Can you really complete a "Quick Close"?

Nationwide, as demand and competition for homes for sale has grown, so has buyer demand for "quick closings".
Note that the term "quick close" is without strict definition. You know a closing is quick when you're in one. There is less time to get a mortgage approved; less time to scout the home inspection; and less time to prepare for your final settlement.
Requests for quick closings have climbed as the home buying landscape has become more competitive. Buyers will offer to "close quickly" so their purchase contract stand-outs among the competition.
Offering to close within 30 days is one way in which buyers attempt to "sweeten the deal". And now, today, as lenders approve purchase home loans more quickly, buyers can offer quick closings with more confidence.
Ellie Mae reports that the average time to process, approve and fund a purchase loan fell by four days in August to 42 days. This equals the fewest number of days since Ellie Mae started tracking such data.
The main reasons why purchase turn-times are improving is that mortgage rates have increased.
During May and June, mortgage rates rose nearly every week, moving from 3.35%, on average, to somewhere north of four. This increase -- and its sudden, sharp nature -- spawned a surge of refinance and purchase applications as buyers rushed to get ahead of the market.
Lenders slowed down as pipelines filled up.
Then, with mortgage rates elevated through July and August, refinance activity slowed. Fewer homeowners pursued the FHA Streamline Refinance and VA Streamline Refinance programs; and fewer homeowners attempted to use HARP.
As loan volume decreased, lenders were able to turn purchase approvals more quickly to the benefit of today's home buyers.
Through the end of 2013, however, mortgage rates may move lower. As loan volume rises, then, your ability to do a quick close will wane. Therefore, if you're going under contract and want to maximize your closing speed, follow these helpful behaviors. Your loan can be approved more quickly.

How To Get Your Purchase Approved More Quickly

For buyers wanting to close quickly, some of the loan factors will be beyond your control. For example, you cannot control how fast an appraisal is performed because the appraisal requires the cooperation of the seller; or how fast a title search is performed by a title company.
However, there are steps you can take to make sure your loan gets approved as fast as humanly possible. Step one is to be prepared.

1. Know Your Paperwork Requirements

It's no secret. Mortgage lenders like paperwork. When you're buying a home, you'll want to be prepared with the most commonly-required verification documents. This can include W-2 statements and federal tax returns from the last 2 years; your two most recent paystubs; and your last two bank statements. You should also have a copy of your drivers license handy, as well as the social security numbers of everyone whose name will be listed on the mortgage.
Furthermore, if you know you have a unique credit situation such as a recent short sale or foreclosure; child support or alimony payments; or gift funds from a relative, have the relevant, related documentation ready.
This "gathering paperwork" step can be the most time-consuming one in the mortgage approval process. You know you're going to need the documents. Consider scanning them and having them ready in advance. This can save days off your approval time and help you reach your closing more quickly.

2. Don't Keep Secrets From Your Lender

Be honest and open with your lender -- even if you worry that what you share may harm your approval. There are two reasons for this.
The first reason to share is that withholding information from your mortgage application can constitute loan fraud, which is a far worse outcome than not getting mortgage approved. The second reason is that your mortgage lender will often uncover what you're electing not to share anyway.
As part of the mortgage approval process, a credit check is performed and various "occupancy tests" are conducted by an underwriter. Employers are contacted to verify job status and public records are sometimes checked as part of the approval.
With so many mortgage programs available for today's home buyers -- from large-downpayment to low-downpayment to no downpayment at all -- the more information you share with your lender, the more equipped he'll be to help you close quickly.

3. Use Pre-Approvals To Speed Closing Time

For a buyer, mortgage pre-approvals are among the most under-used tools to speed a purchase closing. Home buyers with pre-approvals in-hand at the time of offer can typically reduce closing times by one week or more. It's because of the role which a pre-approval plays to a lender.
Mortgage pre-approvals are "dry runs"; approvals based on an expected set of loan criteria which will eventually go to closing. During the pre-approval process, your lender will take a complete loan application which includes performing an income and asset verification, and he will account for specific loan traits which may affect your final approval such as your personal credit scores, any required child support payments, and the availability of a co-signer, as examples.
In fact, when a pre-approval is issued, the only missing item is often the physical property address of the home being purchase. To compensate, lenders use dummy information based on probable loan data including a sample purchase price, a sample real estate tax bill, and a sample homeowners insurance policy and/or homeowners association assessment, where applicable.
With their loan "pre-approved", buyers can move immediately from the "Writing The Contract Phase" to the "Underwriting The Loan Phase". This can save 7 days or more days from the approval process.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

Pre-Qual vs Pre Approved

 

Why Is It Good To Get Pre-Qualified?

