Loan Limits Increase, Saving Buyers Money

BIG NEWS!

Conforming loan limits have increased to $484,350.

High balance loan limits have increased to $726,525.

Conforming Limits

If you want the best loan, a conventional loan, you can now borrow up to $484,350 without paying a higher interest rate for a jumbo loan. If you have not owned a home in the past three years, you can do as little as 3 percent down payment (5 percent down for previous home owners).

High Balance Limits

If you live in an area where the median price of homes is higher than the national average, such as much of California or in Western Washington, then you can borrower up to $726,525 without paying a higher interest rate for a jumbo loan.

Advantages of the Mortgage Broker

  • Your mortgage broker (myself in CA or WA) can get you these loans now, today. The banks and other lenders are trailing behind at waiting until 2019 for availability.
  • Your mortgage broker will shop wholesale, saving you money over retail (banks, etc.) Why pay more?
  • Only the mortgage broker is required by federal lending law to get you the best and lowest interest rate they have available.
  • A mortgage broker is required to take classes annually, to update fingerprinting/criminal background checks every three years, to have their credit checked regularly. Why would you go to an unlicensed loan officer at a bank or credit union for the most important financial decision of your life? Yes, I am biased, but for a very good reason!

Thank you for reading and passing on this vital information to your real estate agent and interested home buyers.
Carolyn Warren, NMLS # 1284134 Apply online here.

Build and Protect Your Credit Like the Pros

Released today! 

Build your credit profile in the very best way so that you achieve top tier credit, gain respect from everyone you do business with, and save thousands of dollars on everything from auto insurance to a home loan.

Reading this book will take you from beginner status to expert. It starts with the basic of how to get your first credit card and proceeds to insider information not many people outside the industry know. When you finish, it will be like having a college degree in credit, if there were such a thing!

It’s not enough to have top credit. You must also protect your credit and finances, because there are more scams, frauds, and schemes now than ever before. Get the tips you need for protecting yourself from rip-off artists.

Makes a good gift for young adults, immigrants to the U.S., and anyone else who wants to improve their expertise on credit scoring.

Paperback available today for only $8.99. Kindle is $5.99.

Order here.

 

Three Things To Do When You Want to Buy a House in the Near Future

Is buying a home in your near future? If so, you will probably be asking to borrow $200,000, $300,000 or even $500,000. That’s a lot of cash!

Certain requirements come along with lending large sums of money. Here’s what you can do now to improve your chances of getting approved.

Buying a House?
Here’s Your “Must Do” List

1. Save money like a squirrel saving nuts for the winter. Stop buying $5 coffee drinks, another pair of shoes (when you already have pairs with no holes in the soles), clothes on sale, restaurant meals, and all those other seemingly small — but honestly — unnecessary items. The underwriter wants to see your bank balance increasing every month to show that you will be able to afford a house payment that’s more than your rent.

2. Say no to offers to open new credit. Getting a new credit card to save 10 percent on your purchase today will lower your credit score. It is not worth the savings! You want top tier credit so that you qualify for the lowest interest rate on your mortgage. It makes no sense to save $20 today and pay $1,000s more in interest on your house payment.

3. Be happy driving your old car. One of the biggest mistakes people make is adding an auto loan to their debt ratio. The proper way to prioritize is house first. Everything else is secondary and must wait until after you are in your new home.

THE SACRIFICE YOU MAKE TODAY WILL BE WORTH IT WHEN YOUR REALTOR HANDS YOU THE KEYS.

Do your friends a favor and pass on this information to them. As always, thank you for reading my posts.

 

New Underwriting Guidelines Coming December 8

Fannie Mae has announced that DU 10.3 coming out the weekend of December 8, 2018, will have new underwriting guidelines. If you plan to apply for a home loan soon, or if you are a mortgage lender, here is what you need to know.

Tighter Rules for Debt Ratio

For people who have a high housing ratio, approvals are tightening.

This means if the house payment is most of your monthly outgo, you will not be able to push the debt-to-income ratio as high as before. Statistics show that people who have little to no debt other than their house payment are a greater risk to lend to when the house payment pushes the limit.

Looser Rules for Appraisal Waivers

More properties will receive an appraisal waiver as those loans continue to perform well.

This means that if you have a good credit score, good assets, and a good down payment, Fannie Mae might not require an appraisal on the property, saving time and money on the loan. However, even if you do have all those factors, an appraisal report could still be required for another reason, such as there is not enough data on the particular address.

Good News for Medical Collections

This is not a change, but as a reminder, medical collections do not factor into the credit score.

No Tax Liens or Judgments on Credit Reports

Judgment and tax lien information are no longer reported on the credit report due to the National Consumer Assistance Plan.

However, lenders use other sources for discovering liens and judgments, so you still have to deal with them to get a home loan. If you have been a tax lien and a payment plan, and if you’ve been paying on time for 12 months, that will not stop you from getting approved for a mortgage.

