With Golf and Mortgages: It's Important to Know the Rules

  With Golf  and Mortgages: 

It's Important to Know the Rules

There are a LOT of rules in golf ...  

That fact has drawn increasing attention as of late.  But truth is, golf rules have always provided controversy and remained front and center during golf tournaments over the years.  

Just ask these golf pros:

LPGA star Lexi Thompson, PGA players Craig Stadler and Paul Azinger, golf mega-star Tiger Woods, and more. Not knowing ... or being unaware of a rule ... cost them strokes during important golf rounds and ultimately a win (and money) on the tour. 

Strong parallels between golf and mortgage lending can be made.  Be unaware or not know the rules of mortgage lending?  It can possibly cost you ... in time, money, and opportunity to attain success.  

Just as in golf, the rules of mortgage lending are important.  They are intended to ensure all play by the same rules.  The "rules" demand that Lenders ... and the entities that insure loans ... approve borrowers that are "qualified" to borrow money and have the ability to repay the loan in full, no matter race, sex, familial status, location of property (redlining), and more.

The Mortgage Pre-Approval is another good example of a "rule" existing in the modern mortgage process.  While the act of being pre-approved was suggested by agents years ago, it has now become almost a necessity.  While some agents may show a property to a potential Home Buyer that has not pursued Mortgage Pre-Approval, it's become increasingly rare. 

So how and why did this "rule" come about?  The process of obtaining a Mortgage Pre-Approval likely started with Home Buyers needing to prove an "edge" over their buying competition in a highly competitive housing market ...

When a Buyer proves they can successfully complete their home financing to buy, they're viewed more favorably by Sellers.  It's easy to understand why most Sellers stick to this "rule" regarding Mortgage Pre-Approvals and entertain offers from pre-approved Buyers only.  

It's easy to see why:  Do otherwise, and they risk a possible loss of time and money ... and disappointment.

The backbone of any Mortgage Pre-Approval is the potential Borrower's Credit Report.  In order for me to order a tri-merge Credit Report, I, as your Lender, need the following basic info from each Borrower to be placed on the Mortgage:

• Full Name(s)
• Address(es):  2 years required.*
• Social Security Number(s) Date(s) of Birth
• Permission to run the Credit Report(s)

       *If you haven't resided at your current address for two years, info regarding previous address(es) is required.  If currently renting, SOMETIMES, the following is needed:  The Name, Address, and Telephone Number(s) of Landlord or letter from Landlord stating the amount of Monthly Rent and the Statement "Paid as agreed for past 12 months".

What does this all-important Credit Report disclose to your Lender?

It provides your Credit Scores from each of the 3 main credit bureaus:  Equifax, TransUnion, and Experian.  The middle Credit Score received is the score that Lenders utilize during your Pre-Approval.  

Here's an example of that "rule" ...

Credit Bureau 1:  723 Score

Credit Bureau 2:  735 Score

Credit Bureau 3:  741 Score

The score the Lender uses is:  735

Why are Credit Scores so important?

Most mortgage loan programs/loan types have minimum Credit Score requirements.  Some loans are simply not available to Borrowers with lower Credit Scores ... or those that don't meet minimum loan requirements.

"Rules" regarding Credit Scores are clear.  The lower your Credit Score, the lower your chance of securing a Loan Approval.  Likewise, lower Credit Scores typically mean higher Interest Rates, increased financing costs, or both.  The higher your Credit Scores, the lower the Interest Rate earned for financing.

Once it's determined that you are credit eligible, you will be asked for more detailed information regarding:

• Employment - Employment History
• Current Employer
• Length of Employment
• Income 
• How you are paid (Salary, Hourly, Commission, Bonus, Overtime) Social Security, Pension, Investments - if retired or disabled)

Those items or documentation that will verify income will be requested at this time too.  Those include:

• W-2's
• 1099's
• Tax Returns (Last 2 years)
• PayStubs (Last 30 days, consecutive)
• Court Orders for Support or Alimony ...

You then move on to the topic of DownPayment Funds.  Be prepared to answer the following questions:

• What DownPayment Funds do you have available, if any?
• Are Gift Funds being provided to you?  If so, by whom? How much?
• Are you eligible for VA home buying benefits?

