Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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The Mortgage Business-Not How It Was

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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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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


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M.B.A. Shows Mortgage Applications Decreasing

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The Mortgage Bankers Association released a weekly survey as of Aug. 21st, 2013 that spoke about mortgage applications. We recently had been seeing the market increase at a rapid rate and it is surprising that applications would decrease so suddenly.
The MBA stated that their finding s shows, “The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week.”
Form the press release we can see that this drop is not due to the lack of people buying home, but rather people no longer refinancing. “The seasonally adjusted Purchase Index increased 1 percent from one week earlier,” where as “The Refinance Index has dropped 62.1 percent from the recent peak reached during the week of May 3, 2013.”
It seems that this recent shift away from refinancing is really affecting the real-estate market. The MBA state that this change has greatly to do with rate changes in the past month, “The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.68 percent from 4.56 percent, with points increasing to 0.42 from 0.39 (including the origination fee) for 80 percent loan- to-value ratio (LTV) loans. The effective rate increased from last week.”
This is speaking on a national level. The MBA covers 75% of retail residential mortgage applications in the U.S. . People should not be afraid to purchase or refinance right now. Rates being in the mid 4’s are truly not bad. In the time I have spent working in the mortgage industry I have seen rates more than twice that and people were still buying homes.
Buyers need to be aware of that is happening in the market and not hesitate to ask questions and seek out answers. For the full press release please visit http://www.mortgagebankers.org/NewsandMedia/PressCenter/85394.htm .
For any questions of suggestions please feel free to email me at Ingrid.Quinn@cobaltmortgage.com of visit me at http://www.CobaltMortgae.com/IngridQuinn or http://www.ScottsdaleMortageExpert.com


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Locking, What is it?!

Lock on Chains
In today’s volatile market, consumers need to understand what a lender offers as options for locking in their loan. Many consumers think that when they begin speaking to a lender, the rate they discuss that day will be the rate they carry from there on. However, this is not the case. Laws govern what constitutes a loan application. An actual loan application requires that 6 pieces of information are received, which triggers disclosures for the good faith estimate and the ability to lock in loans. These items are social security number to pull credit, borrower name, estimated value, monthly income, loan amount sought & property address. These six things are important because without these six items a lending company is not able to give a borrower a locked rate.
A borrower is required to give all of the information except the address when prequalifying. Once you have a property under contract then you have the ability to lock in a rate for the loan. Loan rates are locked in for a specific period of time. This time frame is based upon the close of escrow date. Typically loans are locked 15, 30, 45 or 60 days. There is the option of locking in rate for a longer period of time, but this is mainly used when you are purchasing a home that is being built for you and will not be completed with in 60 days.
What does locking in a rate/loan actually mean? When you lock your loan your lender should provide you the rate and/or points as well as the specific date of expiration of those terms. Regardless of how the market changes, your rate will continue to hold as it was locked. This can be both a good and bad thing.
Whether the market improves and rates lower or the market worsens and rates increase you are guaranteed to have the rate you have in writing. There can be an exception to these rules, but only with some lenders. This is called a renegotiation policy. This can typically occur when the market improves at least .25%(depending on your lender’s rules) and your lender will allow you to change your locking contract. Keep in mind that when you choose to lock in your rate, you are asking the lender to protect you and you are making a commitment to do the loan with your lender. The shopping rate time is over. Renegotiation is a courtesy provided by your lender.
Borrowers need to make sure that when they go to lock in their rate, that their lender gives them their terms in writing. You should never assume something has been done without seeing it in writing. Be safe, talk to your lender about locking and what their renegotiating options are. Never hesitate to ask questions and learn as much as you can.
For questions for suggestions please feel free to email me at Ingrid.Quinn@CobaltMortgage.com or visit me at http://www.scottsdalemortgageexpert.com or http://www.CobaltMortgage.com/IngridQuinn .


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How Much Can I Qualify For? DTI, What is it?

