Nov 27th 2023 @ 8:41 AM
What is a limited review and what does it mean?
25% down for owner occ and 30% for second homes and investment properties
What is required? A condo Questionnaire
The underwriters review and them check for assessments coming due? Delinquencies, etc.,
A full review is where the budget is required and the number one item is reserves. Do they have 10% reserves
Condos have experienced higher insurance premiums on the master policy and are there repairs needing to be done
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What you need to know about Condos when getting a mortgage
Putting down 25% on a primary and 30% down on second and Investment properties is called a limited review. When you put less down then there is a full review if the project is not already approved.
You need to see the approved budget. if the reserves are less than 10%, no deal
also reviewed the insurance policy and the sinkhole coverage was 10% when it needs to be 5%. It is important to do your homework before paying for home inspections and appraisals, the condo review team really does its job in the end, and better to be prepared beforehand. If you need me to review your budget let me know
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45% of adults children are still living at home
45% of young adults are still living at home. 23 million is the number today.
Everything changed, in 2020/21 it was all cash buyers or conventional. 2023 FHA and VA are back in and the seller is more negotiable to
paying closing costs.
The change from 2020 to 2023 is higher rates and no inventory.
Now what will happen in 2024? Everything in life is a snapshot in time. Changes happen, there is a spring, summer, fall, and winter, and the tied comes in and goes out.
What is today will be different tomorrow rates will come down again and these young adults will have the opportunity to own
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What is the income debt ratios allowed on Conventional, FHA and VA
Conventional will allow up to 50% income-debt ratio, FHA is up to 55% and Va has gotten approvals for up to 59.5% income/debt ratio.
you take the monthly mortgage payments, plus car payments, student loan payment and credit card payments and divide that into your gross monthly income.
conventional allows up to 50%, FHA up to 55%, and Va can get approvals up to 59%
Every loan is run through Du/LP and that is the decision maker based on all the variables of income, credit, funds available, etc,
Conventional and FHA are at about the same payment if you are putting down the min down payment for each.
Good information to have when purchasing a home
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Is it time to think about getting a Hecm for Retirement
Whether or not a Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a good idea depends on your specific financial situation, goals, and needs. Here are some factors to consider when determining if a reverse mortgage is suitable for you:
Age and Eligibility:
HECMs are typically available to individuals aged 62 and older who own their home outright or have a low mortgage balance. The older you are, the more funds you can potentially receive from the reverse mortgage.
Financial Needs and Goals:
Evaluate your financial needs and goals. Are you looking to supplement your income, cover healthcare costs, or fund home improvements? A reverse mortgage can provide a lump sum, monthly payments, or a line of credit to meet these needs.
Homeownership Plans:
Consider how long you plan to stay in your home. If you plan to move in the near future, a reverse mortgage may not be the best option as the loan becomes due when you no longer live in the home.
Costs and Fees:
Be aware of the costs associated with a reverse mortgage, including origination fees, mortgage insurance premiums, closing costs, and interest. These costs can impact the overall value of the loan.
Impact on Heirs:
Understand how a reverse mortgage may affect your heirs' ability to inherit or keep the home. The loan balance becomes due upon the borrower's death, and the heirs may need to repay the loan or sell the home to settle the debt.
Alternative Options:
Explore other financial alternatives, such as downsizing, selling your home, or exploring traditional loan options, to determine if they better suit your needs and financial goals.
Counseling:
It is a requirement to undergo counseling with a HUD-approved counselor before obtaining a reverse mortgage. The counselor can help you understand the terms, costs, and implications of a reverse mortgage.
Financial Stability:
Consider your overall financial stability and ability to meet ongoing obligations, including property taxes, homeowners insurance, and home maintenance.
It's crucial to carefully weigh the pros and cons, seek advice from financial professionals, and thoroughly understand the terms and conditions of a reverse mortgage before making a decision. Consulting with a financial advisor or housing counselor who specializes in reverse mortgages can provide valuable insights and guidance based on your specific circumstances.
