Wishing You Happy Holidays and a Very Merry Christmas!

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

gmundt@goapmc.com

www.genemundt.com

Top 5 "Hiccups" and Mistakes Made by Mortgage Loan Borrowers

Top 5 "Hiccups" and Mistakes Made 

by Mortgage Loan Borrowers

"Wish Lists" are a hot topic for kids, no matter the time of the year.  Do you know any kid that doesn't have a list of things they're wishing for at the handy?

Did you know that Loan Officers often have Wish Lists too?  I can tell you that I most definitely do.

What's at the top of my LO Wish List?  A smooth-flowing, successful mortgage process for each and every one of my borrowers.  

Sadly though, hiccups and mistakes happen.  Both the real estate and mortgage process are conducted by humans, so it only follows that issues arise.  And it's also true that rare or unseen things can take place during a process.

But there are some hiccups and mistakes that are more commonplace or occur with more frequency.  Things that with a little preparation and planning can be avoided.

Below you'll find the hiccups and mistakes that I see borrowers commit most often after they've been pre-approved for their financing to buy a home.  Hopefully, by sharing them here I can help you avoid them as you move forward with your mortgage financing and home buying.

The 5 top hiccups and mistakes most commonly made by mortgage loan borrowers are:

     1.  Issue:  Accepting a gift or check for the Earnest Money written to someone NOT named on the Real Estate Contract or the Mortgage Application

     Tip:  If YOU are the buyer and mortgage applicant, the Earnest Money check should be written from YOUR funds.  The best way to look at the Earnest Money check is that it is an advance on your Down Payment ... or the funds you will need to Close on your loan.  

     Be Aware:  Checks from Non-Borrowing, Non-Buying parties can cause problems!

     2.  Issue:  Transferring monies/funds needlessly or repetitively from one bank to another ... or from one account to another (even if transferred within the same banking institution).

     Misconception:  That all funds needed to cover down payment and closing costs (known as "Cash to Close") must be accumulated, or deposited, to one (1) account.  
     
     Truth is:  Separate accounts, separate investments, separate banks can all be verified and documented ... and their collective balances ... can be totaled to demonstrate the needed Cash to Close (funds needed for Approval/Closing).

     3.  Issue:  Just before applying for their mortgage, borrower(s) work fewer hours while conducted their home search and contract negotiations.  

     Note:  For those borrowers working hourly-paid employment, this issue is of special importance.  Mortgage Underwriters look unfavorably at low year-to-date Gross Incomes reported on the most recent pay stubs required for Mortgage Application.

     4.  Issue:  Borrowers accept "Cash" or "Gifts of Cash", then deposit it into the banking account for which the funds for Closing later get verified.   

     Important:  Cash has NO acceptable means of being verified or counted as acceptable funds to Close by a Mortgage Underwriter.

     Tip:  Stop depositing cash into the accounts that you have designated and provided for Mortgage Application. 

     5.  Issue:  Borrower(s) change jobs prior to ... or after making ... application for their mortgage.  

     Important Advice:  Do NOT change employment in any way prior to consulting with me, your Loan Officer.  Consult with me, even if it's for a better job!

     Why:  It could matter (greatly) to the Mortgage Underwriter.  

     How does it matter?

• In terms of job history 
• Employment length of time 
• Verification of income (especially at the new position or new employment)

Remember the old saying, "It's easier to ask forgiveness than it is to get permission?"  When entering or navigating the mortgage process, that is definitely NOT TRUE.  

Always ... always ... check with your Loan Officer prior to making any decision or taking any action.  It's much easier, less stressful, and quicker to do things right the first time and not have to backtrack or perform "clean-up" later.

By talking to, then following the advice of your LO, you'll avoid the 5 common hiccups and mistakes listed above.  And THAT is at the top of my wishlist ...

* Looking for financing answers, options, solutions, and experienced assistance?  

Are you hoping to Buy, Refinance or purchase an Investment Property New Lenox, Will County, 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

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 Appreciated and Welcomed

Student Loan Debt Solution Found via Fannie Mae's "Student Loan Cash-Out Refinance"

Student Loan Debt Solution Found via 

Fannie Mae's "Student Loan Cash-Out Refinance"

Mounting student loan debt has become a huge concern ...

This is true not only for individuals carrying student loan, but for GSE's (Government Sponsored Enterprises) like Fannie Mae that oversee and ensure mortgage liquidity and guidelines to Banks, Lenders, and Mortgage Providers.   

In a previous post, I noted that Fannie Mae had revised guidelines as they pertain to treatment of Student Loan Debt when applying for loan.  Those changes were favorable for Home Buyers carrying student loan debt, as they allowed Mortgage Underwriters some flexibility in examining and allocating for student loans. 

This new more relaxed view removed some financing obstacles and made it easier for Mortgage Lenders to reach mortgage approval for Borrowers.  It opened the door for more potential Borrowers with Student Loan Debt to qualify for a Mortgage and buy homes.  A very welcomed outcome.

Now, adding to that earlier positive change, another new financing option offers hope to those that hold student loans. It comes in the form of financing called the "Student Loan Cash-Out Refinance Option".  The refinance option is backed by Fannie Mae and other wholesale lenders.  

A cash-out refinance option has long been an option available for homeowners with home equity.  Those homeowners could use the refinance to pay off debts of any kind.  

But with this new refinance option, when paying off Student Loan debt, certain costs normally charged to a borrower are "forgiven" or "eliminated".  

