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Colorado Springs Mortgage Blog

Decoding Mortgage Lingo- What's your loan officer talking about?

February 21st, 2012 1:30 PM

Sometimes it seems like people who do mortgages speak their own language. Let's take a couple of seconds to decode a few common terms involving the word closing~

CLOSING COSTS All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.

CLOSING STATEMENT

The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

CLOSING A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).

http://www.springshomesandloans.com/loanapplication

Posted by Hans Fetterhoff on February 21st, 2012 1:30 PMPost a Comment (0)

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Colorado Springs Mortgage Updates 8-23

August 23rd, 2011 1:48 PM

Big day for FHA Memos-

It was a big day for memos in general this morning but the two that will have the biggest impact on your home buying experience involve FHA/HUD loans.

The first involves a really nasty subject, Methamphetamine. If a home is found to have any history of meth, even if it has been remediated, it's pretty much a no go for FHA Financing. Below is the internal memo issued by our corporate office this morning in its entirety.

After confirming with two separate sources at the Denver HOC office, we have learned any home including HUD Repo’s which have any evidence of the use of meth or creation of meth or even if a police report has been issued stating meth was in use in a home is ineligible for FHA insurance. Even if remediation has been done, they will not accept the property. The appraiser is to reject the property if they have knowledge of meth use or creation in the home or if they have been informed of remediation. We will be issuing a notice to all the appraisers to notify them of this issue as well. It is important to know that HUD Washington has not issued anything in writing but has left this particular issue up to the individual Homeownership Centers. The Denver HOC has decided they will NOT accept properties impacted by meth until further notice, although this is not in writing either but is an internal order. Please keep in mind the Denver HOC has authority over 17 western states and this order applies to all the states reporting to the Denver HOC. Please make sure your Real Estate agents are aware of this as well. We have not received any notification from any of our investors regarding this issue, but if the loans cannot be insured, they will not purchase.

Find out if your home (El Paso & Teller Co) was ever a Meth House http://www.springsgov.com/units/police/methLabs/alphaListing.pdf

The second memo actually comes in the form of HUD Mortgagee Letter 11-29. Effective Oct 1st 2011 FHA will be changing it's county loan limit. In El Paso County it will be reduced from $325,000 to $271,050. In order to stay eligible for the higher amount you must have an approved loan and basically close your transaction by September 30th 2011. This won't have a huge impact on the majority of buyers out there but if you fall into this category, the clock is ticking.....

Find your county's FHA loan limit. https://entp.hud.gov/idapp/html/hicostlook.cfm

Posted by Hans Fetterhoff on August 23rd, 2011 1:48 PMPost a Comment (0)

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Getting a Mortgage-Inaccurate Credit Report Information

August 16th, 2011 1:04 PM

The new “Gotcha!” for Credit Reports

As a loan officer, part of my job is analyzing your credit report. In fact, when you apply for a new home loan, I'm going to tell you that it's hands down the most important thing we're going to look at together. Not only is you credit score important but we're also looking for things like bankruptcies, foreclosures, collections, and other negative items.

Many times what we find is inaccurate or misreporting items. Well you might say, "Hey, I'll just call them up and ask to fix it". This typically works on collections that you've paid off that haven't been updated by the creditor or collection agency. We can make these kinds of corrections pretty easily with a letter from the creditor stating that the collection has been paid in full.

Now we have something else that we have to take into account. Sometimes there might be an account that you feel is so inaccurate that you will dispute it with the credit bureaus. You think your doing the "right thing"... well within your rights under the Fair Credit Reporting Act.

Those disputes can now cost you your loan. I just read a great article published by Advantage Credit explaining the reason why Fannie Mae has taken a stance against these disputed accounts.

Why all the fuss about disputed accounts? For years many credit repair agencies have been trying to trick the system by disputing items on a credit report for the borrower. This would tag the dispute remark causing the item to be excluded from the scoring model. This is not always the case anymore. According to Fair Isaac, if a disputed account is derogatory, it will “most likely” still be factored into the scoring model, depending on the nature of the dispute. In the case of accounts in good standing, some information may be excluded from the scoring model. Because their systems are also proprietary they won’t say which items will or won’t be excluded or what would constitute a dispute that would eliminate it from the scoring model. Because a negative account can seriously impact a credit score, having it removed could falsely boost a borrower’s credit score.Fannie and Freddie have implemented this process as a way of protecting themselves from fraud. Read the whole article-http://www.advcredit.com/news/Disputed_Accounts.pdf

As you read in the article, there's an answer. But it's really up to you and your loan officer to do a thorough credit analysis during to the pre-qulaification process in order to keep from having any problems once you have a house under contract. With a little vigilance you can make the home buying porcess just a little bit easier.

