Homeowners Insurance Importance to Mortgage Pre-Approval, Application & Closing

Homeowners Insurance Importance to

Mortgage Pre-Approval, Application & Closing

     After you've signed your Real Estate Contract and you've

agreed to purchase a home, there's still work for you to do as a Buyer and Borrower ...  

     Typically a Real Estate Contract reads that Home Buyers must make Mortgage Application within 5 business days after signing the Contract.  During the Mortgage Application (and even before) I, as your Mortgage Originator, will advise you to begin shopping for your Homeowner's Insurance.  

     For the Pre-Approval, and even at the time of Mortgage Application, I'm using an ESTIMATED dollar amount for the cost of your Annual Insurance Premium.  

     Why?  Because I (and Underwriting) must know and use the actual annual premium to calculate your EXACT total housing monthly Mortgage Payment.  

     Note:  No Underwriter will clear a file for Closing without knowing the exact cost for all components of the monthly Mortgage Payment.  So not having this portion of the Process completed in a timely fashion can cause Mortgage Approval and Closing delays.

     An example of this ...

     Recently, I had Home Buyers that dragged their feet regarding the pursuit of their Homeowners Insurance Policy.  When they finally received a quote for their Homeowners from their Insurance Agent, it was more than double the amount I'd used as the estimate for their yearly insurance premium at the time of their Mortgage Application.  

     After hearing the higher premium amount, I advised my clients to revisit the quote with their Insurance Agent.  If that conversation proved unsatisfactory, I recommended they seek a second comparison quote.  

     Eventually, my Borrowers did receive their Homeowners Insurance Policy, one containing appropriate coverage at a more reasonable cost.  I then proceeded to re-submit their loan file to Underwriting for their all-important "Clear to Close". 

     In Chicagoland, Mortgage Applicants are asked to pay the Homeowners Insurance Annual Premium directly to the Insurance Agency and IN ADVANCE of their Closing.  Upon full payment, a receipt is then provided to us (the Mortgage Lender).  That way no premium payment is still due on the actual day of Closing.  (Paying at Closing can be an option, in some cases.)

     Not seeing to the Homeowners Insurance Policy properly is just one way the scales for Mortgage Approval can be tipped from "Approved" to "Not Approved" for Borrowers.  Carefully following the instructions provided to you by your Mortgage Lender throughout your Mortgage Process ... and then taking care of them in a timely fashion ... saves you from stressful situations arising later in your Mortgage Process.

     Should you need a referral for an experienced, qualified Chicago area Insurance Agent, please contact me.  I'll be happy to provide you the name and contact info for someone to assist you with your insurance needs. 

     
     *  Hoping to Buy, Construct, or Refinance a Home in the New Lenox area, Will County, or elsewhere in the Chicagoland area?  Contact Me Today!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
     I'm easily found at:

Gene Mundt

Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI License #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell or Text:  708.921.6331

eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

           

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), 
DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.

Your Referrals are Always Great Appreciated!  

    

  

"Because" ... The Mortgage Underwriter is Requesting it!

     

 "Because" ... 

The Mortgage Underwriter is Requesting it! 

       As parents, we often find ourselves trying to explain things or reason with our children.  And when we do, it's almost inevitable that we hear a "Why?" after each attempt.  I know each of my boys did this.  Sometimes relentlessly.  

      If you're like me, when this occurred you eventually reached a breaking point.  Thoroughly exhausted mentally and having no more explanations, you finally offered up the only answer left to you ... "Because!" 

     I wrote a post entitled, "Creating a Paper Trail to Document Funds for Your Mortgage Closing".  In that post I related just how important it is to create and prepare a trail of easily-understood and easily-followed documentation prior to and during a Mortgage Application.

     This "paper trail" really trips-up some of my Applicants.  Especially when that "trail" has to be marked and clarified a bit better.  When that happens, it's not uncommon to hear the "Why?" question pop-up.    

