What Are Loan Officers Asked Most Often?

The number one question that we get asked every day from potential clients is, “What is your current interest rate?”

If only that question had a simple answer. If it were as easy as just spouting off a percentage, you might not even need us. That’s because understanding and getting your interest rate is a process. Rather than quote you an interest rate, we like to spend a few minutes going over what exactly is involved in coming up with an interest rate. There are 4 important factors that determine your interest rate. They are:

1.    What is your credit score?

2.    What type of loan program do you want?

3.    What can you afford for a down payment?

4.    What type of property are you getting?

We want to help educate you and guide you in determining your interest rate. We don’t want to give you a quote on the phone by jumping to conclusions, only to have to backtrack what we said based on the information you give us. When you buy a home, you are making one of the most important purchases of your life, so you want to be able to trust the people you are working with. You also want to make sure you know what kind of home you can afford based on that information, so you know what kind of home you should be looking for.

If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!

Raise The Roof! Fannie Mae Has Raised Their DTI Ceiling!

Have you ever been rejected for a mortgage due to your debt-to-income ratio? Or know someone who has? Well good news: starting July 29, Fannie Mae is raising the DTI ceiling to 50 percent! Currently, it sits at 45 percent.

Never heard of DTI? Debt-to-income ratio takes your gross monthly income and determines what percentage of that goes towards any debts that you may have – credit cards, loans, etc. including what your new mortgage payment would be. You can find a free calculator here.

No need to get alarmed quite yet if your ratio is higher than 50 percent. Fannie Mae, Freddie Mac and the Federal Housing Administration all have exemptions allowing you to buy or insure loans, even if you have a DTI above 50 percent.

Word of advice, however, high DTIs are viewed more critically by lenders than any other factor – including credit score. The reason is simple: more monthly debts = a greater risk of late mortgage payments.

Having a lower DTI does not mean that you’re automatically good to go, however. There are still several other factors involved in the approval process, such as your down payment, your credit score and more.

Want to find out what loan you can be approved for? Give us a call today!

Why Do You Need Title Insurance?

Today, we’ll talk about what title insurance is and exactly what you’re paying for.

Whenever I sit down with a borrower, they ask what fees they can expect when they’re getting ready to close. One of those components is title insurance, which can be kind of pricey, but is very important. The important thing to remember is that title insurance is a one-time fee that is paid for at the time of closing. Typically, this is mandatory, so that we know that the property is going to be free and clear of any liens or clouds on title.

After hearing that, you may think to yourself “I don’t need that, it’s just an extra cost.” You might think that your home is free of any lien or clouds on title, but your builder or neighbor may have liens on your property. For example, if you buy a house where a contractor did some work for a previous owner but it wasn’t paid, it could affect your ability to refinance down the road if there are liens against the property.

Another thing you need to be aware of is the TILA-RESPA Integrated Disclosure (TRIP). TRIP was established because of the Dodd-Frank Act of 2010, which was a response to the mortgage crash. The Dodd-Frank Act aimed at making sure buyers are aware of what they’re getting into and understand their financial obligations. This change affects all of us, but the worst of it is going to land on the lending side of things.

The thing that will affect you, the buyer, the most is once you get the closing disclosure, or settlement statement, which replaces the HUD-1 statement. If we, the lender, send the disclosure through the mail, you assume three business days for delivery and then three days for review prior to closing. For example, assuming you receive the settlement statement on Friday, it will be Wednesday before you can close. This means there will be no more last second closings, as the process has now been drawn out a bit.

Do you have more questions that we didn’t answer here? Feel free to reach out! We’re happy to help.

Why Is The Pre-Approval Process So Important?

Today, I’ll discuss the importance of the pre-approval process. The pre-approval process is imperative and essential to be completed prior to you making any offers. The listing agent and seller typically require a pre-approval letter to accompany your offer with the Realtor you work with.

This process can happen a couple of different ways. The preferred methods are to either do this in person or over the phone. You can also go to my website and fill out an application there. I typically conduct a follow-up call after you submit an application.

Ultimately, we need to ask you all the necessary questions. Depending on your answers, we can ask follow-up questions. By the end of the conversation, we will have a great loan profile for you. This allows us to email you a list of required documents.

We want a smooth escrow process. There’s nothing worse as a homebuyer to be running around at the last minute. We do all this work upfront. We can discuss rates and programs. We want to educate you at the end of the first conversation. We want to help you make the best decision for your situation.

We look forward to assisting you with your finance needs!

What Should You Ask a Buyer's Agent Before Hiring Them?

Are you thinking of hiring a buyer's agent? If so, there are questions you should ask to ensure you hire somebody you can trust. Here are a few to keep in mind:

●     Are you a full-time agent?

●     Do you work exclusively with buyers?

●     Do you have a team behind you?

●     Do you have testimonials from past clients?

●     Do you do a comprehensive buyer consultation?

These are all very important questions you should know the answer to, especially the last one. A comprehensive buyer consultation is a very important part of the buying process because it provides an opportunity for the agent and client to go over the client's wants and needs, set expectations for the process, and answer any questions they might have.

If you have any questions about the buying process, or if you would like to talk to one of our recommended buyer's agents, don't hesitate to reach out to us for a free consultation. We're always available to give you a hand!