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 1^st 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

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

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 3^rd 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 3^rd 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. 

FTC Consumer ID

  

ID Theft and your SS

File a Compliant with FTC

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

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

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

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com 

Advantages Of Buying A Home In The Winter

Winter brings a different perspective to buying a home. Although the winter has it's challenges when it comes to buying a home it can be a very a good time to buy for several reasons.

There are fewer buyers out looking with most of them sitting by the fire trying to keep warm. Many don’t want to brave the rain and snow looking for a home. It’s hard enough in the summer, right? It may be more difficult but well worth your time and effort to find the perfect home at a great price.

With fewer buyers out looking you are less likely to come across a multiple offers situation.

Sellers are highly motivated, if a house is listed during the winter months the seller’s circumstance could be to your advantage. They could have a new job and need to relocate. Financial problems or a divorce. Depending on the seller’s situation they may be more acceptable to negotiating.

A home listed in the winter may have been listed for a long period of time. If a home is listed for several months you may be able to offer less. Don’t be afraid to make an offer below asking price. But be careful not to offend the seller with a low-ball offer either.

Very important is the home itself, during the winter is an excellent time to see how a home performs when it is cold, after a good snowfall or rain storm. You can see if the home has leaks or a problem with insulation or lack of it, check for cold corners or rooms. A well-built home will not have icicles hanging from the eves or snow collecting on the roof.

Another advantage is finding a Realtor in the winter months is much easier because most of them are not as busy. They can spend more time with you and help you find the perfect home.

The same could be said for your mortgage professional.  

Another great motivator is your loan and what interest rate is available. Lender’s are less busy during the winter and we often see lower rates during the winter months. Take advantage of this, it could save you thousands over the duration of your loan just by buying during the lull in the market. We never know when rates will go up.

I have given you some great reasons to buy this winter, do your homework and due diligence before you buy your home. Talk to professionals and get the knowledge you need to make your best choice and then put your knowledge to action. Go for it! It’s fun and who doesn’t like moving into a new home no matter the season.

If I can help in any way with questions or your financing I am always available and just a phone call away.

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

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com

Mortgage Insurance Explained

There are two different types of mortgage insurance. 
    1. Mortgage Insurance Premium or MIP

          2. Private Mortgage Insurance or PMI

Mortgage insurance is required on any real estate loan that has a loan to value (LTV) above 80%. Not everyone can save up 20% for a down payment so MIP or PMI allows a buyer to put less down and pay insurance to protect the lender against default and foreclosure.

To explain the difference between MIP and PMI:

MIP is used for FHA loans that require a small down payment of 3.5%. You pay MIP in the form of an annual up-front mortgage insurance premium or (UFMIP) this can be financed into your loan and the current amount is 1.75% of the principal balance. In addition to this UFMIP is a monthly premium of .55% added to your mortgage payment each month.

Example:   250,000 Loan Amount x 1.75% = $4,375 Annual UFMIP 

                   250,000 Loan Amount x .55% = $1,375 /12 = $114.58 Monthly MI

FHA MIP is on your loan until the loan is paid in full or you refinance into a conventional loan and remove it after you have 20% equity in your home.

PMI is for conventional loans when you put less than 20% down. The rate factors are based on the individuals credit history and risk factors. Typically ranging from .35% to 1% of principal balance. Most insurance companies require a 660-fico score before they will cover your loan.

There are different ways to pay this type of PMI, you can choose to pay it all upfront at time of closing or as a monthly premium or a combination of both.

Lender’s also offer a slightly higher interest rate to cover the cost of the insurance called lender paid MI. I don’t recommend this if you plan to stay in your home for more than 5 years, because the higher rate is for the life of the loan and the best part about this type of PMI is you can request to have it removed after you have 20% equity in your home.

When you request your PMI to be removed you must do it in writing and they will require an evaluation of value to done on your home to establish your LTV and confirm you have 20% equity. You may have to pay for an appraisal to confirm value.

The Homeowners Protection Act of 1998 became effective in July 1999 and is known as the PMI Cancellation Act.  It was enacted to protect homeowners from the difficulty of cancelling PMI from their home loan. Now if you forget to request removal the lender is required to remove your PMI automatically when your LTV reaches 78%. I still recommend you keep track of your home’s value annually if you have PMI.

How you can avoid PMI and MIP is with a VA loan. Veterans who qualify can get 100% financing. With a VA loan there is a funding fee that is normally financed within the loan but no monthly mortgage insurance. 

