Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Pulling Credit Affects Your Credit Score

Credit Score

When I am talking to a client about preparing to buy a home, I always inform them to not apply for a new line of credit or credit card. Applying for a single credit card has a negligible effect on their score but applying for several in a short period of time does make a difference. Doing so can affect their over all credit score and can in turn change their eligibility for certain mortgage programs. When you apply for credit, an inquiry is generated. The creditor wants to determine what your current credit score is and what your credit history looks like in order to determine what program will best fit your needs and eligibility.

So, what is a credit inquiry? An inquiry is a notation on your credit report that someone has requested your credit file or that you have requested credit. Two types of inquiries may appear on a credit report. These are known as “hard” inquiries (can impact your credit score) and “soft” inquires (that don’t)

What counts as a hard or soft inquiry?

Applying for a loan or credit card can result in a hard inquiry, but applications not tied to a form of credit can result in a hard inquiry as well. A credit check for a new mobile phone or apartment, for example, can also generate a hard pull on your credit report. “The general rule is, if it is an inquiry that indicates that you may be taking on additional financial obligations, then that could be meaningful to your risk of being able to repay other debts,” says Maxine Sweet, vice president of public education for Experian, one of the three major credit bureaus. A cellular phone or apartment signifies the possibility of an additional monthly payment.
Soft Inquiries not related to a new financial commitment won’t hurt your credit score. These include credit checks from employers, companies sending preapproved offers of credit or insurance, existing creditors conducting periodic account reviews or your own request to see your credit file.

How inquiries are scored

Inquiries don’t count as much as payment history, revolving utilization and other factors that contribute to the calculation of a credit score. The actual impact of an inquiry can vary according to your credit history. If you have few accounts or a short credit history, inquiries can cost more points. The amount of points deducted may not be the same for each additional inquiry, as they might be scored in ranges. Past a certain threshold, the consumer could max out on the damage from numerous credit checks. Hard inquiries stay on credit reports for two years, but the length of time they impact the score depends on the scoring model (or credit bureau) used.

Multiple inquiries generated when rate-shopping for a mortgage, auto or student loan are consolidated by credit scoring models when done within a certain window of time. The FICO scoring model ignores multiple mortgage, auto and student loan inquiries in the 30 days prior to scoring but if shopping for all 3 in that window of time will alert lenders you are shopping for high priced items and reduce your score significantly. Stay off the new car lot when shopping for a home.
If you consider keeping credit inquiries to a minimum while shopping for a home loan you should be safe not to do any harm that will significantly impact your ability to get a quality mortgage. If you have questions or comments please contact me at Ingrid.quinn@cobaltmortgage.com or visit my website http://www.scottsdalemortgageexpert.com 


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5 Basic Steps of the Mortgage Process

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Every loan is unique. However, most loans follow the same timeline of events as follows:

1. The Application: The borrowers must begin the process by completing an application. Lenders will offer at least one of three simple methods you can choose from to complete this portion of the loan process; an online application, a face-to-face interview, or a phone interview. The information requested you should easily know, but you may want to be ready with paperwork to answer questions if needed. The completed application must then be signed or e-acknowledged depending on the method of disclosure of the application.

2. Documentation: Following up the application with the specific documents your lender requests is also a very important part of getting your loan closed quickly and efficiently. The list of required documentation will be specific and needs to be followed exactly.

3. The Appraisal: During the time you are gathering your required documentation; your lender will have an appraisal ordered. Appraisers are willing to work with each borrower’s schedule. The title work is also ordered by your mortgage professional during this step.

4. Loan Approval: The loan processor will submit your loan file to the underwriting department. An underwriter is the person who approves, suspends, or denies the home loan. There are two types of loan approvals, conditional and final. Conditional approval means that the underwriter requires a few more items to fully approve the loan. These conditions are very specific and the lender will keep in touch with you if they need additional paperwork. Final Approval (known as a “clear to close”) means that you fully approved are ready for the next step. At this time, closing documents will be prepared and sent to your closing company, either an attorney or escrow company depending on the state you are purchasing your home in.

