Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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Pre-Qualification Vs. Pre-Approval

mortgage-prequalification

There seems to be a misunderstanding of the difference between a pre-qualification letter and a pre –approval letter. Both letters are given to a home buyer by a lender and it is usually suggested that a buyer gets this letter prior to shopping for their home. These allow clients to know exactly what their price range is and what they realistically can be approved for.

When in Arizona, both of these letters are documented with the same form, a PQF/ Pre-Qualification Form.

A pre-qualification letter can be created by simply having a conversation over the phone with a lender and having a credit check run. All this letter states is that from the information you have given the lender, you are qualified for up to a specific amount. If you are getting a pre-qualification letter, please take the time to be specific and honest with your lender. This will allow you to get the most accurate results possible.

On the other hand, there is also the option of getting a Pre-Approval letter. This letter is completed with the same form as a pre-qualification letter only with additional comments/notes made on it. This means that the file has been sent through a desktop underwriting (DU/LP) engine and documentation has been collected & reviewed by processing as well as an underwriter. This is usually marked with a TBD “to be determined” address. This is an approved loan simply requiring an appraisal, contract & title work.

Realtors appreciate when clients take the time to go through this process because it allows them to properly determine which homes to show and what is going to be best for that specific client. Yes, a pre-approval does take a little more effort and time, but in the end it can really give you the edge when looking to buy! For questions or comments please feel free to email me at Ingrid.Quinn@cobaltmortgage.com or visit me at scottsdalemortgageexpert.com .


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Rumor: Loans Are Hard to Get

rumors

I receive phone calls on a daily basis from people looking for a mortgage. They want to get prequalified to purchase a home and most want to have the rumor “It’s hard to get a loan nowadays” dispelled. There are a lot of mortgage options available:

1. Conventional conforming loans- up to 97% loan to values to $417,000 or higher depending on area of the country loan is placed
2. FHA loans- 96.5% loan to values
3. VA loans- 100% loan to values for veterans & military personnel
4. Jumbo loans- loan amounts over conventional conforming loan limits
5. UDSA- 100% loan to value rural area loans
6. Private/hard money loans
7. Home Equity loans

So where is this bad information coming from? Media, banks, mom & dad, professionals in your life? Getting a loan is not that hard. You need decent credit (not super excellent), a job, and cash for a down payment and closing costs potentially, depending on the type of financing you are eligible for.

Many times the clients I talk to are referred from agents that were supposed to take the client out to look at a rental. If they can afford an $800-$3500 rent payment for example, they may be able to buy a home.

It is important for the consumer to get re-educated on the market today when they are looking to make any kind of move, renting or purchasing, so they know their options and have a plan in place. Many people are surprised when I tell them you can qualify to purchase now. With the market improving and interest rates at historic lows still, now is a great time to buy a home! If you have any questions or comments, I would love to hear from you. I can be reached at Ingrid.quinn@cobaltmortgage.com or http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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Where did that Money Come From!? Documenting Cash to Close

  Cash to Close

    It seems like recently I have been running into the same issue with many of my clients. Where is their cash to close coming from to purchase a new home? I have a couple in particular that just got married and, of course, received a stack of cash and checks as gifts from their guests.

   On their January bank statement a $10,000 lump sum deposit appeared and in turn questions arose. Luckily for them we are now in April.

   Loan requirements are your most recent 1-2 months bank statements. If we had needed to use January’s bank statement my clients would have been in a bit of a predicament. Can you imagine being required to hunt down gift letters from every single guest at your wedding?

   Another instance was a young man was selling his ATV for cash to close. I’m glad he informed me of this so we could take the proper steps to document the funds.

   When you have an asset that there is a title or a document showing your ownership prior to selling or transferring ownership, please take the time to make a copy! We need a copy of the bill of sale and to fully cover your bases have the buyer pay in a cashiers check. Any cash transaction is not documentable.

