Karl's Mortgage and Related Info Site

 

Once your loan application is filled out and sent to the underwriter for review, the first thing they will look for is your ability to payback the loan you are requesting. My team and I have a streamlined loan process to help you get your ducks in a row prior to this review. A grand slam loan package is in perfect order and answers all the important questions up front. We know what the underwriters are looking for, based on extensive knowledge of guidelines for a multitude of loan programs that are available today.

What is the underwriter looking for when they review the loan application?

The underwriter wants to know about your personal financial picture, including savings and credit history and your employment stability. The co-borrower's history is also taken into consideration. The underwriter also considers the loan amount and appraised value of the home you are looking to purchase or refinance. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can I do on my end to make it easier?

Before taking out a home loan it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. Aim for having enough savings to cover your down payment, closing costs if necessary, and two month's expenses in case of emergency. We'll help you find the loan program that works for you.

If I just started a new job six months ago, can I still apply for a loan?

A stable employment history is important, but the underwriter does take human factors into consideration. If you've recently completed college or vocational training, or were released from the military, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are loan programs that can work with your situation. If you are a freelancer or do contract work, the underwriter will look for consistency in income over the last two years.

Consistency is the key word in the underwriter's mind. But know that lenders have developed many different loan structures to meet the needs of the general public. When your grandparents bought their first home, they probably put 50% down and made a lump sum payment when the note was due. Times have changed, and so have loan programs. My team and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors®, CPAs, Financial Planners and Credit Repair Consultants to lend you additional assistance.

Call me directly for a free consultation.

Superior Home Mortgage Corp. licensed in DE, FL, GA: Georgia Residential Mortgage Licensee #14511, MD, MI, NY: Licensed Mortgage Banker - NY State Banking Department, NC, PA, SC, VA: Virginia State Corporation Commission License # MLB-566, & DC. Superior Mortgage Corp. licensed in CT, MA: Mortgage Lender License # MC3208, NJ: Licensed Mortgage Banker - NJ Department of Banking, RI: Rhode Island Licensed Lender & Broker, & TN. SHM Mortgage Licensed by the New Hampshire Banking Department

Did you know that the major credit bureaus sell your personal information? It's true! Known as "trigger leads", the files of borrowers applying for a home loan are immediately flagged, packaged, and sold by the credit bureaus to the highest bidders.

For about $25 to $100 or more, your name and certain specifics about your credit report, including your address, phone number, mortgage history, and even your FICO score range, are sold to unscrupulous mortgage companies which then blindly solicit your business. This results in numerous unwanted phone calls and junk mail offers which are in no way associated with your real estate agent or loan professional.

Unfortunately, no legislation presently exists to prevent the credit bureaus from profiting at your expense. As a trigger lead, you are simply at the mercy of any number of too-good-to-be-true offers designed specifically to try and discredit the mortgage professionals you know and trust.

Don't be fooled! Ultimately, there are only a limited number of sources where lenders may turn to obtain mortgage money, and it's unlikely that you will find an unbelievably low rate without an unbelievably high cost. That's why, prior to taking an application for any loan program, I always encourage my clients to opt-out of credit bureau solicitations by visiting www.optoutprescreen.com. For new home buyers, this is the simplest way to avoid the problem altogether.

As you embark on what could be the largest financial transaction of your life, it's important to have a professional mortgage specialist on your team who has your best interests at heart.

If you'd like more information on trigger leads, credit reports, or the various mortgage products available to help you reach your financial goals and needs, call me today.

Everyone makes choices. Their outlook on life, whether at home, at work, behind the wheel or at the theater, directly correlates to the decision to be either positive or negative. In essence, it's as simple as whether you see the glass half full or half empty. As author Stephen R. Covey puts it in his much publicized book, The 7 Habits of Highly Effective People,* you can choose to be proactive or you can choose to be reactive. He takes his theory a step further, saying that a proactive stance leads to greater success and contentment. From that perspective, a reactive person is sabotaging himself or herself.

