How to Improve Your Credit Prior to Buying a Home

iLoan recommends iQualifier as a powerful credit analytics tool to show you the way. If you’re looking to pre-qualify for a home and want a lower rate or better loan program, iLoan recommends iQualifier to enable you to analyze your credit history with the same tools that lenders and credit agencies use. Additionally, it takes you beyond that analysis demonstrating how different financial decisions may affect your credit in the months ahead. iQualifier can help you: • Better understand your credit standing • Improve your financial decision making • Achieve your financial goals (& target credit score) • Save money …

Today’s Rate vs. Today’s Rates – Mortgage as a Second Language

The mortgage industry is almost cruelly filled with nearly impossible jargon.  Most of it is inconsequential from the consumer’s perspective and only serves to make communication easier for industry insiders.  However, when it comes to the concept of choosing an interest rate from your lender par rate, buy ups, buy downs, discount points and lender credits are a must know. Definitions: Today’s Rate – “Today’s Rate” is a myth perpetrated as a reality.  It is something the mortgage lending industry came up with because it’s an intellectually condescending industry that doesn’t believe that its clients can do math or understand …

Your Monthly Housing Payment Beyond Principal Interest Taxes and Insurance: Utilities

Nobody wants to be house poor.  Therefore, understanding what your mortgage payment will be when buying a house is only part of what should be considered when contemplating one’s housing costs.  Getting quotes on phone service, security systems, internet and cable are easy enough but utilities like heating and cooling costs can be a little trickier.   Taking these costs into consideration is important though because miscalculation can lead to unexpected payment shock.  Should that payment shock occur, it’s often too late to do much about it so it’s necessary to be proactive. Some of the required seller disclosure items are …

Planning Your Home Purchase With a Mortgage Recast

Often times, seemingly in a fantasyland, home buyers might want to buy their new home first non-contingent on a home sale and sell their retained home shortly after moving into their new one without a financial inconvenience.  They might want to do this to get a better price due to negotiating from a position of strength or it might simply be a matter of logistical convenience.  Whatever the reason, the difficulty arises when they want to use the equity from the home that they’d be selling to achieve a lower payment on their mortgage for their new home.  Most would …

A Permanent Extension of the Private Mortgage Insurance Deduction?

The tax deduction on private mortgage insurance has been bounced around like hot potato ever since 2007. The problem with the lack of predictability in tax deductibility of mortgage insurance is that when people are make decision on which of the four types of mortgage insurance they want on their loan, it’s typically with long term considerations in mind.  This lack of certainty has turned some mortgage insurance decisions into guesswork.  To date, the tax code has provided no long term predictability to aid the consumer in this important and difficult decision. With the help of Senators Debbie Stabenow and Mike …

Buying a Home & Getting a Mortgage with a H-1B Visa

These days, any time a lender sees a square peg and a round hole, they tend to run for the hills.  In the case of homebuyers seeking a mortgage with H1B visa status, too often this is the case.  If they’d patiently take the “outside in method” of loan structuring (start with Fannie Mae/Freddie Mac, then check mortgage insurance guidelines and then reference the lenders underwriting guideline overlays), they’d find that these waters are not that hard to navigate and that round hole isn’t as round as it may appear. An H1B visa is a work permit issued by a …

How to Choose and Calculate Your Private Mortgage Insurance (PMI)

Saving an eighth of a percent on interest rate can save a little on your monthly payment and shopping around on closing costs can save a little on your down payment but perhaps the most overlooked and costly mistake when buying a home is not choosing the right mortgage insurance if the down payment is less than 20%.  The wrong decision on this choice can cost thousands of dollars. Let’s take a generic purchase of 200,000 dollars with the minimum down payment and compare them but before that, here are some definitions that you’ll need: Borrower Paid Monthly Mortgage Insurance …

Why Some Refinancing Borrowers Leave Money on the Table: The Issue of Reissue Rates