   If any of the bank statements show deposits that are not payroll deposits & are over 25% of you monthly gross income, the source of those deposits should be documented (For example: gifts, inheritance, liquidation of stocks, etc.). All mortgage program guidelines require a full paper trail on where these deposits originated, copies of checks, deposit slips, etc. If any of the bank statements have more than one page, a copy of all pages are required, even if the other pages don’t show anything important or are blank. Depending on how long the transaction takes you may need to send in updated statements as you get them.

   Copies of the most recent statements (or most recent quarterly statement) on any other asset accounts (like stocks, CD’s, 401k, IRA, etc.) are required. If these assets are going to be liquidated or borrowed against evidence of that is needed, and evidence of the deposit of the funds into the new account (such as deposit slips and copies of the check).

   You are entering into a major financial transaction when purchasing a home! The best thing for you to do is to be upfront and honest with your loan officer from the very beginning because anything that is not disclosed upfront tends to cause problems near the end of the transaction process. Your loan officer is your advocate and will fight for you to get the loan you need to buy your home. Be honest with them and let them work for you! For questions or comments, please contact me at Ingrid.quinn@cobaltmortgage.com or visit my websites at www.scottsdalemortgageexpert.com or www.cobaltmortgage.com/ingridquinn.


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Closing Costs, What Are you Paying For?!

  Buyer-Seller-Rd-SignWhen you purchase a home, there are many things to keep in mind, especially pertaining to financing. As a buyer, you need to be prepared for not only your down payment on the home but also closing costs. These are the fees affiliated with the loan and the purchase transaction being processed and closed.

   You pay closing costs to the Title Company, state/county/city, lender, and you also pay tax and insurance escrows, and per diem interest. The closing costs that you pay the lender are usually far less expensive than you pay to the other parties. All costs and down payment funds are paid at the closing table to the Title Company and they are then dispersed to the various entities/vendors that the fees are owed to.

   The following are the seller concessions that the seller can pay on top of splitting the transfer & recordation taxes (if applicable, splitting these taxes is customary in many areas) In Arizona, it is standard in the resale contract for the seller to pay the Owner’s Title Insurance. Sellers may pay up to 3% of the sale price towards a buyer’s closing costs, escrows, and per diem interest, on a conventional loan with a 5% down payment.

   Sellers can pay up to 6% of the sale price to the borrower’s closing costs, escrows, and per diem interest on a loan with a 10% or 20% down payment. On FHA loans a seller is allowed to pay up to 6%. On VA loans, the seller may pay all closing costs for the veteran.

   On an investment property the maximum seller credit for closing costs is 2% of the sales price.

 

   Here is a list of some fees that are included in closing costs:

-Application Fee (if any)

-Loan Origination Charges

-Points

-Appraisal Fee

-Prepaid Interest

-Private Mortgage Insurance

-FHA, VA and Rural Housing Fees

-Home Owners Insurance

-Flood Determination Fee

-Property Survey Costs

-Title/Escrow Fees/Title Insurance

 

   Your lender will give you an estimate of closing costs on the purchase of a particular house you’ve selected. This is called a “Good Faith Estimate” (“GFE”) and it is required by law to be given to a buyer. Then, the day or before closing, the Title Company will give you an actual “Settlement Statement” (aka “the HUD” or “the HUD-1”), which is the final and complete form with all the numbers for the sale, including the actual closing costs.

   There are many different ways of handling the cost to close, including “buyer assist”. The best idea you can do is sit down with either your realtor, financial adviser or a loan officer and simply ask. They will be more than willing to answer any questions and make sure you are truly ready to buy! If you have any questions please feel free to email me at Ingrid.quinn@cobalmortgage.com


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Shopping Interest Rates

shopping rates
There are many things to consider when shopping interest rates. When most homebuyers are shopping for a mortgage they only look at the interest rate and points. There are a number of considerations beyond the interest rate and points. Below are some important things to consider when shopping for a mortgage.

