When is a broker the best choice for a mortgage?

When is a broker the best choice for a mortgage? There has long been debate about whether a mortgage broker or a direct lender is the best source for a purchase or refinance loan. Advertisements for each platform claim the higher ground, but what is best for you? Mark Wells at Preferred Financial addresses why a mortgage broker may be your best bet when seeking mortgage...

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USDA mortgage financing

USDA mortgage financing The USDA mortgage program continues to be available to many borrowers in the Upstate, and can be an excellent choice, providing the borrowers and the property meet the requirements and guidelines for the loan. Here, Mark Wells of Preferred Financial Services discusses the various aspects of the program. I have heard of RDA loans, but not USDA...

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Credit scores and mortgage rates

Credit scores and mortgage rates Since the mortgage meltdown of 2008, all loan programs are subject to risk-based pricing.   Your credit score is one of the biggest factors in determining the level of risk assigned to your mortgage. Mark Wells at Preferred Financial Services answers questions about interest-rate pricing, and how your credit scores can affect the rate...

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Refinancing with a home equity line

Refinancing with a home equity line With interest rates still low, many homeowners are refinancing. In cases where they have both a first mortgage and a home-equity line, questions come up about how to best structure their refinance. Mark Wells of Preferred Financial Services answers commonly asked questions: The rate on my equity line is low right now, but it can go up....

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New appraisal guidelines may make borrowing easier

New appraisal guidelines may make borrowing easier Prior to the crash of 2007-2008, Fannie Mae and Freddie Mac had instituted a national value-tracking system in which all appraisals across the country were stored in a giant database that could be accessed by any lender to cross-check the valuation given by an appraiser. After a number of years of tracking this...

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Financing renovations and repairs

Financing renovations and repairs There are several ways to approach financing for renovations and repairs, each with its own advantages and disadvantages. Mark Wells of Preferred Financial Services provides answers to often-asked questions about how mortgage financing can be put to work for those projects. I have some general repairs that will cost a little under $10,000...

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Fannie Mae relaxes debt-to-income guidelines

Fannie Mae relaxes debt-to-income guidelines In an announcement last week, Fannie Mae indicated that it will incorporate higher debt-to-income ratios in its underwriting guidelines. Mark Wells at Preferred Financial Services discusses the impact this will have on borrowers buying or refinancing a home. How significant is this change in the overall picture of mortgage...

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Co-Signers, co-borrowers, and the mortgage process

Co-Signers, co-borrowers, and the mortgage process Mark Wells of Preferred Financial discusses which loan programs do and do not allow for co-signers, and when a co-signer can make a difference in getting loan approval.   What is the difference between a co-signer and a co-borrower? A co-signer is someone who signs onto a mortgage loan to strengthen the loan, but...

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Financing options for second homes and vacation homes

Financing options for second homes and vacation homes Second home (vacation home) financing has its own special underwriting guidelines and product offerings. Here, Mark Wells at Preferred Financial Services answers common questions he receives from customers looking to buy or refinance a second home. How do lenders define a second home?  Very specifically—a second...

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Adjustable rate mortgages (ARMs)

Adjustable rate mortgages (ARMs) Adjustable Rate mortgages have been around for more than 30 years in various forms, and are still among the choices offered to consumers. Mark Wells at Preferred Financial Services discusses the pros and cons of ARMs. What are the advantages of an ARM compared to a fixed rate?  The single advantage of an ARM is that the rate is lower than...

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Mortgage qualifying after a credit disruption: short sale

Mortgage qualifying after a credit disruption: short sale Last week, Mark Wells of Preferred Financial Services discussed guidelines affecting mortgage financing after a foreclosure. Here, he covers a short sale event. Short sales occur when borrowers are forced to sell a house for less than what they owe on it. In a short sale, the lender must agree to the sale, because...

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Resetting after a major credit disruption: foreclosure

Resetting after a major credit disruption: foreclosure There are five categories of credit disruption that require waiting periods before a borrower is eligible for mortgage financing, regardless of income or credit scores. These are: Foreclosure, a deed in lieu of foreclosure, a short sale, Chapter 7 bankruptcy, and Chapter 13 bankruptcy. In this three-part series, Mark...

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Mortgage qualifying after a major disruption: bankruptcy

Mortgage qualifying after a major disruption: bankruptcy For homebuyers who have a bankruptcy filing in their past, there is good news: this event will not keep them out of the housing market forever. In fact, recovery from a bankruptcy can be as soon as 2-3 years after the discharge date. Waiting periods vary depending on which of the two types of personal bankruptcy was...

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FHA announces reset of condominium financing

FHA announces reset of condominium financing  On June 9, the Federal Housing Administration (FHA) announced plans to revise the approval process for individual condo loans. Previously, FHA would only finance a condo if the total complex was FHA approved. Since very few developers or HOAs wanted to go through the approval process, very few FHA loans were made for condos....

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Judgments and tax liens no longer to be filed with credit bureaus

Judgments and tax liens no longer to be filed with credit bureaus Starting July 1, the credit bureau system will no longer report judgments or tax liens on a consumer’s credit report. This may have a positive impact on a borrower’s ability to qualify for a mortgage, but it also has the capacity to present additional challenges. Here, Mark Wells of Preferred Financial...

