Gene's Bit of Blogging
Obtaining Mortgage Quotes, Pre-Approvals, & Info
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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 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 - 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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Gene Mundt, Mortgage Lender - Chicago Bancorp: Posted on Friday, February 17, 2012 11:35 AM
What's Your Point?? Nawwwww ... Not THAT Point!
A great scene, isn't it? But it's not those "points" I'm going to talk about in this blog. No, I'm talking the "points" referred to when discussing mortgage costs and options.
I've had several discussions as of late, with some pretty confused borrowers regarding these "points". They've had no real grasp of exactly what a "point" is prior to our discussion. What it can equate to in cost to them. How the cost of a "point" is figured. This is especially true with first-time home buyers.
Here's what I tell my clients when starting this discussion ...
The best way to think of a "point" cost, is to remember a percentage point equaling the number 1 ...
One percent (1%) = 1 point One percent (1%) = .01
Then the cost of the "point" should be thought of this way: Cost of Point = .01 X Your Loan Amount
Okay, let's put some actual dollar amounts into the equation. It will make better sense to you.
Let's say you are borrowing $200,000 for your mortgage. One (1) "point" then costs you an additional $2,000 at Closing. Here's the math equation for that: .01 X $200,000 = $2,000
The question I typically hear during these conversations is this ... If these "points" COST me as a borrower ... why would, or should, I even think of buying them? What does buying a "point" accomplish for me
Think of "points" (and the dollars associated with them) as interest earned or paid to the bank. The "reward" for you as the Borrower when buying that "point" is the lower interest rate received for the life of their loan at that bank.
Alot to digest, isn't it? It must be remembered too, that as the markets fluctuate, so does the benefit of paying a "point" ... and the resulting reduction in interest rate earned for doing so.
 As a rule ...1 point paid = 1/8% lower interest rate
Again, let's revisit the math we did above for that: $200,000 Mortgage Paying 1 "point" Cost of "point" equals $2,000
Let's say, on the day this "point" and mortgage costs are being quoted to you, the interest rate is lowered by 1/4%. We'll say from 4% interest rate to 3.75% interest rate. The savings realized by the borrower each month (for buying a "point") is then $28.60.
Now, there is one more very important thing to figure into considering a "point" purchase ... and whether it makes sense for you to buy the "point" for your mortgage. And that's, how long you expect to be in the property you are buying or refinancing.
Why does that matter? Again, the numbers tell the story ...
We now know that the amount you save in interest monthly for buying your "point" was figured at $28.60 above ... and that you will pay $2,000 at your closing to receive that monthly savings. So to figure what your "break even" time is ... meaning the point where the savings in interest would equal the dollar amount paid on the "point" ... you do the following:
Amount paid for "point" ... $2,000 divided by:
Amount saved in interest each month ... $28.60 Equals:
70 payments
Knowing how long it takes to payback the savings realized by paying a "point" is absolutely essential when making your decision to buy that "point" ... or not. Then you simply need to consider if you plan on being in the property you are buying long enough to reach that "break even" time.
Helping you understand HOW the savings on "points" are figured ... and HOW buying "points" can affect your bottomline ... is an important part of my job, as your mortgage lender.
But the answer and decision is one that only you, the borrower can ultimately make. I hope that this blog helped you do that ...
 * Having an experienced, knowledgeable mortgage lender at your side during the many decisions your are called upon to make during your home buying is crucial. Contact me today. I'll put my 35 years of mortgage experience, knowledge, and expertise to work on your behalf. I'll be very glad to hear from you. 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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Buying a Home, Financing, Mortgages, Refinance, First-Time HomeBuyers, Obtaining Mortgage Quotes, Pre-Approvals, & Info, Money-saving Strategies, Mortgage Closing Costs, Asking credit and mortgage questions, home buying, Mortgage Costs, Closing Costs
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