1. Mortgage loans have so many variables that you can’t just view a rate quote online and be assured it applies to you.
Interest rates are priced differently according to:
.loan amount
.property type (single family detached, condo, multi-family)
.credit score
.state or region the property is located in
.occupancy type (primary residence vs. vacation home vs. investment property)
.how many days the rate is “locked-in” for (15 days, 30 days, 45 days, or more)
.whether or not there is a pre-payment penalty
.debt ratios

2. Is the lender you are looking at an internet lender, mortgage broker, mortgage banker, or a bank? Knowing who will ultimately be processing and funding your loan, helps to insure you will have a smooth process. Is the appraiser a local company? All of this affects your ability to get to the deal you signed up for, and getting to the settlement table on time.

3. What are all of the fees, such as processing fees, underwriting fees, appraisal fees, credit report cost, etc. Does the loan have an origination fee, discount points, or broker origination fees? There are many third parties to a loan, and they all get paid. There is no such thing as a loan with no fees. If someone offers you a loan with no fees, you are paying for it somewhere else (in the form of a higher interest rate, or a pre-payment penalty).

4. Are the quotes current, and are all the options you are considering quoted on the same day?

5. Did you get the APR (Annual Percentage Rate)? Many times lenders will quote you low interest rates, but then have a significantly higher APR’s, which indicates that they have higher than normal closing costs.

Most consumers are so focused on the interest rate, that they take their eye off of the ball in other areas like closing costs. For questions or comments, 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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HARP Has Been Extended Through 2015

ImageThe Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to extend the current expiration date for the HARP refinance program until December 31, 2015. The program was set to expire the end of 2013.

The program has provided many homeowners the opportunity to refinance an underwater or high loan to value mortgage to a lower rate. Over 2 million homeowners have taken advantage of refinancing since the program inception in 2009.

 Am I eligible? To be eligible, you must have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, sold to those agencies on or before May 31, 2009. The current loan-to-value ratio on the mortgage must be greater than 80%. Borrowers cannot have missed mortgage payments in the past 6 months and cannot have had more than one missed payment in the past 12 months.

How do I take advantage of HARP? The first step homeowners should take is to see whether their mortgages are owned by Fannie Mae or Freddie Mac.

Homeowners can log on to:

https://www.knowyouroptions.com/loanlookup to look up on Fannie Mae’s website

https://ww3.freddiemac.com/corporate/ to look up on Freddie Mac’s website.

If you are still unsure contact your servicer and ask. Any comments please feel free to email me at ingrid.quinn@cobaltmortgage.com or visit www.scottsdalemortgageexpert.com.


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Financing Your Home with a HomePath Mortgage

what-is-the-HomePath-mortgage-loan-option A HomePath Mortgage allows a buyer to purchase a Fannie-Mae owned property with a low down payment. The down payment can be as low as 3% for an owner occupant. It is a conventional loan. Investment properties can be purchased with a HomePath loan also without the typical 20-25% down payment. Down payments for an investment property can be as little as 10% down.

Other benefits of purchasing a HomePath property are:
*Private mortgage insurance is not required when the down payment is less than 20%
*An appraisal is not required which reduces the buyers closing costs over $400
*Owner occupant purchasers are given a First Look opportunity. When a new listing comes on the market, an owner occupant buyer has the first 15 days to make an offer before Fannie Mae opens the property up to investor buyers.
*Fixed-rate & Adjustable Rate mortgage options available based on down payment
*Seller contributions allowed for closing costs
*Gifts from immediate family members for owner occupied buyers allowed

HomePath also offers a mortgage option which is for renovation purchases. Some of the benefits are:
*Renovation amount based on appraisal “as completed value”
*Available for primary residence, second homes, and investment properties

When doing a home renovation mortgage through HomePath you are able to purchase a home that needs light renovations. The loan amount will include both funds for the purchase as well as the work to be done. This is only up to 35% of completed value and no more than $35,000.
For more information and to see properties available, login to http://www.homepath.com. I also recommend that buyers have a realtor represent them in a HomePath purchase. If you have questions about this information, please contact Ingrid Quinn at http://www.ScottsdaleMortgageExpert.com or email Ingrid.quinn@cobaltmortgage.com.