Lifestyle Mortgage Blog

Find out what is included in your Debt to Income and how it affects your Mortgage Annette Bui | Updated June 18, 2020 | Mortgage Programs 101 Debt to income is your monthly gross income based on the last two year average amount. This is conservatively always the base and excluding any overtime, commission, bonus unless you have at least two years history of receipt and trending upwards in the most recent year. If you have the year end paycheck stubs for the last two years, this is always the best way to be able to use the extra income. Items included in your debt to income on the front end will be the mortgage expense, taxes, insurance, association dues. Where as the backend is the total of all expenses including credit card debts (minimum payment), student loans, personal loans, child support, tax lien repayments, any solar panel payments.

How is FHA private mortgage insurance calculated? Annette Bui | Updated June 18, 2020, | Mortgage Programs 101 FHA PMI is abbreviated for private mortgage insurance that comes in two parts. The upfront one time cost added to your loan balance and the secondary is the monthly amount based on a percentage of your purchase price. PMI used to fall off once you reach 78% of your loan to value. However, the rules have been changed for some time now and unless you put 10% down on the original purchase. The PMI does remain on the loan over the lifetime. Here's the upfront portion that is the more expensive part of the program and how it is calculated. The good news is you will have two options to lower or remove this insurance by either refinancing into a conventional mortgage once you reach 20% equity or electing a one-time premium buy out option that normally may be anywhere from $3,500 to $4,500 instead of the lifetime amount you would otherwise pay.

Find out what your required income is and how it is Calculated Annette Bui | Updated June 17, 2020, | Mortgage Programs 101

Find out what Debt to Income Means and How it is Calculated Annette Bui | Updated June 17, 2020 | Mortgage Programs 101

How are Collections viewed in your Mortgage process? Annette Bui | Updated June 18, 2020 | Mortgage Programs 101 Collections are a significant dent to your credit scores and most creditors don't want you to know that there is a statute of limitations that allow for it to fall off after seven years. As long as you have not reached the creditor or initiated contact. However, the moment you do and they record this then it starts the clock over again. Anytime you make contact without the intent of paying off and resolving right away, it may impact your scores negatively. However, if the amount is below $2,000 and you are searching for a mortgage. Often,  you can ignore it as long as your overall credit scores still qualify and there are no other bankruptcies or foreclosures that have not passed the waiting period.

Understanding Fees in a Mortgage Loan Annette Bui| Updated June 08, 2020 | Mortgage Programs 101          It can feel overwhelming trying to interpret the loan estimate when you are buying your first home or simply handling all the paperwork involved in a refinance. So it may be tempting to call around and shop to make sure you are getting the best deal. But in order to do that, the crucial part will be learning how to interpret your loan estimate and making sure you understand the details.           Part of the mortgage process is the estimates for the pay off to your old loan on a refinance to include your lender fees such as underwriting, lock in or processing/origination fees. This is shown on page 2 section A of the loan estimate. The most commonly checked part is going to be whether there is a discount cost to buy down your interest rate and get a reduced payment or a lender credit applied to your third party costs. Next, are ...

Know how your Income is Affected by COVID-19 Income Changes Annette Bui | Updated June 18, 2020 | Mortgage Programs 101 Amidst this pandemic, with so much uncertainty between volume of cases rising and passing its peak of the curve and further contradictory information. It's hard to say with any amount of certainty if and when there is a second wave. If the reopening plans are going to be worth the economy recovery while risking a surge in new cases being reported. It may even be that there were not enough resources previously to obtain a true indicator of new cases due to lack of tasting. However, one thing is for certain is the mortgage rates have seen an all time low but with many underwriting guideline changes. Primarily tightened to the discretion to ensure homeowners can still make their obligations. Below are some of the new income guideline changes and how it may impact your ability to qualify.

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Did you know that if your student loans are in deferment or forbearance that there is an impact on your refinance? If the loan is deferred 12 months after your loan closing date or says $0 per/month on your credit report then you are fine. But if it does not show anything at all then you may still need to account for at least 0.5% of the balance owed divide by 12 to be included in your debt and income ratio. Your debt and income may be higher than you think. For example, if you owe $35,000 and you are looking to refinance. Then, it would be $35,000 x 0.5%= $175 per/month. That means if you pre-tax income is $7,500 and your other expenses including your mortgage may be higher than it should be. Usually, conventional loans will cap the total debts at no more than 43% of your pretax income which including the mortgage, then all your other expenses can only go up to $3,225 per/month.

