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- How to obtain your Certificate of Eligibility letter for a VA Home Loan
Veterans: Simple easy steps to guide you to success To get a Certificate of Eligibility (COE) for a VA home loan, a veteran must follow a specific process. The COE is essential for securing a VA-backed mortgage, as it proves the veteran's eligibility based on their service history. Here’s how a veteran can obtain a COE: 1. Determine Eligibility First, the veteran must meet the eligibility requirements for a VA loan, which typically depend on: Length of Service : Generally, veterans must have served 90 consecutive days of active duty during wartime or 181 days during peacetime. National Guard or Reserve service may also qualify. Discharge Status : Veterans must have an honorable or general discharge, but those with a less-than-honorable discharge may still qualify under certain circumstances. 2. Apply for the Certificate of Eligibility There are several ways to apply for a Certificate of Eligibility : a. Online (eBenefits Portal) Fastest Method : This is the most efficient way for most veterans to apply. Requirements : You’ll need a Premium eBenefits account to access the application. Process : Visit the VA's eBenefits website : www.ebenefits.va.gov Log in or create an account. Navigate to the "VA Home Loan" section. Request your Certificate of Eligibility . The process is often automated, and you may receive your COE instantly. b. Through a Lender Many veterans apply through a VA-approved lender. The lender can help you obtain the COE by submitting the application directly to the VA on your behalf. This is a good option if you're not familiar with the process or don’t have an eBenefits account. Lender websites often have a streamlined process for submitting a COE request. Some lenders will even offer to assist you with the application for free. c. By Mail (VA Regional Loan Center) If you prefer paper forms, you can fill out VA Form 26-1880 ("Request for a Certificate of Eligibility") and mail it to the nearest VA Regional Loan Center. You can find the form here: VA Form 26-1880. Mailing address will depend on your location, and you can find it on the VA's website. d. By Phone (VA Regional Loan Center) Veterans may also request a COE by calling the VA’s Loan Eligibility Department at 1-800-827-1000 . This method might require additional verification steps. “America’s veterans have served their country with the belief that democracy and freedom are ideals to be upheld around the world. " – John Doolittle 3. Wait for the COE Online : If you apply online, you might receive the COE immediately (in some cases). By Mail : The processing time for a mailed request is usually around 3-4 weeks , depending on your service record and the VA's workload. 4. Use the COE Once the COE is issued, it can be given to your lender when applying for a VA home loan. The lender will use it to determine your eligibility and benefits, including the loan amount you qualify for. Additional Notes: Veterans with Specific Circumstances : Veterans who served in specific units or were on certain types of service (such as being a National Guard or Reserve member) might need additional documentation or have different eligibility requirements. Restoration of Eligibility : If a veteran has used a VA loan before and paid it off, they may be eligible for restoration of eligibility to use the benefit again.
- 5 Proven Strategies for Winning a Multi-Offer in a Competitive Market
Are you in the market for a new home in a highly competitive area? Have multiple offers been causing you stress in your quest to find your dream home? No need to worry, we're here to help! We have some helpful tips that will give you the edge you need to come out on top in a multiple-offer situation. First and foremost, it's incredibly important to be well-prepared for this exciting adventure! Make sure to do your research ahead of time and have all your documents ready to go. This means getting pre-approved for a mortgage, having proof of funds, and gathering all necessary paperwork. Being well-prepared not only demonstrates your seriousness, but also shows the seller that you are ready and eager to take the next step in this wonderful journey. In addition to that, it's really important to emphasize the importance of COMMUNICATION. It's a great idea to reach out to the listing agent and show your interest in the property. Don't hesitate to ask questions about the seller's preferred timeline and any specific terms they may be looking for. Building a friendly rapport with the seller can actually give you an advantage over other potential buyers. Another great tip to consider is making a strong initial offer. One thing you can do is offer a higher price than the asking price or add some favorable terms to really make yourself stand out. But, of course, it's important to make sure that your offer is still within your budget and aligns with the market value of the property. Get a competitive loan quote Today! To make your offer even more enticing in a multi-offer situation, you might want to think about adding an ESCALATION CLAUSE. This simply means that you're open to raising your offer by a specific amount if other offers start rolling in. It sends a strong message to the seller that you're truly committed to winning this property and you're ready to step up and make it happen. When it comes to multiple-offer situations, timing is everything! It's super important to be proactive and act quickly. Make sure to submit your offer as soon as possible and promptly address any counteroffers or negotiations that might come up. The quicker you act, the greater chance you have of coming out on top! In a nutshell, winning in a multiple-offer scenario requires some preparation and good communication. It's all about making a strong initial offer and maybe even including an escalation clause. And of course, don't forget to take quick action! By following these friendly tips, you'll increase your chances of securing your dream home in a competitive real estate market. Good luck!
