Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Advantages of Working with a Local Lender

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One of the greatest advantages of working with a local lender is that they are better able to communicate with you.

We live in the age of technology and making use of the newest developments is important in any business, but nothing can replace a good face to face conversation. I maintain an open door policy with my clients. Day or night I am available. I personally get to know each of my borrowers and can update them within moments on their loan status and what, if anything is required. Accessibility is an important ingredient for success.

Another advantage of a local mortgage professional is knowledge of the local market.
When you use a local lender, they have expert knowledge of the local market. Why would you use a lender that doesn’t know your area? There are intricacies to the mortgage process that are very area specific; it’s very difficult for a national lender to know all of them for every state. Every area of the country has regional differences, when it comes to closing home loans and purchasing real estate.

Finally, your local mortgage lender will likely be connected to the other professionals involved in the purchase or refinance.

There are many different aspects to a home purchase or refinance. The major people involved are the borrower(s), the lender, the real estate agent, and the title company and inspection professionals. When you work with a local lender, you will receive help navigating the process. By knowing the ins and outs of each part of the process, a local lender is able to keep things on schedule, identify issues and communicate more effectively each step of the way.

If you have any questions or comments please feel free to email me at Ingird.Quinn@cobaltmortgage.com or visit me at http://www.ScottsdaleMortgageExpert.com or http://www.CobaltMortgage.com/IngridQuinn.


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Tax Time and Staying In Touch

tax-time
It’s that time of year again, when everyone is gathering their paperwork from 2013 and preparing to file their tax returns. Clients, who have either purchased a home or refinanced a current home mortgage in 2013, need to retain their final closing statement from their transaction for tax purposes.

Their tax preparer or online self preparing system will ask them for information from their settlement/closing statement. Clients will need to keep this paperwork handy to determine the amount of charges in relation to their recent transaction that can be used as a deduction on their taxes.
Tax payers have questions about what is going to be deductible and it’s always good to have them ask their preparer for that information. The http://www.irs.gov website is also very helpful. Also, remind them that they will get a year end summary 1098 from their mortgage company about interest, property taxes and mortgage insurance paid for the tax year. If the loan has been sold to a new servicer, it is also good to remind them that they will receive more than one 1098.

This is a great time for realtors to reconnect with their clients from the previous year. Sending your client a copy of their final HUD (closing statement) is a helpful service you can provide and is one of the activities you can plan on an annual basis when doing your yearly business plan. You can securely retain the final HUDs throughout the year and when January 2015 rolls around, you have them at your fingertips to forward to each client with a thank you and a reminder for referrals.

What else are you doing to stay in touch with your client during the year? I appreciate your feedback. To contact me please, email Ingrid.quinn@cobaltmortgage.com or visit my website at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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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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Qualified Mortgage (Q.M.) What is it?

MortgageApproved
Qualified Mortgage (QM) and Ability to Repay rules are in effect on loan applications received on or after January 10, 2014. Part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the new rules are designed to protect buyers from purchasing homes they can’t afford and provide lenders protection from liability when originating loans that meet the Qualified Mortgage standard.
What is a Qualified Mortgage?

A qualified mortgage is a home loan that has:
• Regular periodic payments in substantially equal amounts
• Been underwritten based on a fully amortizing payment schedule using the maximum rate allowable for the first five years after the date of the first periodic payment
• Verified the borrower’s income and assets; and current debts, including alimony and child support
• A borrower’s total debt-to-income ratio of no more than 43% (see “Temporary QM” for exceptions to this requirement)
• Met points and fees limitations
• None of the following features: negative-amortization, interest-only or balloon-payment features

Points and Fees

A loan must not exceed the limits listed below for points and fees for either Temporary or Standard Qualified Mortgages. These fees typically do not include those that are paid to third parties such as appraisers or title companies unless those companies are affiliated with the lender.

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Higher-Priced Mortgage Loans

For a lender to originate a Qualified Mortgage with safe harbor legal protections, the lender must ensure that the Annual Percentage Rate (APR) does not exceed certain thresholds. For 1st lien mortgage loans, the APR cannot exceed an index called the Average Prime Offered Rate (APOR) by more than 1.5%. For 2nd lien mortgage loans, the APR cannot exceed the APOR by more than 3.5%. FHA APR cannot exceed APOR +1.15% + annual NI%.

What does the Qualified Mortgage mean for you and your buyers?

Most loan programs today already adhere to the standards that make up the QM rule. The new rule simply formalizes that lenders must make – and document – a good-faith determination before closing the loan that the borrower has a reasonable Ability to Repay the loan. At minimum, this determination is made based on eight factors, which are already the tenets of mortgage underwriting:
• Current income or assets
• Current employment status
• Monthly mortgage payment
• Monthly payment on any simultaneous loan
• Monthly payment for mortgage-related obligations (taxes, insurance, HOA, etc.)
• Current debt obligations, alimony and child support
• Monthly debt-to-income ratio and residual income
• Credit history

There will not be a significant impact for loans that are eligible for Fannie Mae, Freddie Mac, FHA, VA or USDA. Although some jumbo and non-conforming programs will tighten their standards to the 43% debt-to-income threshold, most customers using these programs will still qualify.

The points and fees limitations and higher-priced mortgage loan limits are generally seen as a positive for homebuyers, as they will prevent many lenders from charging high ancillary fees, large amounts of discount points, and higher interest rates. However, there will be a small amount of riskier loan products that will be difficult to offer without violating the QM thresholds. Some lenders may decide to offer those mortgage products that are not eligible for QM safe harbor legal protection, but doing so will expose them to greater legal risks.


