March Madness: Higher Home Prices Coming Soon

bidding-war-273x300Mid-March, just about the time of the NCAA basketball tournament, home sales skyrocket to the highest of the year. That’s what happened last year and in the years before. There is no reason to think 2016 will be any different. Savvy sellers who have been waiting like patient cats suddenly list their homes for sale. Buyers, giddy with excitement at finally seeing more choices on the market, race to outbid one another.

I saw it with my own eyes right on my little cul-de-sac. Three home owners placed their properties for sale, and all three sold above asking price inside of a week.

Typically, the market continues at a brisk pace (although not as brisk as those two mad weeks in mid-March) until mid-August when the heat finally drives buyers off the streets and down to the beach, and families with children turn their attention to back-to-school.

If you are in the market to buy a home and want to save tens of thousands of dollars, you might want to get your Purchase Agreement signed around now before the spring frenzy begins. Whatever you do, make sure you have a written pre-approval letter in hand before you go out house shopping. Without that, no seller will take you seriously. If you are buying in California or Washington, I am state licensed in those states and am happy to help you.

Contact me here or send me an email at cwarren @

Amazon’s highest rated mortgage book.

????????????????????????????NMLS # 1284134 Envoy Mortgage, a full service mortgage lender.

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New HomeReady Program Helps Extended Families — and Friends — Buy a Home

Extended families or friends who live together and all contribute to the household income have had a challenge when trying to buy a home. One person might not have a credit score (or a too-low score). Or, they might not be able to document the down payment money.

For these good folks, the new HomeReady loan program comes to the rescue!

The HomeReady loan allows a non-borrowing person’s income to be considered. As long as this person lives in the home, his or her additional income allows the borrower to be approved with a higher debt-to-income ratio. (Up to 50% DTI) The non-borrower does not have a credit check at all.

This is not subprime lending. This is Fannie Mae recognizing that multi-generational families are stable and historically make their payments on time. HomeReady honors family tradition by making home ownership more attainable.

Facts About the HomeReady Loan Program

  • Down payment required is 3% of the purchase price. The down payment can be a gift, grant, come from a down payment assistance program, or be your own funds.
  • You get a lower monthly mortgage insurance fee than with the FHA or traditional conventional loan.
  • Income restrictions apply. Depending on the neighborhood of the property, your income can be 80% to 100% of the area’s median income. (Your loan officer can provide figures for your area.)
  • The non-borrowing person does not have to be a blood relative. He or she can be a friend who will be living in the home for at least 12 months after purchase.
  • The non-borrower’s income must be at least a 30% contribution. This is to ensure that his or her income is sufficient to help out in case of financial hardship or emergency. More than one non-borrower can be used to meet that 30%. For example, you can use both grandma’s and a brother’s incomes to add up to the 30%.
  • You can be a first-time home buyer or a repeat home buyer.
  • You cannot own rental properties. This is not a program for investors to amass a portfolio of properties.
  • You can buy a condo or a house with 3% down. Manufactured home with 5% down.
  • Minimum credit score is 620 (middle of three credit scores).
  • At least one borrower must take an online class about responsible home ownership. Fannie Mae’s fee for the class is $75.

    Please help get the word out by sharing on Facebook and Twitter, because home ownership is a wonderful thing.

Need more information?

For other rules and guidelines, see your loan officer. If you are in Washington or California, I would love to help you. I am state licensed, NMLS 1284134. I work for Envoy Mortgage, a full service mortgage lender.

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How to Shop for a Mortgage Now — with no GFE, Good Faith Estimate, post-TRID

Speak with the loan officer to determine if you have a good personality match.

Since the release of new lending laws, commonly called TRID, on October 3, 2015, there is no more GFE (Good Faith Estimate) or TIL (Truth in Lending). Both of those forms have been replaced by the Loan Estimate (LE). But, you cannot get a LE without first having the address of the property you want to buy. So how do you shop for a home loan at the pre-approval stage?