Purchase Loan 101 Annette Bui | Updated June 08, 2020 | Mortgage Programs 101 The purchase loan process can be quite an overwhelming one if it is your first time. The great news is it doesn’t have to be if you are prepared with the right expectations, understand the step by step of how long everything should take and work with both your mortgage professional and your real estate agent. The goal is to do your due diligence so you can properly arm yourself with the tools and resources to start you home ownership journey. Doing the Prep Work The start of your home search can be filled with excitement as you begin your next steps to becoming a homeowner. The preparation is a crucial part of going your loan successfully in a seamless manner. Below are crucial considerations to sit down and discuss with your spouse or partner to be sure you are both on the same page. 1.       Have I been with my same line of work for 2 years? 1.     ...

  How do Renovation Loans work? Annette Bui| Updated June 05, 2020 | Mortgage Programs 101 The purpose of renovation loans or 203k is that it allows both homeowners and home buyers to build the cost of doing a rehabilitation project on a house and roll it into the mortgage. The benefit of this program is that it makes the upgrade process more affordable without having to incur expensive credit card interest and maxing out your debts. You can finance the cost into your mortgage at a lower interest and have a fixed payment. Additionally, the projected renovation updates will improve the value of the collateral and better secures the lenders position. This is designed to help save both time and money for homeowners to gain access to more prospective homes rather than be limited to the homes already in good condition. How can a Renovation Loan be used? The scope of the rehabilitation loan covers expenses of a minimum of $5,000 in costs and up and can be used for virtually a...

How do Investment property Mortgages work? Annette Bui |Updated May 29, 2020 |  Mortgage Programs 101 Investment properties are a great way to leverage assets to create wealth, whether it is a property purchased with existing tenants that occupy the whole house or a multi-family unit with multiple tenants. The intention is to acquire income producing property so essentially another party is paying the mortgage for you for either a short term or possibly long-term investment. When qualifying for this type of loan, depending on whether there is an existing tenant or not. The income may be used to offset your mortgage and other expenses. Unlike primary and secondary homes, an investment property does not have restrictions such as a minimum distance from your primary residence and does not have to be near a resort. In some cases, such properties do not get mortgaged to generate rental income but rather upgraded or remodeled and later sold for a profit by real estate flipping. ...

Annette Bui| Updated May 13, 2020 |  Mortgage Programs 101 Most people do not realize this but even when student loan payments are in deferment or forbearance. The reduced payment may not actually be what is considered in your debt and income calculation for a mortgage approval process. The underwriting guidelines are slightly more stringent if the loan deferment date does not extend past 12 months from when a loan is expected to close  and thus will use up to 1% of the student loan balanced as the payment used to qualify. Sometimes, this may actually end up being a deal-breaker. That is why it is crucial to gather your paperwork upfront especially for a pre-approval and have your paperwork reviewed in full before falling in love with a house during your home search.

How does a condo measure up against a Single Family? Annette Bui | Updated April 28, 2020 | Lifestyle Mortgage Blog While you shop for your dream home, the possibilities may seem overwhelming. Whether you want to be near your hometown, close to work or proximity to quality school districts. One of the bigger questions as you venture to different neighborhoods is the lifestyle differences between choosing a town home or a single-family residence. The debate brings some serious considerations into light such as amenities or association dues as opposed to guard gated neighborhoods or extra space for a growing family   Here are a few factors to consider while you list your pros and cons and review your options. Single Family or Condo? The first priority is to determine where you want to live, whether it is in a large urban city like New York or a suburb in Long island that means it would take a bit more of a commute to get to downtown? These questions are all essential becau...

  Top Seller Fails to Avoid when listing your home! Annette Bui| Updated May 13, 2020 |  Mortgage Programs 101 It’s always an exciting time to plan to move and list your house whether you are upgrading for your growing family or empty-nesters looking for something more manageable. While it is life-changing about taking the big step and getting ready for a new space. It is also crucial to consider how to manage your departure from your soon to be former home. While it is easy to make emotional based decisions when selling your house, a place with many memories and hard work with any updates or remodeling over the years. However, to consider these tips to avoid during your sale. As a seller, is it vital to be considerate of these mistakes when selling your house and be prepared for the process to maximize your return and avoid unnecessary delays in your transition? Overprice Anytime there is a low inventory available in you market, it is often a mistake that sellers beli...