5. Signing: It is time to schedule the signing of the final paperwork, which includes the new note and mortgage! Up until this point in the loan process, nothing you have signed is binding. For purchase loans, this is the final step and you will receive the keys to your new house within a day or two upon closing company’s receipt of funds. For refinance loans, this will begin the three day right of rescission period, in which you will have three days to reconsider. The three day waiting period is not required on an investment property refinance loan. After this three day period, the loan will be completed or “funded.”

Please keep in mind that there are many circumstances that can cause these steps to vary. Each client has a unique financial situation. Your loan officer and his or her staff are there to help you along the way and to make sure you have a successful transaction .
For any questions or suggestions please feel free to email me at Ingrid.Quinn@CobaltMortgage.com or visit me at http://www.ScottsdaleMortgageExpert.com or at http://www.CobaltMortgage.com/IngridQuinn .


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To Make a Pre-Payment or Not?

debt
I get this question quite often from clients who would like to make a lump sum payment and reduce their mortgage payment without going through a full refinance. Check with your servicer to find out if they offer this feature in your loan or if you are contemplating a purchase or new refinance, it is a good question to field before you choose a lender for your transaction. The feature initially discussed is a courtesy offered by your servicer and not all lenders or servicers allow for recasting. Prepayment without penalty is allowed on most loan products and a review of your loan documents at closing is important.

Recasting is the process whereby a borrower applies a significant one-time payment to substantially reduce the unpaid principal balance of the loan in order to lower the monthly payment. Although the remaining loan term and interest rate remain unchanged, re-amortizing the loan based on the newly reduced principal amount results in a lower monthly payment. Conventional, conforming Fannie Mae and Freddie Mac loans are generally eligible, but loan recasts are not allowed on FHA and VA loans. Recasting a jumbo loan depends on the individual loan.

Different lenders will require a different minimum principal curtailment. Typically, the minimum is $5,000 or even $10,000. There will be a nominal one time fee ranging from $100-$500 also. The interest rate on the loan will not change and the re-amortization will be over the remaining original term of the loan. The loan will be re-amortized based on the newly reduced principal amount, resulting in a decreased Principal and Interest (P&I) payment and an overall lower monthly payment. New billing statements will be adjusted to reflect the lower payment amount.

This is a good alternative to a refinance when you have a more favorable interest rate than what the current market is offering. Also, there are no typical refinance closing costs related to the re-amortized loan process.
On the other side of this scenario, is a lump sum payment keeping the P & I payment the same and the term of the loan will then be shortened. This is a typical pre-payment. It obviously will depend on your long term reasons for opting for either type of loan restructure and you should consult your financial professional and your mortgage professional for guidance.

For questions please feel free to email me at Ingrid.quinn@cobaltmortgage.com or visit http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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The Mortgage Business-Not How It Was

MortgageApproved
It’s been a 30 year ride for me in this business. I thought it was time to reflect where the industry has been and where it may go. It certainly is not a boring job. I find it an exciting challenge to daily talk to people and work with them towards their goal of buying a home.

The industry has been in the news a lot in the last 7-8 years and there has not been a dull moment. There have been a lot of changes in the rules and just keeping up with those has been a huge undertaking, but it just takes me back to when I first started out. We verify everything. It’s the way it should be.

I have been through real estate booms and busts, trends come and go and so do people I have worked with. The industry has done some weeding out and hopefully most of the bad apples are gone and hopefully industry standards are where they should be.

What remains the same is that Americans still want to own their homes. I find that people place an enormous amount of trust in my hands and I do everything I can to make their homeownership goal a reality. What has changed, though, is the difference about how a mortgage is originated. The online channel has grown and the mortgage industry has finally automated the process to an almost paperless process. Yea!! Gone are the file folders of 3-8 inch thick loan files and pdf versions of documents loaded into our processing system has make copying and faxing a near thing of the past.