- REAL ESTATE CONTRACTS AND THE VALUE OF HAVING A PROFESSIONAL GUIDE YOU THROUGH THE PROCESS
BUYING A HOUSE CAN STIR UP A LOT OF EMOTIONS because the Real Estate contracts are really detailed and full of legal terms that can be tough to understand. But it's important to remember that YOU'RE NOT ON YOUR OWN in this big step. These contracts are SUPER IMPORTANT because they're all about your future home. Feeling a bit unsure or confused is totally normal. The great news is that there are EXPERTS OUT THERE who can help guide you through it. Real estate agents and lawyers are like YOUR PERSONAL NAVIGATORS in the world of home buying. They know a ton about this stuff and can explain the contract in a way that's EASIER TO UNDERSTAND. They're great at spotting the small, IMPORTANT DETAILS that you might miss. These professionals are really good at PROTECTING YOUR INTERESTS. They go through everything with a FINE-TOOTH COMB to make sure there are no hidden problems. With their help, you can feel a lot more sure about the decisions you're making. Get a competitive loan quote Today! HAVING AN EXPERT ON YOUR SIDE means you don't have to worry as much. They help you make SMART, WELL-INFORMED CHOICES. Think of them as your SHIELD against any issues and your ALLY in getting what's best for you. But these experts do more than just keep you safe. They're also AWESOME AT NEGOTIATING. They'll fight to get the best deal for you, making sure that you're HAPPY and CONFIDENT with the outcome. So, it's really important to get that BUYING A HOUSE IS COMPLICATED. Trusting these experts can make the whole process SMOOTHER and more UNDERSTANDABLE. They'll clear up any confusion and help keep you CALM as you move forward. Even though the journey of buying a house can be CHALLENGING, these professionals will make things clearer and less stressful for you. EMBRACE THEIR EXPERTISE, and let them guide you. You'll feel more and more CONFIDENT as you get closer to getting your DREAM HOME.
- Navigating the Offer Process: A Home Buyer's Guide to Success
Purchasing a new home is an exciting journey, but it's also filled with complexities, especially when it comes to making an offer. Allow us to guide you through the key considerations to ensure your offer stands out and aligns with your interests. 1. Understanding the Market: Research Local Market Trends: It is importance of understanding the local real estate market. Is it a BUYER'S or SELLER'S MARKET? In a Buyers’ Market there is less demand for housing and large inventory of homes for sale. In contrast, a Sellers’ Market will have little inventory and high demand for the existing homes for sale. There is often a reason why a house sits on the market for a long time (say, for six months or more). It could be overpriced or has issues not included in the listing. An experienced real estate agent familiar with the neighborhood should be able to provide some answers. Comparative Market Analysis (CMA): A Comparative Market Analysis is an important tool for home buyers. It provides valuable information about the value of a home AS COMPARED TO other properties in the area. This analysis helps buyers make informed decisions about their purchase. A CMA considers various factors such as the size, location, condition, and features of the home. It also considers recent sales of similar homes in the neighborhood. By comparing these factors, a CMA provides an estimate of the value of the home. 2. Financial Considerations: Your Budget: Think carefully about your finances and how much you can afford to spend. It is crucial to create a budget and stick to it. This will help you manage your money and prevent any financial difficulties. Avoid getting caught up in a bidding war. When participating in auctions or competitive sales, it's easy to get carried away and spend more than you planned or can afford. Remember to stay calm and focus on your budget. Financial strain can be overwhelming and cause stress. It is essential to prioritize your well-being and avoid unnecessary financial burden. Stick to your budget, be mindful of your spending, and make informed decisions to ensure you are financially secure. Pre-approval: Having a mortgage pre-approval can significantly improve the attractiveness of your offer to sellers. Mortgage pre-approval means that a lender has already reviewed your financial situation and is willing to provide you with a loan. This initial approval shows sellers that you are a serious buyer and have the financial means to complete the purchase. Get a competitive loan quote Today! 3. Crafting Your Offer: Price: The price of a home will depend largely on the type of market you local area is in (buyers or sellers) and what type of condition the house is currently in. To help negotiate the best price a Realtor will often use the Home Inspection and/or Appraisal to cite deficiencies on the property. These deficiencies can be used to negotiate repairs, further inspections or pricing adjustments. Contingencies: Common contingencies such as home inspections, appraisals, and financing are essential components of a home purchase offer, serving as safeguards for the buyer. Let's delve into each of these contingencies: Home Inspections: Purpose: A home inspection contingency allows the buyer to have the property professionally inspected after the offer is accepted. This inspection covers the home's structure, systems (like HVAC, plumbing, and electrical), and overall condition. Protection for Buyer: It helps identify any issues or defects in the home that may not be apparent during a casual walk-through. Depending on the findings, the buyer can renegotiate the price, request repairs, or even back out of the deal without losing their earnest money deposit. Appraisals: Purpose: An appraisal contingency ensures that the home is valued at a minimum specified amount, which is typically the offer price or higher. A professional appraiser assesses the home to determine its market value. Protection for Buyer: This contingency is crucial, especially for buyers obtaining a mortgage, as lenders typically only finance a property up to its appraised value. If