Gene's Bit of Blogging
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Gene Mundt, Sr. V.P./ Mortgage Lender - The Federal Savings Bank: Posted on Wednesday, April 18, 2012 2:06 PM
New Changes to Mortgage Rules
and Regulations Don't Have to be
This Summer's "Beanball" and Knock Buyers Out of Their Home Buying Game
 The ever evolving mortgage business requires an expertise and personal commitment by its professionals to provide excellence in service and quality, not to mention results. And part of that commitment includes education and the imparting of knowledge to the public, their clients, and referral partners to industry guidelines and changes to those guidelines.
A recent announcement from HUD, on the processing of those loans intended to be insured with an FHA loan, indicates that further credit tightening is warranted when a Borrower owes more than $1,000 in bills in collection.
In the past, an Underwriter could use discretion and approve such credit scenarios. Now, that is no longer the case ... and that scenario is NOT approvable. Now a Borrower MUST pay-off that debt to qualify, or at minimum, have established a sufficient past history of paying back their creditors on a monthly basis, if not in full. And that includes medical collections, an area where some leniency was also applied in the past.
Now debate may rage about the intelligence or need for this new HUD decision, but the debate changes nothing. The bottom line is: This new ruling is in effect. And that means further education of the home buying public is absolutely necessary regarding it at this time, for it WILL impact Buyers who:
- Have the required minimum Credit Score, but have outstanding, past due collection accounts.
- Do NOT have the funds needed to pay-off debts/collections in their entirety ... but still have the necessary savings for Down Payment and Closing Costs.
The above just points out one more huge reason we in the real estate industry need to educate the public about the home buying and mortgage process better ... and the importance of getting ALL Home Buyers, not just some ... "pre-approved" for their purchase and/or mortgage financing (sooner than later)!
 So Buyers, please take note: This new ruling recently "pitched" at us by HUD does NOT mean your "beaned" and out of your home buying game. It just means this ...
Since HUD is stating that a 3 month payment history, or longer, is needed to approve a scenario with Collections totaling $1,000 or higher ... if you're looking to buy a home in a projected time frame of 6 months from this date, you should absolutely get "pre-approved" NOW!
If you're hoping to become a home buyer, contact me (or your own lender). Take action to stay in the game! Don't hesitate or wait any longer. It's
best to start the "pre-approval" and mortgage financing process
earlier than later. Give yourself, and your mortgage lender, the time to work-out any
credit issues that might be present ... and start collecting the financial
information and documentation needed for mortgage application.
If an agent/broker, pass
this advice on to ALL your potential buyers and everyone else you know so they too can pass it on. Educate as many as possible to these new changes. Save
home buyers, and yourself, the disappointment of starting the home buying and "pre-approval" process "too
late".
As a matter of policy, it is my opinion that it is extremely important that ALL home
buyers talk with a mortgage lender to be "pre-approved". That this should
be established as a priority and absolute necessity.
Home Buyers should know, and respect, the
fact that Agents/Brokers invest much time, effort, and dollars into
their services and those receiving them ... and respect that fact.
These facts together dictate that (in the over-riding cases) ALL Home
Buyers be "pre-approved" prior to their Agent showing them homes.
In the long-run, Buyers are much better served adhering to a "pre-approval" rule.
There are fewer surprises and last-minute issues to see to once actual
mortgage processing begins. The entire process will run more smoothly
and be more enjoyable.
HUD, and other governmental agencies, can "pitch" us new rules and regulations now and in the future ... but it does NOT mean
they have to be "bean balls", knock Buyers out, or keep them from buying a home.
Good, complete
preparation by Home Buyers, their Mortgage Lender, and all their real estate professionals, can mean
these changes are addressed and handled fully to the satisfaction of HUD. Successful home buying and Mortgage Closings can be a result ...
