Urban KC Living Real Estate Blog

According to Reuters...Mortgage Applications Are Increasing Rapidly

Read the full article from Reuters Download Reuters says U.S. Mortgage Applications Rise As Rates Plunge.

Thinking about buying a home in 2009? What to prepare in advance for your lender to guarantee a smooth close.

Some lender rules are changing this week. What do you need to prepare as a buyer to keep things moving smoothly to close? I asked a trusted lender to compile some information on what to expect and what to prepare for in advance to keep things moving smoothly during the buying process. I want to give him a big thanks in advance for preparing this great article!

Terry Hayter with Solutions Bank wrote the following article of "good to know" information for buyers.

When a borrower makes an application, the lender must present them with initial disclosures within three business days. The disclosure package includes the Good Faith Estimate, Truth in Lending disclosure, and other legal forms as required by law.

 

If the disclosures are mailed, the lender must allow three business days for receipt of the disclosures by the borrower. During this period the only fee that may be collected is a reasonable charge for a credit report. If the application was made in person and disclosures delivered at that time, other fees such as for appraisal may be collected.  If disclosures were mailed, only the credit report fee may be collected until the third business day has passed.  

 

The borrower must be provided a copy of the appraisal a minimum of three days prior to loan closing. If not, closing must be delayed until the borrower gets a copy and the three-day window for review has passed. (The borrower may also opt out of this requirement)

 

Any changes in fees or rate that result in an APR change of 0.125% require re-disclosure. The borrower must then receive new disclosures and have at least three days to review before closing. Once again, this is to insure the borrower has time to review and is comfortable with the loan terms and costs.

 

Also, keep in mind that if lenders change in the middle of the process, the new lender will have to start the disclosure process over again.  Changing lenders in the middle of a transaction may result in lengthy and costly extensions.

 

Many borrowers today are often too busy to come to the office to make the application.  These borrowers do it conveniently by phone or online. In these cases, the disclosures are mailed to them. As a result, the timeframes and wait period will be slightly longer. 

 

So, let’s say you want to close as quickly as possible.  What can you do to be proactive and make sure the processing time moves as quickly as possible?

 

• Make the application with your lender in person if possible.
• Get a fully executed, clearly legible copy of the purchase agreement as soon as it's available from your agent to give to your lender.
• Be ready to pay for the appraisal when asked.
• Prepare and be ready to submit all requested documentation (pay stubs, W2's, bank statements, etc.) within 3 days of application.
• Carefully review the disclosure package and notify your lender of any corrections immediately.
• Lock your loan at the time of application or early in the transaction.
• Choose a credible, reputable, ethical lender you can trust to honor the rates and fees they disclose. Surprises at the closing table are not good for anyone.

For additional information, please contact Terry Hayter. You can also contact Terry for your purchase and refinance loan needs!

Terry Hayter

Mortgage Officer

Solutions Bank

Mission Farms

10685 Mission Farms

Leawood, KS 66206

P 913-239-1251    M 816-591-4738    F 913-341-2525

THayter@SolutionsBank.com

 

Paying PMI? You need to read this!!!

What is PMI? PMI stands for Private Mortgage Insurance. If you do not have 20% to put down as a downpayment on your new home, you will become familiar with this term fairly quickly! PMI is insurance that a lender requires you to pay each month if you do not have 20% down. This helps cover your lender in the event you default on your loan.  And yes, it's a monthly expense to you.

Ways to avoid paying PMI? Put 20% down! Or...let's get realistic...f you are like a lot of people, especially first time home buyers, it can be challenging to find 20% just sitting in your bank account waiting to be tied up in your new home.

Fact - once you have your mortgage paid down to owing 80% or less, the PMI drops off and you do not have to pay it anymore. How can you get to this stage quicker?

Since we are in a buyer's market, this may be helpful to you...

I will use the following story just for this example...

Let's say you are wanting to buy a home in Brookside. You work with a buyer's agent that is an Accredited Buyer's Agent (ABR) - we are - and we work hard on your behalf to negotiate the lowest purchase price possible. We do this for all of our buyer clients. With the amount of homes available, buyer's can be more picky over which home they purchase. This is making some home seller's anxious and some will sell their home lower than market (appraised) value.

Let's say after six months of living in your home, you decide to hire an appraiser to get your home appraised. This will cost you a couple hundred dollars. Let's say you purchased it for $200,000, due to the seller being motivated, but it appraises for $250,000. Boom, you now have black and white documents to take to you lender and show that your homes mortgage is $50,000 under appraised value. You now have a balance of under 80% owed on your home and the PMI drops off saving you around $100 a month on your mortgage payment.

Please feel free to e-mail us you story or questions. We would love to hear from you!

Your lender can make all the difference

Let's discuss lenders for a minute...

One of the first items on your home buying check list is to contact a lender and get a preapproval letter. This puts the power in your drivers seat (no one likes manual anymore) and lets you and your REALTOR ride smoothly and comfortably when shopping for your perfect home.

When interviewing lenders, yes interviewing, there are several questions you need to ask them. After all, they are going to request a lot of questions about you! A helpful list can be found on our website at www.urbanKCliving.com.

Once you have completed the lender interview process, remember one thing, you get what you pay for. Just because one lender has a lower interest rate or lower closing costs does not mean better service. In any type of real estate market, you want a lender that offers outstanding customer service. This includes returning your phone calls and answering your questions in a timely manner so you have a grasp on what to expect. After all, the past few months have been brutal! Finally you found the perfect REALTOR, found the perfect home, had a rough inspection but you made it through fine and now your closing day is fast approaching. Don't let your closing day get pushed farther out due to the lack of good old customer service.