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What changes are going on with FHA
When a borrower is turned down by FHA, a warning flag goes out and stays in the connection for 6 months as well as the appraisal. FHA is now waiving that where it will not be put into the FHA Connection so the next Lender will not know. I feel it is important for them to know and to explain what you did differently to get the loan in the status of being approved. The other lender should know if there was a problem the first go around and then it gives you the opportunity as the second lender to show what changes you made to make it into an approvable FHA loan. The appraisal still stays with the home for 6 months regardless of who purchases the home afterward
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Consolidate student loans in a refinance
Advantages:
Lower Interest Rate: Mortgage interest rates are typically lower than the rates on unsecured student loans, especially if you have a good credit score and a favorable financial situation. Refinancing can lead to substantial interest savings over the life of your loans.
Tax Deductibility: In some cases, mortgage interest may be tax-deductible, whereas student loan interest deductions may have income limits. Consult a tax professional to determine your eligibility for these deductions.
Extended Repayment Term: Refinancing your student loans into your mortgage can potentially extend the repayment term, reducing your monthly payments. This can provide immediate relief to your budget.
Simplified Finances: Managing one monthly mortgage payment can be simpler than multiple student loan payments, making it easier to budget.
Risks and Considerations:
Secured Debt: When you consolidate student loans into your mortgage, you are essentially converting unsecured debt (student loans) into secured debt (your home). If you can't make your mortgage payments, your home is at risk of foreclosure.
Extended Repayment Term: While extending the loan term can lower monthly payments, it can also result in paying more interest over the life of the loan. Ensure you understand the long-term financial implications.
Loss of Federal Benefits: Federal student loans come with various protections, such as income-driven repayment plans, deferment, and forbearance options, which may be lost when you refinance them into a private mortgage.
Interest Rate Risks: If you refinance your student loans into a variable-rate mortgage, your interest rate may increase over time, potentially leading to higher overall costs.
Qualification Requirements: Mortgage refinancing may require meeting certain credit and income criteria. Ensure you qualify before pursuing this option.
Closing Costs: Refinancing typically involves closing costs, which can be several thousand dollars. Be prepared for these expenses.
Before consolidating student loans into a home refinance, carefully evaluate your financial situation, goals, and the terms of the mortgage. Consider working with a financial advisor to make an informed decision. It's essential to weigh the potential benefits against the risks and fully understand the long-term consequences of this financial move.
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Does it make sense to refinance or purchase with these higher rates
Whether it makes sense to refinance or purchase with higher interest rates depends on several factors, including your individual financial situation and the specific terms of the loan or mortgage you're considering. Here are some factors to consider:
Current Interest Rates: If the interest rates are significantly higher than what is currently available in the market, it might not be the best time to refinance or make a purchase. However, if rates are only slightly higher, other factors might outweigh the impact of the interest rate.
Loan Term: Consider the length of the loan. If you're looking at a short-term loan, the impact of a higher interest rate might be less significant compared to a long-term loan.
Loan Amount: The amount of the loan also matters. A higher loan amount with a higher interest rate can result in significantly higher overall interest costs.
Monthly Payment: Even with a higher interest rate, if the monthly payment fits comfortably within your budget and financial goals, it might still be a reasonable option.
Other Financial Goals: If you have other financial goals, such as paying down high-interest debt or building an emergency fund, it might be wiser to prioritize those before refinancing or making a new purchase.
Credit Score: Your credit score plays a role in the interest rate you're offered. If your credit score has improved since you last borrowed, you might still get a competitive rate despite a slightly higher market rate.
Future Rate Predictions: Consider whether interest rates are expected to rise further in the future. If rates are expected to increase, locking in a slightly higher rate now might still be beneficial in the long run.
Closing Costs: When refinancing, consider the closing costs associated with the new loan. If the closing costs are substantial, they might offset the potential benefits of a lower interest rate.
Duration of Ownership: If you're purchasing a property, consider how long you plan to own it. If you're planning to sell or refinance again in the near future, the impact of the higher interest rate might be less significant.
Tax Implications: Depending on your location and the laws in your area, there might be tax benefits associated with mortgage interest payments. This could potentially mitigate the impact of a higher interest rate.
