Common Sense Credit Advice While Buying and Financing a Home

   Common Sense Credit Advice

While Buying and Financing a Home  

     It would seem to be common sense, right?

     If you're in the process of applying for a Mortgage and heading towards your Mortgage Closing ... you shouldn't do anything that would upset the fragile balance of your credit or the Mortgage Approval received from your Mortgage Lender.  

     Yet it happens ...

     I provide the advice above multiple times throughout their mortgage processing to my clients ...  

     Stop!  Think!

•  Don't buy anything on current credit accounts/cards 
•  Don't apply for new credit (no matter how tempting or how good a deal it sounds)
•  Don't move funds or monies from account to account

  
     In short?  Don't make a move financially unless you talk to me first!  

     What happens if you don't follow this advice?  Be aware that problems can arise.  Problems that can cause delays.  Problems that have been known to derail Mortgage Approvals and Closings.  

     Now I'm certain you've seen or heard this advice before.  Besides being provided in my many posts, this common sense advice is provided frequently in one form or another elsewhere.

     Yet this morning, I learned that one of my clients had not followed my advice and fallen to temptation.  Over the weekend they had applied for a new credit card at a home improvement center.  It's going to cause them a problem.  

     Yep.  Credit Scores can be that fragile.  So can Mortgage Approvals.


     So do yourself a HUGE favor ...  

     If you're presently in the process of applying for a Mortgage  ... 

     Or thinking of applying soon ... 

     Click on, read, and take the advice provided in my "10 Commandments When Applying for Mortgage" seriously.  Follow my advice to a T.  

     You'll avoid problems and extra stress when you do ...  

  *  Hoping to buy or refinance a home in Chicagoland, Illinois, or Wisconsin?  Have concerns regarding your credit history or Credit Report?  

     Contact me today.  I'll put my 37 years of mortgage experience and expertise hard to work on your behalf.

     I can be easily found at:

Gene Mundt

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

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/Text:  708.921.6331

eFax:  1.815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

          

Gene Mundt, Mortgage Originator, 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 and Wisconsin.  

Your Referrals are Greatly Appreciated!

       

     

Underwriting Guidelines Loosened August, 2015. How That Can Help You Buy a Home Now

Underwriting Guidelines Loosened August, 2015

How That Can Help You Buy a Home Now 

     

   

     Big changes to Underwriting ... made by both Fannie Mae and Freddie Mac ... came to hopeful Home Buyers last August (2015).  Corresponding Underwriting Software Programs changes for both Fannie and Freddie were also made around that time ...

      As these two GSE's (Government-Sponsored Enterprises) presently oversee a majority of residential financing transactions in the world of Conventional Financing, any changes they make have a potential for huge impact.  In sheer numbers alone, changes made by these GSE’s can have rippling, long-reaching results.

     So …

What are some of the changes made in August, 2015?  

Why are they so important?  

And WHO benefits the most from their having taken place?  (Answer?  Home owners hoping to retain their current Primary Residence while purchasing another.)

     As a bit of background … 

     Prior to the August 2015 changes:  Borrowers had to meet several fairly restrictive conditions when seeking mortgage financing.  For many, the biggest hurdle faced during the financing process surrounded the Rental Income on their current home. 

     Because a large number of Home Owners found themselves in negative equity positions (or "underwater") as a result of the housing crisis, many made a financial decision to rent-out their underwater homes while living elsewhere. 

     There were obvious positives to be found in their decision, but there could also be some negatives associated with it.  For homeowners that hoped to pursue the purchase of a new home (while renting their current home), steep challenges were being found prior to the August 2015 changes made. 

     Under OLD rules:  Borrowers couldn't leverage any Rental Income derived from their current (rented) property against a new home’s Mortgage Payment.   

     Buyers with less than 30% equity in their "retained property" had to meet stringent guidelines in this scenario.  Old guidelines dictated that hopeful Borrowers come up with a 6 months of Reserves, in addition to Down Payment and Closing Costs.  

     But with new August 2015 changes in play, that has changed.  Homeowners “underwater” and in a negative equity situation on their current home value VS its mortgage balance, face "loosened" guidelines and an easier time qualifying for financing on a new home purchase.

