Interview with Attorney Siegel on “The New Rules for Mortgages”

Originally posted 2009-12-01 10:36:37. Republished by Blog Post Promoter

Dale Robyn Siegel is a licensed attorney in New York and owner of Circle Mortgage Group, a boutique mortgage broker in Westchester, New York. She is an adjunct professor at Baruch College as well as NYU Schack Institute of Real Estate. She is currently on a mission to re-educate the consumer about real estate finance. Dale has been speaking to the public and teaching real estate professionals about mortgage finance for the past ten years. You can learn more about The New Rules for Mortgages at thenewrulesformortgages.com, and you can purchase a copy at Amazon.com.

1. How much money will a first time home buyer need to purchase a home?

It is best to have a 20% down payment these days. The lenders will also require additional funds to cover closing costs and reserves for taxes and homeowner’s insurance. A reserve of at least two months of housing expenses is required, however I recommend having at least six months covered and in the bank. You just never know what can happen these days.

2. What changes exist to acquiring a mortgage should a buyer be most concerned about?

The borrower is qualified on their credit, assets and income under very strict guidelines these days. Not too long ago, lenders would use one strong factor to compensate for weak ones. Now, there are simply risk assessments and a good credit score might not make up a high expense to income ratio. Thus, it is easier to get rejected for a loan even if the client is almost perfect.

3. What changes have been made to the appraisal criteria, and how does it affect the buyer’s ability to get a mortgage?

Appraisals are now under the scope of HVCC (Home Valuation Code of Conduct) and are ordered by a management service company rather than the lender or loan officer. The service hands out jobs on a “round robin” system (think of up’s in a car dealer). The next appraiser on the list gets it and he/she might not be familiar with that property type or location. Therefore, the appraisal might not be performed from experience and will be unacceptable to the lender or come in low in value. The borrower bears the burden of the cost [appraisal], so they might have to pay for a new one.

4. What credit score is required to get a mortgage?

A buyer’s best asset these days is a good FICO score. If a minimum credit score of 620 is not met, there will be few lenders that one may go to (for a decent mortgage). Of course, there are plenty of lenders that will offer mortgages at different levels of FICO score, but the lower the score, the more of a down payment is required and the higher the interest rate.

5. How long does it take to close on a FHA/VA loan or conventional loan compare to the time to close those loans before the changes to mortgage rules?

I would give a loan more towards 60 days to close whereas before it could have been less than 30. The better prepared the parties are, the faster the process goes.

6. How often does the loan get denied after the completion of the appraisal? What can the buyer do to protect his or her self from the possible monetary losses?

As stated, appraisals are coming in lower than purchase prices more often than not. If this happens, the buyer has to either come up with more money or renegotiate a lower price. Some sellers are willing to reduce, other are not. If the deal goes south, the buyer does not get reimbursed for any money already spent on appraisals or engineer reports. It is simply the cost of doing business.

7. Are there other reasons that a buyer is turned down after receiving a pre-approval letter?

A preapproval is not a commitment to lend. Think of it as a review of the financial profile and a promise to work on getting a loan approval. A borrower can be rejected if the bank feels they do not qualify after they have received all of the documents. In addition, a borrower’s situation could change with loss of employment, income or a credit blemish. So, it is not ever until the fat lady sings- as they say.

8. If a buyer is turned down can the buyer get his or her money back?

Typically a contract will have a mortgage contingency clause. This will state that they have a set time (45 days) in order to make a reasonable application for a mortgage. If the borrower has done all they could and not get a loan, then they will get the down payment back. If they have done nothing to get a mortgage, it will be tough to get a refund.

9. Should a buyer get a copy of his her credit report before applying for a mortgage? If so, when should he or she get it? Who should the buyer contact to get a copy of his or her report? How does the buyer dispute incorrect information? How long does it take to correct the information?

Yes, regardless all people should get a copy of their credit report once a year just to review it for errors or changes. A free annual credit report is allowed by law from each of the three credit bureaus. This can be researched on line for easy access and information. After the report is received it should be examined and corrected with both the vendors/creditors and the bureaus. It takes about 60-90 days to show changes on a report and have a positive effect on the FICO score. So, it is a good idea to stay on top of one’s credit.