Getting pre-qualified for a mortgage is a quick and easy process. Via phone, email or internet, your lender will ask you for some basic information about yourself and -- based on what you share -- you can know whether you qualify for a mortgage.
Pre-qualification questions vary by lender but often include the following :

• What is your annual income?
• What is your credit score or credit rating?
• Have you recently become self-employed?
• Do you own more than 25% of a business?
• How much money do you have "in the bank"?

Your lender may also ask whether you've had a bankruptcy, short sale or foreclosure within the last few years; and whether you're a U.S. citizen.
The answers to these questions can a help a lender determine for what mortgage programs you may be eligible. For example, if you have very little money in the bank and plan to buy a home with 2-units or more, your lender will limit your pre-qualification to FHA mortgages and VA loans.
Similarly, if your credit rating is high with no outstanding judgments or liens, your lender may pre-qualify you for a wide range of mortgage products which are unavailable to buyers with low credit rating.
Based on the information you share, your lender will also assign your purchase to a maximum purchase price.
The strength of a mortgage pre-qualification is that it's easy to process.
The weakness is that it's only as good as the information given to your lender. You may think you're telling your lender your income; or that you know your credit rating, but what if you're wrong like so many buyers before you have been?
This is why pre-qualification letters are only "good". They're a non-verified guess of how much home you can afford. Guesses will do you very little good.
Pre-approvals are a better approach.

Why Is It Excellent To Get Pre-Approved?

Getting pre-approved for a mortgage takes more time than getting pre-qualified. The extra time pays off wonderfully, too.
In the mortgage pre-approval process, your lender will go deeper as compared to a prequalification. Instead of just being asked about your income, your assets, and your credit, you will be asked to prove it.
For example, your lender will ask about your money "in the bank" and whether it's from your job; or, from a 401(k) withdrawal; or, from a cash gift for downpayment; or, from some other source.
The funds will be verified with bank statements.
Your lender will also ask to review your most recent W-2s and tax returns in order to confirm your "eligible income". This figure is then compared to your credit report to determine your personal debt-to-income (DTI) ratio.
Debt-to-income is a key mortgage qualification standard.
Buyers with a debt-to-income ratio below 40% may be eligible for all available loan types include conventional financing, FHA and VA mortgages, and USDA. However, buyers with a DTI between 40-45% may be limited to products via the FHA or VA.
Pre-qualifications don't verify debt-to-income. Pre-approvals do.
Pre-approvals also uncover hidden collections, judgments and liens which may stand between you and your approval.
More than 25% of Americans are harmed by "errors" on their credit report. If you turn out to be one of them, finding a credit report error after you're under contract for home can carry significant costs -- including the loss of your earnest money.
For all of these reasons, home sellers and their REALTORS® insist that home buyers submit a valid pre-approval letter along with their initial offer for the home.
Sellers don't consider offers from people who haven't taken the time to determine if they can even get approved for a loan in the first place.
This is why pre-approval letters are important. They're typically required to even offer on a home.

Get A Binding Pre-Approval (For Free)

Sellers don't accept an offer without an accompanying pre-approval letter. Thankfully, getting pre-approved is easy.
First, contact a lender. It can be any lender. It doesn't have to be your "hometown" bank and it certainly doesn't have to be the lender you'll use when you ultimately get your home loan.
The important part is that you speak to a lender, and get the letter.
When you contact a lender, then, be open and honest about your financial background.
Today's mortgage lenders perform tons of due diligence; much more than 10 years ago. Whatever you attempt to "hide" from a lender, they'll ultimately uncover -- and hiding information may be cause to deny your loan.
Even if it's something as simple as a side-business you've recently started which currently earns absolutely no income, share it with your lender. Ultimately, the business may not affect your approval but let your lender determine what's important and what's not.
You should also alert the lender if you're carrying non-credit reporting debts such as a personal loan from a friend or family member.
Lastly, allow the lender to "pull your credit".
Credit checks can reduce your score but they represent a very small percentage of your overall FICO.
Many people believe that a credit check will affect your credit score by less than 5 points on a scale of 850 points. Without the credit check, though, you can't be pre-approved, so let your pre-approving lender check it.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

What is Title Insurance for?