* Get the professional mortgage information and service you need to buy your home, whether in Will County, IL, Chicago, Chicagoland, or across the U.S. in any of the 50 states. Work with a "big league"
mortgage professional that knows and understands how to guide and
assist you through today's challenging mortgage processing and home buying experience. Contact me today! I'll be glad to hear from you and happy to have the opportunity to earn and win your trust and business. I can be contacted through any of the following:
Direct: 815.277.4036 Cell/Text: 708.921.6331
Conveniently at Skype: 630.219.1316
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Buying a Home, Credit Reports/Fico Scores, Mortgage Banker, Mortgages, Real Estate, Working with a Mortgage Professional, Credit and Financial Counseling, Mortgage & Transaction Processing, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Debt, Education, Asking credit and mortgage questions, Home Buyers, home buying, FHA Mortgage Lending, Closing Costs, Pre-Qualification/Pre-Approval, HUD
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Gene Mundt, Mortgage Lender: Posted on Wednesday, March 14, 2012 10:45 AM
Timely and Important Mortgage Information for Those Wanting to Buy a Home
 Carra Riley was such a great hostess during this interview. She knew exactly what home buyers want and need to know when entering the housing market and asked great questions.
She guided us through important details and timely financing topics ... topics and info that will help listeners navigate ... or "connect the dots" when buying a home and obtaining a mortgage.
I think you will find the information available of great assistance ... whether you are a first-time home buyer, someone refinancing, a move-up buyer, investor ... or an agent hoping to pass-on something of informational value to your clients.
If a question you have is not covered within this interview ... or if you are in need of mortgage guidance or assistance ... please do not hesitate to contact me. I'll be happy to hear from you, answer your questions, and assist you with your needs.
Thanks for listening. I look forward to connecting with you soon ...
Gene
Just "click" and listen!
I can be contacted through any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Email: gmundt@thefederalsavingsbank.com Skype: 630.219.1316
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Buying a Home, Credit Reports/Fico Scores, Importance of Credit, Mortgages, Refinance, Working with a Mortgage Professional, Condos and Townhomes, Gene Mundt's Client Services, First-Time HomeBuyers, Buying or Renting, Debt, Mortgage Closing Costs, Asking credit and mortgage questions, home buying, FHA Approval for Mortgage Lending, FHA Financing for Condominiums, FHA Mortgage Lending, Down Payment, Mortgage Costs, Closing Costs, Interest Rates, Pre-Qualification/Pre-Approval, Interest Rate Lock-In, Co-Signing Mortgages
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Gene Mundt, Mortgage Lender: Posted on Thursday, March 01, 2012 6:10 PM
How to Best Prepare Your
Credit and Financial Position BEFORE Beginning a Home Search Part 2
 Yesterday, I wrote Part 1 to this post. In that portion of this blog, I covered WHY it's important to Plan and Prepare for your home buying/mortgage financing well in advance to actually seeking your mortgage pre-approval or home search.
I also explained and listed what credit/debt, financial documents, and information you will need to gather and then supply to me/your lender when you reach that stage of seeking your mortgage pre-approval.
In this, Part 2 of my continuing blog, I reiterate the importance of adhering to the guidelines provided, especially if you're a first-time home buyer, never having been through the home buying/mortgage financing process before.
Following this pro-active guideline WILL improve anyone's home buying and mortgage financing experience ... streamlining it and enhancing the likelihood of your receiving better interest rates (saving money), more and better mortgage options to choose from, and a less-stressful/more successful mortgage processing.
So after collecting those things listed in Part 1 of this post, what's next?
Credit
- Always Remember: Call/Contact your Mortgage Lender, if you need ANY advice. If considering a purchase in the next 90 days, or in the next year (if you have credit issues especially,) contact me/your mortgage lender for a FREE tri-merge credit report. Find out just what/where you stand credit-wise, then take action!
- Manage your credit cards, making sure ALL balances are kept BELOW the maximum credit available (at worst), and below 10% of the limit (ideally).
- Know the ABC's of your TOTAL debt, from the following criteria:
 - Mortgages (Know the name and address of the Lender, Amount Still Owed, and Your Monthly Payment Amount)
- Home Equity Lines (Again, Know the name and address of the Lender(s), Amount(s) Still Owed, and Your Monthly Payment Amount(s).
- Student Loans (Again, Know the name and address of the Lender(s), Amount(s) Still Owed, and Your Monthly Payment Amount(s).
- Auto Loans (And finally, the same as above. Name, Address(es), Amounts Owed, and Monthly Payments)
- Installment Loans (Meaning: Boat financing, Recreation Vehicles, Motorcycles, Secured Loans, etc.)