To apply for a home loan with me, please see here.

Thank you.

Hard Inquiries on Your Credit Report

Before you get annoyed about all those inquiries on your credit report, read this.

Only a hard inquiry affects your credit score.

A hard inquiry is when you apply for a loan or credit card and the lender then pulls your credit report. Only at YOUR request, does the creditor order your report in order to approve your application.

A soft inquiry is when your creditor conducts their periodic check to make sure your credit isn’t going downhill in a hand basket. A soft inquiry does not affect your score in any way, so don’t worry about it.

A hard inquiry stays on your report for two years, BUT…
it only affects your score for 12 months. So, don’t concern yourself with inquiries that are more than a year old. They mean nothing to you.

Your Legal Rights

In order to make a hard inquiry, the person ordering your credit must have your permission. If anyone pulled your credit without your knowledge and consent, they have violated the law; therefore, they must inform the credit bureaus that the inquiry was made in error and to remove it.

Sometimes credit card companies perform massive soft inquiries looking for candidates to send solicitations to. I suggest you stop those immediately by going to http://www.optoutprescreen.com. That way, an identify thief can’t steal the application from your mailbox and open a card in your name.

A court order is a permissible purpose for pulling credit, even without your written consent.

Don’t Make False Accusations

If you applied for credit, don’t accuse the creditor of making an inquiry without your consent.

Likewise, don’t write to Experian, Equifax, or TransUnion claiming an inquiry was unauthorized when it was, because doing so is saying the creditor broke the law when he or she did not.

Stand Up For Your Rights

On the other hand, if you applied for financing with an auto dealership, then later discover 25 inquiries on your report, that is not right, and you have good reason to demand that the auto dealer instruct the credit bureaus to remove them. If a bank or other lender pulled your credit on the sly, they are in violation of the law and must make it right for you.

If you are married in a community property state and your spouse applies for a loan and gives the loan officer your name, social security number, and date of birth, the loan officer may pull both of your credit reports.

No one can pull your credit report without having your social security number. Remember that and keep your SS private when you don’t want an inquiry on your report.

Inquiries That Don’t Count

An employer, an insurance agent, or government licensing agent may pull your credit (with your knowledge and consent), but this type of inquiry does not affect your credit report, so do not be concerned. Your score will not be docked.

The Most Damaging Inquiries

The most damaging inquiries to your credit report would be when you apply for multiple store cards in a short amount of time. This often happens during the holiday season when store clerks entice you to open a credit card in order to save money on your purchase. If you have a Visa card (or two) and a MasterCard, then you don’t need a wallet full of individual store cards. Just say no thank you.

Inquiries make up 10 percent of your score. If you have A credit and you need to apply for financing, you have nothing to fear about a hard inquiry appearing on your report.

If you need to repair and restore your credit,  check out this guide here.

Interest Rates Spike Higher

In case you haven’t been watching the market, this week mortgage interest rates spiked higher. All lenders have been raising rates, not only in the morning, but two or three times throughout the day.

If you were quoted 4.5% and now are being quoted 5.125%, your loan officer is not lying or pulling a fast one. That is what the market has done this week. (Your interest rate will depend on your credit score and down payment as well as the type of loan. This is just one example.)

Interest rates remained low for longer than any of the experts predicted after the great recession. Now, with the robust economy and the record low for unemployment, the Federal Reserve Board is raising short term rates to protect the economy from inflation and recession. Mortgage rates are following suit.

The silver lining is that higher interest rates are good for your savings and investments.

You must speak with your loan officer about locking in your interest rate. Rates have been moving upward all year, and the prediction is for another increase in December.

The trend is not your friend! I hope we might see a settling down a bit next week, but I do not know if that will happen or not. If it does jag downward, my recommendation is to lock fast, because it might not last the entire day.

 

 

 

Parents: Protect Your Child’s Credit

As parents, we protect our children from danger. So, have you thought about protecting your child’s credit and good name?

One family in Miami discovered that a thief stole their tax returns and obtained the names and social security numbers of three of their children. Credit cards were opened in their names, merchandise purchased, but never paid for. It took six months of work for them to sort everything out — and they live in fear that it will  happen again, but the social security numbers are out there.

By the time your child is 18 and wants to get a student loan or begin establishing credit is not the time to discover that his/her credit has already been trashed.

A minor does not have a credit file and that’s the way it should remain. A fraudster should not be using his/her social security number to open credit.

More than 1,000,000 children were victims of ID theft last year, according to an article in USA Today, 9/21/2018. Sadly, the majority of the criminals were members of their own family who had easy access to their personal information.

Prevention is Better than Cure

You can freeze your child’s credit at no cost. A freeze prevents any credit from being opened in your child’s name until after the freeze is removed (which takes about three days).

Minors who are 16 or 17 must request their own credit freezes, and they can do so by mailing in a copy of their driver’s license or other photo ID.