Title Insurance Claims 

It is the seller's obligation to sell you a home with "clear title". This means that you are buying a home with no liens, encumbrances, or claims to which you did not agree and which are known to the seller or the title insurer.
However, mistakes occur and you don't want to be on the receiving end of a title claim. Note that none of the reasons for a claim will be "your fault", necessarily. Title claims are often the result of oversight or error.
Here are few examples of potential claims against your title :

• Your home sals was not properly recorded in the public record
• The seller's home loan was not properly paid off, or was not recorded as "satisfied"
• Evidence of an undisclosed prior mortgage which was not paid at closing
• Forged notarizations and/or forged witness acknowledgement
• A "newer" will is discovered after probate of an initial will

Again, none of these claims may be your fault, however, you'll still be affected by the claim. Title insurance is protection. And your title insurer will do its best to search for issues before your closing occurs.
This is known as a title search.
Title searches are hunts for flaws on a home's title. The search is performed by the title insurer and involves an extensive hunt through public records and private databases in order to locate claims of interest to a property which currently, and previously, existed.
These claims of ownership are compiled into a document called a "title report". The title report includes the full legal description of the property; a summary of real estate tax payments due and paid; and, recent claims made to the property along with notes stating whether those claims have been satisfied (i.e. are no longer in effect).
Title search errors are covered by your title insurance policy.

You Must Purchase Title Insurance For Your Lender

Title insurance is optional coverage for a homeowner. However, title insurance for your lender is required. This is because -- like you -- your lender has an interest in your property.
Also like you, your lender does not want to see your home undefended, and lost, in a valid title claim.
The lender's title policy is sometimes called a "loan title policy" and it functions in much the same way as your owner's title policy. A title search is performed to identify encumbrances and liens and any unsatisfied claims are addressed prior to closing.
With the title policy in place, in the event of an error or claim, your lender can be reimbursed for losses.
Home sellers typically pay for a buyer's lender's title policy. Premiums are paid up-front at closing with nothing due over the remaining years of a loan. The policy expires when the current loan is paid-in-full. When you refinance, you will be required to get a new lender's title policy.
Costs to re-insure a home against title defects are low.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

Push it to the limit

 
The FHA mortgage offers several advantages to home buyers as compared to a loan backed by Fannie Mae or Freddie Mac.
FHA loans allows for a very low 3.5% downpayment; mortgage underwriting standards are often "loose" as compared to other loan types; and  via the FHA Back To Work - Extenuating Circumstances program, buyers can get an FHA loan just 12 months after a foreclosure, short sale or bankruptcy.
However, the biggest advantage of an FHA mortgage is that you can borrow more money from your bank via an FHA-backed loan than you can with a conventional one. FHA loan limits are higher than Fannie Mae and Freddie Mac's.

What Are FHA Loan Limits?

FHA stands for Federal Housing Administration. The agency is a part of HUD, and has been supporting U.S. homeowners since 1934.
The FHA is not a mortgage lender. Rather, it's an insurer, providing the nation's lenders protection against losses and default. The FHA will insure any mortgage which meets its minimum eligibility standards.
The FHA's minimum eligibility standards, collectively, are known as the FHA Mortgage Guidelines. FHA mortgage guidelines differ in their specifics between purchase and refinance loans, but some guidelines remain shared, too.
For all Federal Housing Administration loans -- purchase or refi -- there is a maximum loan size which the FHA will insure. The maximum loan size allowed by the agency is known as an FHA loan limit, and loan limits vary depending on your home type and where you live.
FHA loan limits range up to $1,403,400. This is the limit for a 4-unit home in Los Angeles County, California. It's also 17% higher than the maximum loan size allowed by Fannie Mae or Freddie Mac.
The FHA lets you borrow more.

How Much Can You Borrow Via The FHA?

FHA loan limits vary by property type. The agency will insure larger loan sizes for a 4-unit home, for example, than a single-family home or a condominium. The Federal Housing Administration will also insure larger loan sizes areas deemed to be "high-cost".
The agency considers an area to be high-cost if its median home sale price exceeds the national average by some fixed amount.
There are 74 counties nationwide which reach the FHA's maximum loan size limit. Plus, there are an additional 697 U.S. counties in which limits are elevated.
In all other counties, FHA loan limits are as follows :

• 1-unit home : $271,050
• 2-unit home : $347,000
• 3-unit home : $419,425
• 4-unit home : $521,250

In high-cost areas -- areas which include New York City; Loudoun County, Virginia and Montgomery County, Maryland; and most of California. In these regions, FHA loan limits range up to :

• 1-unit home : $729,750
• 2-unit home : $934,200
• 3-unit home : $1,129,250
• 4-unit home : $1,403,400

Meanwhile, the agency has designated four areas in which loan limits are even higher, reflecting the ultra-high cost are living there. These four areas are Hawaii, Alaska, Guam and the U.S. Virgin Islands.

