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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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 they agree to take less than the pay-off balance of the...

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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 Wells of Preferred Financial Services summarizes the...

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Comparing mortgage quotes:  how to decipher the information

Choosing a mortgage broker, or knowing which quote is best for you, is not always a straightforward decision.  The government requires certain disclosures to be made, but even these can be confusing.  Mark Wells of Preferred Financial Services answers some often-asked questions regarding rate and closing-cost quotes. Aren’t all interest rate quotes the same? Not...

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Beware of useless credit scores

In recent months, Mark Wells at Preferred Financial Services has had numerous requests for mortgages from borrowers who already had their own credit report and credit scores, obtained through an online credit report service. However, when they chose to proceed with their loan and a mortgage credit report was pulled, their actual credit scores were much lower than what...

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Mortgage loan fraud

The amount of documentation required and the seemingly endless process of getting a mortgage loan closed can be extremely frustrating. But those reams of forms that must be filled out are often an attempt to prevent fraud which has occurred int he past. Mark Wells of Preferred Financial Services discusses fraud issues in the loan process. What is the most common type of...

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New mortgage products for self-employed borrowers

During the 1990s 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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Happy New Year! Don’t forget these tax tips for filing your 2016 returns

Home ownership offers a number of tax advantages, but it’s easy to forget some of the deductions that are available. Here is a list of common deductible expenses to put in your tax file, so you don’t give Uncle Sam more than you owe. If you purchased a home in 2016, any origination charges, the interim interest, any PMI premiums, and some attorney-related charges...

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Supporting home ownership for the next generation – Part 3

Mark Wells at Preferred Financial Services continues the discussion on how parents and grandparents can help the next generation become homeowners. Sometimes it seems like my children are not that interested in owning a home. What should I tell them that might encourage them to take a look at the benefits of home ownership? Property ownership is the cornerstone of a free...

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Supporting home ownership for the next generation – Part 2

Last week, Mark Wells of Preferred Financial Services addressed some financial ways in which parents and grandparents could help the young people in their life secure home ownership. This week, he discusses equally important, non-financial assistance that can make all the difference in the next generation being able to purchase a home. What is the most important thing I...

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Supporting home ownership for the next generation

There are many ways to help your children enjoy the benefits of home ownership, some involving financial participation, and others as inexpensive as offering words of advice. While you probably know the ins and outs of obtaining a home, no one ever gave your kids a class in how to do this. The vocabulary terms, the technicalities of down payment, etc. are all a foreign...

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Loan-limit changes from Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac have announced the first increase in the conforming loan limit since 2006. This will ultimately affect the maximum allowable loan limits on FHA and VA loans, but the immediate effect will be on conventional loans. When will the change take place? The new limit will be in effect for all loans DELIVERED to Fannie Mae and Freddie Mac, after January...

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Update on the new “lookback” credit-score factor

Effective September 30, all three credit bureaus instituted a change in how they calculate FICO scores. The components of the change that were announced publicly indicated that the new FICO model would employ a ‘look-back’ feature that tracks how a consumer has used their revolving (credit card) accounts over the past months and years. Mark Wells of Preferred...

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Down payment for home purchases: Part II

In this second of a two-part series, Mark Wells of Preferred Financial Services answers customers’ questions regarding down payment funding: The house I am buying is worth more than I am paying for it. Can I use the equity as down payment? The answer is “no” for all programs, except in a “non-arms length” transaction—when you are buying the home from a near...

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Down payment for home purchases: Part I

Having the funds for a down payment can make the difference between obtaining a loan or not being able to purchase a home at all. This week and next, Mark Wells of Preferred Financial Services answers some of the many questions customers have regarding down payment: Are there any programs that do not require a down payment? Yes, VA loans (for military veterans) and RDA...

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Mortgage acronyms – advanced level

Two weeks ago, Mark Wells of Preferred Financial provided a list of mortgage-related acronyms certain to make you the life of any trivia party. This week, you can earn an advanced degree in mortgage studies by learning the meaning of these terms: LTV: Loan to Value. This is the ratio of the loan amount compared to the value of the house being purchased or refinanced. For...

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Beware, prepare: Don’t let mortgage ghouls arise to haunt your house-hunt

If you are preparing to purchase or refinance a house, don’t let these items jump up and scare you. Good preparation makes for a better mortgage experience. Here, Mark Wells of Preferred Financial Services tells you how to start your mortgage process on the right foot. Why do they need to know so many things for me to get a mortgage? Think of it this way: if you were...

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Mortgage qualifying for retirees: income guidelines (Part 2)

Last week, Mark Wells at Preferred Financial Services discussed the use of 401-K and IRA rollover accounts to generate qualifying income for retirees applying for a mortgage. This week, he answers questions about other sources of retirement income. I will receive a pension when I retire in six months. Can I apply for a mortgage and use that future income to...

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Mortgage qualifying for retirees: Income guidelines (Part 1)

As borrowers move towards retirement and consider a change in housing, knowing how income is counted (or not counted) as a retiree can make all the difference in being able to relocate or downsize to the home you want. Here, Mark Wells at Preferred Financial Services discusses income guidelines for retirees and answers questions that often arise. Is it easier to apply...

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USDA loan changes to benefit homebuyers

United States Department of Agriculture (USDA) Rural Development loans provide 100 percent (no down payment) mortgage financing for homebuyers in areas that are designated as ‘rural’ by the federal government. Following the crash of 2007, these loans had seen dramatic increases in the USDA Funding Fee and in their monthly Private Mortgage Insurance (PMI)...

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Mortgage matters in divorce situations

When facing a divorce, issues can arise that affect present and future home ownership. Mark Wells of Preferred Financial Services answers questions that can help navigate those waters: I want to buy out my spouse and keep my marital home. Can I cash out funds to buy out my spouse’s equity? Yes, you can. As long as you can carry the house payment with just your income,...

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15-year vs 30-year mortgage – which is better?

Whether they are purchasing a new home or refinancing an existing home, borrowers often ask Mark Wells at Preferred Financial Services whether a 15-year mortgage is a better choice than a 30-year mortgage. Here, he answers some of those questions. I know that I will be paying more interest with the 30-year loan. How much more? That will differ according to your loan...

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Purchasing distressed properties—Part 1

Homebuyers who are looking for a good deal in a tight real estate market often consider purchasing a home that has been foreclosed and is being offered by a bank for resale. Although these may appear to be bargains, obtaining financing for this type of purchase can be difficult. Here, Mark Wells at Preferred Financial Services answers questions about buying a...

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