10. In your opinion, have the changes that have been made improved the mortgage industry or made lending more difficult and complicated for the consumer?

It was a necessary evil on so many levels. The bad apples had to be weeded out of the industry, the lender portfolios needed be flushed of bad loans and non-qualifying borrowers needed to be deterred from getting mortgages. On the downside it does eliminate many good qualified borrowers which is having a crushing effect on the real estate market. However, once this is over and we are back to reality, the ride will be smoother and smarter just ahead.

Great News Investors, You Can Finance 10 Properties Again

Originally posted 2009-02-16 08:15:06. Republished by Blog Post Promoter

On March 1, 2009, <a href=”www.taylorbrownrealestatetalks.com”>real estate investors</a> can once again own and finance up to 10 individual properties.  There are restriction reversal, though. 

The restrictions are as follows:

You must have:

1. 720 credit score
2. 25% downpayment for a 1-unit (30% for a 2-4 unit)
3. No mortgage delinquencies in the last 12 months
4. 6 months of reserves for each investment property

Fannie Mae determine that investors can “play a key role in the housing recovery”.   The change of heart came as a result of foreclosure auctions not going as well as hope due to real estate investors not having cash were limited in the number of properties they could own. 

This decision once again allows investors the capital needed to grow their portofolio and create  wealth through their passive income with real estate investing.   Contact us at Taylor-Brown Real Estate and take a look at the real estate investment properties that have a positive cash flow.   Call  219 803 4489 or email Serena at snorbrown@yahoo.com for details.

Today’s special is 16 short sale properties all under $15K with 13 that are occupied with paying tenants.  There is a 17th property, but it is for $25K.  It, too, is occupied with a tentant paying 858 a month.  

Honesty Will Help Sell Your Home

Originally posted 2010-01-08 05:00:38. Republished by Blog Post Promoter

One quality that you should be looking for in your listing broker is honesty, so if a broker does not give you a realistic view of the value of your home do not hire them.  The broker should provide a detail comparative market analysis.  The analysis should be of the last 30 days of homes with similar features.  Here is why.

Today’s market is very volatile, so if you do not need to sell don’t.  You may find that surprising statement coming from a real estate broker, but there are several factors that makes this statement the best advice for any seller.

In previous years, a seller could list his or her home for as much as the seller wanted as long as the buyer was willing to pay the price, it sold.  The seller also could list the home at a number higher than the Realtor recommended that the seller list the home at, and it would sell.   The seller would term this pricing strategy as “wiggle” room. The reason this stragedy was successful was because it was a seller’s market back in 2003 to 2005.

Those tactics started showing the first signs of soften in 2006 when homes that were listed started remaining on the market for 3 to 6 months before selling.  Prior to 2006, it was not uncommon to have a bidding war on homes.  Several changes in the market happened in 2006 that influenced the market today and turn the market from a seller’s market in 2006 to a buyer’s market in 2009:

• increased in foreclosed homes
• changes in appraisal methods
• increase in minimum credit score to purchase a home

At the end of 2008, there were an upheaval of foreclosures and sharp economic downturn; thereby, prompt mortgage companies to tighten their belt and not allow financing.  Those changes affect buyers being able to qualify for a loan due to the credit score requirement to increase to 620.

The belts were so tight that the government had to step in.  I would like to find out if you think the changes to the mortgage industry that the government mandated helped or hurt buyer? seller?

How to Raise Your Odds of Getting Approved for a Mortgage

Originally posted 2009-12-15 19:16:46. Republished by Blog Post Promoter

Your credit score is the catalyst to you receiving or not receiving a mortgage.  Advantage Mortgage has taken some of the guess work out of obtaining a mortgage.  The company has included an easy to understand tutorial on mortgages and common terms to help the buyer understand common terms that will be used during the acquisition of a mortgage.