     Now it's important to remember that each Mortgage Applicants' financial scenario is unique and different.  And the demands of Underwriting are based on those scenarios.  In other words, they can vary greatly.  

     When requests are made by Underwriters for further documentation, we (you and I as a team) must comply.  Some Applicants can get frustrated by this.  When that occurs, I've exhausted all my explanations, and I'm still meeting resistance for compliance, my last remaining answer can become ...  

     "Because."  "Because the Underwriter is requesting it." 
     
Truth is: 

• The Mortgage Process comes to a grinding halt if the requested documentation isn't submitted

• If the documentation submitted doesn't fully answer and satisfy the Underwriter's question and concerns, it can mean you'll have to produce even more documentation ... or write an explanation addressing their concern

     I understand the feelings of frustration vented during those times.  But the bottomline for any Mortgage Applicant remains:   

     The Underwriter's request for documentation must be acknowledged, reacted to, and fulfilled as thoroughly and as quickly as possible. 

     There's no circumventing their request.  There's no talking them out of it.  The request may seem redundant to you. It may seem over-the-top.  But full compliance is mandatory or you go no further.  Period.

     Sometimes "Because" explains it perfectly ...

     *  If hoping to Buy, Construct, or Refinance a home in a Lincoln-Way Community, Will County, or elsewhere in the Chicagoland area, contact me.  I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Direct:  815.524.2280

Cell or Text:  708.921.6331

eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

        

Gene Mundt, Mortgage Lender, a Lender with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL. 

Your Referrals are Greatly Appreciated!

            

    


       

       

Creating a Paper Trail to Document Funds for Your Mortgage Closing

Creating a Paper Trail to Document

Funds for Your Mortgage Closing

    

      It used to be years ago, that couples ... husbands, wives, and even the kids ... kept their financial accounts together in one bank, one savings account, and typically just one checking account.  I know my parents and my wife's parents certainly did it that way.

     But these days, multiple accounts in multiple institutions is the norm.  Each individual often maintains their own accounts: savings, investment, retirement, and credit.  

     They maintain and pay their own personal accounts, plus they've divided the responsibility for payment of household bills.  The household may have multiple checking accounts too.

     No, Americans no longer conduct finances as simply as they once did.  "Simple" doesn't come close to explaining the finances of my Borrowers seeking a Mortgage.  

     Except for those that are young First-Time Home Buyers, Credit Reports typically trace pages of credit history.  Mortgage Applications show a list of open accounts for each applicant.

     In today's Mortgage Process:  Applicants are called upon to verify accounts and account balances.  

     They also must verify and explain account activity, not just the balance ... meaning deposits, transfers, or withdrawals that may have taken place within those accounts.  

     Those account activities are many times referred to as its "paper trail".  

     Documentation, or the "paper trail", has become increasingly important to the modern Mortgage Process.  Underwriters are sticklers about them being concise, making sense, being easily understood, and easily followed. 

     The demands of producing documentation and a "paper trail" can be challenging for Mortgage clients.  The gathering and verifying of accounts can seem tedious and time-consuming. 

     So how does a Borrower minimize their "paper trail"?  A little preparation prior to and during the Mortgage Application/Process will help circumvent much of the problem.  

     Limiting the number of accounts utilized leading up to the Mortgage Application definitely helps.  Continuing to use a limited number of accounts throughout the Process will help too.

     It must be remembered that the ultimate goal in providing Bank Statements is to satisfy the amount of funds required at closing.  That includes: Verification of the Earnest Money Deposit and that the deposit has cleared the account.  

     Important:  Making your Down Payment on the purchase of your home from that same account is wise, and can limit the amount of documentation needing to be produced.  

     Keeping transfers of money to a minimum and making them only as needed is also wise.  Too many money transfers make an Underwriter nervous and raise red flags ... not to mention, it also creates the need to explain and document those transfers.