- Credit Cards of ALL Types (Know who holds/offers the Card, Account Number(s), What is the Outstanding Balance on Each, and the Minimum Monthly Payment of Each)
Attending to the above IN ADVANCE of entering the mortgage pre-approval process or home search, negotiating a Real Estate Contract, and getting your loan documents together ... not to mention the home inspection process, finding a Real Estate attorney, and shopping for the Homeowners Insurance ... can make your life much easier and eliminate many of the stresses of home buying and financing.
Following these guidelines, can also be the difference between a smooth mortgage approval process ... and failure to be approved for the loan you need.
Invest in yourself and your future. Spend the time needed to get organized. Give yourself the time needed to polish-up those credit scores to the best they can be. Be prepared!
Successfully do the things I suggest above and in Part 1 of this blog ... and you can thank me when we talk about the financing for that new home you're dreaming of ...
* Contact me with your credit and mortgage financing questions and needs. Whether in Chicago, Chicagoland, or across any of the 50 states, I can help. With 35 years of mortgage experience and expertise, I can answer your questions, and assist and guide you successfully throughout your credit enhancement and mortgage process ... and into becoming a new home buyer. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331
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Credit, Credit Repair, Buying a Home, Credit Reports/Fico Scores, Mortgage Lender, Mortgages, Mortgage & Transaction Processing, First-Time HomeBuyers, Choosing a Mortgage Lender, Debt, Asking credit and mortgage questions, Seeking Advice, Home Buyers, home buying, Pre-Qualification/Pre-Approval
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Gene Mundt, Sr. Vice President - The Federal Savings Bank: Posted on Saturday, February 25, 2012 9:51 AM
Considering Helping Your Child
Buy a Home? What Parents and/or Co-Signors Need to Know
 Within the current housing market, there is great opportunity to be found, especially if you're a first-time home buyer. Home prices are down ... lower than they have been for almost an entire decade. And Interest Rates?? The cost of borrowing, in regards to Interest Rates, is at historic lows ... truly a gift, should you be able to take advantage of them.
With all the positive opportunities that exist, many buyers, along with their families, are looking for ways to take advantage of these current positives by buying properties with the assistance of Co-Buyers/Co-Signors. Most considering this path to home ownership are parents and/or relatives.
As a mortgage lender, it is not uncommon for me to receive questions regarding this method of home buying. "Co-Signing" is happening more and more often. In mortgage terms, this method of buying/borrowing is called being a "Co-Mortgagor" ... a fancy term for "another borrower".
This practice is typically utilized when the "non-occupying" Co-Borrower (let's just say a parent) is the stronger applicant on a mortgage ... and his/her income, credit, and assets make for an approvable loan when the "main borrower/buyer" is not able to qualify for a mortgage on their own. Put another way, the child in this scenario is buying their first home, often has adequate credit ... but lacks the job history or income to qualify on their own.
Considering the (child's) parent's income and credit and debt, makes the loan approvable because the parents' "vitals" help the numbers ... meaning the debt-to-income ratios ... needed to reach the approval level. With FHA, the down payment requirement is only 3.5%, and the Borrower (who MUSToccupy the purchase residence) gets as good of Interest Rate as if they had borrowered on the mortgage alone.
Obviously this is great for the son/daughter, but what about the "Co-Signor, Co-Mortgagor, Parent" involved? The fact is, they will share the same debt and note responsibility as the main applicant. That debt/responsibility will appear on their credit report as their mortgage obligation. If the child misses a payment, the parents (Co-Signors/Co-Mortgagors) credit report will show as having a late payment. A very valid reason for all parties involved to give this great consideration prior to agreeing to start the mortgage process.
 Consider this tho ... Co-Signors/Co-Mortgagors (in my most recent Co-Signor/Co-Mortgagor case) were considering buying a home on their child's behalf, because they didn't think the child could qualify on their own. These parents were fully-prepared to put forward a 20-25% down payment, purchase the home in their own names, and then move the child in as a tenant. The ability to become Co-Signors/Co-Mortgagors changed the financial scenario they received significantly for them and their child.
How did it change? What are the differences to be found within the two methods of home buying?