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

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com 

Piggyback Loans are Making a Come Back!

A piggyback loan is used when a buyer doesn’t have 20% down. This loan is considered a purchase money loan and goes in second place after the first lien. In most cases we are seeing a combination that is 80/10/10 meaning you get an 80% loan, a 10% piggyback/second loan and you put 10% down payment. Other combinations are 80/15/5 and an 80/20. All making a comeback..

By doing this it eliminates the requirement for principal mortgage insurance (PMI)

We are seeing more lender’s in 2017 take on this risker scenario not seen since before the 2008 mortgage crisis. These loans are an alternative for the buyer who doesn’t want to pay mortgage insurance.

Mortgage insurance is paid on any loan that exceeds 80% loan to value (LTV) there are several different ways (PMI) can be paid. I’ll go into mortgage insurance on my next blog post.

Piggyback loans are typically at a higher rate than the first loan and often made by the same lender.

I have seen some lenders match the rate of the first if the borrower’s risk factors are low. Meaning the borrower has a higher credit score and low debt to income ratio.

The only loan above 80% LTV that avoids PMI is a VA loan for our military folks. The VA loan for purchase and refinance is 100% financing and the ability to add their VA funding fee and closing costs to the loan, so the Veteran has no out of pocket money required. Great deal for our veterans. 

I am not sure if bringing back the piggyback is a good idea or not, they did cause their share of problems for both homeowners and lenders, causing many foreclosures which is why they disappear for so many years. I see an ever changing environment in the lending industry with lenders taking on more risk. Good or bad not sure!

I think it’s important to make sure that you research the difference between paying PMI or getting a second lien and the rates offered on the piggyback vs the factor used for the PMI.

Other things to consider is the tax benefit of each and with this new tax plan being introduced by our current president. Most of us can deduct our mortgage interest and mortgage insurance but that is likely to change if the new plan passes, at least to some degree depending on the size of your mortgage.

Thank you for visiting my blog and I encourage you to leave a comment or questions. Let me know if my blog has helped you to answer any questions you had. I would love to have ideas about what you all would like to learn about regarding financing or real estate.

Go for it give me some ideas!

Roxy Redenbaugh

ACMC Loan Consultant

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com 

How To Pay Off Your Mortgage Ten Years Sooner!

Most home loans are for a 30-year term. To calculate how you personally can pay off your home  10 years sooner, you will need to get your most recent mortgage statement or go online and get your pay off balance. Now get your interest rate from your statement and using a mortgage calculator. You can use mine at www.roxyloans.com it’s at the bottom of my home page. Just plug in your balance, leave the down payment box empty, add in your interest rate, then change the term from 30 to 10 or 15 or whatever you want the term to be and hit calculate. This will give you the principal and interest you will need to pay each month to pay off your mortgage in the term you picked. 

Now remember if you have property taxes, home owners/hazard insurance and any mortgage insurance that you pay in your mortgage payment each month too, this is called and impound or escrow account. You will need to add that figure to your payment. These figures should also be on your mortgage statement. If it’s not you can probably find the amount online in your account payment history.  

One more thing to note and it’s important. Most mortgage servicing company and lenders may not know what you are doing if you send in more than your normal payment. If you plan to pay extra to pay off your mortgage early, send the extra by mail and by check and add instructions for them to apply this extra amount to your principal balance, you don’t want them to mistakenly add it to any interest due when they receive the payment. Keep good records of your over-payments and check your principal balance every quarter to make sure they are being apply to your account correctly.

If you would like an amortization table of the new amount/term you will be paying, I would be happy to do this for you FREE. Give me a call and we can go over any questions you may have.

Thank you for visiting my blog and I encourage you to leave a comment or questions. Let me know if my blog has helped you to answer any questions you had. I would love to have ideas about what you all would like to learn about financing or real estate. Go for it give me some ideas!

Roxy Redenbaugh

ACMC Loan Consultant

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com 

10 Ways To Pay Off Your Mortgage FAST!

1. Using a mortgage calculator to figure out how much more you will have to pay each month to lower your principal balance and shorten your term. Paying a little bit more then your normal payment will  save you on the interest each month and in turn shorten your term. 

 2. Divide your payment in half and make that payment every two weeks instead of once a month. Because there are 52 weeks in a year at the end of the year you will have made 13 payments instead of 12. Most mortgage servicing companies and lenders will allow you to set this up. They will most likely have a setup fee but you will be saving interest each month and paying off your mortgage early saving you money. Check with your lender to see if they will except partial payments in advance of due date. You will need to get ahead of your current payment to get this in motion.