  

     It's important that the public is aware of the new reality:  New options may now await those hoping to buy and re-enter the housing market.  

     Previously found disappointments may no longer exist.  Homeowners that inquired about home financing in the past and thought themselves stuck in their current home may now qualify for the purchase of a new home.  

     Other August, 2015 changes that could be “game-changers” for current hopeful Borrowers:

• Fannie Mae loosened guidelines regarding the way Underwriters calculate Income, and/or view certain business expenses claimed on a person's tax returns.      

     And more good news: 

• Assets, such as stocks, bonds, investments, and mutual funds may not have to be liquidated when the funds are simply being documented to strengthen a Borrower's Reserve Funds.      

      

     Prior to August 2015 changes:  The above-mentioned investments were discounted as much as 40% off the current fund/stock value when they were being used to "prop-up" a Borrower's file.  Now, in some cases, they're allowed at their FULL present value.

      For those that have paid their mortgages on time and simply lacked home equity, the changes freed them to pursue home buying once again.  They're now able to rent/retain their current home until it is more financially advantageous for them to sell it.

      Combine the benefits of current low interest rates, the low down payment programs available (see my post “You Don’t Need a 20% Down Payment to Buy!”), home prices … with the advantageous changes made by Fannie and Freddie in August of 2015 … and potential Buyers now have a perfect trifecta of reasons to consider action.  

     Bottomline:  Changes are constantly taking place within mortgage lending.  What was true for homeowners and Buyers yesterday, may not be true today or tomorrow. 

     Mortgage Programs, rules, regulations, interest rates, and available financing options constantly evolve and change.  That means the answers and outcome found when seeking mortgage financing can change too.

     If hoping to buy a new home or refinance your current one:  Don’t let answers received prior to the changes defeat you forever.   

     Talk to a Mortgage Originator today.  Get facts and answers based upon current mortgage programs and options available. 

     Especially for “underwater” homeowners, those presently renting their homes, and Borrowers in need of documenting Reserve Funds, the changes made by Fannie Mae and Freddie Mac last August may manifest themselves into new outcomes and pleasant surprises.  Contact me to find out …

Gene Mundt

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

     

Direct:  815.524.2280

Cell/Text:  708.921.6331

eFax:  1.815.524.2281

gmundt@goapmc.com

www.genemundt.com

Applying for a Mortgage Soon? Don't Dispute that Account

Applying for a Mortgage Soon?

Don't Dispute that Account

     Sounds counterintuitive, I'm sure ...

     But until you've talked to me (or your own local Mortgage Originator), don't even think about disputing an account found on your Credit Report.

     Why?  Unknowingly, you can be creating real problems for your Mortgage Application and Approval. 

     Consider this:  A creditor can refuse to change their disputed rating.  Too many disputed accounts on a Credit Report may result in your loan being denied.

     Is that a really a risk you want to run at such an important time?

     A formal dispute placed on a car loan, student loan, credit card, collection ... or even worse, a mortgage loan ... can cause havoc for your new Mortgage Application.  So ...

     Slow down.  Contact me ... and let's talk.  We'll analyze all your options and see what action is appropriate and in your best interest.  

     What is not commonly known:  Credit Bureaus and Automated Underwriting systems now reflect an evolution that has taken place over the last few years regarding credit disputes.  

     Both the Bureaus and Underwriting systems have been re-worked to recognize disputes as a negative impact and rating on a Borrower's "approvability" or "credit-worthiness".  

     But these changes have taken place without much fanfare and public recognition.  And because of that, hopeful Borrowers have all too often been contributing to the issues faced within their Mortgage Process later.     

     Prospective Mortgage Applicants (and the public in general) must be educated to this fact.  The temptation to dispute an account must be avoided, if hoping to finance a home via a Mortgage Loan soon.       

     If a Creditor offers-up a path to formally dispute your account ... just say no!  At least prior to our talking.

     There may be a better course of action available to you.  During our conversation we'll weigh your options and best course as it pertains to your Mortgage and your Approval.  

     But providing solid, written proof and evidence regarding your stance on the account in question, WITHOUT placing a formal "dispute" on said account is often the most prudent course of action ... 