Covey contends that every single day, people have 100 opportunities to be proactive or reactive. Let's say you're in your car on the freeway and an overly zealous driver is practically sitting on your tail in the fast lane. You're driving at the speed limit, actually a couple of miles faster than the law permits. But the motorist behind you thinks he's at the Indy 500. You can stay where you are, infuriate him and possibly get rear-ended. Or, you can move out of harm's way, to that opening in the right-hand lane and let him pass. He's in the wrong, and there's no question about it. Will you follow his lead? Will you be proactive or reactive? It's up to you.

It's very empowering to look at life from Covey's point-of-view. If you moved to the right lane, the reckless driver didn't force you. He didn't win. A vehicle can be a deadly weapon and you made the sensible, mature decision that shows why you deserve a driver's license and the other driver belongs on roller skates.

At work, you can be proactive if you take the time to learn about the principles of nature - in this case human nature and people interaction.

"If you ignore the principles of human effectiveness, you (can) work very hard, but still not get what you want," Covey says. Say that you've been working with a prospective client for the past three weeks, really putting a lot of effort into the new relationship. Then you learn, through some mutual acquaintance, that this would-be client ended up going to a competitor for the same service. It happens, and you don't have to necessarily blame yourself. But, you should take time to reflect on the past three weeks. Were you really proactive or were you reactive? How did you interact with the client?

Covey says principles are "natural laws that govern the world." To attain a proactive mind-set, he emphasizes one must create beneficial relationships, build trust and commit to self-renewal. "To be trusted, you must be trustworthy over time," Covey asserts. As for self-renewal, he says renewal means "preserving and enhancing your greatest asset - yourself."

*©2003 Fireside Books. ISBN: 0743250974. All rights reserved. Available on www.amazon.com

 

 

There is much give and take involved in negotiating a property purchase. That's why it's important to have a checklist of what you want to get out of the deal as a buyer. Bear in mind, the home must be appraised and the lender will be looking at the fair market value on a given property. Since property values fluctuate, your Real Estate Agent should do a comparative market analysis so you are aware of what the trends are for the area in which you are shopping. This will give you an idea as to whether the seller's asking price is realistic. You will also want to know how long the property has been on the market, and if any price reductions have occurred during that time.

Make sure your Real Estate Agent is on the same page with you so he/she is able to represent you properly. You also want to know that you are working with an agent that is experienced in representing the buyer. Not all agents have the ability to provide strong representation for both a buyer and a seller. If you have not yet selected a Real Estate Agent to represent you, my team and I can provide you with contacts that have a proven track record of success with our clientele.

Remember a good deal is mutually beneficial.

The seller will also have a wish list of what they want out of the negotiation. Listen attentively to determine what their hot buttons are. You can use this information to leverage what you want out of the deal at some point along the way.

Find out if the seller has a deadline. Perhaps they have already purchased their new home, or have to relocate because of a commitment to a new employer. Find out what the seller's current mortgage balance is and use this to your advantage.

On the other hand, if the seller wants to move because they can't manage upkeep on the home, or don't want to invest in repairs, these problems will be passed on to you. If you are prepared to go into a deal that involves a fixer-upper, there is an FHA financing program designed to provide funds for both purchase and repair. My team and I can provide you with more information on FHA loan programs and secondary financing.

You would also want to know if the seller is planning this move because there are problems in the neighborhood. Take a walking tour of the area and ask the residents what the neighborhood is like. You can also ask the local police department about the crime rate, or check the local newspaper for crime listings. Don't be afraid to ask questions.

When the seller is intent on getting their way on a certain point, make sure you are getting something in return. Typically the built-in amenities such as the dishwasher and garbage disposal will stay with the home. You can negotiate other items in exchange for something that ranks high on the seller's wish list. Be prepared to split the difference so everyone involved is satisfied with the negotiation. A win-win situation for both the buyer and the seller is critical to a smooth close.

Keep it simple and be direct, but above all, know that my team and I are here to assist you.

Call me directly for a free consultation.