the appraisal comes in lower than the offer price, the buyer can renegotiate the deal, make up the difference in cash, or withdraw their offer without penalty. Get a competitive loan quote Today! Financing: Purpose: Financing or mortgage contingency gives the buyer a specified period to secure a loan to purchase the property. This is contingent on the buyer obtaining a mortgage approval under terms that are acceptable to them (such as a specific interest rate and loan amount). Protection for Buyer: This contingency is vital for those who aren’t paying in cash. It ensures that if the buyer cannot secure financing within the agreed timeframe, they can back out of the contract without facing legal or financial repercussions, including reclaiming their earnest money deposit. Each of these contingencies plays a pivotal role in protecting the buyer from unforeseen issues and financial burdens. They provide a legal way to either renegotiate or exit the agreement if certain conditions aren't met, thereby safeguarding the buyer's interests in the property transaction. Earnest Money: Earnest money is put down before closing on a house to show you're serious about purchasing. When a buyer and seller enter into a purchase agreement, the seller takes the home off the market while the transaction moves through the entire process to closing. If the deal falls through, the seller has to relist the home and start all over again, which could result in a big financial hit. By requesting earnest money, the seller is protected if the buyer backs out Closing Date: Knowing when a seller prefers to (or has to) close on the house can help you make a more attractive offer. This is beneficial for both you and the seller. The situation is different for every seller and the more flexible you are in your closing date, the more appealing your offer may be for sellers. Consider if the seller is building a home and their move in date is contingent on when their new build is finished. Or perhaps they are starting a new job in another state and need to close fast to accommodate their start dates. Get a competitive loan quote Today! 4. The Role of a Real Estate Agent: The agent's role is to protect your interests and ensure that you get the best possible outcome. They will use their negotiation skills to advocate for your needs and push for favorable terms. By leveraging their experience, they can navigate through complex negotiations and handle any challenges that may arise. Negotiation Skills: During negotiations, the agent acts as a mediator between you and the other party. They will use their knowledge of the market and industry to assess the value of the terms being offered. This allows them to determine the appropriate course of action and propose counteroffers when necessary. Understanding the Paperwork: Real estate contracts can be quite complex. They include a lot of important details and legal jargon that may be difficult to understand. It's not uncommon for people to feel overwhelmed or confused when reading through these contracts. That's why it is important to have a professional guide you through the process. A real estate agent or lawyer can help explain the terms and conditions in simple language that you can understand. They can also point out any potential issues or hidden clauses that you may have missed. 5. Being Prepared for Multiple Scenarios: Multiple Offers: It is essential to be PREPARED. Do your research beforehand and have all your documents ready. This includes getting pre-approved for a mortgage, having proof of funds, and all necessary paperwork. Being prepared shows the seller that you are serious and ready to make a move. Additionally, COMMUNICATION is key. Reach out to the listing agent and express your interest in the property. Ask questions about the seller's preferred timeline and any specific terms they are looking for. Building a rapport with the seller can give you an edge over other potential buyers. Next, consider making a STRONG INITIAL OFFER. Offering a higher price than the asking price or adding favorable terms can help you stand out. However, ensure that your offer is within your budget and aligns with the market value of the property. To make your offer more appealing, consider including an ESCALATION CLAUSE. This clause states that you are willing to increase your offer by a certain amount if other competing offers are received. It shows the seller that you are willing to go the extra mile to secure the property. Rejection and Counteroffers: Negotiating can be challenging, especially when you encounter rejections or counteroffers. It's important to remember that these situations are normal, and there are strategies you can use to navigate through them. Firstly, it's crucial to STAY CALM and composed when facing a rejection or counteroffer. Take a moment to collect your thoughts and emotions before responding. Remember that these are part of the negotiation process, and staying level-headed will help you make better decisions. Get a competitive loan quote Today! When dealing with a rejection, try not to take it personally. It's essential to separate yourself from the situation and focus on the facts. EVALUATE the reasons behind the rejection and consider if there are any areas where you can improve your proposal. Remember that rejections can offer valuable feedback that can help you refine your approach. Sometimes, you might receive a counter offer instead of an outright rejection. In this case, carefully ANALYZE the counteroffer and its implications. Consider if the offer aligns with your needs and objectives. Reflect on the potential risks and benefits before making a decision. It may be helpful to CONSULT with others who have experience in negotiations or seek advice from a mentor or trusted colleague. Conclusion: Making an offer on a home is both an ART and a SCIENCE. By understanding the market, aligning your offer with your financial capabilities, and working with experienced professionals, you can navigate this process with confidence and success. We wish you all the best with your home buying experience and this Home Buyer's Guide.