• 1-unit home : $1,094,625
• 2-unit home : $1,401,300
• 3-unit home : $1,693,875
• 4-unit home : $2,105,100

Note that the Federal Housing Administration reviews its maximum allowable loan sizes once per year, and that loan limits may change over time. Several years ago, "high-cost loans" did not exist. In several years, they may cease to exist again.
For now, however, the FHA offers loan size opportunities not available via conventional loans.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.  

Mortgage Events

For watchers of the U.S. mortgage market, this week is the most eventful in months.
Along with a bevy of housing and economic data, the Federal Open Market Committee (FOMC) meets for the sixth time this year. The FOMC is the sub-group within the Federal Reserve which votes upon U.S. monetary policy.
The FOMC is expected to vote to keep the Fed Funds Rate in its current range near 0.000% but may elect to begin tapering the Federal Reserve's QE3 program, which started one year ago last week.
Via QE3, the central banker purchases $40 billion of mortgage-backed securities on the open market monthly, creating excess demand which holds bond prices high. The Fed's stimulus is directly responsible for last year's lowest mortgage rates in history.
In May 2013, the Fed said it would begin considering whether to increase or decrease the pace of its purchases based on U.S. economic growth. That statement sparked a massive MBS sell-off which pushed rates from 3.5% to the current range near 4.5%.
However, the economy has shown little spark since that date. Job growth is slower-than-expected nationwide; housing data has somewhat cooled; and, consumer spending has failed to keep up. The economy is expanding, but not by enough to warrant a "full taper", some believe.
How the Federal Reserve handles QE3 will be the big news this week, and make the largest impact on U.S. mortgage rates. The week's complete schedule looks like this :

• Monday : Empire State Manufacturing Survey
• Tuesday : Homebuilder Confidence Survey; Consumer Price Index (CPI)
• Wednesday : FOMC adjourns; Federal Reserve forecasts released; Housing Starts
• Thursday : Initial Jobless Claims; Existing Home Sales
• Friday : None

It's also noteworthy that five Federal Reserve members have scheduled speeches between Thursday and Friday. Expect these speeches to affect mortgage rates because each speaker is expected to put their personal spin on "what the Fed should do next".

Will HARP 3 Pass This Week?

U.S. homeowners also wonder if this week is the week Congress passes HARP 3.
Also known as #MyRefi and "A Better Bargain For U.S. Homeowners", HARP 3 would be the third iteration of the popular Home Affordable Refinance Program which was first launched in early-2009. More than 2.7 million U.S. homeowners have used HARP to refinance to lower mortgage rates since the program's inception.
It's unknown what will be different with HARP 3, but there is speculation that any, or all, of the following enhancements could be added when HARP is revamped for the public :

1. HARP 3 may allow the "Re-HARP" of an existing HARP refinance
2. HARP 3 may allow non-Fannie Mae and non-Freddie Mac mortgages
3. HARP 3 may change the program cut-off date to include more homeowners
4. HARP 3 may allow larger loan sizes of up $729,750

HARP 3.0 is currently in committee in Congress and may pass this week, or next week, or not at all. Millions of homeowners may be instantly refinance-eligible should HARP 3.0 pass.

Playing the Harp....

What You Don't Know About HARP 2.0

Earlier this year, Fannie Mae and Freddie Mac announced a plan to "market" the Home Affordable Refinance Plan to the public more aggressively. Like many others, the groups believe that HARP-eligible homeowners are either unaware of the program, its benefits, or both.
This website receives a lot of emails from homeowners wondering about HARP and whether they're eligible to refinance. Here are some of the common HARP misconceptions.

I can't refinance with HARP if I have a second mortgage.

Yes, you can refinance with HARP if you have a second mortgage. However, in accordance with HARP guidelines, you cannot combine your two mortgages in a cash-out refinance.
To refinance your first mortgage via HARP, but leave your second mortgage unchanged, your second mortgage lender will agree to subordinate its mortgage, which is a fancy way of saying that second mortgage lender will give permission for you to replace the existing first lien on title. 

I have no equity in my home so I can't refinance with HARP.

Yes, you can refinance your home via HARP if you have no equity. That's exactly the premise of the program! Via HARP 2.0, homeowners can refinance no matter how far underwater they are with their mortgage. This is among the reasons why the HARP refinance has been so popular in Las Vegas, Nevada; Phoenix, Arizona; and other hard-hit areas. HARP is the "underwater mortgage program" -- of course you can use it when you have no home equity. 

I was already turned down for HARP. I won't get approved if I apply for HARP again.

