Gene's Bit of Blogging
Mortgage Closing Costs
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Gene Mundt, Mortgage Lender: Posted on Thursday, March 22, 2012 12:40 PM
It is said ...
Times change, people change, situations change, relationships change ...
The only thing constant is change.
Author unknown
Yes, change is inevitable. That is true ... but I personally believe, that HOW you react to that inevitable change is what is important. It can be your defining factor moving forward.
And if any business industry has seen and had to endure change over the past few years, it's certainly been the real estate industry. Change has been radical and constant.
More change is coming. We have to look no further than April 9th, 2012 to experience that change too. That's the day that upfront costs for FHA Mortgage Insurance will go from 1.0% to 1.75% (on most all scenarios).
Buyers/Borrowers and Real Estate Professionals alike can be upset or complain about this upcoming change, but it won't stop it from happening. Perhaps then a positive outlook ... a "lemon into lemonade" outlook ... is the one we should tackle this change with? What I mean is this ...
Good news can still be found, even taking this upcoming change into consideration. It's not the end of the world. Rates have remained low for a long time and it appears that they will remain low a good while longer.
Now that is NOT to say that we won't see some increase, but rates should remain advantageous. And don't overlook that there IS still time for action prior to this FHA Mortgage Insurance change coming.
A Buyer still has time to find a property, get it under contract, APPLY FOR MORTGAGE through April 8th and avoid the higher fees. That means if you're a Buyer that has already begun the home buying process, this post serves as an "Alert to Action". Get Moving!!
If you're an Agent, you've still got the time and opportunity to communicate with Buyers in your pipeline that are close to taking some action. Let this news serve as a catalyst. All is not lost!
I've put together an illustration (below) of the realities, pros, and cons regarding the upcoming FHA Mortgage Insurance changes coming on April 9th. Utilizing real numbers, I hope to clearly demonstrate what a Buyer's mortgage payment will be PRIOR to the upcoming changes .. and then after them.
| Current | Proposed | Loan Amount = $200,000 |
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| Interest Rate = 3.75% |
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| Current Cost of Upfront Mortgage Insurance * | $2,000.00 | $3,500.00 | Current Monthly Payment for Mortgage Insurance * | $193.58 | $211.98 | Total Payment (Excluding Taxes/Hazard Insurance) | $1,129.07 | $1,154.42 | Change (Increase) in Payments | $25.35 |
| LOSS of Buying Power | $5,500.00 |
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In most cases, a $5,500 reduction in a Buyer's approval price CAN be overcome. And consider this ...
In the scope of things, THIS change ... an increase in FHA Mortgage Insurance costs ... still remains a better option than no FHA-insured loans at all. April 9th will come and go ... and it will not be the end of the world. Working together, we'll overcome it.
* Work with a professional mortgage lender with 35 years of successful lending experience from which to draw upon to benefit you and your finances. Contact me today, so YOU can take advantage of every financing and financial option available to you. I'll be glad to hear from you ... and have the opportunity to earn your business. 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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Financing, Mortgages, Refinance, Announcements and News, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Mortgage Closing Costs, home buying, Right Time to Buy a Home, Clients, Mortgage Costs, Closing Costs, Interest Rates, Pre-Qualification/Pre-Approval, FHA Mortgage Insurance
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Gene Mundt, Mortgage Lender: Posted on Monday, March 19, 2012 5:52 PM
Experience Your Own Home Buying "March Madness"  Ever try to guess when the best day of the week is to buy gas for the car? Ever try to predict the stock market? Second-guess Presidential primary winners? How about NCAA "March Madness" Tournament winners?
I bring this up, not only because the season of "March Madness" is upon us, and guessing "winners" of any kind is currently on a lot of people's minds ... but because I'm hearing lots of questions from clients regarding the timing of locking interest rates.
And although I agree that guessing the winner of primaries, the NCAA tournament, etc., can be fun and rewarding ... and I also believe securing a great interest rate is of importance ...
I also think that:
If all the positives currently available in housing and mortgage financing aren't enough to get you off that home buying fence and in the game now ... there is most likely something else contributing to your NON-decision to buy.
If: - The current interest rates for a 30-year fixed-rate mortgage (4% +/-) don't get you off the bench ...
- A 15-year fixed-rate mortgage (3% to 3.5% range) doesn't make you lace-up your home buying high-tops ...