Here is a quick and easy summary of the three steps I recommend.

1) Call three lenders and ask for an Estimate Worksheet.
This is the new upfront GFE. Depending on the lender, they might call it an Initial Fees Worksheet, Fees Worksheet, or simply use an Excel spreadsheet. Either way, this form shows the interest rate, monthly payment, and fees so you can see the cost of the loan.

2) Speak with the loan officer, compare pricing, and choose your lender.
Notice that I did not say email the loan officer and make your choice. Don’t be lazy! This decision is too important for you to hide behind your screen. Pick up the phone and have a real conversation with the loan officer, because you need to get a sense of whether or not this person is honest, communicates well with you, will provide good service and updates throughout the loan process, and so on. You cannot get all that in an email.

3) Proceed with your pre-approval.
Now is the time to submit your income and asset documentation, photo ID, as well as other paperwork so you can get a good, solid pre-approval letter on company letterhead. You will need this in order to present an offer on a property. Give your pre-approval letter to your real estate agent.

That’s it! Now you are ready to meet with your Realtor and shop for homes.

After you have a mutually signed Purchase & Sale Agreement, ask your agent to send a copy to your loan officer. Now the time clock begins!

With a closing date in place and the PSA in  hand, your loan officer will proceed with processing your loan. He or she will send you Loan Disclosures that include the Loan Estimate as well as other information required by TRID law. You will sign to acknowledge receipt and work with your loan officer through to closing.

If you happen to be buying a home in California or Washington, I would love to be your loan officer and mortgage advocate.  I work for Envoy Mortgage, a full service mortgage lender. (We have our own money to lend as well as work with the wholesale division of other lenders such as Chase, Wells Fargo, Caliber, and others to get you the best deal.) My NMLS # 1284134. Envoy is a Fair Housing and Equal Opportunity Lender.

What’s Ahead for 2016 in Home Buying and Mortgage?

In appreciation for all my book readers and blog followers, I offer my Home Buyer’s Forecast for 2016.

  1. Interest rates will rise slowly and gradually, ending 2016 about half a percent higher than 2015.
  2. March will see a rapid increase in home sales with buyers bidding up prices.
  3. More home buyers will waive the home inspection contingency in “hot markets.” (A mistake in my opinion.)
  4. Hot markets will be Seattle-Bellevue, Denver, Dallas-Fort Worth, Portland, Boise, Salt Lake City, and Omaha. (Thanks to Bloomberg for this one.)
  5. More young home buyers will look at neighborhood walkability as well as ability to ride their bikes to work as an important consideration.
  6. First time home buyers will look at townhomes and condominiums for more affordability, and lenders such as Envoy Mortgage will close more of these purchases due to their more lenient guidelines for multi-family structures.
  7. Buyers will preview homes online but will avoid clicking on online ads by agents and lenders.
  8. Builders will continue to build larger homes on smaller lots, making existing homes more attractive to families who want privacy.
  9. More home buyers will get pre-approved before touring homes, thanks to being better educated about the home buying process.
  10. More people will choose the conventional 3% down payment loan over the FHA 3.5% down payment loan.
  11. First time home buyers will take advantage of private grant money for their down payment as well as state down payment assistance programs.
  12. Underwriting requirements will lighten up and do away with some of the overly tight requirements of yesteryear.

Thank you for 28,000 views of my blog. I know next year will see even more! Thank you to all the readers who purchased my books and a double thank you to the readers who emailed me their gratitude for the information.

May God bless and keep us all healthy and safe in 2016!

equal housing logoCarolyn Warren, Senior Loan Officer
State licensed in CA and WA. NMLS license # 1284134
Envoy Mortgage, a full service mortgage lender, #6666

President Signs Mortgage Insurance Premium Tax Deduction Law

Friday, December 18, the President signed legislation that renews the tax deductibility of mortgage insurance premiums (MI) for qualified mortgage borrowers through 2016.