Market Conditions: Economic conditions and housing market trends can also influence the decision. If property values are expected to increase, it might make sense to proceed even with slightly higher rates.
It's important to run the numbers and consider all these factors before making a decision. You could use online calculators to estimate the total cost of the loan at different interest rates and terms. Additionally, consulting with a financial advisor or mortgage professional can provide personalized guidance based on your specific situation.
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What happens after you close on your mortgage
you get a month off of not making a mortgage payment, close in August your first payment is in October
File for your homestead in the weeks after closing
Do you have portability, did you own a home and sold to buy a new one?
set up to do your mortgage payments online
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Technology and keeping you up to date on the processing of your mortgage
We use a system called Arive, it will update the realtors and the borrower on status of file from beginning to end so you always know where you are at automatically. When we take a loan , within days it is submitted to underwriting, no time at all and we du/lp approve loans that day we get the contract so we know where we stand from day 1. I also attend my closings to make sure all is done and enjoy being with you at the end.
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Are you in underwriting and nothing is moving forward, time to look at other options
Are you in underwriting and no one is getting back to you on the status of your loan? Do they keep asking you for more information and nothing seems to be moving forward? Maybe it is time to get a second opinion on your status.
I am closing on a loan today where the borrower originally went to their bank and 2 months later nothing happened.
We closed them in 30 days after assessing the situation. The loan they applied for was never going to get approved. We switched loan programs and paid off debt to qualify.
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What do you need to know about FHA
Mortgage Insurance: FHA loans require borrowers to pay an upfront mortgage insurance premium (MIP) at closing and an annual MIP as part of their monthly mortgage payments. The mortgage insurance protects the lender in case the borrower defaults on the loan.
Credit Score Requirements: One of the benefits of FHA loans is that they are more lenient with credit score requirements compared to conventional loans. While specific lenders may have their own credit score requirements, borrowers with credit scores as low as 580 may be eligible for an FHA loan. However, a lower credit score may require a larger down payment.
Down Payment: FHA loans generally require a minimum down payment of 3.5% of the home's purchase price. This down payment requirement is lower than the standard 20% down payment required for many conventional loans.
Loan Limits: FHA loan limits vary by location and are influenced by the median home prices in the area. These limits dictate the maximum amount that the FHA will insure for a mortgage in a particular region.
Property Requirements: FHA loans have specific property standards that the home must meet to be eligible for financing. These requirements aim to ensure that the property is safe and habitable for the borrower.
Debt-to-Income Ratio: Lenders typically look at a borrower's debt-to-income (DTI) ratio to determine eligibility. FHA loans may be more flexible with DTI requirements, allowing a higher ratio compared to some conventional loans.
Primary Residence: FHA loans are intended for primary residences and are not suitable for investment properties or second homes.
Streamline Refinance: FHA offers a streamline refinance option, which allows current FHA borrowers to refinance their existing FHA loan with minimal documentation and underwriting.
It's essential to note that lending guidelines and regulations can change over time, so it's a good idea to consult with a mortgage lender or broker to get the most up-to-date information and determine if an FHA loan is the right option for your specific circumstances.
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Paying off medical collections and what you may not know
Removal of collection account: When you pay off a medical collection, the collection agency may update the account status to "paid" or "settled" on your credit report. In some cases, they may even remove the collection entirely from your credit report. This can have a positive impact on your credit score because a paid or removed collection is generally viewed more favorably than an unpaid collection.
Scoring models may vary: Different credit scoring models, such as FICO Score and VantageScore, treat paid collections differently. For instance, FICO Score versions 9 and newer do not consider paid medical collections when calculating scores, whereas older versions do. VantageScore models generally exclude all paid collections, regardless of the type. However, it's important to note that lenders might still consider paid collections during their evaluation process, even if they are not factored into the credit score.
Late payment history: Paying off a medical collection does not erase the fact that it was previously delinquent. Late payments associated with the collection account could still have a negative impact on your credit score, even if the collection itself is resolved. However, as time passes, the impact of the late payment history diminishes, and your credit score can gradually improve.
