You have many different choices for where to get a mortgage. There are banks, mortgage banks, and mortgage brokers. Many try to sell you their products, for example, down payment assistance, free appraisals, first-time homebuyer loans, doctor’s loans, public employee (teachers, police officer) loans, etc. hoping you’ll bite on the sales pitch in lieu of...
Tag: #realestate
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IS IT MOVE-IN READY?
In order to get a mortgage, the property condition must be move-in ready; it must be habitable and safe. I often get asked if there is a list of items the house must have in order to meet the habitability standard, but there is not, as it is on a case-by-case basis. Here is a...
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WHAT ARE FANNIE MAE AND FREDDIE MAC?
You may have heard of Fannie Mae and Freddie Mac. What are they, and how do they affect mortgages? Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are Government Sponsored Enterprises (GSE). They are quasi-governmental entities that were established to enhance the flow of credit in the housing industry....
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WHY AN INVERTED YIELD CURVE IS GOOD FOR FINANCING CRE
The black economic cloud that is typically associated with an inverted yield curve does indeed have a silver lining. The correlating chart shows the U.S. Treasury rates for Jan. 2, 2018, the blue normal curve, and Aug. 13, 2019, the red inverted curve. The inverted portion of the curve doesn’t turn positive vs. the 20-day...
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PREFERRED LENDERS
Many real estate companies have preferred lenders to whom they encourage their agents to refer. This preferential status can be misleading. In many instances, these lenders are “preferred” because they pay a fee to the real estate company, or the real estate company enters into a joint venture with the lender. These “pay to play”...
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COMMODITIZATION OF MORTGAGES
All you have to do is push a button and get a mortgage? If so, what kind of mortgage are you getting? Is it the right mortgage for you? Does it matter? There is a definite trend in the media to commoditize mortgages. That is, to try to influence you that you don’t need to...
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LOAN AMORTIZATION: WHAT DOES THIS MEAN?
Mortgage loans are typically amortized over 30 years. What does this mean? A borrower will pay a combination of principal and interest payments over a 30 year term. The interest is front loaded, so for approximately the first ½ of the loan term, the borrower is paying more interest than principal. Loans typically do not...
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HOME MORTGAGE DISCLOSURE ACT
You may be asked to provide more information regarding your race and ethnicity when applying for a mortgage loan. Pursuant to the Home Mortgage Disclosure Act (HMDA), lenders collect this information to ensure applicants are treated fairly and that the housing needs of communities and neighborhoods are being fulfilled. Applicants are asked their demographic information...
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THERE ARE MANY DIFFERENT WAYS TO GET APPROVED FOR A LOAN
There are many different ways to get approved for a loan today. Dodd-Frank legislated there must be an ability-to-repay the loan (as if this needed to be legislated). As a result, lenders took a strict interpretation of this rule. In order to qualify, you had to be a salaried employee, or if self-employed have a...
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WHAT HAPPENS TO YOUR LOAN AFTER IT CLOSES?
What happens to your loan after it closes? It is typically sold by the lender. Two sales take place: • The lender will sell the Note, which is the document you sign at closing promising to pay the loan over time; the servicing rights to the loan will be sold. • The servicing rights are...