- VA Loan Assumption: A Guide for Buyers and Sellers
If you're a Veteran considering the assumption of a VA home loan or a civilian looking to assume one, there are critical factors to consider. VA entitlement, loan assumption timelines, and financial implications can be complex and may affect your decision. In this informative blog, we'll break down these aspects to help you make informed choices. Understanding VA Entitlement VA entitlement is a crucial factor when it comes to loan assumptions. If your VA entitlement is tied up in an existing loan, you might want to swap it with another Veteran. However, if you're selling your home and a non-Veteran is assuming the loan, you'll likely lose your entitlement. It's a complicated process, and the consequences vary depending on the circumstances. Loan Assumption Timelines One significant pitfall with VA assumption loans is the time it takes to complete the process. In ideal situations with knowledgeable lenders, it can take as little as 30 days. However, it's not uncommon for it to stretch out to eight months or even a year. Why? Because many lenders are more accustomed to processing purchase loans than assumptions. There's a lot more legal and risk assessment involved in loan assumptions. Get a competitive loan quote Today! The Complex Assumption Process Lenders need to be fully aware of the complexities of the assumption process. They must consider whether a new appraisal is needed to ensure the property's value. They also need to evaluate new credit reports and income of the assuming party. These additional steps slow down the process and often lead to delays. Financial Considerations for Buyers As a buyer, you need to be prepared for potential financial challenges when assuming a VA loan. If the loan amount is less than the purchase price, you'll be responsible for covering the difference. This difference can range from a few thousand dollars to hundreds of thousands. It's crucial to have a plan in place to secure this additional funding, such as a second lien, like a HELOC. However, finding a lender willing to take on such risks can be challenging. Beware of Misleading Marketing Many VA assumption loans are marketed as fantastic deals, but the reality is that they often don't make sense due to the complexities and risks involved. Be cautious and do your due diligence before diving into an assumption loan, whether you're a buyer or a seller. In conclusion, VA home loan assumptions can be a viable option, but they come with complexities that demand careful consideration. If you're not well-versed in the process, it's easy to get overwhelmed. Always seek advice from experts and thoroughly research your options before proceeding with a VA loan assumption.
- Don't let the FHA 100 Mile rule break your plans
FHA Loans are some of the most flexible loans available in the market today. They only require a 3.5% down payment and have common sense underwriting. However, if you are looking at an FHA loan and you already own a house and your desiring to borrow money to buy another house. This FHA guideline may come back to bite you… FHA insures loans, but does not guarantee them. Instead the FHA insures the lender in the event you do not make your mortgage payment. This insurance allows lenders to take a sense of risk they would not normally have taken on loans. FHA loans are the second most popular form of residential mortgages in America with the first being Conventional mortgages. While FHA is incredibly flexible with it's common sense underwriting and government backed insurance it is very sensitive to rental income situations in certain instances. Start with a no-obligation rate and cost quote now! Here is the problem with FHA Loans and rental property If you currently have a house, regardless of what type of loan you have on that house and you are looking to purchase a new primary residence. You need to be aware of the restrictions imposed on your income, particularly your rental income used to qualify. If you are planning on converting your departure residence into a source for rental income. You will need to ensure you are choosing the correct loan type if your two homes are within 100 miles of each other. FHA loans come with restrictions or extra rules that you need to consider and this is were things can become problematic. The FHA has a requirement that specifically states the new primary residence must be 100 miles away from the old departure residence. This means you cannot keep your house and then turn around and buy another one a few miles away using an FHA Loan for the acquisition of the new primary home. The two properties need to be 100 miles away from each other. If the properties are not 100 miles away from each other then you will not be able to count the rental income for the departing residence. Hence you would have to qualify with the additional debt of the departing residence monthly payment. Ready to get started? In such a scenario you would be much better off going with 5% down Conventional Loan to acquire a new primary home as the conventional financing does not have a 100-mile distance requirement. This would allow you to offset your departing residence monthly payment with up to 75% of the monthly rental income. Keep this in mind when you’re figuring out what you want to do with your home. Can you switch Loan Programs? In some cases, it might make sense to change loan programs or potentially even sell the departure property. Of course every ones situation is different and you will need to choose what is best for you. If you were to choose to sell your departing residence, then you could possible place a larger down payment on your new home and avoid the 100 mile FHA rule or switch to a conventional loan and possibly not have to pay a monthly mortgage insurance premium. These are things to consider when deciding what type of loan program and loan structure makes the most sense for you. This is also precisely why it always is generally a good rule of thumb to work with an experienced lender specifically familiar with the intricate details of FHA and Conventional loans. Hint that’s not an online lender. Looking for a quality lender? Start with a no-obligation rate and cost quote now!