Credit utilization: Paying off medical collections may indirectly affect your credit utilization ratio. When you pay off a collection, it reduces your outstanding debt, which can lower your overall credit utilization if you have other credit accounts. Maintaining a low credit utilization ratio (the percentage of available credit you're using) is generally beneficial for your credit score.
Credit report duration: The impact of a paid medical collection on your credit score lessens over time. Credit scoring models typically place more weight on recent information, so as the collection ages, its influence on your score diminishes. However, the collection will remain on your credit report for a certain period, usually seven years from the date of delinquency, even if it's paid.
Overall, paying off medical collections is generally a positive step as it demonstrates responsibility and a willingness to resolve outstanding debts. While it may not entirely eliminate the impact of the collection on your credit score, it can help improve your overall creditworthiness. It's always a good idea to monitor your credit report regularly, address any errors or discrepancies, and establish healthy credit habits to maintain or improve your credit standing.
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Building your kid's credit
Educate them about credit: Teach your kids about credit, including the importance of responsible credit management, how credit scores work, and the impact of credit on their financial future. Ensure they understand the responsibilities and potential pitfalls of using credit.
Add them as an authorized user: Consider adding your child as an authorized user on one of your credit cards. As authorized users, they can benefit from the positive payment history associated with that account. However, make sure you monitor their spending and set clear guidelines to avoid misuse.
Encourage responsible credit behavior: Encourage your kids to develop responsible credit habits by making small purchases and paying off the balance in full each month. This will help them establish a positive credit history and demonstrate their ability to manage credit responsibly.
Co-sign a loan: If your child needs to take out a loan, you can co-sign the loan to increase their chances of approval and potentially secure a lower interest rate. However, remember that co-signing makes you equally responsible for the debt, so be cautious and ensure your child is committed to repaying the loan.
Help them open a secured credit card: A secured credit card is a good option for those with limited credit history. Your child can open a secured credit card by making a cash deposit that acts as collateral. By using the card responsibly and making timely payments, they can build credit over time.
Monitor their credit: Regularly monitor your child's credit report to ensure there are no errors or fraudulent activities. Encourage them to review their credit report annually as well.
Promote financial responsibility: Emphasize the importance of financial responsibility, such as maintaining a budget, paying bills on time, and avoiding excessive debt. These habits will contribute to their overall financial health and improve their creditworthiness.
Remember, building credit takes time, and it's crucial to start early. Encourage your kids to be patient and diligent in managing their credit. By following these steps, they can establish a solid credit foundation, increasing their chances of qualifying for a mortgage when the time comes to buy a home.
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Update on Second homes with Rates
Increased risk: Lenders perceive financing a second home as riskier because borrowers are more likely to default on payments for a second property compared to their primary residence. In times of financial difficulty, people are more inclined to prioritize their primary residence over a secondary property.
Less owner occupancy: Second homes are often used as vacation homes or rental properties, which means they may be unoccupied for long periods. Lenders consider this increased risk because vacant properties can be more susceptible to damage, maintenance issues, or depreciation.
Higher loan-to-value ratio (LTV): Lenders typically require a larger down payment for second homes, which can result in a higher loan-to-value ratio. A higher LTV indicates a riskier investment for the lender, as there is less equity in the property and a higher chance of loss in the event of foreclosure.
Different tax implications: Mortgage interest on primary residences can be tax-deductible up to certain limits, which reduces the overall cost for homeowners. However, the tax benefits for mortgage interest on second homes are often more limited or nonexistent. This reduces the overall financial advantage of a lower interest rate.
Market conditions and demand: Interest rates are also influenced by supply and demand dynamics in the lending market. If there is a higher demand for mortgages on second homes, lenders may increase interest rates to compensate for the perceived risk and manage their loan portfolio.
It's worth noting that interest rates can vary based on individual financial circumstances, creditworthiness, and the specific lender's policies. Therefore, it's essential to shop around and compare rates from different lenders to find the best available option for financing a second home.
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What happened to me on my monthly mortgage statement
My mortgage statement after receiving it for 10 years got mailed to a previous address. then the escrow payments each month were used to pay down the loan at the end of the year. there were no escrows.
