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Mold, Mold Mold….It’s Everywhere!

by Bill Sohan on January 3, 2012
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Mold 150x124 Mold, Mold Mold....Its Everywhere!

Mold has become an ever present nuisance in vacant homes.  Due to the expected rise in bank-owned or foreclosed properties, it is essential that everyone involved in a 203K transaction understands the need for an expert.  Mold is difficult to completely remove and it’s removal should only be left to the experts.  Not only will most investor’s require this, it also a good way to prevent future costly lawsuits due to potential illness from the home.  Evidence of any water should be inspected thoroughly and when in doubt an expert should be consulted.  Keep in mind that many underwriter’s will be on the look out for any evidence of water damage. Make sure you use a reputable company with years of experience in mold abatement.

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How Much Mortgage Money Can I Qualify to Borrow in Maryland?

by Bill Sohan on July 13, 2011
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How much mortgage money can I qualify to borrow in Maryland?iStock 000003309531XSmall How Much Mortgage Money Can I Qualify to Borrow in Maryland?

 This is typically the number one question Maryland mortgage professionals are asked by new clients.

 Of critical importance when considering mortgage financing: There is sometimes a difference between what a client ***can*** borrow and what they ***should*** borrow.

 In other words, what makes for a comfortable long-term mortgage payment?

 The Quick Answer:

 If we’re simply considering the financial math, lenders will calculate your Debt-to-Income Ratio and generally allow for 28-31% of your gross income to be used for the new house payment with up to 43% of your gross income to be used for all consumer related debts combined.

Sample Mortgage Scenario:

 Let’s use a gross monthly income of $3000 and a qualifying factor of 30% Debt-to-Income Ratio:

 $3000 multiplied by .3 (30%) = $900 max monthly mortgage payment
 This means that your mortgage payment (Principal, Interest, Taxes, Hazard Insurance) cannot exceed $900 a month.

“Ballparking” a Qualifying Loan Amount:

Simple step:  We use a safe average of $7 per month in payment for every $1000 in purchase price so…

 Step 1)  $900 a month divided by $7 = $128.50

 Step 2) $128.50 multiplied by 1000 = $128,500 loan amount.

 Remember, these are average ratios and guidelines set by most lenders for common Maryland mortgage programs.

Keep in mind, while most consumer debts are listed on a credit report, there are some additional monthly liabilities that may contribute to the overall qualifying percentages as well.

Regardless of how your personal income and credit scenarios factor in, it is important to consider your overall budget when trying to determine how much of a mortgage you should qualify for.

 Other items to consider in your monthly budget:

 1. Confirm all debts are taken into account
2. Any private notes or family loans
3. Short-term expenses – medical, auto repairs, travel, emergencies
4. Plan on additional expenses for the home such as water, electric, maintenance, etc…
5. Keep a cushion for savings and financial planning

 For more information or to check your qualifications in Maryland, call Bill Sohan at Academy Mortgage Corporation: 410-963-2308 or bill.sohan@academy.cc                                                   www.yourbaltimorelender.com

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Maryland Mortgage Pre-Approval Process

by Bill Sohan on May 19, 2011
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iStock 000010166188XSmall Maryland Mortgage Pre Approval ProcessEven though many lenders are still quoting quick 10 minute pre-qualifications over the phone or online, a true mortgage approval that holds any weight in Maryland is one that has been issued by an underwriter who has had an opportunity to review all of the necessary documents.

With a constant stream of new lending guidelines, volatile mortgage rates and tightening regulation from Washington, very few real estate agents will show new homes to a First-Time Home Buyer without at least a pre-qualification letter.

A Pre-Approval Letter will help you in three ways:

It’s obviously a good idea to get your paperwork prepared ahead of time so that the pre-approval process is as thorough as possible.

In order to get a pre-approval letter, you’ll start by filling out a loan application and submitting a few documents for the loan officer and / or underwriter to review.

Common Loan Pre-Approval Documents in Maryland:

Income / Assets for Wage Earner:

  • Last 2 year W2s and Tax Returns
  • 2 most recent Pay Stubs
  • 2 most recent Bank Statements, 401(K), Liquid Assets, Investment Accounts

Income / Assets for Self-Employed:

  • Last 2 year Tax Returns – Business and Personal
  • Last Quarter P&L Statement

Letter of Explanation For:

  • Employment Gap or New Line of Work
  • Late Payments / Judgments / Bankruptcy on Credit Report

Other:

  • Bankruptcy Discharge
  • Child Support Documentation
  • Lease Agreements (If own other Rental Properties)
  • Mortgage Payment Coupons (If own other Real Estate)

…..