Even if you've been turned down for HARP, it would make sense to apply for HARP again. This is because HARP-approved lenders often use in-house variations of the official HARP guidelines and those variations are different between banks. You may be approved for a loan for a loan

I can't refinance my home via HARP because it's not my primary residence.

HARP 2.0 can be used to refinance homes of any occupancy type. Investment properties can be refinanced via HARP, and so can second homes and vacation properties. HARP can be used in all 50 states, the District of Columbia, and all U.S. territories. 

I can't use HARP because my lender doesn't offer it.

Not all lenders offer The Home Affordable Refinance Program; this is true. However, U.S. homeowners are free to refinance with any HARP-approved lender. This freedom was among the improvements of HARP 2.0. There are thousands of lenders making HARP 2.0 mortgages. You can get mortgage rates for a HARP loan here.

I can't use HARP because I am not behind on my mortgage payments.

The HARP refinance program is not meant for homeowners who are behind or delinquent with their mortgage payments. HARP can only be used for homeowners who are current. The HARP program is not meant to save a person's home from foreclosure. Homeowners facing difficulty with payment should contact their loan servicer immediately.

I can't use HARP because my loan has mortgage insurance.

You can use HARP 2.0 for loans with existing private mortgage insurance (PMI). This is a change from HARP 1.0 and applies to loans with both borrower-paid mortgage insurance (BPMI) and lender-paid mortgage insurance (LPMI).  However, it can be difficult to find banks to offer a PMI program. If you try to refinance your loan with PMI and you are turned down by a lender, apply again somewhere else. You may get a better outcome.

Are You HARP 2.0-Eligible But Don't Know It?

There are an estimated remaining 4-plus million households nationwide who could refinance via HARP, but haven't. Some of these 4 million households are unaware that HARP 2.0 exists. Others are unaware that they'd qualify.

CLICK TO VIEW VIDEO ON HARP 2.0

 Use the links below to determine if your loan is a Fannie or Freddie Mac owned loan. For assistance you can call 877-276-6400 Ext 101 Gene Neal

Fannie Mae

http://www.fanniemae.com/loanlookup/

Freddie Mac

https://ww3.freddiemac.com/corporate/

If your home is a Fannie Mae or Freddie Mac owned loan email me back so we can prepare your paperwork before the rush.

eneal@athccorp.com

Are you ready to purchase?

Pending Home Sales Index : Forward-Looking

Each month, the National Association of REALTORS® publishes its Pending Home Sales Index (PHSI), a forward-looking housing market indicator.
The Pending Home Sales Index is meant to measure the number of homes which are newly under contract. Data has shown that the number of homes newly under contract positively correlates to the number of closed sales two months into the future, which makes the Pending Home Sales Index a reasonable proxy for the future health of U.S. housing.
When the Pending Home Sales Index rises, another National Association of REALTORS® report -- the Existing Home Sales report -- tends to rises too, but on a 60-day delay. Similarly, when the Pending Home Sales Index shows a retreat in homes under contract, two months later, the Existing Home Sales report often drops, too.
It's this predictive quality which makes the Pending Home Sales Index unique.
Unlike other widely-cited home valuation trackers such as the Case-Shiller Index and the FHFA's Home Price Index; and home sale trackers such as the government's monthly New Home Sales report which cover what has already happened in housing, the Pending Home Sales Index tells us what will happen in housing.
80% of homes under contract close within 60 days. Most of the rest close in months 3 and 4. The Pending Home Sales Index correlates to future closing.

2013 Housing Market Remains Strong For Sellers

The National Association of REALTORS® shows the July Pending Home Sales Index at 109.5, a slight decrease from the month prior and the second straight month for which the index fell.
However, this doesn't mean the reading is weak. Any time that the Pending Home Sales Index beats 100, it's significant. "100" is the index benchmark value which correlates to the housing market's performance in 2001, the year the index launched.
2001 was a "good year" for housing. When the Pending Home Sales Index beats 100, then, it suggests that today's housing market is performing better than the one from 2001.
It's been 15 months since the Pending Home Sales Index fell short of 100.
Today's buyers have undoubtedly experienced the effects of an improving market. Homes are selling rapidly at prices close to, or above, their original listing price; multiple-offer situations are more common; and sellers have negotiation leverage over buyers in many U.S. markets.

How Much Home Can You Afford In Today's Market?

Planning to buy a home this year or in 2014? Despite rising home prices and homeownership costs, the market remains ripe for buyers.
Purchasing power is near all-time highs and low- and no-downpayment mortgages are readily available from U.S. lenders. One such program -- the Conventional 97 -- allows for a 3% downpayment and a downpayment gift, and is available in all 50 states. FHA loans are popular, too.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.