For children under 16, parents or guardians must mail in their requests. You can find instructions on the websites of the credit bureaus:

http://www.experian.com/freeze/center.html#content-01

http://www.transunion.com/credit-freeze

https://www.freeze.equifax.com/Freeze/jsp/SFF_FrzMinorChild.jsp

In addition, take steps to see that your child’s personal information is locked away securely so that a visitor to your home cannot obtain it.

Yes, it takes some effort to freeze credit, but working your way out of a credit nightmare is a thousand times worse.

Please pass on this information to other parents so they can also protect their children’s credit and good name.

Thank you!

Credit News for U.S. Veterans!

New credit leniency and protections for our highly respected U.S. Veterans have been signed into law. Here are the important points to know:

  • Medical debts/collections incurred cannot be reported to a veteran’s credit report for one full year from the time the medical service was provided.
  • If any medical debt has been reported as delinquent, a collection, or a charge-off, it must be removed from the veterans credit report once it has been satisfied.
  • If a medical debt is in the process of being paid by the VA, and the Veteran provides the proper documentation to the credit bureaus, it must be removed from their credit report.
  • Veterans on active duty are to receive free credit monitoring that will alert them to any material changes on their credit reports.

Thanks to the Economic Growth, Regulatory Relief and Consumer Protection Act initiated by Senator Mike Crapo (R-ID) and signed into law May 2018.

Thanks to Credit Repair Resources, LLC, for this information.

Thanks to every United States Veteran and Service Member for protecting our great nation.

Please pass on this important information to every U.S. Veteran, because many have medical accounts and are unaware of this law. Thank you.

Why are Interest Rates Going Up?

Mortgage interest rates have been trending upward all year. So, what’s ahead, and why?

The Federal Reserve Board will be meeting at the end of next month, and right now, the markets are banking on another .25% increase, according to Origination Pro, a publication for mortgage loan officers.

“Again?” Yes, as I type this, I have received an alert that rates are going up midday and to lock now if you’re floating your rate.

“Why?” Because good economic news leads to higher rates.

  • The number of new jobs for August was higher than expected.
  • More individuals are re-entering the workforce.
  • Wages have increased, on average.
  • Consumers are spending more money, putting cash into the marketplace.
  • Consumer confidence is soaring.

Chairman Jerome H. Powell said in his speech on changing markets and monetary policy:

“Over the course of a long recovery, the U.S. economy has strengthened substantially. The unemployment rate has declined steadily for almost nine years, and at 3.9 percent, is now near a 20-year low… With solid household and business confidence, healthy levels of job creation, rising incomes, and fiscal stimulus arriving, there is good reason to expect that this strong performance will continue.”

Read the full speech here.

Time for Action!

If you have an Adjustable Rate Mortgage (ARM), consider refinancing into a fixed rate, if you plan to keep the house for a substantial amount of time.

If you want to shorten your mortgage term to 20 years or 15 years, do so now before rates go higher.

If you want to buy a home and stop paying rent, don’t procrastinate. Get pre-approved for financing and contact a local real estate agent.

If you are working on your credit, ask your loan officer if you can qualify for an FHA loan now while your credit is improving.

As always, thank you for reading and recommending my books and services.

 

Low Down Payment Loan Programs

Here’s the low-down on buying a house with a minimal down payment. 

These are excellent loan programs. I’ve highlighted some advantages of each.

HomePossible Advantage

  • Only 3% down payment.
  • You don’t have to be a first-time home buyer.
  • Can be a house or condominium.
  • You get the same low interest rate as the buyers with 20% down.
  • Reduced monthly mortgage insurance fee.
  • There is an income limit, unless the neighborhood is an area with low home ownership (called under-served area).
  • 620 credit score or higher.
  • Money comes from Freddie Mac (get the loan through your mortgage broker).

HomeReady

This is Fannie Mae’s version of HomePossible.

  • 680 credit score or higher.

FHA – Federal Housing Administration

  • Down payment is 3.5%.
  • 580 credit score
  • Bankruptcy Chapter 7 okay after 24 months discharge.
  • Can be a house, condominium, or manufactured home.
  • No education class required.
  • Has an upfront mortgage insurance fee of 1.75% that is rolled into the loan.

My Recommendation

I recommend speaking with a mortgage broker who will find the best and lowest priced loan that is available for you. Only a mortgage broker is required by federal lending law to get you the lowest interest rate available. Why? Because mortgage brokers shop wholesale lenders for you. Banks, credit unions, and direct lenders use their own money, so they don’t have the wholesale options. Therefore, they are allowed to charge you whatever they like (within limits). For example, today a home buyer received a quote from a direct lender (rhymes with Build Mortgage) with an interest rate of 5.5% whereas the mortgage broker’s rate is 4.5%.

If you are in Washington or California, I am licensed in those two states and would be happy to help you! (NMLS # 1284134)

You can apply online here.

 

 

 

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