Happy House Hunting!

Get Pre-Qualified Now!

Posted by Hans Fetterhoff on August 16th, 2011 1:04 PMPost a Comment (0)

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Down Payment Assistance-CHFA Home Opener Plus

December 1st, 2010 4:13 PM

I'm sure most of you have a preconception of what CHFA is or what CHFA is all about. Most of what I heard before I became a lender was always negative. There was always a stigma associated with it, like it was for people with bad credit or the recapture tax was terrible, or the compliance review took too long and even that CHFA was broke.

Well now after experiencing a few first hand, I have to say that you’re missing out if you don't consider a CHFA mortgage for yourself or for your buyers if you’re an agent. A CHFA loan can definitely open doors with its down payment/closing cost assistance program and as the market swings back in the seller’s direction; I see the popularity of CHFA mortgages only increasing.

First, let’s dispel the myths and negativity associated with this program:

• CHFA is not broke and never was, it's bond program was suspended for a short period of time but they were always solvent and lending.

• Compliance reviews are currently at 24-48 hrs

• There is only one program out of 4 that has a recapture tax associated with it and CHFA will reimburse you if you ever have to pay it!

• This isn't just a program for folks with credit challenges; buyers with great credit can take advantage of the down payment assistance programs as well. Unfortunately this is the only option for buyers who have credit scores between 580-619 and buyers with no credit scores at all.

CHFA currently has four programs available designed for first time home buyers and non first time home buyers and is currently the only way to monetize the $8000 tax credit. Most programs have a down payment/closing cost assistance component that typically comes in the form of a second mortgage. Even though this second mortgage has to be paid back it is still very affordable because it is amortized over thirty years and it's typically a very small loan in the first place. The two most basic requirements are that the buyers take a buyers education class and that they contribute a minimum of $1000 to the transaction.

All-in-all it's a very useful program and for the right person can open doors that would have been closed otherwise. Please consult with your CHFA approved mortgage lender or contact me with any questions 719-686-3652.

Posted by Hans Fetterhoff on December 1st, 2010 4:13 PMPost a Comment (0)

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Down Payment Assistance-El Paso Co Bond

December 1st, 2010 4:12 PM

As a Mortgage lender that specializes in home purchase transactions in Colorado Springs, the biggest challenge that I see keeping potential homeowners from purchasing a home today is the lack of a down payment. When applying for financing, especially in today's market, the amount you have saved for your down payment really dictates the type of financing that will be offered to you even if your you have great credit.

If the down payment requirement is the only thing holding you back from the benefits of being a homeowner, then I have some great news! If you live in El Paso County you may qualify for grant through the El Paso Co Mortgage bond program. This grant can equal 3% of the loan amount and it never has to paid back! This grant works very well in unison with an FHA loan which requires only 3.5% down.(It can also be used with VA or USDA Financing). For example, if you were looking to buy a home that was listed for sale at $150,000 under current FHA guidelines you would need $5250 down. If you were to use this program the grant would be for $4342 which means you only need $907.
This program isn't for everybody and has some stringent guidelines regarding income and credit score.

Below are some Highlight:
1. Minimum Credit Score 600
2. First Time Home Buyers Only(Except in target areas)
3. Maximum Loan Amount $283,000(Higher in Target Areas)
4. Family income no greater than $71,000 for a 2 person household or $81,650 for a 3 person household or more. (Higher in target areas)
5. Interest Rate 4.500%/4.782%APR
6. 30 Year Fixed Rate Mortgage

I know you've been thinking about being a homeowner, so take the next step!

Posted by Hans Fetterhoff on December 1st, 2010 4:12 PMPost a Comment (0)

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Shopping for the right mortgage.

December 1st, 2010 4:10 PM

Shopping for your mortgage is just as important as shopping for your home. The right loan can save you tens of thousands of dollars.

Prior to applying for a loan, a prospective buyer can determine how much money they can borrow through a process called prequalification. While it does not constitute a commitment from a lender to make a loan, prequalification can help a prospective homeowner determine their price range.

During a pre-approval process, you may be able to obtain a mortgage loan commitment from the lender prior to the purchase of your home. Your pre-approval certificate from the lender will strengthen your position when you negotiate with a seller.

As you begin the mortgage application process, it is important to answer these three questions:
1. How long do I plan to stay in this home?
2. Do I anticipate that my income will rise or remain fixed?
3. How important is it to me to pay down the principle?

A frank discussion of these questions will help you and your loan officer determine the right mortgage program for you.

Posted by Hans Fetterhoff on December 1st, 2010 4:10 PMPost a Comment (0)

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