Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Down Payment of Your Home Purchase

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Where is my money better spent if I have to make a choice, down payment or discount points? When it comes to putting a down payment on a home there are a number of different options available and each individual has a unique situation. It is best to weigh the options and determine what is going to be best for you in the long run. Different loan programs offer different down payment options:

VA Loans: 100% financing maybe available

USDA Loans: 100% financing maybe available

FHA Loans: minimum down payment is 3.5% of the sales price to FHA’s county maximum. Check your local market for FHA maximum loan limits. https://entp.hud.gov/idapp/html/hicostlook.cfm

Conventional Conforming Loans: 5% down payment is the minimum required for a Conforming Loan.

Non-Conforming Loans: check with your mortgage professional (programs may vary)

3 Things to Keep in Mind:

Larger Down Payment – Just remember, the larger your down payment means the less money you have to borrow. This also means you’ll have more equity already available in your new home. This is important for borrowers in many ways, including lower monthly payments, potentially better loan terms, and the possibility of not having to purchase mortgage insurance.

Discount points – The easiest way to think of discount points is that in order to lower or discount your interest rate, you pay a premium. This increases your closing costs and may have an impact on the money you have available for your down payment. Before you agree to pay discount points, you should consult your mortgage professional about the amount of money you are going to save monthly. From there you can decide if this route will benefit you in the long run. I have written in detail on the subject of discount/mortgage points. For more information on this subject please visit my blog Mortgage Points, What Are They?

Qualifying for a Loan- qualifying for a loan can be tricky, but with the help of a mortgage professional you can look at your options and determine what will be the best way for you to qualify. In some cases you may need to work with a combination of things to fully qualify for the loan you need.

There is no answer that is right for every borrower. Many factors play into a home loan and a mortgage professional is there assist you with the decision making process by laying out your options. Never hesitate to ask questions.

For questions 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


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Short Sale/Deed in Lieu Seasoning per Fannie Mae

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New Fannie Mae loan changes on the horizon could affect you! If you’ve recently had a short sale or deed-in-lieu of foreclosure (DIL) and are looking to purchase a home again, here’s what you need to know:
Fannie Mae announced that on August 16th of this year there will be changes to regulations. For several years now, Fannie Mae has allowed buyers that previously were involved in a pre-foreclosure hardship (short sale, or deed in lieu), to buy again using Conventional financing in as little as 24 months with a 20% down payment and a minimum 680 credit score.
After August 16th, this early purchase programs is being retired, and replaced with longer waiting period, but with much less strict down payment and credit score requirements. Buyers that experience a short sale or deed in lieu of foreclosure are able to buy again using Conventional financing after a four (4) year waiting period.
From what we understand, it appears that after the four (4) years from a short sale or deed in lieu, that you can qualify using the standard Conventional qualifying requirements of a minimum 620 credit score, and 5% down payment.
Exceptions: If a homeowner can prove that the short sale was due to an extenuating circumstance such as job loss and can provide strong documentation, then the waiting period may still be reduced to two years.
There are still options other than conventional conforming programs to assist buyers purchasing a home prior to 4 years. FHA & VA financing have shorter waiting periods; 3 years for FHA financing and 2 years for VA. Also, there are portfolio products available where a time limit does not exist but terms of that type of a loan are significantly less favorable than previously described programs.
If you have questions or comments, please feel free to contact me. Visit http://www.cobaltmortgage.com/ingridquinn or email me at Ingrid.quinn@cobaltmortgage.com.


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Where to Begin The Home Buying Process

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When you meet with a Realtor, they will want to get some information from you. First, they will want to know if you have been prequalified with a mortgage lender. Then the Realtor will want to find out the features you are looking for in your new home. What type of home are you looking for single family, townhome, condo, square footage, location and the biggest question, what’s your budget? Knowing all of this information up front gives you an advantage. The home buying process can be overwhelming, unless you put together a plan for success right from the start. Be ahead of the game and meet with a loan officer. He or she will give you a realistic idea of what you can afford and provide you with information about the process you are about to embark on.