What I still feel is important is the relationship of the quality referral to an experienced and trusted lender. Though online access is readily available, the referral to your mortgage lender is important because they are handling all of your personal information and the trust factor is imperative as to who has your information.

A home purchase is close to if not the largest personal purchase you will make. Take the time to find your trusted advisor in this process. It will make the experience a smoother one. For questions or suggestions please feel free to contact me at Ingrid.quinn@cobaltmortgage.com or visit my websites http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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Credit and the Mortgage Application

credit shock
40 million Americans have errors on their credit report and 20 million of them are significant mistakes. Statistics provided by http://www.cbsnews.com/video/watch/?id=50153672n Almost everyone I speak with is not familiar with the real credit report site that is the one that offers you a free report that you are entitled to every year. The website is http://www.annualcreditreport.com as listed on ftc.gov . Removing errors is your responsibility, and it takes some time and patience.
As you go into this site, it will ask you for some personal information. Then it will ask which report you would like to obtain first, Experian, Transunion or Experian. Once you select your bureau, you may need to work through all the services it offers to get to the free report. You do not need to sign up for monitoring and you will have to pay for your score if you want to receive it. If you order one score to get an idea of where you are, choose Equifax or Experian. I have found these bureaus more widely used by creditors and most accurate reporting.
Once you have your reports, review them for accuracy. Conventional, FHA, VA loans do not accept a disputed item that carries a balance to be open on your report.
Below are 7 tips to Fix Credit Mistakes as recommended in an article published on the National Association of Realtors website http://www.houselogic.com/home-advice/home-taxes-financing/dispute-my-credit-report/# :
1. Fix the Error Immediately
2. Make sure you Fix all bureaus
3. Report Credit Fraud to credit bureaus, police and the FTC.
4. Mistakes usually originate with the creditor. Contact them first.
5. Contact your state’s attorney general office if you need additional help.
6. Have proof to back up your claim.
7. Have patience and save all documentation, emails and correspondences. Get corrections in a letter on the creditor’s letterhead for your records.
Credit bureaus make money by gathering information from the people we do business with and then sell that information to banks, merchants, insurance companies and employers who use it to make decisions about our credit worthiness and reliability.
(quoted from http://www.cbsnews.com/video/watch/?id=50153672n)
Your credit is your responsibility.If you have success stories about how you were able to correct errors, I would love to hear about them. Contact me at Ingrid.quinn@cobaltmortgage.com or visit my websites at http://www.cobaltmortgage.com/ingridquinn or http://www.scottsdalemortgageexpert.com.


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Arizona Market Protected From Bubble

azIn Arizona some people are concerned that we are experiencing another market bubble. There are new regulations that have been put in place to ensure that the quality of loans made now will not have the devastating effect it did 8 years ago. In the mortgage industry, we have seen that these new regulations may cause the process to purchase a home to be a little more time consuming, but it’s better to be safe than sorry. One of the main regulation changes is in the ability to choose an appraiser.
Due to the HVCC (Home Valuation Code of Conduct) put into effect in 2009, in an effort to ensure the stability of the housing market, lenders across the country are required to have an appraiser randomly selected. HVCC is a set of rules for the mortgage lending and real estate appraisal industries. The intended purpose of the HVCC is to protect appraiser independence and prevent pressure from being applied to appraisers to produce a desired property value. Ultimately, these safeguards are intended to protect consumers.
Loan officers are not permitted to discuss the appraisal and value with the appraiser directly. Appraisers (who now know they are under Federal scrutiny) have made it a regular practice to conservatively appraise Arizona homes. This stabilizes the inflation rate of home prices in Arizona and in turn does not allow the market in rapidly increase, leading to another bubble.
Another aspect that has changed is the necessary documentation required from a borrower trying to get a home loan. I have written on this subject before, but feel that it needs to be touched on again.
Many clients have jokingly asked “what else do you need? a blood sample?” I understand that Loan Officers are very specific on what they ask for and it can get very tedious, however, there is a reason for this. Borrowers that cannot demonstrate an ability to save have a higher chance of missing mortgage payments and/or foreclose. Now, borrowers are permitted to receive a gift from a family member. This may seem strange because if a borrower receives a gift it does not show their capability of saving. What it does show is the support and backing from family/friends.
Many people may not agree with the new regulations, but they are in place. They are there to protect not only our market from another downturn, but also to protect the borrowers from possible financial turmoil. Borrowers should not hesitate to ask questions during the loan process. At the same time, borrowers also need to be understanding and accommodate the requests that may come from your loan officer. For any questions or comments, please feel free to contact me by email Ingrid.Quinn@cobaltmortgage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com