Re-Blogged with permission via: http://www.mtgprofessor.com/A%20-%20Title%20Insurance/Reissue%20Rates.html posted February 25, 2012 Ten years ago, Kenneth Harney wrote an excellent series of articles on why many refinancing borrowers pay too much for title insurance. In one article, published June 9, 2002 in the Baltimore Sun, Harney stated: “No one knows how much American homeowners lose annually by overpaying title premiums when they refinance their mortgages. Even title insurance industry officials admit the problem is substantial. They say some consumers could save 50 percent or more at refinancing if they’d simply memorize two words: “Reissue rate.” Use them as a mantra at your next refinance.”  Not much seems to …

Minnesota Mortgage Refinance and Purchase Mortgage Calculators

You are in your jammies, its 1:00 AM and visions of new homes are dancing in your head.  How much is this going to cost?  What interest rate will you get?  Who are you gonna call?  No need, my friend…the internet has got you covered! Information is GOLDEN.  And if you are like most, you are a do-it-yourself-er (DIY).  You want and expect information at your fingertips until you reach a certain point in the home buying process. I GET THAT. Most people prefer to browse and learn online before shopping with the aid of a real estate or lending …

FHA Seller Paid Closing Costs to be Reduced

To much fanfare, FHA announced measures to better protect their insurance fund in a recent Final Ruling published in the Federal Register.  Slipped in as a footnote to this announcement was a declaration that FHA is deaf to the concerns of the real estate industry.  They are taking aim to again attempt to reduce the allowable seller paid closing costs.  Make no mistake; they wouldn’t be doing this twice if they didn’t fully intend to see it through this time (regardless of industry feedback). First, a little history (with a touch of nerdy stuff).  On July 15th of 2010, FHA …

Do I Need to be Late on My Mortgage to Qualify for a Short Sale? – Don’t Take Yes for an Answer!

I have a lot of people call me to get pre-qualified to purchase a home using FHA financing after a short sale. Early on, not a lot of these scenarios panned out but these days, more and more of them do. When they don’t, the number one reason is because they took bad advice from a party to their short sale transaction. That advice? “Mr. and Mrs. Short Seller, you need to be late on your mortgage to qualify for a short sale.” This is often false and has devastating consequences. In many cases, proving imminent danger of default is …

FHA Premium Rate Increase Makes PMI a Better Option for Many Borrowers

The Federal Housing Administration (FHA) implemented a 25 bps increase to its annual premium rates on April 18, resulting in a payment increase for FHA borrowers. With this change, RMIC (an iLoan preferred mortgage insurer) offers equal or lower monthly premium rates on all LTVs with no upfront premium. RMIC Monthy PMI vs. FHA MIP · Lower Total MI Premiums 30-Year Fixed · Purchase1 Unit Primary Residence Loan Amount £ $417,000 > 95% LTV · 35% Coverage 95% LTV · 30% Coverage FICO 720+ FICO 700+ RMIC FHA RMIC FHA Upfront — 1.00% — 1.00% Year 1 1.15% 1.15% 0.94% …

Fannie Mae Guideline Changes – Gifts, 97% Financing and Mortgage Insurance

There has been some recent excitement about Fannie Mae (FNMA) changing her guidelines on down payments and allowing gift funds as an acceptable form of down payment in lieu of a borrower’s own funds. Before we all get excited about FNMA getting a little FHA in her with respect to gift funds, we need to realize that the guidelines for mortgage insurance and FNMA are not aligned. So long as they aren’t, this change will only have minimal effect. This chart outlines the new accepted forms of down payment from FNMA’s perspective: Here’s the Fannie definition of acceptable donors for …

Monthly Private Mortgage Insurance – It Doesn’t Make Any Sense. . .

Few know that there are more than 22 different types of private mortgage insurance that can be used what a homebuyer puts less than 20% down on a conventional loan.  Most assume they’ll be saddled with monthly mortgage insurance which, more often than not, makes the least mathematical sense.  A different application of private mortgage insurance to a conventional loan can reduce monthly payments, add tax advantages, increasing a homebuyer’s purchasing power and save many thousands of dollars. As though there isn’t already enough to know, real estate professionals need to know the differences between the mortgage insurance providers (i.e. …