In turn, these savings result in either a:

• Lower interest rate offering  

       or ...

• Additional "cash out" at Closing  

It truly can be a real benefit to Borrowers to finance in this manner.

As with any new program, there will be a learning curve felt by lenders, but for current homeowners with sufficient equity looking to reduce or eliminate higher interest rate Student Loans and higher Student Loan payments ... there can be profound relief found via a "Student Loan Cash-Out Refinance". 

Should you want more information, have questions regarding this new Student Loan Cash-Out Refinance (or other mortgage options), or your eligibility for putting this new refinance option to work for your benefit, please contact me.  I'll be happy to answer all your questions and assist you moving forward.

    
* Looking to find what possibilities exist for you?  Are you hoping to Buy, Refinance or purchase an Investment Property New Lenox, Will County, 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

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.

Condos, Dwelling Parcels, PUDs, and Legal Ownership

Condos, Dwelling Parcels, PUDs, 

and Legal Ownership 

I've "been around" ...

Around the mortgage business, that is.  For over 40 years.

And during those 40 years, besides being a Mortgage Originator, I also held an IL Real Estate Appraiser license for around 2 decades.  Plus I was honored to serve on my local Village Board.  

My time served on that Board included working on a Comprehensive Plan for the Village and on the Building and Zoning Commission.  Each capacity fulfilled provided me with amazing opportunities to learn and expand my knowledge.  Most importantly for me was what I learned regarding real estate and the financing of it.  The experience complemented my work immensely.

But even with all these varied opportunities and experiences that have come my way over the years, I still run into "firsts" as a Mortgage Originator.  Things I've just never heard of or encountered anywhere before.

And yep, as you've probably guessed, such was the case with one of my Borrowers last month ...

I was working on their application for mortgage and the property they were buying was described as an "attached dwelling in a Planned Unit Development".  The Planned Unit Development (commonly referred to as a PUD) was described as such in the legal description of the parcel, within the subdivision that the parcel was platted in.

Now it's important to note at this time:  The term "condominium" appeared nowhere within the legal description provided.  The first I saw the term used was on the appraisal which had been completed on a condominium form (known as the Fannie Mae 1073 for a conventional loan).

The questions that immediately popped into my mind were:  

• Why was the appraisal for a PUD property being completed on a condominium form ... and appraised as such?
• Why did the appraiser compare this PUD property to condos?
• Why was the appraiser insisting this property was a condo after we had ordered the appraisal as a Single-Family Attached Planned Unit Development (PUD)?

As the Rules, Forms, and Approaches for each property type valuation are different ... different lending guidelines are required for each property type too.  Clearing this up was important.

After reading the submitted appraisal, I asked that the Condominium Declarations be provided to me.  We had not been provided any previously.  

Now I'll admit, there are always exceptions to the rule, but in the majority of instances, an Illinois property cannot be declared a legal condominium unit unless a Declaration of Condominium is recorded as part of the Illinois  Condominium Property Act.  So my next call was to the title company.  

That call confirmed that there was no Declaration of Condominium for the property or the immediate development.  The property was, in fact, a "dwelling parcel" and defined as such by the legal description and the original platting of the phase of the development it resided in.

So next, I asked for the survey of the property parcel be provided, since the defined lot lines and dimensions were unclear on the recorded Plat of Subdivision I found online.  Gaining knowledge of the defined lines and dimensions of the property site were important, as a PUD property differentiates itself from a Condo ownership by its very definition.

• A PUD features an individually-owned parcel/site
• Condo Ownership features a shared or common site 

Calls to the Management Company for the property association and the Township Assessor provided me little or no assistance.  The Management Company said they couldn't make a definitive determination regarding ownership status. The Township Assessor said that they treated the value and assessment of the property the same regardless of the property's legal ownership rights.

Notably, in my world, condominiums have no "land value", as no site or lot is individually defined or owned.  Yet, our subject property had a breakdown of land and building assessments.

My search for answers was becoming daunting, but as the LO and lender, we had to determine and document:

• The true Property Rights (Ownership Type) of the Subject Property
• The correct Appraisal.  We had to make sure the Appraisal Report was on the appropriate form for the financing program being utilized by the Borrower.  (And should the appraisal need to be corrected, make sure no additional fee is charged to the Borrower or to us for the correction performed.) 
• That a Closing with correct documentation take place.

The Appraiser and the Appraisal Management Company finally came to agree with me that this property was NOT a condo.  They eventually identified the property for what it was ... a "dwelling parcel"- within a Planned Unit Development (PUD).

And even after all the questions, searches, and corrections ... the loan closed on time.  The post-closing process was completed.  

Now there is no doubt that this subject property was unique in some aspects.  How upon first look, it might appear much like a condo.

But it's vitally important that the legal ownership of property be determined and defined for the Borrower/Buyer of the property's sake (and the Lender's).  Those determinations and definitions go way beyond appearances or physical aesthetics of the property.  It took my scratching way below the surface to reveal the truth of this property.

There were many lessons to be learned from this property and its transacting.  But perhaps most notably it pointed out the importance of working with an experienced knowledgeable Loan Officer (and real estate agents) ... a professional willing to be dogged in their search for answers and facts.

Those answers and facts resulted in Buyers/Borrowers knowing for sure that the ownership in their property is held in its correct and legal form ... 

* When in need of Mortgage info or service when buying, refinancing, or Investing in a home in New Lenox - elsewhere in Chicagoland - IL & WI, 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

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 Appreciated and Welcomed