 3. Refinancing your 30 mortgages into a 

15-year or even 10-year term mortgage will save you an incredible amount of interest. This has become very popular as baby boomers look at retirement and want to stay in their homes.

 4. Refinancing in general could be an option for you to save money, I always advise my clients to do an annual mortgage analysis to make sure your current mortgage is working for you and see if there might be is a better loan product available that could save you money.

 5. Blending a traditional mortgage with one or more deposit saving accounts. Both the mortgage and savings are established with the same bank/lender. Each mortgage payment is made and the interest is calculated on principal of your mortgage loan, minus the aggregate in your savings accounts, you still have access to your savings. This is a very common financial tool used in many countries that our US banks really don’t want you to know about.

 6. Setting goals to pay off your home early can also mean sacrifices no one wants to work a second job, but increasing your income with a second job or other type of work that can increase your income and pay this extra income to the principal on your mortgage will work to get it pay off early.

 7. Cutting up those credit cards is another sacrifice you could do to create extra income. Once they are paid off, start making that same payment to your mortgage principal.

 8. Do a price analysis on all your other expenses to see if it’s possible to reduce some of your monthly bills. Cell phone, cable and internet, electric. If you use your checking account to pay all your bills, some banks have reports on the different type of expenses you spend your money each month, use these reports to see where you spend and where you can reduce your spending. Take that savings each month or even quarterly and make a payment toward to mortgage principal.

 9. Investment accounts, 401K, Roth IRA’s, IRA’s, annuities, life insurance with cash value, etc. Checking these accounts annually to see if using them to pay off or reduce your mortgage debt is financially right for you. Determine your gain vs the interest paid on your home and see where you are and what is working and what is NOT.

10. Using your home as a money earning asset, renting it out. Renting a room or space in your home. If you have the ability to turn remodel old basement or attic into a rental space you can earn a second income from your home. If you have a lot of land or large lot consider renting a space to someone living in an RV or storing it for them while they are not using it. Be creative and do what works for you.

With all of these different ways to pay off your mortgage early please make sure you are careful and if you need help contact me. I can whip up an amortization table or do an mortgage analysis pretty quickly for you and help you with any questions you might have about any one of these 10 ways.

Thank you for stopping by my blog,  I appreciate and welcome your comments and questions.

Roxy Redenbaugh

ACMC Loan Consultant

roxy@roxyredenbaugh.com

Certified Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com 

USDA Home Loan Program NOT just for Farmers

USDA is a power loan helping first-time and lower income home buyers realize the American dream of owning their own home. You don’t have to be a first-time homebuyer to qualify. This loan features ZERO down and allows you to incorporate 2% of your closing cost into your loan. 

USDA loans are eligible in rural and suburban areas in the US, they allow many types of property of be included. Townhouse, Condominiums, Single Family Residents as well as multifamily units. You can also use a USDA loan for refinancing your current home. It’s THE most affordable loan product in the marketplace with zero down, the lowest mortgage insurance rates (MI) with a 1% upfront fee and .35 monthly rate.

USDA is a loan program provided by the US Department of Agriculture. But don’t let that discourage you thinking this loan is for AG land or farmers only, not the case at all.

USDA guarantee the loan, this means the US Department of Agriculture backs the lender if for some reason you default on your loan and reimburses the lender, this insurance allows lenders to approve loans at a higher risk with zero down.

It’s easy to get started to see if you qualify, contact me for a fast, easy and free prequalification process. I will provide you with a preapproval letter for your Realtor, you can then go shopping for your home.

Once you find a home you’ll want to make sure it’s in an approved USDA area prior to submitting an offer.  You can easily check at USDA link Income/Property Eligibility to see if your income and property are eligible. 

Your home will be appraised to insure value, the lender will send your file to USDA for final approval and once they sign off on your loan approval, you close escrow and move into your home. It’s about a 60-day process. In most cases USDA will take no more the 14 days to review and approve your loan once submitted by your lender.

I hope this information has been helpful to you.

I always welcome and encourage your comments and questions.

Thank you for stopping by my blog, enjoy your day!

Roxy Redenbaugh

ACMC Loan Consultant

roxy@roxyredenbaugh.com

Mortgage Coach

Branch Manager

NMLS #269926

www.roxyloans.com