- Or your not hearing the roar of the crowd cheering "ARMs!!" ... (under 3.5%), "FHA!!" (3.5% down) ... or other special financing programs attributes ...
It's time to go back to the clipboard, re-examine your game plan, and reflect intently.
Also consider this. Taking your home buying game into overtime now may cost you more money when you finally buy too.  In the last week alone ...interest rates went up a 1/4% ... and ... for the same interest rate quoted prior to that increase ... a borrower will have to pay 1 "point" (1% of their loan amount) as additional Closing Costs. (See my article regarding mortgage "points") A 1 "point" increase in costs?? Oooooo ... Foul! Somebody blow the whistle!! Penalty!
Listen up if you're considering entering the home buying market. My message is a timely one. The NCAA isn't the only thing experiencing "March Madness". These are the current "stats" being found in many March 2012 housing markets and present financing terms ...
Approvable Credit
+ Stable Employment
+ Great Interest Rates + Fantastic Housing Prices + Attractive Down Payment Requirements ='s A Winning and Happy Home Buyer!
Don't focus so intently on only one aspect of your mortgage financing game, that you're blinded or unintentionally "double-dribble" on another.
Find a professional and experienced big league home buying "coach" (your mortgage lender). Ask them questions, including, "If I postpone buying a home now ... how long will it take me to regain the monthly interest rate savings I will pay/lose in EXTRA "point" fees at my Closing later? What's my financial tipping point? When is it a "losing" proposition for me to wait further to buy?"
My suggestion is this. The time to prepare and enter the game is now, if you want to buy a home and your credit and finances are in good shape. This is especially true in many housing markets where they currently are returning to pre-recession good health.
Don't let the opportunity to take part in the winner's bracket slip away. Surround yourself with skilled team members. Expect to work a little at this game. Grab your gear. Sharpen your focus ... and your home buying elbows.
Do all this, and YOU will be a "March Madness" winner!
* Work with a team player with the skills and knowledge to guide you to the winner's circle in all 50 states. Contact me today. I'll put my 35 years of experience and expertise to work on your behalf. I can be contacted at any of the following: Direct: 815.277.4036 Cell/Text: 708.921.6331 Skype: 630.219.1316
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Buying a Home, Credit Reports/Fico Scores, Mortgages, Mortgage & Transaction Processing, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Mortgage Closing Costs, Asking credit and mortgage questions, Seeking Advice, Home Buyers, home buying, Right Time to Buy a Home, Home Ownership, Down Payment, Mortgage Costs, Closing Costs
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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, 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, Mortgage Lender - The Federal Savings Bank: Posted on Wednesday, February 22, 2012 3:49 PM
"Connecting the Mortgage Dots in Today's
Real Estate Market"
Carra Riley, Cosmic Cow Pie, and
Gene Mundt, Mortgage Lender Answer
YOUR Mortgage/Credit Questions
Looking for answers to your mortgage/credit questions?
Together, Carra and I will be discussing and answering mortgage questions, such as:
As someone with 35 years of mortgage experience, an
in-depth, multi-decades background as a licensed real estate appraiser, and as
a Certified Financial Planner, I have the extensive knowledge and expertise
needed to answer the questions you have ... and also provide the services you
need in Chicagoland and across the entire U.S.
 It's easy to take part in this Cosmic Cow Pie session. Just dial (347) 994.1903 and ask us your
questions! If you can't join us during
the live blogtalkradio program, you can listen to a replay of this program at
any time. Just go to Carra Riley's
Cosmic Cow Pie blogtalkradio site and "click" to listen at your
convenience.
I can always answer your mortgage and credit questions at a
more convenient time for you through any of the following means: Direct: 815.277.4036 Cell/Text:
708.921.6331 Skype: 630.219.1316
See you then!
For more Cosmic Cow Pie and Carra Riley's insights ...
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Credit, Credit Repair, Buying a Home, Credit Reports/Fico Scores, Mortgages, Refinance, Working with a Mortgage Professional, Appraisals, Condos and Townhomes, Announcements and News, Gene Mundt's Client Services, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Asset-Based Lending Program, Mortgage Closing Costs, home buying, Right Time to Buy a Home, Investors and Investments, HARP 2.0, FHA Approval for Mortgage Lending, FHA Mortgage Lending, Down Payment, Mortgage Costs, Closing Costs, Interest Rates, The Federal Savings Bank
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