How Buying in a Homeowners Association Can Affect Mortgage Approval and Monthly Payments


 How Buying in a Homeowners Association 
Can Affect Mortgage Approval 
and Monthly Payments


     Homeowners Associations ... and the fees associated with them, come in all sizes, shapes, and forms ...

     While many Chicagoland properties are not associated with any Homeowners Association (HOA), many ... especially those built after or during the 1980's ... are likely to lie within a subdivision with an established HOA - Homeowners Association.

     These Associations usually provide commonly owned facilities or services for the benefit of ALL property owners within the Development.  

     Some examples of amenities and services supported by Homeowners Associations/Fees are:
  • Parks 
  • Pools 
  • Tennis Courts
  • Marinas
  • Clubhouses
  • Recreational Facilities 
  • Signs 
  • Lawn Care/Snow Removal
  • Retention Ponds
  • Walking Paths
  •  More ...
     The cost of maintaining these facilities is shared among the Association's homeowners.  Homeowners pay fees or dues to cover these costs by monthly, quarterly, or annual payments to the Association.

     Whatever the frequency of payments made to the Association ... when it comes time to seek financing to buy (or Refinance) within an HOA, a monthly cost is calculated for Mortgage Qualifying Purposes.  In the case of Chicagoland Condominium or Townhouse Associations, the dues are typically paid monthly.  Potential homebuyers should be aware, some HOA fees/dues can be fairly substantial.

     It only stands to reason then:  Mortgage Lenders must factor Association dues into a decision to Approve or Deny a mortgage ... even though Association Dues are paid separately from your Mortgage Payment.  

     Many potential mortgage clients are unaware or caught off-guard regarding this fact ...  

      Homeowner Association dues/fees are treated by Mortgage Underwriters just like Real Estate Taxes, Homeowners Insurance, or Private Mortgage Insurance is.  Each of these various sectors of owning property is counted as a housing expense when Approval for Mortgage financing is sought.

     To showcase how this can affect a Mortgage Approval and monthly Mortgage Payments, consider the following comparison between a purchase of two (2) similar properties.  One home lies within an HOA, the other does not ...
     
     Borrower #1:  Buys a home with the same Sales Price as Borrower #2, but ... the property Borrower #1 purchases is NOT located within a Homeowners Association and has NO Association Fees.  

     As a result:  Borrower #1 will have a monthly housing payment lower than Borrower #2 because they will not be paying a monthly HOA fee.

     Borrower #2:  Because of the Homeowners Association associated with the property they hope to buy ... and the fees they will need to be pay, Borrower #2 must:
  • Have a higher monthly income to qualify for the payment that includes the HOA fee
     
     OR Consider other options:
  • Consider lower-priced homes in order to be able to qualify for a Mortgage/Monthly Payment that includes an HOA fee    
  • Consider same-priced properties that do not lie within an HOA or are unaffected by HOA fees/dues
    When a home being considered for purchase lies within a Homeowners Association, it can affect more than the periodic HOA fees/payments you must make.  It can also determine whether you can financially qualify to purchase the home.  

      Good communication and ongoing dialogue between all parties ... Borrower (Buyer), Agents, and Mortgage Originator, etc., is vitally important during any property search.  

      Each helps you secure the information and guidance needed to make sound decisions regarding differing properties and financing, especially when Homeowners Association and accompanying dues come into play.  

      Thoroughly discussing the options you have (both financially and property) with your mortgage and real estate professionals prior to viewing homes will make for a much more fluid, less stressful home buying experience. 


     *  When in need of Mortgage info or service when buying a home in Will County or elsewhere in Chicagoland, contact me.  I'll be happy to 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

American Portfolio Mortgage Corp.
NMLS #175656

Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281

   


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 Appreciated and Welcomed

     

    

        
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Mortgage Facts:  What Time is It?
Part 2

    
     The other day, I heard a commercial on a Chicagoland radio station regarding mortgages.  Being a Chicagoland LO,  my ears obviously perked up.

      Much of the info I heard, especially about interest rates, was troubling, as the rates quoted within the commercial were out of sync with what I knew were that day's available rates. And it was terribly misleading info for any hopeful Borrowers listening.  

      I suspected the commercial I was hearing was at least a few weeks or more old in content.  The rates quoted certainly reflected that as true. 

      So what had happened that had caused interest rates to change?

      Think about what's been going on over the last week or so.  The many things that have taken place during that time within the U.S. alone.  Then add world events to that. 

      Surely it had been a very busy week in U.S. and world events, but that's fairly typical. Things don't remain the same or quiet very long these days. 
     But all those events and changes caused gas prices, the stock markets, interest rates to react.  At times very quickly.  Up down, up down, up down ...  