- Big News on Assuming a VA Loan
If you are diving into the world of homeownership, particularly as a veteran or military member, VA Loans are an essential topic to understand. The VA Loan offers an array of benefits for our veterans and their families to include easier underwriting, lower interest rates, no mortgage insurance, and a higher closing ratio than any other loan type. Of course, VA Loans are also assumable. The concept of "assuming" a VA Loan might sound complicated, but with the right information, it becomes a clear path. Let's dive in and gain a better understanding. Ask a Knowledgeable Loan Officer Understanding VA Loans A VA Loan, backed by the U.S. Department of Veterans Affairs, offers unique benefits to qualified veterans, active-duty service members, and certain military spouses. One of its most notable advantages is often requiring zero down payment. This feature alone has helped countless veterans achieve the dream of home ownership since the loan program began in 1944. Today the VA Loan is responsible for creating the most diverse group of home owners, showing a reflection of our nation’s service members. The Mechanics of Assuming a VA Loan When you assume a loan, you're essentially taking on the mortgage of the current homeowner. If the property you're interested in is financed with a VA Loan, you can continue the mortgage payments under the same terms the original borrower had. The servicer will need to vet your ability to repay the mortgage before they agree to let the loan be assumed. Questions? Click Here Advantages of Assuming a VA Loan: Favorable Interest Rates: The original borrower might have secured their VA Loan when interest rates were particularly advantageous. By assuming the loan, you can benefit from these rates without needing to renegotiate. The advantages show directly in home ownership affordability. When assuming a loan at a lower interest rate, you can naturally qualify easier with lower debt to income ratios. Cost Efficiency: Assuming an existing loan may circumvent certain initiation fees and related costs of establishing a new mortgage. Servicers may have costs associated with assuming loans, but the cost is significantly lower than completely reprocessing a new mortgage. Need Help? Steps to Navigate a VA Loan Assumption Locate an Eligible Property: Seek properties where the existing owner has an assumable VA Loan. Any VA loan can be assumed, the trick will be finding a homeowner that is ready to sell their home and let a buyer assume their VA Loan. Lender Verification: The institution that provided the original VA Loan will conduct a thorough review of your financial credentials, including creditworthiness and income. Each institution will have different standards or requirements to allow a VA Loan assumption to occur. If the buyer does not meet the institution’s requirements, they can deny the loan assumption. Secure VA's Consent: Apart from the lender’s evaluation, the Department of Veterans Affairs must also sanction the loan assumption, ensuring all prerequisites are met. Negotiate the Financials: When assuming a loan, you inherit the mortgage's remaining balance. If the property's valuation has increased since its purchase, it's crucial to agree with the seller on addressing this price discrepancy. Often the buyers will need to bring a down payment to satisfy the difference between the home’s market price and the assumable loan amount. Finalize the Transaction: Upon approvals and final negotiations, you and the seller will formalize the assumption through legal contracts with the servicer, making you the new responsible party for the VA Loan. Are you Eligible to assume a VA Loan? Points of Consideration: Not every VA Loan on the market is available for assumption; eligibility often hinges on the loan's origination date. Assumption might involve certain fees. However, they are generally more economical than initiating a new mortgage. Securing the approval of both the lending institution and the VA is paramount. Without these approvals, potential complications can arise for both the buyer and the seller. Veterans may prefer to let another veteran assume their VA loan. This could ensure their VA entitlement would become free for a future purchase if they desire. Proper credit history, income verification and assets are still required when assuming a VA Loan. VA Loan assumptions do not require the property to be used as a primary residence, unless another veteran is replacing the entitlement with their own. Conclusion Assuming a VA Loan can be an advantageous endeavor for those aligned with its stipulations and benefits. By being informed and proactive, potential homeowners can harness this option to secure favorable loan terms. The journey to homeownership is multifaceted, and understanding the intricacies of VA Loan assumptions is an asset in this expedition.
- Is it bad that my mortgage keeps getting sold?
Does this really Happen? Imagine this: You went through the process of carefully comparing different mortgage lenders, making sure to choose the one that best suits your needs. But then, just after closing on your home, you receive a letter from a new company introducing themselves as your servicing provider. It can be quite unsettling, especially if you're a first-time homebuyer. You might start wondering if you did something wrong, if your lender is allowed to do this, or if your payment amount will suddenly change. Well, let me put your mind at ease and provide you with some information on what it really means when your mortgage is sold to another company. Why are mortgages sold? From your perspective as a borrower, it usually means that the servicing of your mortgage has been transferred to a new company, and you'll be sending your monthly payment to them instead. The way this happens can vary depending on the mortgage originator you initially worked with. Some mortgage originators don't actually service loans, so they sell your loan shortly after it's funded to a mortgage servicer. It's also not uncommon for your mortgage to be transferred from one mortgage servicer to another. Mortgage servicers earn fees for handling your account, and sometimes they decide to sell the rights to service your mortgage to another company. This has become a common practice and is often an option even for companies that claim to “Never sell your Loan”. Questions? Click Here Do you give Consent? You don't actually need to give your consent for your mortgage to be sold, and your loan can be sold multiple times. However, lenders are required to disclose whether your loan will be sold and how often they typically do so. You might be thinking, "This all sounds a bit scary!" But trust me, it really shouldn't be. The terms of your loan will stay the same, unless you have an Adjustable Rate Mortgage (ARM) or another type of adjustable loan. In those cases, your payment amounts might change. However, if you don't have an adjustable loan, your payments will only change if factors beyond the scope of your loan, such as mortgage insurance or property taxes, change. These changes can happen regardless of whether your loan is sold to another company. Curious who owns your mortgage? This is where things can get a bit confusing. The company that originated your loan or the servicer may not actually own your loan. Nowadays, most home loans are guaranteed or issued by government-chartered companies like Fannie Mae, Freddie Mac, or the FHA. These companies purchase loans from lenders to free up money so they can lend to other mortgage borrowers. But