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First and Second Combo Mortgages are Making a Come Back!

983077351003885_mortgage-applicationI have recently come across loan pre-qualifications where a 1st and 2nd combination mortgage loan option may be the right solution for a client. One main reason that a client may wish to separate their total mortgage amount into two loans; avoiding P.M.I. (private mortgage insurance). Many lenders including Cobalt Mortgage offer these types of loan scenarios when buying a home. Use of the combination of a 1st mortgage and 2nd mortgage is when the total amount to be borrowed is to be separated in to two loans. This is typically done with the first mortgage being within conforming loan guidelines (loan amount depending on location of the home) and a secondary retail or private loan being is set up for the remaining amount. A conforming (Fannie Mae or Freddie Mac) first mortgage will typically have more favorable interest rates than a non-conforming loan. Second mortgages can be taken in typically 2 forms, as a Home Equity Line of Credit (HELOC) or a fixed rate mortgage.
PMI or Private Mortgage Insurance is required by Fannie Mae and Freddie Mac as well as most investors when a 20% down payment is not made. Private mortgage insurance is paid to protect the lender against loss if a borrower defaults on a loan. Some borrowers choose to use a 1st and 2nd mortgage loan option when they have money for a down payment; however it is not enough to meet the 20% requirement. I have discussed P.M.I. in detail in my previous blog “P.M.I. vs. M.I.P. What’s the Difference?” (Please feel free to visit that blog for further information on that subject) PMI may also be tax deductible for some clients but for those who it is not, may want the 2nd mortgage for the purpose of having tax deductible interest.
It is best to discuss your options with your mortgage lender and your tax professional for guidance on the options right for you. For questions or suggestions please feel free to contact me at Ingrid.Quinn@CobaltMortgage.com or visit me at http://www.ScottsdaleMortgageExpert.com or http://www.CobaltMortgage.com/IngridQuinn .


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Flood Insurance Changes and How They Effect Your Home Purchase

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A few months ago F.E.M.A. made some significant changes to the National Flood Insurance Program (NFIP) that was originally established in 1968. For details on this subject refer to the F.E.M.A website, http://www.FEMA.gov , but I felt that there are a few key points that people need to know about. Typically, a homeowner’s insurance policy is shopped for towards the closing date of a purchase transaction. At that time, a purchaser finds out they will need to purchase flood insurance if their new home is located in a flood zone. An issue that clients have been running into is the lack of an elevation certificate on the home they are purchasing and effective October 1, 2013 an insurance agent must quote worst case premiums which can reach into the thousands of dollars if an elevation certificate is not available on the home they are buying.

The elevation certificate is an important administrative tool of the NFIP. It is to be used to provide the elevation information necessary to ensure compliance with community floodplain management ordinances, to determine the proper insurance premium rate. The surveyed elevation data, typically the elevation of the lowest adjacent grade of the structure in question, is provided by a Licensed Land Surveyor. If you are looking to buy a home that is in a flood zone and requires flood insurance to be purchased, this should not be left to the end of the loan process because it may take a week, two or three to obtain the certificate and closing may be delayed.

The cost of obtaining an elevation certificate is usually the responsibility of the buyer. Maximum coverage through the NFIP is for $250,000. For full details and changes made to the National Flood Insurance Program please visit: http://www.fema.gov/media-library-data/7c1b0352fe3987c36569fccc492ab2ca/change_package_508_oct2013.pdf. For questions, please contact me by email at Ingrid.quinn@cobaltmortgage.com or visit my website http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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Numbers and their Impact

Choose-a-Realtor
I read an interesting article by Lew Schelman in the November 4th National Mortgage News. He pointed out some interesting statistics and tidbits about how numbers correlate to certain home pricing strategies and some things to consider when coming up with the number to set a home’s sales price.

“Home sellers may not be afraid of certain numbers, at least not all of them. But according to Trulia, setting a price and “lucky” numbers go hand in hand.” Studying asking prices for homes since October 2011, Jed Kolko, Trulia’s chief economist, discovered that sales prices that end in 9 were the next most popular number after zero. 53% of all non-zero list prices on their site ended in 9. The next most common number was 5. Also, when home prices are reduced, they are more likely to have a 9 as the last number. When sellers are more eager to sell, the home price will also be more likely to have a 9.

When home prices were over $1,000,000, buyers are less likely to be influenced by the numbers game. Only 1 in 4 homes listed for $1,000,000 and up had a 9 as the last digit. The number 9 is also more popular in some markets, for example in up state New York. The number 4 is a number that can be unsettling in Chinese communities because the pronunciation of the number is similar to the word “death” in many Cantonese and Chinese dialects. On the flip side, the number 8 is “phonetically similar” to the words wealth or prosperity. The number 13 anywhere in the list price only appeared in the asking price of 13% of Trulia’s listings. In Nevada, lucky number 7 was more likely to be found in their listing numbers and the numbers 3 and 6 that represent positive and negative references in Christian numerology are more prevalent in a Bible Belt’s home prices.

So as an agent or a home seller, thinking about the numbers and their impact may be worthy of consideration in setting your sales price. Jed Kolko also wrote that “setting the right asking price for your home isn’t all science and it isn’t all art. Sellers and agents pick numbers to signal their strategy, and to appeal to the traditions and superstitions of local buyers.” Have you considered this when setting your selling prices?

I’d love to hear your feedback. I can be reached by email Ingrid.quinn@cobaltmortgage.com or leave a comment on my blog page. Visit me at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.