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Posts Tagged ‘houses’

In the event you have steered clear from what has been going on in the mortgage industry for the last year or two, I thought I would point out some changes and how they affect you.    These changes have slowed down the amount of refinances being done, but being aware these changes may make the process a little easier.

Here are 7 things you should know…

1)       A good credit score is now 740 and higher.   If you have a middle credit score between 740 and 620, you may still be able to refinance, although you may see a few adjustments to your rate for the lower score.  In general, anything below 620 is considered “higher risk” and will not be available for a refinance.

2)       The value of your house has likely dropped.   Nobody enjoys hearing this news, but it is a reality.The last two years, house values have dropped in most parts of the Country.   This simply comes down to supply and demand.   The number of homes on the market has increased due to foreclosures, short sales, unemployment, loss of value, and many other factors.   With so many houses available on the market in each neighborhood, a buyer now has more choices and leverage when purchasing.   This has a direct effect on the appraised value of your home, because appraisers use recently closed sales to determine the value of your home.    If the house across the street recently sold, and is roughly the same square footage, the same age, and has a lot of the same amenities; it is probably a great comparison for an appraiser to use.   This will give you a good indication of the value of your home.

3)       The refinance process takes much longer than before.Many homeowners became used to refinancing very quickly.   This is not the case any longer.   New legislation has been put in place to protect the homeowner, and these steps have delayed the refinance process.    If you are in the process of refinancing, expect the process to take 30 to 45 days with your lender or mortgage broker.    In addition to the new regulations put into place, many lenders have decreased employees, causing additional delays.   

4)       Taking cash out of your home is not as easy as it has been in the past.You will no longer be able to use your house like an ATM machine.A cash out refinance limits you to 85% of the value of the house.A cash out refinance will cost a little more to the borrower in terms of rate or fees.   Expect to pay about 1/8 of a percent higher for a cash-out refinance if your loan amount is 60% higher than the value of your house.   This is industry wide, not on a case by case basis.  

5)       Stated loans do not exist.Your qualification will be determined based upon your ability to prove your income over the last two years.    You cannot use bank statements, receipts from sold goods on EBay, or any other alternative method you may have used in the past.   Underwriters now verify everything and you must be able to prove it with traditional methods such as tax returns, recent paystubs, and verifying employment over the phone.    Regardless of how good your credit, you still need to prove your income.

6)       A new policy has been established for appraising your home.   The new Home Valuation Code of Conduct (HVCC) was implemented to prevent loan officers from pressuring appraisers for higher values.   Now, loan officers are not permitted to speak with an appraiser or order an appraisal directly.   Instead, the new HVCC requires that appraisals be ordered through an independent third party company, and eliminates any interaction between appraisers and loan officers.   The third party acts as the middle man, receives the order from the loan officer, and places an order with an appraiser.   There are many problems with the process in general, but most notable is that appraisals are being done on homes where the values needed to refinance are not realistic.Prior to the change, a loan officer would call an appraiser, place the order, and give an estimated value.  If that value was unrealistic, the appraiser would notify the loan officer and the appraisal would not be done, saving the borrower $300 to $500.   Now, the appraisal is being done regardless of value, the value is too low to refinance, and borrowers are out the cost of the appraisal.This is just one of the minor issues with HVCC….there are others.   Hopefully, some of the people behind this process try and refinance and see how much it is truly hurting the industry, and make the appropriate changes.  

7)       You can get turned down for a loan.    To some, this sounds crazy.People actually get turned down for loans now.The three C’s determine your eligibility for a loan..Collateral, apacity, and character,.    You need to have the credit score, job history, and mortgage and employment history.   In general, your character has to qualify you for the loan.    You must also have the capacity to afford the loan as well as the equity in the home.    The three C’s were thrown out by many companies in the past, but they are back and my guess is they will be here to stay for quite some time.

To find out about more changes in the mortgage industry and what you can do to qualify, visit http://www.timmarose.com

Since home prices peaked in the UK last October many homeowners have lost track of what their homes are now actually worth. This is because house prices have been falling month on month for almost a year, and with a range of reports claiming that home prices have dropped by varying levels many homeowners may now be confused as to what the true price of their property actually is.

There are many reasons for the falling prices of houses for homeowners, mainly being the current credit crunch, which will new house buyers off the market as there are no mortgages available anymore.

There are a number of reasons why you may be looking to get your home priced. You may be thinking about putting your house on the market and moving on, in which case you clearly need an idea of what you will get for it. You may be thinking about borrowing against the equity in your property, and will need to provide the lender with details on the value of the home. You may simply be curious to find out what your home is not worth of nearly a year of month on month property price falls.

Of course, there is little point in getting your home valued unless you can be certain that the valuation you receive is an accurate one. Although you can easily contact a local estate agent to come and value the home you may find that you do not get an accurate valuation from just one estate agent, as the valuation may be too high or too low depending on whether the estate agent is prioritising on getting a higher level of commission or a quicker sale on your home.

It is therefore a good idea to get around three surveyors from different estate agents to come and look at the house in order to provide you with a valuation. Obviously, you should not mention that you have already been given a valuation, as otherwise each estate agent may base his or her valuation on the one that you have already received. Your aim should be to get a totally independent figure from each one so that you can see whether they all come to roughly the same conclusion with regards to the value of your house.

You can also help yourself further by doing your homework. All you need to do is check the prices of other houses for sale in your area that are similar to yours and see whether they are going for the same sort of price that the estate agent has priced your property at. By checking out the prices of other properties that are already for sale you can get an even better idea of the true value of your property.

If you are putting your property up for sale and you find that the value of the house is now far less that you had hoped you need to bear in mind that inflating the asking price in the hope of getting more money could result in your property failing to sell in the current climate.

If your property does not sell at your desired price and you still have equity in your home, then homeowner loans could help to improve your current home removing the need to move. For more information on property prices and finding out your properties worth read the articles on finding a mortgage from an independent financial advisor