don't worry, as a borrower, you do have certain rights. Your current lender must provide you with a notice when your mortgage is sold. The new mortgage servicer must also notify you within 30 days of the transfer, providing you with their name, address, phone number, the date of transfer, and whether the transfer of ownership will be a public record. During the transfer of your loan, you have a 60-day grace period where you won't be charged a late fee if you accidentally send a payment to your previous mortgage lender. It's essential to carefully read the statement from your new mortgage servicer to ensure all the information is correct. If you spot any issues or errors, make sure to contact the new servicer right away. Questions about your Mortgage? Click Here The sale of your loan shouldn't cause any problems. However, there are a few common issues to watch out for. First, be sure to avoid any confusion by reading all correspondence from your new servicer and noting when you need to start making payments to them. If you have any questions about who, when, and how to make your payments, don't hesitate to reach out to them. Also, be aware that when your lender changes, you might lose certain features like online account access or paperless statements that not every provider offers. Lastly, if you're in the process of a loan modification or refinance when your loan is sold, you shouldn't have to start over with your new servicer. Just keep accurate records of what you've sent and received to avoid any issues due to the transfer. Pay attention to your mortgage. I know it can get a bit confusing at times, but the ability to sell loans helps lenders and servicers stay stable and profitable, which ultimately frees up more funds for homebuyers like you. If your loan is sold, stay proactive by asking questions and keeping your new payment information organized. Paying attention to this straightforward process will lead to a stress-free transition for you and your new mortgage servicer. I hope this information reassures you and helps you navigate the transition smoothly. Feel free to ask if you have any more questions or concerns. Good luck with your mortgage journey!
- Getting a Home Loan with Child Support or Alimony is Only as Difficult as You Make It
Separation or divorce is tough, and when kids are involved, things can get even trickier. Now, throw in the challenge of getting a home loan when you're getting alimony or child support. Let's break this down and look at a type of home loan called a Fannie Mae conventional loan. These are great loans to consider for just about any situation, but especially after a divorce. What's a Fannie Mae Conventional Loan? Think of Fannie Mae as the owner of the home loan. They will be the company that ultimately agrees to purchase your loan for secondary market purposes. There are other types too, like FHA, VA, and USDA. But each of these will handle alimony and child support money differently. That's where it can get a bit confusing and why we will only concentrate on Fannie Mae Conventional Loans today. How Fannie Mae Looks at Your Income When you're trying to get this type of loan, they look at: How long you'll continue to receive the money: You need papers, like a divorce paper, that show you'll continue receiving the child support or alimony. Sometimes, local laws can also be proof if you don’t have a document to prove continuation. But keep in mind you will still need to prove receipt of the funds for the documents / laws to be valid. Your past payments: They want to see you've gotten your child support or alimony for at least six months. You can show this with bank statements or checks. Income Calculation: Talk to someone who knows about taxes to see if you need to pay taxes on your alimony or child support. If you don't pay taxes on it then you may be able to “Gross up” the income! This means you may be able to count a qualifying income higher than your actually income depending the tax percentage you paid the previous year. Get a competitive loan quote Today! Working with a Smart Loan Person It's super important to have someone who knows the separate guidelines when computing income for “nontaxable income”. A loan officer that is not knowledgeable or at least knows where to find the knowledge may miss key factors in computing your income. Each of the programs mentioned earlier will have varying calculations and one may support your needs more than another. Knowing the rules for all the guidelines is essential to providing you the best support. Need to speak with a Mortgage Expert? Click Here. How Divorce Changes Things Getting a divorce can shake up your plans for homeownership. With separating of assets and changing of your financial situation, getting a new house might seem out of reach. Plus, alimony and child support can make things even more confusing when it comes to calculating future incomes. Alimony and Getting a Loan Alimony is a set amount of funds one spouse gives the other as support. Typically known as spousal support, this money comes from the higher earning spouse and goes to the lower earner to offset the difference created from the divorce. It’s important to note not all divorces will result in either spouse receiving alimony. To count alimony when getting a home loan, you need: Documents that show the payment details. (Amount, Length and Ending terms) Proof you’ve gotten alimony for six months. Proof you’ll keep getting it for at least three more years. Child Support and Getting a Loan Child support, like alimony, are funds given to help with child expenses. You can count it when getting a loan if you have: Documents detailing the payment terms of child support. Proof you have received it for at least six months. Proof you will continue receiving child support for at least three more years. Do you have Questions? Click Here. Tips for Getting Your Loan with Alimony or Child Support Be organized: Keep all your documents showing a history of child support and alimony. Any documents that go over the terms and agreements of the reported income. Keep your credit good: Pay bills on time, keep credit card utilization low, create a lengthy history of credit and keep track of your credit score. Knowing what affects your credit score and how to keep it in good standing will prove worthwhile. Plan for money changes: Divorces can be difficult emotionally and financially. Establishing a plan for making future expenses will help you navigate the changes a divorce may bring. Look at all loan choices: Keep in mind every ones situation is different and the loan program that worked best for your friend, family member or whoever… may not be the best plan for your situation. Different loans have different rules. Check them all out to see which one fits your situation best. Find a the right loan officer: This person will be your guide, so find someone who knows about alimony and child support. This person must have the knowledge and/or ability to find the correct loan program for your needs. In Conclusion It might feel tricky to get a home loan when you have child support or alimony. But if you stay on top of things, have a good credit score, and find a great loan guide, you'll be closer to getting that home. And if you're ever unsure, don't be afraid to start asking questions early in the process. It doesn’t matter if you are a year or 2 years away from purchasing a home, It’s always best to understand your own situation and how it will affect your options for buying a home. Always aim for the best choice for your future!