Last July they changed the address to the previous address and then began paying down my loan each month with the monthly escrow. It is imperative you review your monthly statement each month plus look at the homeowner's insurance when it is due, did the premium go up? property taxes in the range? can you get rid of your monthly PMI?
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You can now shop for private Flood insurance on FHA loans
Traditionally, FHA loans, which are insured by the Federal Housing Administration, have required borrowers to obtain flood insurance through the National Flood Insurance Program (NFIP). The NFIP is a federal program managed by the Federal Emergency Management Agency (FEMA).
Private flood insurance refers to flood insurance coverage provided by private insurance companies as an alternative to the NFIP. Historically, private flood insurance options have been limited, and FHA loans generally required NFIP coverage.
Now you are able to obtain Flood insurance thru the Private sector for FHA loans, previously you could have gotten quotes that were way higher and prevented a sale from happening. That has now all changed.
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not only the buyer beware on wiring but the lender too
I'm sorry to hear that wire fraud is occurring with scammers targeting lenders. Wire fraud is a serious issue that involves the use of electronic communications to deceive individuals or organizations and manipulate them into transferring funds or sensitive information to the fraudsters. It's important to be vigilant and take steps to protect yourself and your organization from such scams. Here are some general tips to help prevent wire fraud:
Verify identities: Always verify the identity of the individuals or organizations involved in any financial transactions. Use trusted and verified contact information, independently confirm their identity, and be cautious if there are any inconsistencies or red flags.
Be cautious of unsolicited communications: Be wary of unsolicited emails, phone calls, or messages requesting wire transfers or sensitive information. Scammers often use social engineering techniques to create a sense of urgency or manipulate victims into taking immediate action. Take the time to verify the legitimacy of such requests.
Educate employees: Provide training and awareness programs to your employees about common types of scams, including wire fraud. Teach them how to recognize warning signs, and suspicious requests, and how to report potentially fraudulent activities within your organization.
Implement multi-factor authentication: Use multi-factor authentication for financial transactions whenever possible. This adds an extra layer of security by requiring additional verification steps beyond passwords, such as unique codes or biometric authentication.
Secure communication channels: Ensure that communication channels, such as email or messaging platforms, are adequately secured. Use encryption methods and strong passwords to protect sensitive information.
Establish internal controls: Implement internal controls and approval processes for financial transactions. This can include requiring multiple authorized individuals to verify and approve wire transfers, particularly for large amounts.
Regularly update security measures: Stay updated with the latest security practices and technologies. Install security patches and updates for your software and systems to address any vulnerabilities that could be exploited by scammers.
Report incidents: If you encounter or suspect wire fraud, report it immediately to your local law enforcement authorities and your bank or financial institution. They may be able to assist you in recovering funds or preventing further fraudulent activity.
Remember, staying vigilant, educating yourself and your employees, and implementing strong security measures can go a long way in protecting against wire fraud and other scams.
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Regenerate response
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cash out refiannce and getting money at a closing on a first time homebuyer
Wanting to cash out and refinance your home on appraised value, must now wait 12 months.
for 1st time home buyers making under 64k, you can get 1,250 to 2,500 at closing after taking a class and getting your first-time home buyer certificate
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Does it makes sense to refinance with a higher interest rate
There may be some situations where it makes sense to refinance at a higher interest rate in order to consolidate debt. For example, if you have multiple high-interest credit card debts and can only qualify for a personal loan with a slightly higher interest rate, consolidating your debts with the personal loan may still be beneficial if it allows you to pay off your credit cards and avoid high-interest charges.
Ultimately, the decision to refinance at a higher interest rate for debt consolidation will depend on your individual circumstances and the terms of the loan. It is important to carefully evaluate the interest rate, fees, and repayment terms of any loan offer before making a decision.
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Loan officers attending your mortgage closing
Final verification: The loan officer can verify that all the loan documents are correct and accurate. They can also ensure that the loan is being disbursed according to the agreed-upon terms.
Clarification: If there are any last-minute questions or concerns about the loan, the loan officer can be present to answer them and provide clarification.