      Make sure:  To maintain good records of all accounts utilized.  Keep each and every page of the record of your monthly bank accounts ... even if it has just a page number at the bottom, as it WILL be required by an Underwriter.  

     I can't tell you how many times delays have been caused by this seemingly minor detail.  (As a rule of thumb, when documentation is concerned, NOTHING is a minor detail anymore.  See the list of documentation typically needed for Mortgage Application HERE.)

     Creating a Paper Trail to Document Funds for Your Mortgage Closing.  All the info and suggestions above speak to why it's so important to speak to and work with a Mortgage Originator well in advance of the time when you hope to start searching for a home.  Allow yourself at least 6 months to a year, if possible.

      You'll be better prepared and educated as to the best way to proceed throughout your home buying transaction.  And you'll also be positioned to navigate the Mortgage Process quickly and easily, having to produce the smallest "paper trail" possible ...

     
*  Hoping to Buy or Refinance a Home in the Chicagoland area?  Contact Me today!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
     I'm easily found at:

Gene Mundt

Mortgage Originator  -  NMLS #216987  -  IL Lic. #031.0006220  -  WI Licensed #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell or Text:  708.921.6331

eFax:  1.815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

         

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  
Conventional, FHA, VA,  Jumbo, USDA, and Portfolio Loans in Chicago
and the greater Chicagoland region, including:  
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, 
Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Referrals are Welcomed and Greatly Appreciated!

       

     

    

     

The Beauty and Benefit of Organization to Mortgage Financing

The Beauty and Benefit of Organization 

to Mortgage Financing

     The word:  Organization ...
    

     
    The definition of Organization:  The act or process of putting the different parts of something in a certain order so that they can be found or used easily

     Some Synonyms for Organization:   

• Grouping
• Structuring
• Management 
• Planning
• Method
• Assembly

     
     During tax season, is the perfect time to talk of ... Organization.  Because if you're ever going to be organized during the year ... or have the organization of your finances and financial papers under control ... it's during this time.  In a way, it's almost mandatory in order to file taxes.  At least in some good measure.

     For those thinking you may want to buy a home during the remaining portion of the year, pay special attention ...  NOW ... while you're organized and your finances and documentation are fresh in your mind ... is a great time to get a jump on your upcoming Mortgage financing.  

     Should you be in the preliminary planning stages and  gathering info to see if you're capable of financing a new home, it's the perfect time to contact a Mortgage Lender.  You have much of the info you'll need already at your fingertips and you'll be ready to ask questions and find the answers you need to make your decision.

    If you e-filed this year's taxes, you'll need to keep the paper copies of your tax returns for your records.  Document fully any payments you made regarding your taxes ... or refunds received.  They'll likely be required at the time of your Mortgage Pre-Approval and Application, especially if the two coincide. 

     If you've already arrived at the decision to buy, you're in a great position, as you've already got a good portion of the documentation assembled to make your Mortgage Application.  To continue the preparation for your financing, find a list of documents that are typically needed for Application HERE. 

     Fact is, the better your organization skills in regards to your finances, the better you'll navigate your future Mortgage Process ... and the more quickly you'll find the success you seek.  The more organized you are in the paperwork process, the smoother your loan process will be.  The more accurate the information exchanged between Loan Officer and Client, the better the application, and the chances for loan approval increase.  

     None of this is a coincidence.  A client's level of organization directly influences the level of enjoyment they'll find throughout their financing process.  In otherwords, a little organization is beneficial and pays dividends.   It's a beautiful thing ...

    
    *      To discover what options for Home Buying (or Refinancing) exist for you in New Lenox, another Lincoln-Way Community, Will County, or elsewhere in the Chicago area, contact me.  I'll put my 36 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Direct:  815.524.2280

Cell or Text:  708.921.6331

eFax:  815.524.2281

www.genemundt.com

gmundt@goapmc.com

Click HERE for your FREE Mortgage Consultation!

Ready to Apply for your Mortgage?

             

               

Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.