- The Ultimate Homebuying Guide: Navigating Your First Purchase Like a Pro
Embarking on the journey to homeownership is exhilarating and fraught with potential pitfalls, particularly for first-time homebuyers. I break down some of the key missteps and misconceptions that novice buyers frequently encounter in their pursuit of the perfect home. The Critical Importance of Pre-Approval in Your Home-Buying Journey An all-too-common mistake is the act of browsing and considering homes before understanding what you can feasibly afford. This oversight often originates from confusing pre-qualification with pre-approval. The former is an initial, often verbal, review of your financial status, while pre-approval is a comprehensive assessment that examines your bank statements, pay stubs, and credit reports, ultimately providing you with a realistic budget for your home search. The distinction between pre-qualification and pre-approval is not merely semantic. In the high-stakes world of homebuying, having a pre-approval under your belt conveys seriousness and preparedness to sellers, potentially giving you an edge in competitive markets. Honesty: Your Best Ally in Securing a Home Loan When engaging with lending institutions, transparency, and honesty in providing your financial details are paramount. Any discrepancy, intentional or otherwise, can create hurdles, potentially reducing your pre-approval amount or affecting the integrity of your application. A candid relationship with your lender will ensure an accurate assessment of your purchasing power, fostering a smoother transaction process. Navigating Career Changes During the Home Buying Process Aiming to enhance your financial or lifestyle situation through job changes is commendable but can inadvertently complicate your home buying journey. An alteration in your employment status or compensation model can impact your loan qualification status, even if your income remains constant. Keeping the communication channels open and consulting with your lending advisor before making such changes can help mitigate any negative repercussions. Busting the Myth of the 20% Down Payment The misbelief that a 20% down payment is obligatory can deter many potential buyers. There are varied programs that facilitate homeownership with reduced or even zero down payment, depending on your circumstances and the area in which you’re purchasing. Jerry Holland emphasizes that while larger down payments can reduce your monthly outlay, they are not a strict prerequisite to homeownership. Navigating the Sea of External Advice While loved ones may offer advice with the best intentions, it’s crucial to discern between well-meaning guidance and expert advice in the domain of home buying. The housing market is influenced by an array of factors, including supply and demand, job reports, and broader economic indicators. Your professional team, comprised of your lender and real estate agent, is tuned into these dynamics, ensuring you make informed decisions based on accurate and current market insights. Protecting Your Interests with a Dedicated Real Estate Agent Engaging with sellers or builders without your own representation could jeopardize your interests. The seller’s agent inherently possesses a fiduciary responsibility towards the seller, which might conflict with your interests. Securing your own real estate agent, whose services are typically paid for by the seller, ensures your interests are safeguarded throughout the transaction. The Significance of Mortgage Contingencies Mortgage contingencies, or backout clauses, are another area where homebuyers may inadvertently stumble. These contingencies, which can pertain to inspections, appraisals, and due diligence, act as protective mechanisms, providing you with legitimate means to renegotiate or withdraw from a deal should unexpected issues arise. Waiving these contingencies may expose you to considerable risk and should generally be approached with caution and in consultation with your real estate agent. Navigating the multifaceted world of homebuying necessitates astute understanding, transparent communication, and a team of experienced professionals to guide you through each step. If you’re embarking on this journey, New Point Lending is poised to assist, ensuring that your path to homeownership is smooth, informed, and ultimately successful. For more insights and assistance, reach out at NewPointLending.com.