What is MI?

If your down payment is less than 20%, there is mortgage insurance. Most often, this is paid via a monthly fee, but you can also choose to pay it as an upfront lump sum, or half lump sum with a lower monthly fee. Another option is lender-paid MI where you take a higher interest rate in exchange for not having the fee.

MI protects the lender in case you default on your loan. In a moment, I will explain a new advantage for you, the home buyer.

How Long Does MI Last?

With a conventional loan, when you have 20% equity, you can ask your mortgage lender to drop the MI. Most FHA loans require MI for the life of the loan. If you have an FHA loan with enough equity, it can make sense to refinance into a conventional loan to  get rid of the MI — especially if you can lower your interest rate and/or loan term at the same time.

Using MI as a Tax Deduction

If your adjusted gross income is  not over $100,000, you may deduct all of the MI premium.

If your adjusted gross income is $100,000.01 to $110,000, then deductions are phased out at 10% increments for each additional $1,000 of adjusted gross household income.

A Silver Lining to MI: A Perk for Home Buyers!

One reason a lot of folks dislike MI is that it protects the lender, not them. (Although to be fair, MI enables you to buy a house with a small down payment.)

Now, there is an additional advantage! Some lenders — including myself — can offer you protection in case of job loss along with MI. This particular program will pay six months’ mortgage payments, up to $1,500/mo, if you are out of work. This is a lot of peace of mind, knowing that your mortgage won’t slide into default while you are between jobs. And even if $1,500 isn’t enough to cover your entire payment, it will go a long way toward making your payment so that your emergency savings account doesn’t tap out so quickly.

There is no payback whatsoever. Up to $9,000 will be paid toward your mortgage if you are out of work. It is not a loan; it is a true insurance benefit. This feature is for the first two years of home ownership.

Now that I’ve mentioned being a licensed loan officer, I am required to state my NMLS license number, which is 1284134. (CA, WA)  Employed by Envoy Mortgage, a full service mortgage lender.

equal housing logoThank you for reading my blog. If you have any questions, let me know.


After Seven Long Years, Feds Raise Interest Rates

Floor of the NY stock exchange today. Photo by Richard Drew/AP

Floor of the NY stock exchange today. Photo by Richard Drew/AP

Today was the first time since 2008 that the U.S. Federal Reserve Board raised interest rates. This was no surprise as Speaker Janet Yellen had given us plenty of warning that it was coming, that the economy was strong enough to handle a rate increase. Rates increased by 0.25%.

Since the market is anticipatory, lenders had already built into their rates this expected increase. So why then have rates been so volatile this week?

Other factors, including the feeling of uncertainty in the marketplace, have influenced interest rates more than this move by the Feds. Investors can be jittery, and it may well take several more days for nerves to calm down.


One important thing to understand is that the Feds did not raise mortgage interest rates. They raised short term rates, and a 30-year mortgage is not short term. Short terms rates, typically called money market rate and the treasury bill rate, affect credit cards, auto loans, and other short term loans.

If you are carrying credit card debt from one month to the next, now is a good time to stop using your credit card until you pay off that balance.

On the other hand, mortgage interest rates will be influenced by other factors, including the global economy.

While we could predict today’s short term interest rate increase (because the Feds told us it was coming), no one can consistently and accurately predict mortgage interest rates.

I continue to stand by these guidelines, which I have written about in my books.


  1. If you see a rate you like, lock in the rate and don’t second guess yourself.
  2. If you plan to stay in your home for less than seven years, look at the 5/1 ARM, because you will save money both in the beginning and overall.
  3. If you plan to stay in your house for the long-term, or if you cannot sleep at night without a “forever rate,” then take the fixed rate mortgage.
  4. If you are refinancing, you must consider the term (number of years) equally with the interest rate.

As always, thank you for stopping by my blog. For more information about today’s event, see the Federal Reserve Board Press release here.

Should You Buy or Sell a House During the Holidays?