Every buyer has a unique financial situation, credit score, job history, income, debt and financial goals. A mortgage lender will analyze your information at the beginning of your home buying process, maybe before you even meet with your agent and in turn this will give you the ability to focus on the properties that are the best fit for you. Today, it is not uncommon for people to have small hiccups through out the home buying process. Meeting with your mortgage lender before you begin looking at homes will put you in the best position possible. Some of the simplest things can become a deal breaker if they are not addressed in a timely manner up front.

Over the past few years, the home loan process has undergone major changes. Government requirements, coupled with new banking standards have implemented procedures to help avoid future housing troubles. Meeting with a lender should be step number one. You should be prepared to provide copies of tax records, W2’s, complete bank statements and pay stubs. Having your prequalification or pre approval (both topics are discussed in a previous blog) in place will help you to have the greatest success with an offer on a new home.

For more information about the home buying process or if you have questions or comments please visit http://www.cobaltmortgage.com/ingridquinn or http://www.scottsdalemortgageexpert.com.


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Mortgage Points, What Are They?

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Mortgage points, also referred to as ‘discount points ‘or an origination fee are made payable at closing. Each point is charged at a portion of 1% of your mortgage loan. A discount point reduces your interest rate by a set amount. The amount by which the rate is reduced for each point varies according to your mortgage and your lender. On average it is 0.25% – 0.5%. A discount point is different than an origination fee; however it can also be termed ‘a point.’

The origination fee is a lender fee. Some lenders charge this fee while others don’t. You should always ask your mortgage professional whether the quote they are offering has an origination fee and/or discount points associated with it. This will allow you to know exactly what your monthly payment will be.

If you reduce your interest rate by paying discount points, your monthly repayment will also be reduced. It is a good idea to take into consideration what the monthly savings are by paying the additional cost of points and whether it is money well spent. You may want to use the funds to increase your down payment or do some improvements to your new home, which in turn will increase its value or make the home more enjoyable to you. Points can in some cases be tax deductible, so it is a good idea to check with your tax professional for advice.

Mortgage points can be a good investment for you. Your mortgage professional should help you with this calculation and find what will work best for you in the long run. As I always say, never hesitate to ask questions. Mortgage professionals are here to help you during this process and to make it go as smoothly as possible.

If you have any questions or suggestions on future topics please feel free to contact me at Ingrid.Quinn@cobaltmortgage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com .


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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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Qualified Mortgage (Q.M.) What is it?

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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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Bi-Weekly Payments, Good or Bad?

Occasionally, a client will ask about a program to make bi-weekly payments on their mortgage and I feel this subject should be discussed. If you have recently taken a mortgage, you will likely receive information in the mail about this type of payment plan, from your own lender or a third party. Please take the time to verify if it is coming from your lender servicer or a third party service that got your loan information from public records. The usual information states that for a few hundred dollars, you can save thousands in the long term interest, simply by having half your mortgage payment debited from your bank account every two weeks, instead of making one monthly payment.

Lenders often use an automatic bank draft for their biweekly plans, which means all your mortgage payments will be made on time. The main reason a homeowner may choose to take this option is if it makes their monthly budget work for their household and the long term effect on their accumulated interest is beneficial. By making 26 payments of half your mortgage, you are in effect making 13 monthly payments instead of the normal 12.

Depending on the terms of your loan, that extra payment each year may make a change in the principal amount of your loan and in turn lower the amount of interest accumulated over the life of your loan. There may be an up front fee to enroll or a monthly fee included in the payment which is typically charged by a third party servicer. The results of this type of payment plan can be achieved by homeowners taking the initiative themselves.

There are a two ways this can be done:

– saving money throughout the year for the extra payment and at the end of it

or

– dividing the cost of one monthly payment and add that amount to each monthly payment in principal reduction

When all is said and done, homebuyers should look at the big picture. How long are you planning on staying in the home? Can you comfortably make those bi-weekly payments? Homebuyers should not hesitate to speak to a mortgage professional about this type of payment program.

If you have any questions or suggestions for blogs 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