The biggest difference is in how the bank perceived their upcoming ownership. Parents that just buy a property outright and rent it to their child are considered investors by the bank lending money. Investors pay higher interest rates to borrow money (typically a minimum of 3/4%) ... and/or their Closing Costs rise several thousand dollars. Why? Because the bank considers this type of loan a higher RISK because of the "occupancy" status of the property.
Now you know a bit about the ins-and-outs of Co-Signing/Co-Mortgaging. But if you're a parent, or someone considering Co-Signing/Co-Mortgaging, you're going to need to know ... where and how do you start the process? What financial documentation will be expected from you? What funds will be subject to verification?
Much of the process of mortgage financing will be the same for Co-Signors/Co-Mortgagors as for the actual resident(s) of the property. A handy list of those financial documents needed for mortgage application can be found via my website, by clicking ... "HERE".
What is probably the most common concern or question I hear from Co-Signors/Co-Mortgagors (parents), is ... "How has the mortgage process changed since I last participated in it"?
There is no denying the truth. For a great many parents the mortgage process will be unrecognizable from their own prior financing experiences. And admittedly, the requests for documentation and verification will seem a bit overwhelming.
But documentation and verification is what is required to move the modern mortgage process along to successful completion. Underwriters and end-lenders will not be deterred from it. Co-Signors/Co-Mortgagors must be prepared to have monies/accounts/downpayments verified, along with their employment, credit/debt, and more, just as their child will.
Now, more than ever, the mortgage process itself is specific to those borrowers taking part in it ... so individual and personalized instructions regarding your financial scenario will be provided by your mortgage lender. Listen. Learn. Comply.
If you do so, those requests are completed in a timely fashion, and the lender's instructions are followed, Co-Signors/Co-Mortgagors can help their child successfully establish credit, obtain historically low interest rates, and buy a home at very friendly housing prices.
Should this be a financial step you are considering within your own family ... contact me, or your own mortgage professional, to obtain information specific to your needs.
Becoming a Co-Signor/Co-Mortgagor for your child could be the gift that sets them down the path to a healthy financial future.
* For personalized mortgage information and service regarding your family's Co-Signor/Co-Mortgagor options in Chicago, Chicagoland, or across the nation, please contact me. I will put my 35 years of mortgage experience and expertise to work on your family's behalf. I can be contacted through any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Credit, Buying a Home, Credit Reports/Fico Scores, Mortgages, Chicagoland, DuPage County, Will County, First-Time HomeBuyers, Families, Debt, Mortgage Closing Costs, Asking credit and mortgage questions, Home Buyers, Children, home buying, Right Time to Buy a Home, FHA Mortgage Lending, Down Payment, Mortgage Costs, Closing Costs, Interest Rates, Pre-Qualification/Pre-Approval, Baby Boomers, Co-Signing Mortgages, Parents/Relatives Assisting with Down Payment/Home Buying
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Gene Mundt, Sr. Vice President - Chicago Bancorp: Posted on Wednesday, January 11, 2012 11:09 AM
Twinkies .. Ding Dongs .. Ho-Ho's in Bankruptcy! Say it ain't so ...
What a perfectly horrid way for me, a known "sweet-a-holic" to start the day ...
Can sweat-inducing fear get any more close, real, or personal than that???
Yep, it's true folks. Twinkies ... a favorite from your childhood ... the cute, puffy little cake-like sweet with a creme-filled middle ... that rumor has it could survive a nuclear blast ... that's been produced for over 80 years ... could not survive the current recession.
Hostess, the maker of these sweet treats, blames their demise on many things. Some of which are competition (are you kidding me??? Twinkies have no competition!) and rising labor costs and issues. Now the labor issues I believe and understand!
Do not fear, however. Baking and distribution of your favorite guilty pleasures will not cease. A group of lenders has come together to save the day.
So see? We lenders are not ALL bad ... We saved Twinkies!!
And Who could possibly imagine a world without Twinkies??
* If I can assist you with your personal credit, financial, or mortgage concerns and fears ... please ... do not hesitate to contact me. My 35 years of mortgage lending experience and expertise will calm you and guide you through whatever concerns you have or on to a successful mortgage transaction. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316 |
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