Customer service: Attending the closing is an opportunity for the loan officer to provide excellent customer service to the borrower. They can help ensure that the borrower has a positive experience and feels supported throughout the entire loan process.
Relationship building: Building a strong relationship with the borrower is important for loan officers. Attending the closing is an opportunity to connect with the borrower in person and continue building a relationship beyond the loan transaction.
Overall, the loan officer's attendance at the closing can help ensure a smooth loan process and provide excellent customer service to the borrower.
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Get of the Trigger list
So what is a trigger list and how does it work?
Each time that you apply for a credit card, auto loan, mortgage, or refinance, your personal information is distributed to lenders, insurance, and credit card companies who have subscribed to products known as a “trigger list”.
• Prospective creditors purchase a subscription to a trigger list service. They set the criteria for their list - for example, anyone who has applied for a mortgage or refinance, in a certain area code, with a FICO score of at least 720. They also choose what additional information they would like to have included: names, addresses, phone numbers, mortgage balances, etc. as well as how often they would like to receive the list (daily or weekly).
• When you apply for a mortgage or refinance, your chosen lender orders a credit report (with your permission).
• Within hours of ordering your report, your file is red-flagged by the major credit reporting agencies for inclusion in trigger lists.
• If your profile matches the conditions of any trigger list subscribers, your personal information is sent to those subscribers.
• Shortly thereafter, the subscriber makes you a “firm offer of credit”, usually by mail, e-mail, or phone.
How to stop the trigger lists
.
You may opt out of trigger lists and other pre-screened offers of credit safely and securely online at http://www.optoutprescreen.com/ or by calling 1–888-567-8688. Submitting your opt-out request takes less than five minutes and is the only way to prevent credit reporting agencies from reselling your personal information each time you apply for credit. Requests can take up to 5 days to process, so don’t delay - opt out today!
You may also want to add your phone number to the National Do-Not-Call Registry (https://www.donotcall.gov/) at this time.
It can take up to 5 days for the bureaus to update their records for opt-out requests and 30 days to be added to the do not call list.
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How does the mortgage process work
Pre-approval: Before you start looking for a home, you may want to get pre-approved for a mortgage. This involves submitting an application to a lender and providing information about your income, assets, and debts. The lender will then review your application and credit history to determine how much you can borrow and at what interest rate.
Home Search: Once you have pre-approval, you can start looking for homes within your budget. You may work with a real estate agent to find properties that meet your needs.
Purchase offer: When you find a home you want to buy, you will make an offer to the seller. Your offer will include the purchase price, any contingencies (such as a home inspection or financing), and the proposed closing date.
Mortgage application: If your offer is accepted, you must submit a formal mortgage application to the lender. This will involve providing additional documentation, such as bank statements, pay stubs, and tax returns.
Home appraisal: The lender will typically require an appraisal to confirm the value of the property. This will involve an inspection by a licensed appraiser who will assess the condition of the home and compare it to recent sales of similar properties in the area.
Underwriting: Once the appraisal is complete and your application is submitted, the lender will review your application and supporting documentation to determine whether you qualify for the loan. This process is called underwriting.
Closing: If you are approved for the mortgage, you will need to attend a closing meeting. At the closing, you will sign all the necessary paperwork and pay any closing costs, which may include fees for the appraisal, title search, and attorney fees. Once the closing is complete, you will officially become the owner of the home and the mortgage payments will begin.
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What is going on with interest rates with the bank failures
In some cases, the failure of a bank could actually lead to lower mortgage rates, particularly if the government steps in to bail out the bank or provide support to the broader financial system. This can happen because government intervention can help calm markets and increase investor confidence, leading to lower interest rates across the board.
Overall, the impact of a bank failure on mortgage rates will depend on a variety of factors, including the size and significance of the bank, the condition of the broader economy and financial system, and the response of government regulators and policymakers.
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FHFA put in new parameters that can increase your interest rate further
FNMA/FHMC loans will be affected by the rate due to ltv, credit scores, and income/debt ratio
will it be better in some cases to go FHA
will a higher than 40% income debt ratio affect your rate
down payment can affect your rate
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