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Short-term rentals and your home mortgage

Short-term rentals and your home mortgage The sharing economy—supported by platforms like Uber, Airbnb, and VRBO—offers flexibility and savings, and extra cash for those who have goods or services to offer. But it also raises questions. For example, if you rent your home out through an online marketplace, does it cease being your primary residence and become rental...

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VA loans benefit veterans, active duty, and long-term reservists

VA loans benefit veterans, active duty, and long-term reservists This weekend, as we recognize and honor those who have served their country in the armed services, it is a good time to take a look again at one of the most important benefits offered to veterans of all military branches. Originated under the GI Bill, this program is generally referred to as a VA (Veterans...

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Selling the cow to buy the farm: smart ways to come up with the funds for a home down payment

Selling the cow to buy the farm: smart ways to come up with the funds for a home down payment One of the most significant problems facing new home buyers is coming up with the funds for a down payment. Mark Wells of Preferred Financial Services shares some creative—and perhaps unknown—sources that can be used to find those down payment funds: First, the easy one: If...

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Resolving home equity line issues

Resolving home equity line issues Many homeowners took out a home equity line of credit (HELOC) prior to the downturn of 2007.  A large number of those loans offered interest-only payments for up to 10 years, and are reaching a point at which they will re-set and begin to amortize. Most products require a 10- to 15-year payoff term, which can dramatically increase the...

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Financing for new-home construction

Financing for new-home construction With housing inventories low, many consumers are considering construction projects for new homes. Mark Wells of Preferred Financial Services answers common questions related to construction financing. I want to buy a lot and build a new house on it. Can I get a single loan to do all of that?  Yes, but a lot of things need to be...

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Mortgage brokers put lender competition to work to benefit borrowers

Mortgage brokers put lender competition to work to benefit borrowers Home buyers can get a mortgage loan from one of two major platforms: From a direct lender (a bank or a mortgage banker) or from a mortgage broker. Here, Mark Wells of Preferred Financial discusses the differences between the two and the advantages of each. What is a mortgage broker and how does this...

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Privacy and the mortgage process

Privacy and the mortgage process Many borrowers are uncomfortable revealing information in their mortgage loan application that they fear might become public knowledge, or they do not want shared with another company or government agency. Mark Wells of Preferred Financial Services discusses your legal protections and what to expect when you apply for a mortgage. I don’t...

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Preparing for the mortgage process

Preparing for the mortgage process  If purchasing or refinancing a home is in your plan for 2017, there are steps you can take ahead of time to make the process of obtaining a mortgage go smoothly. Mark Wells of Preferred Financial Services answers common questions about how to prepare to apply for a loan. I have heard horror stories about having to document all kinds...

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Lender-paid PMI: Should you consider this option?

Lender-paid PMI. Recently, conventional lenders have adopted a “No monthly PMI” loan program, sometimes referred to as a “Lender-paid” PMI loan. Mark Wells of Preferred Financial Services discusses the pros and cons of this program. How can a lender make a loan where there is less than 20 percent down and not include a monthly PMI premium in the payment?  As...

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Second Homes and Tax Filing

Second Homes Tax Filing. Owners of second homes receive tax write-offs that can offset the expense of owning the home, and additional write-offs may apply for those who rent out their second homes part-time. However, correctly reporting the information from a second home on your tax return can sometimes make the difference in your ability to buy or refinance another...

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Buying a new home without selling your present home

Many borrowers would like to purchase a new primary residence without having to sell their present home first. Some hope to get a bargain on a new home and need to be able to act quickly, while others want to keep their present home to earn income as a rental property. Mark Wells of Preferred Financial Services addresses questions about how this can be worked out. Am I...

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New mortgage products for self-employed borrowers

During the 1990’s and up through the market crash of 2007, many self-employed borrowers made use of Stated Income or No-Income-Verification (NIV) mortgage programs to purchase or refinance their homes. These programs recognized that self-employed borrowers have access to cash flow for debt service that a normal wage earner would not. These programs disappeared after the...

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Mortgage options for manufactured housing

South Carolina has a high percentage of manufactured homes in its housing mix, and mortgage programs for these homes have often been difficult to obtain. Mark Wells at Preferred Financial Services discusses financing options for these homes and answers common questions from purchasers. The dealership I have been talking to has ‘modular homes’ for sale. Are these the...

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Common misconceptions about buying a house

Mark Wells at Preferred Financial encounters homebuyers each day, many of whom have been putting off buying a house because they either misunderstood the qualifications that are required, or because they did not understand the process itself. Here, he answers questions that are asked most often. I heard that after the crash, lenders started requiring 20 percent down...

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Mortgage qualifying after a major disruption: bankruptcy

In the last two columns, Mark Wells of Preferred Financial Services addressed guidelines affecting mortgage financing after a foreclosure and a short sale. Here, he covers a bankruptcy event. There are two types of personal bankruptcies—Chapter 7, in which the borrower cancels all allowable debts, and Chapter 13, in which the borrower enters into a structured repayment...

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