      Note:  Should you wish to flex your VA home buying benefits, you will be required to supply the following documentation in addition to all the basic info:

• Copy of your original Certificate of Eligibility
• Copy of DD-214

Most Buyers are typically asked for the following: 

• A copy of your Driver's License or State ID Card
• A signed copy of the Real Estate Contract on the home you're purchasing, plus any Riders
• Names & Contact Info for your Attorney 
• Name and Contact Info for your Insurance Agent

Where/when applicable, you may be asked for:  

• All pages of your Recorded Divorce Decree(s) or Separation Agreement(s)
• 12 Month Court Printout of Child Support received
• Bankruptcy Papers:  Recorded Bankruptcy Discharge, plus the Schedule of Creditors
• Collection Documentation:  Filed & Stamped Release of any Judgment, plus explanations of any outstanding  Collections
• Your most Recent Social Security Award Letter or Pension Award Letter

If you currently own Real Estate, you'll be required to provide the following info:

• Mortgage Account Information 
• If applicable, info on any Home Equity financing
• Home Insurance Policy Info/ Real Estate Tax Bill
• Address and Info on additional Real Estate owned (Investment, Vacation/2nd Home, Timeshares)

For those that are self-employed and seeking Pre-Approval or Mortgage Application, the following documentation is typically required:   

• The last 2 years of filed Year-to-Date Profit and Loss Statement
• 2 years of complete Tax Returns

If you hope to be Pre-Approved and apply for a Mortgage, you can pretty much count on all the above questions and requirements being in play.  Those are the "rules" with financing currently.  

Yes, you're right ...  

There are lots of "rules" involved in the current mortgage process.  But as I pointed out above, a knowledge of the rules beforehand helps immensely.  

Have questions?  Ask them.  The sooner the better.  Want to know more about the mortgage process?  Reach out to me.  Hope to be Pre-Approved or apply for a Mortgage in New Lenox? Will County?  Elsewhere in the Chicagoland area?  Contact me.  

Know the "rules" regarding mortgages ahead of time.  Be aware of what info and documentation you'll be asked to produce during your Pre-Approval or Mortgage Application (and gather it pro-actively).

It helps you elevate your financing "game".  Helps you avoid the "traps" and "water hazards" some find during their mortgage process.  And it will make you a winner ...

         

* Hoping to be Pre-Approved ... or 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 or Text: 708.921.6331

eFax: 815.524.2281

www.genemundt.com

gmundt@goapmc.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 Always Appreciated and Welcomed!

  

Rent VS Buy: Finding the RIGHT Answer

Rent VS Buy: 

Finding the RIGHT Answer

Rent VS Buy ... which is better?

Seems everyone has an opinion on this debate.  Pro and Con.  Especially when rates are low.

But truth is, no one but the person(s) considering this question has the "right" answer.  Or at least what's the "right" answer for them.

It's also true:  Facts, emotion, and gut feeling weigh into the making of the decision reached.  Or not so final ... as timing factors into this decision-making too.  The "right" answer can often be just a temporarily right one.

So, with all the factors mentioned above playing into the decision-making process, just where and how do you start it?  

The right answer to that question is:  You should start by doing some simple homework.

To make that easier to do, I've provided some handy tools for you on my website. Just click HERE to find a host of calculators that will help during the early stages of your decision-making process.

After gathering some info ... and when you decide to move to the next step ... home buying ... it's time to get serious.  During this next step, you need to ...

Evaluate Your Options

To accomplish this:  It's best to list the pros and cons of buying and renting as they pertain to your life and financial scenario.  

Keep in mind:  No two lists look the same, as everyone is considering and weighing their own personal pros and cons. 

But the following infographic provides you some suggestions of those things you might want to consider while making your decision:

As you'll note:  There's one glaring omission to the above infographic.  There's no mention of personal finances.

This important next step in your fact-finding needs to include me, your Loan Officer.  

After answering some questions, I'll be able to provide you an analysis of your credit/financial standing, a synopsis of the financing options available to you should you hope to buy, and the feasibility of your successfully securing the financing you need to do so.

Only after this evaluation is concluded, can you seriously weigh "Rent VS Buy" and make the best decision for yourself.  The decision that will be "right" for you both in the short and long-term.

The "right" answer to your Rent VS Buy question is answered with your taking a series of steps and doing some fact-finding.  And yes, some soul-searching too.

The answer becomes clearer the more facts you have and the more you know about your finances, options, and desires.  Each step is fairly easy to take ... and I'll be there to help and guide you every step of the way.

To discover what's possible.  To answer your Rent VS Buy question, contact me today ...

            

* Hoping to buy or refinance a home or investment property in New Lenox, Will County or elsewhere in the Chicagoland/IL - WI? 

