What are Appraisers Looking For in Current Chicagoland FHA Assignments?

What are Appraisers Looking For in

Current Chicagoland FHA Assignments?  

    

     FHA loans have been gaining a lot of attention as of late.  As of  April 1st, FHA annual mortgage insurance premiums rose  on the majority of FHA loans by 0.1%, or 10 basis points. 

     Still, even with the rise in cost, FHA is a viable option for many potential Buyers to consider for mortgage financing.  With that said, as with all financing options, the final choice (and wisdom) of mortgage program lies in the individual applicant's personal financials and credit ... and is something that needs to be  thoroughly discussed and weighed  by the applicant and their  Mortgage Lender.

     But once the decision to move ahead with  FHA  financing is made ... what then?  

     This has been of great interest to many of the agents I work with, along with their Buyers.  Many questions arise, but frequently both want to know,  "What it is that Appraisers are currently looking for on Chicagoland FHA assignments?"  

     The answer is:  There is no punchlist or checklist for "do's" and "don'ts" regarding repairs or replacement of items within a property.  The reports I see have become more representative of a common sense "judgment call" by the Appraiser assigned to the case.

     I know that sounds much like a cop out and a non-answer.  But the reality is that FHA's stance has evolved over the last few years and has migrated away from the nit picky minor repairs that Lenders and Agents in the Chicagoland region had become all too familiar with.  That's not to say that a property's peeling or chipped paint won't need to be scraped or re-painted.  Or that missing smoke detectors won't need to be installed.  They still do and they will be asked for.

     But the fact of the matter is, Appraiser's current requests are now based more upon safety, sanitary concerns, and soundness of the property.  Unnecessary inspections are typically a thing of the past. 

     In my opinion, the attention and job of the Appraiser has shifted and is now once again focused on the  Subject Property's  value.  (Rightfully so.)  Home inspection issues are left to Home Inspectors.  The appraising has returned to being a bigger assignment than just "looking for repair issues".

     To help you better understand the focus of Appraisers during FHA assignments, I have attached a link to the more pertinent pages of the nearly 150 pages of reference on this topic found in  HUD Guidelines.  I believe this information can be of real value and help to Realtors when representing their Sellers and Buyers ... and in communicating with Appraisers and Mortgage Lenders. 

 

Valuation Analysis for Single Family 

One - to Four - Unit Dwellings (4150.2)

Requirements for Existing Housing 

One to Four Family Units (4905.1)

     

     I hope that this information, list of considered repairs, and checklist of property requirements proves helpful.  As always, should you have questions ... please  contact me  with your questions or for clarification.

     *  Wondering if a FHA mortgage is an option for you when Buying or Refinancing a home in  New Lenox,  Will/DuPage County, or elsewhere in the Chicagoland area?  Let's talk!  Contact me today ... we'll put my 36+ years of mortgage expertise and experience hard to work on your behalf ... and discover the best financing options for you now and in the future.

     I can be conveniently found at any of the following:

Direct:  815.524.2280

Cell/Text:  708.921.6331

gmundt@goapmc.com

www.genemundt.com

FREE Consultation

eFax:  815.524.2281     Skype:  630.219.1316

Ready to Apply for your Mortgage?  Click  HERE!

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"Will the Mortgage Process Get Easier Soon?"

"Will the Mortgage Process Get Easier Soon?"

     I'm questioned about the topic of mortgage processing all the time.  But probably the question I hear most often, especially from those within the industry is, "Will the mortgage process get easier soon?"

     It'd be easy to give a quick answer ... "yes" or "no".  But

truthfully, I believe the answer is really ... "maybe". 

     After reading yet another news article on this topic just this morning, ("When Will Mortgage Lending Standards Ease?" by Tim Manni, U.S. News & World Report), I thought it time to broach the subject again.

     Within the article above, it gives the author's opinion on a list of actions that must take place in order to cause (positive) changes within current lending standards.  I'm sure all the items mentioned on this list can and will be debated as to IF they will ever happen ... or at minimum, WHEN they might happen.  My personal opinion is that even if things change on this scale, it'd be quite a while before we see results from those changes. 

     Those considering Buying a Home (or Refinancing) have the power to control some of their own destiny regarding the mortgage processing services they experience and receive.  There ARE steps they can take to insure a faster, smoother mortgage process.

     Now some will say that what I tell you here is self-serving.  I'm a Mortgage Lender.  And that would be true, for I firmly believe that there are differences to be found within the mortgage service(s) and guidance I offer and that of other lenders.  But that said, this is also true ...

     There are Mortgage Lenders that have soaked-up and retained vital information, learned valuable services, and honed tools while navigating their clients during the last few years of more strict Underwriting regulations.  And there are others that have not.  Here's a few ways to measure ...

