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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Purchasing distressed properties—Part 2

Last week, Mark Wells addressed questions regarding the purchase of distressed properties. Here, he continues with those questions: I am buying a distressed property and the appraiser has noted that a number of repairs need to be made to the home to make it marketable and habitable. The seller is balking at doing the repairs and the lender won’t close without those...

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Mortgage lending and property types

Day in and day out, Mark Wells at Preferred Financial Services talks to homebuyers planning to purchase a new residence. Questions often arise about whether a particular type of property can be purchased using standard mortgage financing programs. Here, he answers questions about how lenders view various property types in the mortgage approval process. What do you...

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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 property? Can this cause issues when you...

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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 pay-off term, which can dramatically increase the monthly payment compared to the...

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Insurance and mortgages 2016

Buying or refinancing a house includes costs for different types of insurance, some required and some optional. Here, Mark Wells of Preferred Financial Services answers questions about the different types of insurance products encountered when transacting a mortgage. I see “Homeowner’s Insurance” on my Loan Cost Estimate Sheet. What is that? Homeowner’s insurance,...

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Insurance and Mortgages

Buying or refinancing a house includes costs for different types of insurance.  Some are required and some are optional.  Here, I’ll answer questions about the different types of insurance products encountered when transacting a mortgage. I see “Homeowner’s Insurance” on my Good Faith Estimate.  What is that?  Homeowner’s insurance is sometimes called...

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Adjustable Rate Mortgages

With rates rising somewhat over the past few months, many borrowers have inquired about Adjustable Rate Mortgages, which offer lower rates than the 30 year fixed products .  Here, I’ll discuss the advantages and pitfalls of ARM’s.   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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Retirement Assets and Mortgage Lending

Many borrowers have questions about how retirement assets are counted in the mortgage process – do they count as income?  As reserves?   Knowing how they are used can help you as you are preparing to qualify for a purchase or a refinance mortgage.   Here, I’ll answer questions about retirement assets. I have a substantial 401-K account, and my loan officer...

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Title Vesting and Mortgage Financing

Quite often, borrowers want to hold title differently than the way they applied for their mortgage.  Here,I’ll. answers questions regarding how title vesting and mortgage responsibility can be separated, to gain the flexibility needed for different purposes. My wife and I are buying a home.  I don’t mind being on the Note and Mortgage, because we need my income...

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USDA Financing

The USDA mortgage program continues to be available to many borrowers in the upstate, and can be an excellent choice of loan programs providing the borrowers and the property meet the requirements and guidelines for the loan.  Here, I’ll discusses the various aspects of the program.   I have heard of RDA loans, but not USDA loans.  What is the difference?  ...

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First Time Home Buyer Questions

Low interest rates and good housing prices have combined to offer many young adults the opportunity to purchase a home, for about what they are paying for rent.  If part of your new year’s planning includes home ownership, preparing beforehand is essential.  Below are some questions from potential first time home buyers and offers advice on how to prepare to be a home...

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Dodd-Frank 2014 Is Here

January 14th ushered in the new Dodd-Frank provisions for mortgage loans, bringing about significant changes that will eventually change the mortgage landscape. Below are some questions regarding some of the provisions of this new law. I’m hearing about ATR and QM mortgages.  What in the world are those?   As with any good government regulation, you have to give your...

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How Much House Can I Afford?

Of all the questions that I field each week, this is by far the most common:  how much house can I afford? What does the industry mean by “Affordability”?   It is simply whether the house payment, along with the borrower’s other debt obligations, will be at a level where the borrower will not be in financial distress, possibly resulting in missed payments or...

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Down Payment for Home Purchases – part 2

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 1

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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VA Loans

Since WW II, the federal government has provided a mortgage loan benefit for those  who have served in the U.S. armed forces called VA Loans.  Originated under the GI Bill, this program is generally referred to as a VA (Veteran’s Administration) loan.  It has several advantages over other loan programs and has its own unique guidelines.  Here, Mark Wells answers...

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15-year vs. 30-year mortgage — which is better?

With interest rates again touching on 70+year lows, many homeowners are considering refinancing. Mark Wells at Preferred Financial addresses the often-asked question of whether a 15-year mortgage is better than a 30-year mortgage. I know that I will be paying more interest with the 30-year mortgage. How much more?  That will differ according to your loan size, but for a...

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Co-Signing a mortgage loan

Each week Mark Wells at Preferred Financial receives calls from parents wanting to help a child, or another family member buy a house.  Inevitably, the question of co-signing comes up.  Here are the most asked questions he receives in regard to that issue. My child has bad credit.  Can I co-sign with him so he can qualify?  The answer to this most asked question is...

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Trusts, LLC’s and Title to Real Estate

At Preferred Financial Services, Mark Wells often receives questions regarding how real estate title can be held.  Here, he addresses questions about Trusts, corporations, and LLC’s. Can I purchase an investment property and hold the property in an LLC or corporation for liability purposes?  Fannie Mae and Freddie Mac do not allow for their loans to be closed in the...

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What are all These Fees?

Closing on a purchase or refinance loan involves a number different services. The anticipated charges for these services initially appear on your Good Faith Estimate at the time you apply for your loan, and the actual charges appear on your HUD-1 settlement statement at closing.  Here, Mark Wells at Preferred Financial Services, provides definitions of the fees you may...

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Will I Qualify For a Mortgage?

On the minds of all homebuyers is the dreaded question:  Will I qualify for a mortgage? In the 20 years he has been providing mortgages for homebuyers, Mark Wells has found that often times the person most worried about this is actually the person most likely to qualify.  “People who are worried about their credit are usually those who feel a high degree of ...

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