Category: purchase financing


TRID Is Upon Us!

   We are finally in it’s midst, folks. The long awaited lending guideline change is here, and for loan applications taken as of October 3rd, 2015, TRID guidance must be followed. As a quick refresher, TRID is the acronym for “TILA-RESPA Integrated Disclosure”. The new regulations cover a multitude of printed pages that we will not go into here. The most visible impact, & the one that those in the industry are watching so very closely, is the requirement that a borrower on a mortgage loan must now have the ability to review his Closing Disclosure no less than three...

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Will Fannie Mae’s New Collateral Underwriter™ Crush the Appraisal Process?

If you have been anywhere near lending or real estate social media lately, you have seen a great deal of news about what FNMA will be doing with appraisals. Much of the chatter would lead one to believe that we are facing a world of chronic low appraisals, delays in closings, & increased costs for consumers. Not to mention an almost Armageddon-like stifling of property values. Much of this remains to be seen, & like all new things, it can be difficult to separate fact from “distortion”. My personal expectation on all of this is that we will see “evolution”,...

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What is a “PMI Advantage”?

An agent partner of mine asked about a loan program that he heard advertised on the radio. One of our competitors (to remain nameless) is advertising a mortgage program billed as “PMI Advantage”. The advertisement states “PMI can cost you thousands. Let us pay the PMI so you don’t have to“. Who would pass up an offer like that? Heck, if an airline tells me “let us pay your baggage fee so you don’t have to”, that would be music to my ears! That is, until I discovered that the airline ticket itself will cost me substantially more. Here is the inside...

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Change Coming For FHA Mortgage Insurance

HUD is making some long awaited changes to the cost of FHA mortgage insurance. These changes are definitely for the better, & will bring reductions to the monthly mortgage payment for folks that obtain an FHA mortgage after this change is made. When a homebuyer obtains an FHA mortgage, they pay mortgage insurance to HUD to protect the lender against default. This is similar to PMI on a conventional loan. The FHA mortgage insurance is paid in two fashions: first an “up front” lump sum payment is made, & this amount is typically rolled into the mortgage. For a standard FHA...

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What Does it Take to Finance a Condo? Part 2

As discussed in part 1 of this topic, obtaining a mortgage on a condominium presents additional hurdles that do not exist when financing a standard home. This previous post delved into the “nuts & bolts” aspects of a condominium, & why it is different than financing a free standing home. In this post, we’ll get down to the nitty-gritty, & talk about what can make a condo approve-able, or “warrantable” in mortgage speak. We will also explore some things that can simply make a condo project ineligible for most types of financing. The items below are relevant to “conventional” mortgage financing of...

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What Does It Take To Finance A Condo? Part 1 of 2

So did your last condo transaction feel more like a hobbit adventure into Mordor than a standard real estate deal? If so, that is definitely understandable. Financing a condominium can have an unpredictable outcome, which nobody ever wants in a transaction. What is it about condominium financing that adds such a layer of complexity? Over the next few posts, we will explore this topic.  We will identify unique condo financing criteria, as well as tips to hopefully smooth out this process to ensure a successful closing. Let’s start by looking at the factors that make financing a condominium different than...

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Are Homebuyers “Breaking Bad” By Embracing ARM Loans Again?

OK, a confession here. The title of this blog post was meant to grab attention. Certainly there is no intent to imply that homebuyers that choose an adjustable rate mortgage fall into the same category as our wayward friend, Walter White. That said, during the financial collapse of 2008, ARM loans were cast into the fire and vilified as one of the elements that contributed to the collapse. Truthfully during that time, the fact that a mortgage was an ARM wasn’t typically the primary problem. Subprime loans, & loans that did not verify income were often written as ARM loans,... 0

5 Things That Buyers Must Not Do When Applying For A Mortgage

Texting while driving. Not looking both ways when crossing the street. And Frasier Crane running with scissors. The dangerous things that we shouldn’t do in life are endless. In a similar way, there are things that homebuyers simply cannot do when applying for a mortgage. Many years ago, I sat in on a training session for new real estate agents, & the trainer was doing a great job talking about farming, networking, marketing, and all the things that an agent must do to build their business. She then went into great detail on the mechanics of putting together a good...

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2 Weeks Into Qualified Mortgage-What The Underwriters Are Saying

There has been so much speculation into what the new Qualified Mortgage-Ability to Repay (QM-ATR) rules will bring to our industry. Predictions ran the gamut, from “this will crush our business” to “this is no big deal” and everything in between. We are now a little more than two weeks into the new guidance, & as is often the case, the practical truth seems to lie somewhere in the middle. Granted, this is all still very new from an operational standpoint, but here are some things that we can put in the “truth” column, when evaluating “truth vs. myth”. Borrowers...

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The Road Ahead: Home Finance in 2014

2013 is now behind us, and with 2014 underway, what kind of changes can we expect in home finance? The short answer: more regulatory hurdles, more due diligence by lenders, & somewhat higher interest rates & costs. What a way to start the new year! It is not all bad news though.  It is important to keep perspective with regard to these changes, & there is no reason that folks should be frightened away from a home purchase. For many borrowers, the extra due diligence & regulations will be transparent, & will have minimal impact on their loan application. Over...