Christmas Wreath on a Red DoorI have purchased a home during the holidays, and I have purchased a house during the peak of summer. Let me tell you, it is easier to buy during the holidays. Here’s why.

Three Advantages of Buying a Home in December

  1. Less competition means you are more likely to get a better price and less likely to lose out in a bidding war.
  2. Seller knows you are serious, because the looky-loos stay away when they’re otherwise occupied with shopping, decorating, and baking.
  3. Interest rates usually remain flat. As of today, the Feds have not issued the rate increase they have been speaking of.

You Don’t Have to Move During the Holidays

Just because you execute a Purchase & Sale Agreement now, it doesn’t mean you have to move during Christmas week. You can set your closing for January after your busy schedule has calmed down.

How Long Does It Take to Close a Loan Now?

As a Senior Loan Officer, I am closing loans in 30 days; but not all lenders are as fast. Many are asking for 45 days with the new TRID laws that require an extra three-day waiting period between providing the Closing Document for your review and your actual loan signing. Speak with your loan officer about how fast they are closing loans nowadays. If his or her answer sounds shaky or if they want longer than 45 days, it likely means they are having issues processing and I would seek another lender. If you want my recommendation for a loan officer who can close in 30 to 45 days, please see the state list below and then send me an email with the details via my Ask Carolyn Warren page.

States for which I can recommend a loan officer:


Required Legal Disclosure:

I work for Envoy Mortgage, a full service mortgage company. NMLS # 1284134
State licensed in CA and WA

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A Storm, Hurricane, Tornado, Flood, or Other Natural Disaster Could Delay Your Home Loan Closing

house after storm (2)Winter storms have swept across the Plains and Central Texas. This morning, alerts went out to all loan officers doing mortgage loans in those areas. Has a storm hit your area? Are you in the process of buying or refinancing a home? If so, this is information you need.

After a storm that could potentially damage the subject property, an inspector (usually the appraiser) will be required to visit the property to assess any damage.

If no damage was done, your loan will progress as normal. However, there could be a delay of several days while underwriting waits to receive the inspector’s report.

If the storm damaged the property, then repairs will need to be completed, and the inspector will revisit the property and take photos for underwriting verification. Only then can your loan progress to final approval.


If you are required to pay an additional inspection fee that will be included in your closing costs, then the new TRID law (as of 10/3/2015) requires the lender to complete a Change of Circumstances form and send you a new Loan Estimate (LE) with the additional fee. Then you have to wait 3 days so that you have ample time to review the new LE. Yes, the Feds have decided you need three days to look at the inspection fee before your lender can proceed with your closing documents. If this causes a delay in your closing, you need to do two things:

  1. Check the date of your interest rate lock expiration. Your loan officer can help you with this. You might need to buy an extension for your rate lock.
  2. Check to see if you need the seller to sign a closing extension. Check with your real estate agent.

If this delay is a concern, speak with your loan officer about the possibility of paying for the re-inspection fee outside of the loan closing costs so that a new LE with the required 3-day wait period is not required.

I hope everyone stays safe. My heart and thoughts go out to those who were hit by the storms.

Available at most fine booksellers.

Available at most fine booksellers.


Available at most fine booksellers.

Available at most fine booksellers.

How I Got a Credit Score of 815 (and you can too!)

credit rangeI checked my credit score today using the free site, Credit Sesame. More about what that means in a moment. But first, I was pleased–but not surprised–to see that my score today is 815. Here is how I earned the coveted score of over 800.

Payment History = 35% of the credit score

I have zero late payments on my report. (It wasn’t always that way. More about that later.)

Credit Utilization = 30% of the credit score

If your credit cards are maxed out, you get docked a lot of points, even if all payments are made on time. If your credit cards are over 50 percent of the limit, you get docked points. My credit utilization is only 6%; so because it is under 10 percent, I gain points.

