Avoid making any major purchases. You might be thinking about purchasing new appliances for the new home. This is not the time to do it. Avoid making any major purchases on jewelry, appliances, furniture, vacations, or anything with a significant price tag.

Buying or leasing a car can make a negative impact on the way the lender views your financial status. This is a big ticket item that dramatically affects your debt-to-income ratio. You may feel you have room in your budget to purchase a new car, and think this is a worthy investment if you are looking for a home that will mean a longer commute for you on a daily basis. But by tacking a car payment onto your existing debt, you reduce the amount that you will qualify for in a home loan. A $400 a month car payment can reduce your approved loan limit by as much as $50,000. Think about doing this after your loan is approved if you really need it.

What costs are involved?

Within 3 days of your application, your Loan Officer must provide you with a good faith estimate of closing costs. Along with any down payment, you will have to pay closing costs as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:

• Application/Processing Fee – Charged by the loan officer to process your loan application.
• Appraisal Fee – Charged by the appraiser to determine the current value of the property.
• Closing Fee – Charged by the closing agency (escrow, attorney, title) to ensure the close of your transaction.
• Credit Report Fee – Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.
• Title Search/Title Insurance Fees – Charged by the title company to ensure the property is free from liens or title defects.
• Origination Fee – Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.
• Discount Points – Paid to the lender to secure a lower interest rate.
• Miscellaneous Fees – VA and FHA loans may have other fees associated with them. Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.

Let us help you evaluate your personal situation and assist you in finding the loan program that works best to meet your individual goals and needs.

I know a lot of people are talking about the struggles they are having buying or refinancing their home in today’s market. One of the biggest issues we are facing today are APPRAISALS!

Many people are trying to take advantage of these low mortgage rates but are not able to do so because they owe much more than what they can now borrow based on their new appraised value. It is not out of the ordinary to have borrowers bring BIG checks to close their refinance transaction. Like this article states, many folks will face some hurdles during the mortgage process that they didn’t even a few years ago. 

All we can say to our clients (or potential clients) is  hang in there. We are all in this together. It has never been more important to work with a trusted loan officer to walk you through today’s hurdles that you, the borrower, will be facing. Our goal is to get qualified folks into their homes — and we’ll do what it takes.

We’ve heard a lot in the media that NOW is the best time (in history) to refinance — and we at First Preferred Mortgage Company agree.  Here are a couple of reasons why consumers SHOULD consider refinancing now. 

Lower Your Interest Rate
Securing a lower interest rate is one of the top reasons for refinancing. This can make a big difference in your monthly out-of-pocket costs for housing and save money on financing fees.

Build Equity Faster
If you are in a position to make higher monthly payments due to an increase in salary or other good fortune, you may want to switch from a 30-year loan program into a 15- or 20-year loan structure. This enables you to build equity faster and save a tremendous amount of money on financing fees. (And who doesn’t want to do that?)

Change Your Loan Program
Some homeowners who start out in an ARM find that they would like to switch to the stability of a fixed rate mortgage at some point. An ARM may have been the most attractive rate and loan package when you first financed your home, but we can provide you with loan comparison charts to find out if you can save money with another type of loan program that might work better for you right now.

Credit Score Has Improved
If your credit score has improved as a result of making your mortgage payments on time and in full, you may be in a position to take advantage of your improved credit standing. We can review your current credit score, the terms of your exsisting mortgage, and review options for other loan programs that could not only reduce your monthly payment, but also save you money on interest fees paid over the life of the loan.

Use the Equity Your Have Established
A cash-out refinance allows you to tap into the equity you have built up in your home. You may want to pay off revolving credit card accounts, send a child to college, or use the money for home improvements or personal expenses.

We could go on about why this could make sense for you. Don’t hesitate to ask us your questions about refinancing  and what the process looks like. We’re happy to break down the clutter.

Once your loan package has been sent to the lender, there are a number of things you should avoid doing that will change your financial picture. Remember, the lender is looking for stability and consistency. If you want the best interest rate, keep that in mind. Here are a few things to consider:

The lender is looking to see what your source of down payment is.

Your lender will most likely ask you to provide proof of your liquid assets. This includes bank statements for checking and savings accounts, verification of investments, and any other liquid assets. Some of the things they ask for may seem trivial, but keep in mind, if you are planning a move to a new home, it’s important to have all documentation readily available. If the lender asks for cancelled checks or deposit receipts to meet certain conditions, you want to be able to find these things quickly to avoid delaying the closing of your loan. Make sure your paper trail is easy to document, and don’t move money from one account to another.