- Mortgages, Gig Work and the Modern Lifestyle
A Guide to Navigating Non-Traditional Income Paths (Gig work) Today, we're going to tackle a modern challenge: how to make non-traditional income streams count when trying to secure a mortgage. Whether you’re working part-time gigs, diving into the ever-evolving gig economy, or engaging in seasonal work, this article's got your back. Decoding the Income Jigsaw Puzzle Before diving deep, let's break down the types of income we're talking about: Part-Time Job: These aren't your regular 9-5s. They offer fewer hours, and while they might not be your main gig, they're still significant. Gig Job: Here, we're talking about roles like being a Lyft driver, managing a bustling Etsy shop, or even taking photographs on the side. Secondary Employment: Are you juggling two jobs at once? Then this is where you fall. It may not be a full time second job, but it is consistent and needed. Seasonal Work: This is for those who have jobs related to particular seasons, like ski instructors in winter or lifeguards in summer. Understanding Mortgage Heavyweights There are five big names in mortgages to familiarize yourself with: Fannie Mae, Freddie Mac, FHA, VA, and USDA. They each have their rulebook. Knowing their views on non-traditional incomes is your secret weapon. Although each are similar, they are also different in how they treat or evaluate your extra income. Diving Deeper into Fannie Mae's Perspective While Fannie Mae is just one of the big mortgage agencies, understanding its criteria can give you a clearer picture: They like consistency. So, a two-year record of your part-time or secondary job is a good sign. The fewer gaps in employment, the better. Try to have no work breaks longer than 30 days in the past year. Multiple employers are okay as long as you've been continuously working. If your part-time role complements your full-time one, that's a gold star for you. Sometimes, they can be flexible. A 12-24 month work history might work if other factors are in your favor. Freddie Mac, FHA, VA & USDA - How They Fit In Each of these agencies has its nuances. For the nitty-gritty, I recommend checking out our detailed video. But a common thread across them all? They value stability and reliability. Behind the Scenes: Underwriters & Lenders Mortgages are not just about checking the right boxes. Underwriters, those who decide on your mortgage approval, take a lot into consideration. Their judgment plays a big role into issuing your approval, but they will use guidelines from each of the five loan programs to evaluate things like your credit score, job stability, credit history, monies in reserves and banking history. If an underwriter fails to make the right decision and approves a loan that should not have been approved, they could receive a poor remark on their chums report and possible be let go by the lender. Additionally, individual lenders might add their own layers of requirements. Known as lender overlays, these can be stricter than standard guidelines. Lenders will do this to ensure they stay within good standing with their investors and the agencies that will purchase the your loan once it closes. Higher standards means it is less likely the lender will need to purchase the loan back from an agency should it fail the agencies audit test. Golden Nuggets to Keep Handy Remember, each lender is unique and is willing to accept more or less risk. What works for one might not for another. Don't be caught off guard by lender-specific rules. Always, always reach out for guidance when in doubt. The mortgage world can be a confusing place, but with the right map and guide, you'll find your way. Securing a mortgage with unconventional income sources might feel like an uphill battle, but with the right knowledge and strategy, it's absolutely achievable. Stay informed, gather your documents, and never hesitate to ask questions. Your dream home is closer than you think!
- The Looming Financial Pressure of Restarting Student Loan Payments and How to Navigate It
Student Loan Payments – The Impending Storm For countless Americans, the pause on federal student loan payments was a welcome respite from mounting financial pressures. This relief, granted by the CARES Act in March 2020, had a profound impact on personal finances. However, as we approach August 29, 2023, this temporary moratorium officially ends. The ramifications? From September 1, 2023, interests on these loans will once again accumulate, with the first payments due in October. The resumption of these payments may bring about financial turbulence for many households, especially when considering their other monthly debts. The Implication for Homeowners If you own a home, you're already familiar with the intricate dance of balancing various expenses - mortgages, maintenance, utilities, and the likes. The reintroduction of student loan payments might feel like an unwelcome guest at this already crowded party. Worse yet, if your student loans are in default, there are real risks of wage garnishment and possible tax refund offsets. It's a grim picture, but all is not lost. The SAVE Plan – Income-Based Payments As the storm clouds gather, there is a beacon of hope for those feeling the strain. It's possible to make your student loan payments more manageable. The solution? Tailoring your payments to your current income through repayment schemes like the recently launched SAVE Plan. Here’s what the SAVE Plan offers: Payments anchored to your income, potentially reducing monthly amounts. A more inclusive income threshold, ensuring a larger pool of beneficiaries. A protective “grace period” ensuring any delinquency isn’t immediately reported to credit bureaus. And a bonus piece of information: You might be a candidate for a student loan forgiveness scheme you didn’t even realize existed. Private Student Loan Consolidation Warning A word of caution in these turbulent times: Not every institution or company you encounter is genuinely rooting for you. Some might lure you into consolidating your federal student loan into private loans. This shift might sound attractive, but it strips away the numerous benefits and protections associated with federal programs. Transitioning to a private student loan implies waving goodbye to the prospects of income-based repayments or federal loan forgiveness initiatives. It’s clear who stands to gain in this transaction – and it's certainly not the borrower. Your Financial Health and Well-being With the varied pressures homeowners face, from credit card bills to fluctuating interest rates, the resumption of student loan payments can feel like the proverbial straw that broke the camel's back. But remember: your financial journey is unique, and so, there are tailor-made solutions for your distinct situation. This isn't a journey you need to undertake alone. Income-Based Payment – Taking Proactive Measures While the evolving financial landscape can be unnerving, with the right guidance and strategies, brighter days are ahead. By seeking advice and being proactive, we can not only weather this financial tempest but emerge stronger. So, let's chart this course together. Navigate the complexities, explore options, and ensure that your family’s financial foundation remains robust. In these unpredictable times, some peace of mind goes a long way. Are you facing challenges with your student loan payments? Let’s traverse this journey hand in hand. Reach out, and together, we’ll find the best route for you.