      These days, there's literally a risk of any informative commercial (or article), and the info contained within it, becoming obsolete or inaccurate within seconds of airing or completing it.  That's how quickly changes can occur in today's markets.  

      So often within my work as a Mortgage Originator, I encounter clients that refer to "having seen" information on the internet or hearing it on radio.  And that's most likely true.  

      But that info may no longer apply.  It may be entirely incorrect or unavailable ... or the info may only be semi-correct.  Parts of it true, other parts not.  Reality is it might have been correct or available at one point, but it's no longer valid or no longer applies currently.  

     While you blinked ... things changed ...

     As a Mortgage Originator, I acknowledge the financing and interest rates can change at what seems like lightening speed.  

      That FACT is definitely something that those pursuing financing and mortgage info must digest, come to grips with, and then remain keenly aware of.     

     Those changes affect the interest rate you are quoted when first speaking to a Mortgage Originator.  And it affects the rates available when it comes time to "lock" your interest rate in.  

      And changes taking place can also determine the amount of time you have to make decisions regarding them.  World occurrences, and reactions to them, move swiftly.

     Mortgage Facts: What Time is It? (Part 2)  With so many changes happening so quickly and frequently within the U.S., world, and Mortgage industry ... the importance of when an article/post is written or when information was offered, is rapidly increasing.  

      Whether reading or hearing information with facts and direction within it, make note of that ...

     *  When in need of Mortgage info or service when buying a home in Will County or elsewhere in Chicagoland, contact me.  I'll be happy to 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

American Portfolio Mortgage Corp.
NMLS #175656

Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281


   

Click Here for: Testimonials


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 Appreciated and Welcomed!

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Property Addresses: Gettin' Down to the Nitty Gritty



Property Addresses: 
 Gettin' Down to the Nitty Gritty        


     Take just a second and read through the following statements ...
“The devil is in the details” 

... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"


     Details ... Details ... it's all about the details ...

     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.

     When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  

Gene Mundt Stats & Testimonies     Sports statistics and games ... minutiae regarding music and performers ... details on topics of all kinds ... were shared and argued about on an ongoing basis.  It's still that way to this day. 

     I guess it only makes sense then that I gravitated to a profession and industry that demands (and is driven by) detail and detail accuracy.  Details are vital to the mortgage process! 

     Unfortunately, though, with details needed and included in such high number, it increases the risk of errors occurring.  Addresses ... address discrepancies and/or errors on Real Estate Contracts ... is just one area where that risk is great.  

     You wouldn't think that something as simple as a property address would be that big of an issue.  But address discrepancies and errors are found far more often than you'd think.  Granted, the "error" may be small.  But it's still an error ... and it can cause problems. 

     Here's an example of an address error displayed on one recent Contract I received ... and the correction needing to be made as a result:  

     The details as provided on the Real Estate Contract: 
  • The transaction's Subject Property was located in an "unincorporated" area.
  • A town was named within the physical location given for the Subject Property, as identified by its Legal Description.
    The Problem:
  • The town in which the Subject Property was located was identified differently by the United States Postal Service (USPS ... https://www.usps.com)             

 
     Why the details become vitally important in this scenario:
  • Within the Mortgage Industry, the ONLY acceptable address reference is that which is found on the USPS website (noted above). 
  • All mention(s) of Subject Property or transacted address on any document, report, or form utilized within the transaction must be uniform in detail and show the USPS address.     
     Most issues regarding address variations or error revolve around the use of directionals, (East, West, North, South).  They're either added where they shouldn't be or vice versa.
  
     Another issue regarding addresses that crops up often includes the misuse of the terms Avenue, Drive, Street, Lane, Court, etc. ... or their abbreviation.  Even this seemingly minor issue and small incorrect detail can possibly trigger a condition in Underwriting.  And it could have to be corrected in order to receive a "clear to Close".  

     Again, these issues might sound trivial, but the U.S. government and the mortgage industry have deemed they are not.  Serious attention to this detail is required.

     These issues and details can typically be addressed or corrected during Underwriting.  That is true.  

     But if Agents and/or Attorneys can help avoid them proactively by checking the USPS website for verification, that is preferable.  The issue is avoided entirely.  And it minimizes the possibility of time delays, frustrations, and stress added later during Mortgage processing.

     As the saying goes ... 

     "... in life, it is often the tiny details that end up being the most important". 

     In the Mortgage and Real Estate business, nothing could be more true ...  





* Hoping to Buy or Refinance a home in New Lenox or elsewhere in the Chicagoland area? Contact me! 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

American Portfolio Mortgage Corp.

nmls #175656

Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281

   


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 Appreciated and Welcomed!

     
     
         

     

     

     

     
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