Age of Credit History = 15% of the credit score

My oldest active account is 18 years, 1 month old. If I close that account, I will lose points, so I don’t want to do that.

My newest account is 8 months old, because I opened a credit card within the last year. Once an account is open for six months, it is considered old enough to be included in your credit rating. Also, at 8 months, it has aged enough that it is no longer docking me points for “unknown usage,” meaning they don’t know if I will max it out or pay on time when first opened. This is why you don’t want to open a new account right before applying for an auto loan or mortgage.

Account Mix = 10% of the credit score

The credit bureaus prefer a mix of credit cards, installment loan (such as auto or student loan), and mortgage loan. However, you can still get a score of over 800 without a mix; as is my own case. I have five open credit accounts.

Credit Inquiries = 10% of the credit score

I have zero inquires in the past 12 months, according to Credit Sesame. That seems odd since I opened a credit card just eight months ago. Either Credit Sesame is incorrect or the card didn’t result in a hard credit inquiry. I will have to look into that.

Is Credit Sesame Accurate?

Credit Sesame provides one score obtained from the Experian National Credit Equivalency, which means it is one bureau’s consumer credit score. The consumer score is more lenient than the mortgage score, because it is less risky to give someone a credit card than it is to give them a mortgage. The score from Credit Sesame varies from the actual Experian score by an average of 33 points, according to a study conducted by Doctor of Credit.

Using Credit Sesame is free, gives a good ballpark estimate of your score from one of the three bureaus, and will not hurt your score or show as an inquiry on your credit report.

If You Need to Repair Your Credit (Like I Did)

Cover.CreditThere was a time when I did not have an 800 score. I unknowingly made some mistakes, including letting a department store credit card payment slide for a month. On top of that, someone else’s late auto payment was showing up on my report. When I purchased my first home as a young, single woman, I had to take an FHA loan, because my score didn’t qualify for a conventional loan.

I took charge of my situation and raced to the top of the chart. You can do the same!

Certified credit repair specialists and experienced attorneys are one way to go. But if you don’t mind taking the time to do the work yourself, you can save $500 to $2,000 in professional fees. Instructions on how the professionals restore your credit and good name are in my book, which is getting great reader reviews on Amazon, and many more emails to me from folks who don’t post reviews. Feel free to check it out here.


Why Did Mortgage Interest Rates Increase Midday?

yellen 750xx4000-2248-0-15Rule of Thumb: Bad economic news = lower interest rates.

Good economic news = higher interest rates.

November 4, 2015, Federal chairwoman Janet L. Yellen spoke before the House Financial Services Committee. She said the economy is “performing well,” and therefore “it could be appropriate” to raise interest rates mid-December.

A few hours later, William C. Dudley, president of the Federal Reserve Bank of New York, said, “I fully agree with the chair. It is a live possibility, but let’s see what the data shows.”

Mortgage lenders reacted immediately. I was sitting at my desk when the email from our Pricing Dept. came through with the subject line: “RATES WORSENING!!!!” All interest rates were suspended while readjustments were made. New rates posted showed an increase in fee for any particular rate of about 0.3%.

If, for example, you had a $200,000 loan, to get the interest rate you want, it would cost $600 more in fee. (.3% of $200,000)

Lenders felt the need to raise rates immediately, because they don’t want to be holding a lot of loans that are under-priced next month.

Will Rates Go Down Again?

It can appear that a midday rate hike is an over-reaction, a knee-jerk response that went too fast and too high. It often happens that the cost settles back down over the next few days or so. But not always.

Just as lenders were taken by surprise midday, no one can accurately predict on a consistent basis what will happen with interest rates. Experts give educated guesses, but that is all they are.

Yesterday, several representatives urged Janet Yellen to wait longer before raising interest rates. California Democrat Brad Sherman joked, “If you want to be good with the Almighty, you might want to delay until May.”

One thing is for sure: only God Almighty knows for certain what will happen.

Photo credit: Bloomberg Finance


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