     Remember:  You must have legitimate data and written proof in order to accomplish your goal successfully.  But when you have that proof, your account can be "re-rated" or the derogatory rating can be deleted from your Credit Report. 

     Any "correction" should come from the Creditor (Credit Card company/bank/etc.) and immediately sent to each of the 3 Credit Bureaus (Experian, TransUnion, Equifax).  

     This final step trips-up way too many, as it's assumed that the Creditor(s) will share the new updated information with the 3 Credit Bureaus.  They may or may not.  

     Bottomline:  It remains YOUR responsibility to inform each of the 3 Bureaus.  

     Play it safe and follow through with this important task, as it's in your best interest to see that it's successfully done.   

     When a correction is reported to the Bureaus, they will, in turn, update your Credit Report.  While each case is different (and I do not represent that all results will be successful or as hoped for) ... you may head off potential issues with your Mortgage Approval by acting pro-actively.  Consult with a Credit Repair Specialist if uncertain of corrective steps to be taken.

     In the modern Mortgage Process, the experience level of the Mortgage Originator you choose can't be understated.  Successful navigation through the steps of addressing credit disputes and credit analysis is just one example of this fact.

     Get your Mortgage questions answered today.  Let's talk! 

 *   Hoping to buy or refinance a home or Investment Property in New Lenox - Will County - Chicagoland - IL/WI?  Have concerns regarding your credit history or Credit Report? 

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 #216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/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, Lockport, Channahon, Romeoville, Naperville, etc.), 
DuPage County, the City of Chicago, Cook County, 

and elsewhere within IL and Wisconsin.  

Your Referrals & Testimonials are Greatly Appreciated!

     

How Thick Will the Icing Be on YOUR Mortgage Cake?

How Thick Will the Icing Be 

on YOUR Mortgage Cake?     

     I write mortgage and real estate-related blogs.  But I READ a lot of mortgage/real estate blogs too ... and the subsequent comments made to them.

     Often, someone else's post or thoughts will provide inspiration for my own writing.  That was the case this morning ...

     Nicole Doty, Broker/Owner of Zion Realty in Gilbert, AZ, while commenting to a post of mine entitled,  "Are You a Hopeful Home Buyer?  Did You Just File Your Taxes?", stated: 

     "Depending upon the amount of the (income tax) return it could be the icing on the savings cake a potential home buyer was waiting for."

     Nicole is right.  The old adage of "timing is everything" is definitely appropriate when talking down payment funds coming from tax refunds.

     And many hopeful home buyers are receiving tax refunds right now ... or will be soon.  Tax refunds they hope to parlay into a down payment on a home purchase.

     Pair those tax-refund-down-payment monies with the lower interest rates currently available and you have a pretty thick and sweet "icing" for your mortgage cake.  Thicker and sweeter than the icing you'd have found on your mortgage cake even just a few weeks ago.

     Yep!  Timing is everything ...

     Unfortunately, no one can predict precisely how long interest rates will remain this low.  How long that "icing" can remain that thick.  Even industry gurus can't agree.

     

     So here's something to consider:  If you're hoping to buy soon ... or somewhere down the road in 2016 ... now might be a pretty sweet time to get started.  

     The ingredients in your icing ... tax refund down payment and lower interest rates, could make for a pretty tasty cake.  And great savings ... now and over the term of your loan.

     If nothing else, contact me now to see what options and possibilities exist for you to buy a home or refinance the one you have.  (IL & Wisconsin)  Doing so will definitely benefit you when you make your mortgage application.  

     But up until that time, it will help save you money.   Improved credit and finances benefit you everywhere in life.

     The timing is right to take action.  The time is now.  Let's talk!

   
*  Hoping to buy a home or refinance a home in the greater Chicagoland area?  Contact me today.  I'll put my 37 years of mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt

Mortgage Lender  -  NMLS #216987  -  IL Lic. #0006220  -  WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/Text:  708.921.6331

eFax:  815.524.2281

gmundt@goapmc.com

www.genemundt.com

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Gene Mundt, Mortgage Originator, an Originator 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 and Wisconsin. 

Your Referrals are Greatly Appreciated!