or AMC. Again, the lender is NOT allowed to charge a penny more then the report cost.
If they insist you pay any other fees RUN and don’t give them any of your personal information.

ID theft can happen to any of us doing things like applying for a home loan, buying a car, shopping online and many other situations we come across all the time. Ways you can avoid ID theft is to safeguard your personal information as best you can. Don’t email personal information because email is not secure. Don’t give out your Social Security number to anyone that calls you for any reason. Monitor you bank accounts and your credit accounts and set up alerts for both.

I have listed some resources below. I hope this information helps you and if you ever have any questions please contact me. 


Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Friday, December 1, 2017

Tips On Selling Your Home In The Winter

If you find yourself needing to sell your home in the winter months, it’s important to consider a few things that could help you get the job done without compromising on the value of your home.

Make sure your home is cleared out and clutter free especially important that you clear your entry way of muddy or wet shoes and boots. I know it is difficult but try to remove your personal items and family pictures.
You want your buyers to imagine themselves in your home not your family.

Be sure to have your thermostat set at 68-70 degree, this is very important if your home is vacant. If a buyer is freezing during their visit they are less likely to stay and explore your homes great features. If you are living in the home and have a fireplace, have a fire going. Make your home warm and cozy. The same is true for any outbuilding you may have. A warm shop or garage is much more inviting.

Lighting is very important during the winter when our natural sun light is limited, and the days are shorter. Make sure your rooms are lite up and your dark hallways have recessed lighting, it’s an easy and inexpensive area you don’t want to crimp on.

If you are selling during the Christmas holiday, it’s a great time to show off how festive your home can be, make it beautiful with decorations and let the buyer see how it shines during the holidays.

Be sure to have a photo album or slide show running on your TV that delay’s your home during the spring and summer months. Show off your vegetable and flower garden. It is sometimes hard for a buyer to picture what it may look like during the summer.

Have your home ready and easily accessible by removing any snow or ice on the driveway and walkways all around your home. Make it safe for people to see your entire property.

According to Redfin reports and Bankrate your home is 9% more likely to sell, a week faster for 1.2% more in the winter! Good stats, right? This could be because seller's are more willing to negotiate during what is a difficult time to buy a home. 

I hope this information will help you sell your home. If you have any questions, please ask, I would be happy to help. 

Thank you for visiting my blog, I encourage you to leave a comment or questions. Let me know if my blog has helped you. I would love to hear your thoughts and any ideas for future posts. 
Go for it give me some ideas!

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926