canada-cut-interest-rateIf you talk to a lender, they are going to drill down to the 4 most important aspects of your loan when trying to purchase or refinance a home. What do you make, Who do you owe, How much cash do you have to work with and What is the property value?
I am going to focus this blog on the numbers involved in qualifying income and what the rules are to get someone an approved loan. Growing up in the mortgage business, I learned the rule of 28/36. Back in the 80s those were important numbers. What do they mean? They stand for the debt to income (DTI) ratios that lenders use as a basic qualifying guideline.
28% of someone’s gross monthly income (or determined self employed income or passive income of some kind) could be tied up in housing expense. That includes principal, interest, taxes, insurance, HOA/condo fees, and possible 2nd mortgage, if applicable. 36% of your income could be tied up in total debt. That includes house expense plus monthly debt like car payments, student loan debt (see Student Loan blog) or credit card payments.
Now, we hear how the mortgage market has tightened up, but the ratios we work with have relaxed over the years surprisingly. It is not uncommon to see ratios in the 35/45 range or even 35/55. Different types of loans, such as FHA, Conventional, VA or Jumbo have different thresholds for approval. You will see more flexibility when the quality of the loan is stronger. Larger down payments, high credit scores and/or cash reserves after closing are all qualities that could command a lower risk loan and therefore allow a higher DTI.
Many loans are run through automated underwriting systems such as DU (Desktop Underwriter) or LP (Loan Prospector) that measure the risk of a loan. Lenders take those results and continue to process the loan if an acceptable response/approval has been received. Knowledgeable loan officers and processors can work with these systems and try to figure what characteristic of the file may need to be improved to reach an acceptable response. Then the loan officer will be able to tell the borrower how much of a loan they are qualified for.
For further questions or suggestions, please feel free to email me at Ingrid.Quinn@cobaltmortgage.com or visit me at http://www.ScottsdaleMortgageExpert.com or http://www.CobaltMortgage.com/IngridQuinn.


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Investment Purchase Options

Purchasing an Investment Property?With recent media attention and television shows that focus on buying and/or flipping (buying distressed properties and remodeling), there has been an increase in property investment purchases. These investors know the benefits of buying an investment property. Whether they rent them out to tenants or they flip a distressed property, buying another home can generate passive income for a homeowner. Because restrictions or tightened guidelines have come to mortgage lending companies, many investors are looking for alternative ways to finance their purchase. By researching all of your available options, you will be able to find a way to finance your potential investment property. Below are some options that may be available to you:

Conventional Conforming Mortgages

The rules will vary depending on whether an investor owns 4 or less financed residential properties or 5-10 financed residential properties. Before applying for a loan, make sure that you have your bank/asset and income paperwork in order. Lenders will require your last 2 years personal Federal tax returns. If you currently own rental property and will need to use rental income as qualifying income, it should be reported on your tax returns. Many investors set up LLCs or partnerships for managing rental property income and expenses. Copies of those returns will be required as well. Also, it is a good idea to obtain a current copy of your credit report as lenders will also have FICO requirements for investment mortgages that may be higher than those scores required for a simple owner occupied transaction.

Private Portfolio & Hard Money Lenders
Investors that flip properties must have short term cash to complete the majority of their purchases. Often, they are attending courthouse auctions to buy foreclosed homes. Many times, they obtain loans from private lenders at high interest rates and costs. With this type of loan, investors are under pressure to sell the house as quickly as possible.
You may choose to finance your investment purchase by using the equity in your primary residence as collateral. You can borrow the money from your primary home to pay cash for your investment property.
If you own additional properties, you can use the equity in multiple homes to finance your next purchase by using cross-collateralization. Some lenders will use your primary residence, as well as second home equity as security when buying an investment property.

How have you financed an investment purchase?
Please comment or email me at Ingrid.Quinn@cobaltmortgage.com or visit my websites at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.


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Life After Short Sale

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Over the past couple of years, Short Sales have become more prevalent. Banks have been more receptive to short sales and have opted to negotiate instead of foreclose. Several clients who have called to be prequalified have had a Short Sale in their recent past. They have asked me when they can get back into the buying pool again. The rules to obtaining a mortgage after a short sale differ depending on the type of financing a buyer wants to use for their next purchase.

CONVENTIONAL FINANCING

With a 20% Down Payment, a Buyer can purchase a home using Conventional Financing after a 2 year waiting period from the Short Sale date (which can be found on their final HUD settlement statement). With 10% Down Payment, a buyer must wait 4 years from their Short Sale.

FHA FINANCING

Using FHA financing, a buyer must wait for 3 years to have passed from the Short Sale date.

VA FINANCING

The waiting time with VA financing will be 2 years.

USDA FINANCING

USDA financing will be a 3 year wait from the Short Sale date.

It is a good idea to great prequalified with your lender from 6 months to a year out before you purchase another home. Many times there could be some credit repair work that may need to be done on your credit history to make sure that your credit score and history are reporting accurately.

Do you have a Short Sale experience you would like to share? Please comment or contact me at Ingrid.Quinn@cobaltmortgage.com or visit my website at http://www.cobaltmortgage.com/ingridquinn.