Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant


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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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APR vs. Interest Rate, What’s the Difference?

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Recently one of the Realtors I work closely with asked me what the actual difference between APR (annual percentage rate) and the Interest rate. Well, there is a big difference and when you are shopping for a home mortgage you are going to want to pay attention to a lot more than just the APR that is being offered by a lender. The short answer to this question is that simple interest is only the interest you pay on the loan whereas the APR is an informational number that covers some of costs of obtaining a residential loan, including points, interest, lender administration fees, mortgage insurance and various title fees.
In the case of a mortgage, the annual percentage rate, or APR, is the total yearly cost of financing a home, expressed as a percentage of the amount financed.
The federal Truth in Lending Act requires the lender to disclose both the nominal rate and the APR. Loans are frequently offered on different terms. Loan terms from different lenders can make it hard to figure out which offer is truly the best one.
The APR disclosed can be rounded up or down to the nearest one-eighth of a percentage point. Both the APR & simple interest rate must be advertised in the same font size or APR may be larger in print.
What this all means is that the APR of a loan is essentially a consumer tool designed to assist people when looking to make a major purchase. On the other hand, you have your simple interest rate. This is a very straight forward percentage that will be applied to your loan and determines your monthly payment.
People can use APR to get a general idea of what you will be looking at long term, but when it comes down to it people need to not be hesitant to ask lenders questions. Call them and find out what exactly their APR includes and what other fees are to be expected. You can also talk to your realtor and ask them about different lenders they have worked with. It’s never a bad thing to get a second opinion. Especially from a professional who is there to get you into your new home or assist you your refinance transaction.
For any questions or suggestions please feel free to email me at Ingrid.Quinn@CobaltMortage.com or visit me at http://www.CobaltMortgage.com/IngridQuinn or http://www.ScottsdaleMortgageExpert.com .


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Always Get a Home Inspection!

home-inspection1

Finding the perfect house is like love at first sight. You can search and search and when you least expect it, you will fall in love, but when love at first sight strikes, you need to be cautious. Just as you would get to know a person and see if you are compatible before settling down you should get to know the house. A home is where you build your life and this is a commitment not to be taken lightly. I always suggest that my clients need a professional’s eye when looking into the possible issues of a home.
Think of having a home inspection like bringing your newfound love home to meet your parents. Just as your parents will scrutinize this new person in your life, the home inspector will scrutinize the house. Both simply want the best for you and are willing to do what it takes to show what’s really underneath the surface.

Normally, you have 10 days according to the Arizona standard real estate contract, to do all the inspections on a home, structural, mechanical, well and septic, termite, permits with the county, crime reports, etc. The cost of the inspection is outside of your loan transaction. Usually, I wait for the go ahead that the inspection was satisfactory and that there are no deal killing issues with the home before I order the appraisal for my client. Why spend $400-$500 on the appraisal if the inspection is not acceptable?
I highly recommend doing all the necessary inspections and that unless you are a licensed contractor and know a lot about a home and its construction that you have a licensed professional perform the home inspection. Your Realtor should give you the names of a few inspectors to contact.
I would be interested in your comments about any home inspection stories you can share. Please comment on my blog page. I can be contacted at Ingrid.quinn@cobaltmortgage.com or visit my website at http://www.cobaltmortgage.com/ingridquinn.


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Buying Without Selling

4412037-handling-multiple-homesMany homeowners would like to buy a new home and not have to manage the timing of a simultaneous close or would like to do some work on the new home without having to live there. The buyers are not sure they would even be able meet lender’s qualification guidelines carrying both properties.

With a strengthening housing market and housing inventory low, why should a seller accept an offer from a buyer that has a house to sell? Who knows if the buyers are realistic and price their current home to sell, or will do all the right things to market and sell it quickly? Sellers wait to get a cash or non-contingent offer, because they know one will come along soon enough.

There are rules to qualifying for a new home without selling your current home. You must be able to make the required down payment from savings or secured borrowing. The easiest way to qualify is to you have the income to carry both homes without the benefit of rental income to offset the payment of the current home. If the current home is owned free & clear, the lender will count the tax, insurance and HOA fees as monthly liabilities. We must receive a Desktop underwriting approval for the income to debt obligation ratios. Then we are good to go. There are asset reserve requirements.

For a Fannie Mae or Freddie Mac conforming loan up to $417,000 or $625,500 in high cost areas of the country, and a buyer is converting their current home to an investment or 2nd home the reserve requirements for assets after close are if there is 30% equity in the converted residence, then 2 months of the new home payment and 2 months of the converted home payments are required. If there is not 30% equity, then 6 months payments for each is required to be in reserves. There are additional reserve requirements if the homebuyer will own more than 2 properties.
Please feel free to contact me for additional information at ingrid.quinn@cobaltmortgage.com or visit me at scottsdalemortgageexpert.com or cobaltmortgage.com/ingridquinn


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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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Sellers Where Are You?!

selling-your-home

Markets go up. Markets go down. Markets react. Markets change. Knowing all of this, it makes you wonder what sellers are waiting for! Where are all the sellers? All we hear about in most real estate markets is about the lack of inventory. We hear that sellers are still stung by the real estate correction and waiting “a bit longer” for values to recover before selling. I would advise sellers that are thinking of selling, to repeat the above statements about the market a few dozens times, and then call a Realtor and list their property for sale.

A perfect example of how markets react, change and fill holes is found in articles I have been reading recently about the resurgence of new home construction, as well as by investors who are buying, renovating and flipping properties. Just turn on HGTV and check out the shows! In other words, builders and investor/flippers are stepping in where the average seller will not! That is a signal to sellers that the market will find housing without them.

Sales of new homes in the US are surging. Builders are business people, they identify opportunities, and they are forward looking. New-home sales rose 18.5% compared to a year earlier. Sales of previously owned homes has actually fallen 20% in the Western region of the US because of lack of inventory. What is even more striking is that this difference in sales exists even though a typical new home costs 37% more than one already built. Builders are responding to buyers needs! Where are the sellers of existing homes?

Nearly one in four homeowners and renters say now is a good time to sell a home, according to a survey released recently by Fannie Mae. What are you waiting for…sellers? The economy almost collapsed 5 years ago. Real estate got severely damaged. We have seen a lot of recovery and strength.
And as far as timing, I’d sell now. Don’t wait for “when you have time to repaint the bedrooms”, or for spring, or the summer when the flowers are in full bloom. Inventory is low now; buyers are frenzied for inventory now. While trends certainly vary by region, according to a Trulia study, buyer search activity generally peaks in March and April, while seller listings peak in July. Most sellers would be better off if they pushed the process to now. Sellers could face problems if mortgage rates jump or the economy worsens. And let’s face it, at some point the supply of homes for sale will increase.

Sellers would be wise to be forward thinking, and realize that markets are reacting, people will buy a new home with or without them, other sellers may beat them to the punch, and most importantly that real estate prices which have been strong and rising. So my advice to sellers is, “inventory is low, prices are going up, sell now while things are strong.”


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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