Most Maryland borrowers also want an opportunity to learn more about the loan officer before digging up all of these personal documents. Spend 15 minutes on the phone asking the loan officer to explain how mortgage rates work, quizzing them on some basic industry vocab or just to see if they know what to prepare your agent for ahead of time. The Q&A session can be more than just a lender qualifying you, as long as you’re prepared to ask the right questions.

Either way, you’ll definitely want to have the above list of approval documents ready once you’ve decided on the right loan officer that you trust will meet your expectations.

For more information on getting pre-approved for your mortgage in Maryland, call Bill Sohan at Academy Mortgage Corporation at                  410-963-2308 or email at bill.sohan@academy.cc

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Phoenix Housing Market: Home Prices Slightly Dip

by Steve Lines on September 29, 2010
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Each month the W.P. Carey School of Business at Arizona State University releases reports on the Phoenix housing market. The most recent report indicates that August marks the third consecutive month of median existing-home prices falling. Foreclosures also spiked back up to levels not seen since March of this year. The Phoenix Business Journal also reported on this press release.

The report notes that slow resale activity is not uncommon as the selling season comes to a close. Likewise, it’s also not uncommon for median prices to drop–generally school schedules and holidays allow little to no desire or time for potential homebuyers to go house shopping.

Foreclosure activity, as percentage of the total resale market, varied throughout the Valley such as 56 percent in El Mirage, 31 percent in Scottsdale and 46 percent in Gilbert. Another significant component of the market was the sale of previously
foreclosed property, which accounted for approximately 40 percent of the traditional transactions (4,800 sales). Thus, foreclosure–related activity represented 67 percent of the recorded activity.

In previous housing downturns, consumers responded to the low interest rates and attractive home prices of the housing inventory available to them. ASU’s report notes that while these conditions do currently exist in our present housing market, there are a few significant factors keeping the market from rising back up:

  • slow economic and job recovery
  • low consumer confidence
  • and stricter underwriting policies

While it’s true that the current market is not ideal for sellers, there are many advantages for potential buyers. Interest rates continue to stay low (frequently meeting or breaking records) and housing prices are substantially low, too.

In regards to consumer confidence, it’s important to choose a lending companyblurbn Phoenix Housing Market: Home Prices Slightly Dip that you trust and feel comfortable with but that also has the experience necessary to make sure your loan process goes smoothly. Academy Mortgage was recently rated the “#1 Independent Lender” by Corelogic and continues to achieve top-tier rankings for FHA, resales, and builder loans.

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FHA Changes in Loan Requirements and Regulations

by Steve Lines on July 13, 2010
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If you’ve been considering buying a home in San Diego with an FHA loan, there have been some changes in recent months that you should be aware of. While most of the regulations are geared towards lenders, some of it ultimately affects you as the buyer.fha FHA Changes in Loan Requirements and Regulations

  • Credit Scores. New FHA borrowers must have a minimum credit score of 580 to qualify for the 3.5% down payment plan. Borrowers who have credit scores less than the 580 minimum will be required to put down at least 10%. Having less than a 580 credit score will not disqualify you from the loan—it just requires less favorable lending guidelines. If you aren’t far from reaching that 580 mark, there are ways to improve your score rather quickly.
  • Up Front Mortgage Insurance Premiums. Premiums have gone up to 2.25% for all FHA case numbers assigned after April 5, 2010. This includes the purchase money mortgages, the FHA’s Streamline Refinance program, and full-credit qualifying refinances.
  • Seller Concessions. The FHA has lowered seller concessions to 3% (it was previously at 6%). FHA officials say “the move is designed to eliminate the temptation to inflate the appraised value of a home for sale.”
  • Increased Transparency in the Loan Process. All FHA lenders are subject to a neighborhood watch program. According to the FHA, this program shows “lender performance rankings to complement currently available Neighborhood Watch data.” The Department of Housing and Urban Development has made information available on their website that allows the public to view a lender’s loans. The data shows how many loans are delinquent, if there are any serious delinquencies, and lending insight into that particular lender’s financial well-being. Additionally, the program acts as a part of a larger FHA initiative to better monitor and increase enforcement of FHA lenders to make sure that all loans are in accordance with FHA loan requirements and regulations. An FHA press release proposed Amendment of the National Housing Act that requires “all approved mortgages to assume liability for all loans that they originate and underwrite.”

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