     A good Mortgage Lender provides potential mortgage applicants guidance and assistance well prior to actual Mortgage Application.  They answer questions thoroughly.  Spend the time necessary to educate regarding the process and how it transpires.  They assist in every phase leading up to application.  Credit Repair.  Documentation needs.  They help their clients become the best mortgage applicant possible.

     A good Mortgage Lender has learned from prior Underwriting experiences to anticipate what Underwriters typically request during certain mortgage financing scenarios.  And they will have prepared themselves, their files, their clients, and the other professionals within the transaction for those Underwriting requests in advance.  

     By doing that, the good Mortgage Lender eliminates many last minute issues from arising.  The Lender cuts down on the stress level for all involved within the transaction.  They save time.  They meet deadlines and set contract dates.  They can save money.  They can save entire transactions from falling apart.    

     The good news regarding this is ... You as the potential Mortgage Applicant retain and have complete control over who you choose as your Mortgage Lender.  You don't need to feel like a human pinata during your mortgage processing.  You are not defenseless.  

     Use the power at your disposal!  Flex your muscles!  Put yourself in the driver's seat!  Take the time and make the effort to find the very best Mortgage Lender possible for you and your needs.  Seek referrals.  Check references.  Ask questions.  It makes a huge difference as to the speed, quality, success, and level of enjoyment you experience while in the mortgage process for your home.

     "Will the mortgage process get easier soon?"  

     Yes!  No!  Maybe!  You help decide ...


     *  Hoping to Buy or Refinance a home in New Lenox, Will/DuPage Counties, or elsewhere in the Chicagoland area?  Contact me today!  I'll put my 36+ years of mortgage expertise and experience hard to work on your behalf.
     I can be conveniently found at any of the following:

Direct:  815.524.2280

Cell/Text:  708.921.6331

gmundt@goapmc.com

www.genemundt.com

eFax:  815.524.2281     Skype:  630.219.1316

FREE Consultation

Ready to make Mortgage Application?  Click HERE!

You are Invited to Follow Me through

any of the Social Media found below:  

     

     

    
    


     

    

     


          

      

    

What's the POINT of Points, Rate Locks, and Floating Your Interest Rate When Obtaining Mortgage Financing in Chicagoland?

What's the POINT of Points, Rate Locks, and 
Floating Your Interest Rate When Obtaining 
Mortgage Financing in Chicagoland?

     Not too long ago, I wrote a post asking for input as to topics I should blog about.  Wow!  I need to be careful what I ask for in the future.  I got lots of great suggestions, and I'll be addressing some today and more in the future.

     2 of the questions I received were from  ActiveRain Member Michael Setunsky,  Michael's Commercial, Northern Virginia.  They were:

"When is it a good time to lock in a loan rate?"  

and ... "Can you explain how points work?" 

     Both great questions, Michael!   

     Many of those I speak to are somewhat confused about both topics at the beginning of their mortgage process.  Because of the great low Interest Rates we are presently experiencing, mortgage applicants are very eager to "lock in" their rate.  They question me as to when I'll be taking that action on their behalf.  

     Understandable.  But as the old sayings go ... "it's not so easy" and "timing is everything".

     Interest Rates are typically locked in at 15-day increments.  In other words, there are 15, 30, 45, or 60-day rate locks.  Depending on the Closing Date set/within the Sales Contract ... and the "anticipated" loan processing time, the Loan Officer will discuss a rate lock with their Borrower, (typically) at the time of  Formal Loan Application.  

     Some Borrowers choose to "float" with the market changes (hoping for a downward Interest Rate trend), or others will "lock" for the length of time necessary to process their loan and Close before the lock expires.  Expired rate locks are a Loan Officer's and mortgage company's nightmare!  There are costs associated with extending or re-locking an Interest Rate.  (Obviously something both Loan Officer and company hope to avoid). An expired rate lock also can expose a Borrower to higher Interest Rates or additional costs.  

     Please Note:  The SHORTER the term of the lock (15 or 30 days), the BETTER the margin or compensation is earned by the Lender.  This also can result in a better Interest Rate for the Borrower.  

     As far as Points are concerned ... think of Points in this way:

1 Point  =  1% of the Loan Amount

So if borrowing $300,000, a Point is equal to $3,000.  

     IF a Borrower chooses to pay that Point, it is with the hopes of lowering their Interest Rate over the term of their loan.  A Borrower can choose to buy any portion of a Point (or more than 1 Point) to obtain a lower Interest Rate ... or to cover the additional borrowing costs that are charged typically to Borrowers with lower credit scores ... or if the loan is to an Investor and they will NOT be occupying the property.

     Points are simply "upfront interest", charged at Closing and used to offset costs or purchase a lower Interest Rate.  Since the Mortgage Lender or Loan Investor receives a lump sum of money right away, rather than an income stream of smaller amounts later, they are willing to lend their money at a slightly lower Interest Rate.  Points paid are a benefit to both parties.