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 or Text: 708.921.6331

eFax: 815.524.2281

www.genemundt.com

gmundt@goapmc.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 Always Appreciated and Welcomed!

    

Financing a Chicagoland Home "Flip"

Financing a Chicagoland Home "Flip"

"Flipping" shows are increasingly popular on TV these days ...

"Flip or Flop", "Masters of Flip", "Flip this House" represent just a small sample of the shows currently on air featuring the buying, renovating and selling of homes within a short timeframe for investment and profit.

While entertaining to watch, the rise in popularity of these shows really showcases American's ongoing fascination with home and real estate.  It's also is an indicator of the return of a healthier U.S. housing market.  

It seems Americans are once again willing and more capable of facing the monetary risks involved in "flipping".  And real estate investors are seeing a higher likelihood of making good money.

Most of the shows shown above spotlight couples focused on "flipping" as a way to make a living.  It's their family business and it generates them income.

But "First Time Flippers" on the DIY network, features friends, family members, and couples that tackle flipping a home for the first time as a way to make extra income.  They have no previous experience renovating a home, it's not their main form of employment or their main source of income.

As a Mortgage Originator, over the recent months, I've definitely seen a spike in the interest and number of questions I'm receiving regarding "flipping".  Both from contractors and investors, but from non-business related individuals too.

I think much of the interest is due to the popularity of the TV shows mentioned above.  But the fact that local housing markets have improved have also contributed.  They once again are better able to support this type of investment buying and selling. 

For those considering entrance into the "flipping" or housing investment market, there's much to know and consider.  The choice and purchase of property, its financing, and source of capital for its renovation probably head the list.

Below you'll find just a small sampling of the things that investors must know and consider before conducting a "flip" ... and in order to avoid a financial "flop":

• Does the proposed property and neighborhood support the improvements to be made?  (Work with a knowledgeable local agent.)
• Where are the funds to come from for the purchase and renovation of the investment home?
• Are down payment funds available for an investment property purchase?  (Investment properties typically need a larger down payment made.  Interest Rates on investment properties are also typically higher than on primary residences.)
• What financing program best suits the purchase and renovation being considered?  (Consider "seasoning" rules for each)  
• What term of loan should be considered?
• How long will the renovation take?
• How long must the title to the renovated property be held before it can be "flipped" or sold?
• Will "Comparables" be available to support the newly renovated property's new (sale) Appraisal?
• Tax ramifications ... both property taxes and personal (capital gains) taxes
• More ...

Most of the hopeful first-time "flippers" I've talked to have not been aware that investments of this type involve a financing "seasoning" period ... meaning a period of time in which they are required to hold the investment property before they can turn around and sell it.  

The length of this "seasoning" period* is dictated by the type of mortgage being sought by the buyer for the property.  As sellers consider offers on their property, it's wise that they know the "seasoning" periods associated with differing types of loans.

The following are the typical "seasoning" periods for mortgages most often utilized by buyers:

• FHA Loan:  FHA Loans typically require a 90-Day "seasoning" period, meaning if the seller bought and closed less than 90 days from the FHA loan (Case Number Request), the deal is NOT eligible for FHA Financing at that point.
• Conventional Loans:  Most Conventional Loans, backed by Fannie Mae or Freddie Mac, have no true waiting periods (Some individual Banks that buy and service loans may have a different policy)
• VA Loans:  Va Loans do not have a "seasoning" period

(* The "seasoning" period starts as of the date of the investor's purchase (date of the Deed.)

However, it must be pointed out:  In each of the above types of mortgage financing, extreme cases could warrant a second Appraisal, if the increased property value (differences) can't be supported and documented.

What is considered an "extreme" case?  The following may trigger the request for a second appraisal to be made:

• The Seller bought the property for sale in the previous 6 months or less, and the profit is 100% above the initial  price paid
• The First appraisal is inconclusive, and the Lender's Underwriter requires a second Appraisal Report be done

As you can see, the buying, renovating, and financing of a "flip" property can be a huge undertaking, even for those that are seasoned "flip" professionals.  Flipping a property can be profitable.  It could also spell financial disaster.  

That's why it's best to educate yourself fully ... and weigh all the pros and cons ... of this type of investment prior to taking any action.  Eliminating as many upfront risks as possible is key to reaping a positive profitable outcome ...

    

        
* Hoping to buy or refinance a home in New Lenox, Will County, or elsewhere in the Chicagoland area? Contact me now!  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

www.genemundt.com

gmundt@goapmc.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 Always Appreciated and Welcomed!