Here's how you can stay in their good graces and avoid sky-high rates.

Debra Tanner was thrilled when, in early 2008, her longtime credit-card issuer cut her interest rate nearly in half, from 16% to 9%. But a few months later, the thrill was gone. In August, Tanner discovered that the card issuer, HSBC Bank, had jacked up her rate to 30%. In fact, the rate hike had gone into effect several billing cycles earlier without Tanner noticing.

When she called to protest, a customer-service representative told Tanner that her rate was being raised because she had been two days late with a payment. The bank refused even to consider restoring her lower rate until at least November.

Tanner, who owns a gift-basket business in Clearwater, Florida, considers herself a responsible borrower. The issuer has steadily increased her credit limit (to $16,000 currently) since she got the card in 1993. "I don't see anything in my record that justifies raising my rate so high," she says. After Kiplinger's contacted HSBC, the bank agreed to lower her rate to prime plus five percentage points -- about 10% recently -- and to give her credit for the additional interest charges she had paid since March.

What Tanner learned the hard way is that lenders are not only skittish about extending new credit but are also clamping down on existing customers. In July 2008, a survey of senior loan officers by the Federal Reserve Board found that during the preceding three months, 65% of U.S. banks had tightened their credit-card lending standards by raising required credit scores or lowering existing credit limits. That was up from the April survey, in which 30% of banks reported tightening their standards.

A year ago, a credit score of 720 had lenders lining up for your business; today you need a score of 740 or higher to get the best rates, says Ben Woolsey, director of marketing and consumer research at CreditCards.com. Bank of America, for example, says it's looking for higher FICO scores, although it wouldn't specify a number.

And a higher score alone might not be enough to keep lenders happy. They're also scrutinizing your credit-card use more frequently, looking at where you live and what you buy. HSBC, for example, says it has tightened its credit criteria and will "continuously monitor changing market and economic conditions."

In addition, says Woolsey, lenders are less willing to cut you slack for minor, one-time infractions. And you're less likely to receive solicitations for new credit or to get automatic increases in your credit line. "The definition of what makes a good customer has gotten a little more stringent," says John Ulzheimer, president of consumer education for Credit.com.

Risk factors. In some cases, credit-card companies are using geography as a risk factor, especially if you live in an area that's experienced declining home prices or if you hold a subprime mortgage. For instance, Discover is cutting back on marketing programs in "rising-risk areas" and limiting automatic credit-line increases. Discover didn't cite specific risk areas, but states such as California, Florida and Nevada have been hit hard by home foreclosures.

Your work or business could also be a factor. American Express says it's reducing credit lines for cardholders at greatest risk - including small businesses in the construction, home-building and mortgage industries.

Some card issuers are also paying closer attention to your spending habits. In June, the Federal Trade Commission sued CompuCredit Corp. for failing to disclose to cardholders that the company would monitor certain payments - to bars, massage parlors and marriage counselors, for example - and could reduce their credit lines as a result. There's nothing wrong with that kind of snooping, as long as card issuers tell customers that they use such data to evaluate risk. CompuCredit says the FTC's allegations about its marketing practices are "untrue and without merit."

What to do. Despite the increased scrutiny, you can still satisfy card issuers' requirements.

• Pay your bills on time and keep your balances as low as possible - preferably to 25% or less of your credit limit.
• Use each of your cards at least once every quarter. That will prevent a lender from closing an account that it deems inactive, says Ulzheimer.
• Look elsewhere if your card issuer cracks down. If you have a stellar record, you still have leverage with other lenders, says Scott Bilker, founder of DebtSmart.com.
• Don't close old accounts. That increases the ratio of your outstanding balance to your available credit, which can hurt your credit score.
• Ask for help if you're in a tight spot. Card issuers are sometimes willing to waive late fees, reduce interest rates or establish payment plans before you become delinquent, especially if you've been a good customer in the past.

Reprinted with permission. All Contents © 2009 The Kiplinger Washington Editors. www.kiplinger.com