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Don’t Kill Your Credit Score!

credit shock
Credit, Credit, Credit! Your credit score is a crucial part of your financial future and present. Whether you are looking to open a credit card, buy a home/vehicle your credit score will not only dictate your ability to make that purchase, but also what interest rate you will have. You have three different credit scores, but for this article I am going to focus in on one and that is your FICO credit score. It registers on a range of 300 to 850.
You should strive to have a score of 780 or higher to be in the best shape to make major purchases with the best interest rates. In the mortgage industry we suggest that our clients hold a minimum of a 620 credit score. This is primarily the lowest score most, not all, lenders have as a threshold for a mortgage.
Now let’s get down to what this article is all about. What can damage your credit score and what you should look out for. I will discuss seven different things that can greatly affect your credit score.
Carrying Large Balances:
You should never accumulate large amounts of debt. Yes, keeping a large balance on a credit card can enable you to increase that cards limit. However, you need to be aware that your debt effects about 30% of your overall credit score.
Closing Credit Cards:
This may seem like a smart move if you are having credit issues, but the length of time you hold a line of credit also effects your credit score. If you are able to maintain a credit card for many years it looks much better on your credit as opposed to quickly paying off balances and closing cards.
Paying Late:
Nobody wants to see a late payment charge on their account and payment history is a major factor that lenders look into. For your FICO credit score, payment history makes up about 35% of the score.
Defaulting:
It may seem obvious, but failing to pay back an owed amount to a lender will severely damage your credit score. The largest form of default is bankruptcy or foreclosure on a home. Both of these situations can easily cut your credit score by 100 points.
Having to many lines of open credit:
This is when the age old phrase “to much of a good thing,” comes into play. Applying for a loan or credit card with numerous creditors can cause your credit score take a small hit. If you apply for multiple lines of credit at the same time, those little hits will add up quickly.
Not Having a Credit Card:
Many people are cutting up their cards and closing their accounts in hopes of helping to keep them out of debt, but this is a double edged sword. On the one side you are not accumulating more debt and in turn do not have to worry about payment. On the other hand, you are not showing payment/credit history and are not helping your credit. Having a small credit card that you use for something specific like fuel or groceries is smart to have as long as you are able to make your payment at the end of the month.
Co-Signing:
We all have friends and family we care about. There are times where those people may need our help to qualify to receive a line of credit. You must take precautions when choosing to co-sign on anything. If you are not fully capable of taking on that debt alone it may not be the best choice to help. You should always prepare for the worst and if for some reason the person you co-sign with is not able to make the payment it will become your responsibility. You don’t want to be faced with a collection agency looking for money from you because you tried to help someone out.

These are all great examples of what can hurt your credit score and things you should look out for. You should always be diligent about keeping up with your credit score and know what’s going on. Work smarter so you don’t have to work harder in the long run.
If you have any questions regarding a home mortgage or suggestions please feel free to email me at Ingrid.Quinn@CobaltMortgage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com