     MOST times, a "Point" will typically "buy down" an Interest

Rate by anywhere from 1/4% to 3/8%, depending on the daily market swings, mortgage pool investing, size, type of loan, and other factors.  

     I liken "locking-in" an Interest Rate to taking aim at a duck in a shooting gallery.  It's like a Mortgage Lender is trying to hit a moving target.  There simply can be no set formula for this scenario.   

     This is a great example of where working with an experienced Mortgage Lender, well-versed in the movements of the market, is extremely beneficial to Borrowers.  Doing so can translate to real monetary savings realized by the Borrower.

   

 

     *  Have questions regarding Rate Locks, Points, or Mortgage service  in New Lenox, or elsewhere in the Chicagoland area?  Contact me!  I'll be happy to put my 37 years of mortgage experience and expertise to work on your behalf.

     I can be found at any of the following:

Direct:  815.524.2280

Cell/Text:  708.921.6331

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 Business and Referrals are Appreciated!

  

             

        

      

     

The Baker-Koren Round Barn Farm Park in Manhattan, IL

The Baker-Koren Round Barn 

Farm Park in Manhattan, IL

     In many ways, my wife and I are much alike and in complete sync.  Our backgrounds are very similar.  We have the same number of siblings.  We're both #3 children.  We're from the same small town.  Etc. ... etc. ...
    

     One thing that I learned that was quite different though, was the fact that I knew little about my family tree when growing up.  I had little knowledge of my ancestry other than where both my parents had grown up, they both had come from large families, and that I was mainly of German heritage.  Hard to guess that with a name like Mundt, right?

     My wife on the other hand, knew in great detail what her blood line was.  Some of her fondest memories are of her father telling stories of his own life and those handed-down of her grandparents, great uncles and aunts, and great-great-great family members.  

     Family history, plus history regarding our hometown of Manhattan, the farmers that had settled it, and Will County, was a common topic at family gatherings.  I caught the bug ...

      Manhattan, the town where we both grew up, was pretty small.  But Manhattan, IL has grown.  Proximity to Chicago, the western suburbs, major highways, and more dictated that.  Manhattan now has commuter train service to Chicago.  A big advantage to many new and younger residents.  

     During recent growth, new subdivisions replaced much of the surrounding farm land.  More housing developments and commercial are planned for the future. 

     In 2003, the Manhattan Park District was approached by Frank Koren, a farmer that owned property on the outskirts of Manhattan, to buy his farm.  The Koren Farm was not any ordinary farm.  The property had been a working farm since the earliest settlers had worked it in the mid-1840's.  

     Somewhere shortly after that time, 2 round barns had been built upon the farm.  One of those barns survives still today.

     It would have been easy to overlook or forget the farming roots of the community during all the recent growth, but both Marilyn and I are proud to say that the Village of Manhattan's Park District has taken big steps to protect and preserve some of Manhattan's farm heritage.  We feel that's important and valuable.  

     Frank Koren had seen to the surviving historic barn being 
designated a  Will County Historic Landmark in 1999.  When he approached the Manhattan Park District in 2003, he wanted to see if they'd be interested in buying the farm, further preserving it, keeping the museum within the historic barn going, and utilizing the barn and farm within the park district.  

     Since buying the farm, the Manhattan Park District has slowly and consistently worked on the property to enhance its use and increase its availability to the residents of the Village and  public in general.  

     Repairs, construction, and continued development will be ongoing as revenue is available.  The Round Barn itself has already received a much-needed facelift, a new roof, and been partially painted.  The old, historic building has also been stabilized.

     The Round Barn Farm Park has been developed into a nature and forest-themed playground.  There's a new ball field that can accommodate a 50', 60', and 70' base change.  It's also home to an 18-hole Disc Golf Course.  

     The course winds through the beautiful oak trees scattered throughout the farm and runs alongside the flowing waters of Jackson Creek.   Outfitted with both novice and professional dual baskets and concrete circular tee pads, the course offers play to fit everyone's level of enjoyment and need for competition.

     Events such as the  Round Barn Wine Festival  and  Manhattan Civil War Days  are hosted at the historic farm located at  24115 South Route 52,  in Manhattan, IL each year.  

     The Baker-Koren Round Barn Farm Park, and the other services and activities offered by the Manhattan Park District, are just one of the many reasons that the Village of Manhattan, IL is a great place to live and to raise a family.

     *   Should you be hoping to buy a home in the Village of Manhattan, the Lincoln-Way High School District, Will County, or elsewhere in the Chicago area ... please contact me.   I can help you with your mortgage financing and also provide referrals to many of our area's finest real estate-related professionals.
     I'm easily found at:

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

             

    

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 and WI. 

Your Business and Referrals are Greatly Appreciated!