Not only does Advantage Mortgage prides itself on providing information on the terms related to mortgages, it wants to be the company that you think of no matter what your credit score.

Advantage Mortgage has cutting edge mortgage programs for:

• self employed
• first-time home buyer
• investors
• move up buyers

No matter what your mortgage needs let Advantage Mortgage guide you through the process.

All to often a buyer finds him or her self alone when considering purchasing a home.   Advantage Mortgage holds your hand with its knowledgeable professionals.  These professionals will answer all questions pertaining to mortgages.  They will provide you with a good faith estimate of all charges as well as, explain the difference between a fixed and adjustable rate mortgage.

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Mortgage Interest Rate – Latest News

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To truly benefit from a mortgage refinance, the new interest rates must be lower than your previous rate. With the housing market in the condition it is, and.

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Articles and Blog Posts About the Mortgage and Housing Market on Cape Cod.

Improve Your Credit Score – Lower the Interest Rate on Your Loans …

Improve Your Credit Score – Lower the Interest Rate on Your LoansSubprime Blogger (blog)By having a low credit score, under 650, you are going to find that the interest rate on most of your loans is very high. To combat this your goal …

Get Your Powerful Copy of The New Rules for Mortgages Today

I was honored recently with reviewing the book, The News Rules for Mortgages.   This book was written by Dale Robyn Siegel.  Dale Siegel is a renowned attorney and current president of Circle Mortgage Group in White Plains, NY.

Her new book is unprecedented and I felt it would be beneficial to the readers to reveal more strategies that a reader will receive if he or she get his or her copy of the book.

Did you know that certain things that you do with your credit has a weight of importance?  For instance, paying on time is 35 percent of the FICO score.

“Controlling your debt” is 30 percent of your FICO score.

Cancellation of credit cards is a “no no” because longevity of credit makes up 15 percent of your FICO score.

In Siegel’s book, she reveals exact how you can use the latter information to improve your credit score.  Get your copy today by click on this link.

Related Articles about The New Rules for Mortgages…..

• The New Rules for Mortgages by Dale Robyn Siegel (bargaineering.com)
• Dale Siegel Shares the New Rules for Mortgages (frugaldad.com)
• 5 Ways To Kill Your Credit Scores (creditra.blogspot.com)
• Win at the credit scoring game (money.cnn.com)
• What is Your Mortgage Handicap? (zillow.com)

Credit How Important Is It?

Originally posted 2008-12-24 06:41:44. Republished by Blog Post Promoter

If you are considering buying a home, check your credit first.  Most credit reports have incorrect information.  According to the US Public Interest Research Group as many as 79 percent of consumers have mistake on their credit report.

First step, I would recommend is get a copy of your credit report.  The credit bureau can provide one free copy a year and you are entitled to a free copy if your credit is denied.  There are three major credit bureaus, and they are:

• Equifax Post Office Box 740241 Atlanta, Georgia 30374 or call at  800 685 1111  www.equifax.com/fcra
• Transunion Post Office Box 1000 Chester, PA 19022 800 916 8800 www.transunion.com
• Experian Post Office Box 2104 Allen, TX 75013 800 493 1058 www.experian.com

When contacting the credit bureau by mail, please provide the bureau with proof of identity.  Provide:

• Copy of driver license
• Copy of social security card
• Last five addresses

You will need to get all three credit report because to qualify for a mortgage all three credit bureau’s score are used.  This is called a tri-merge report.   The mortgage uses the middle credit score to qualify you for the loan, so you want to make sure all three is as high as you can get them.

Once you have your credit reports look to see if all the information is accurate.  Dispute incorrect information through the credit bureau that is reporting the information in writing.  Some bureaus provide a fill in the blank form for your convenience for this purpose.  If one is not provide, write a letter that gives the name of the creditor, the account number, and the reason the information is incorrect.  The creditor has 30 days to response to the credit bureau as to the accuracy of the information.  If the information can not be verify it must be removed.

Along those same lines, all outdated information on your credit report is supposed to be removed after seven years.

Even if there is bad credit that is true.  Time is the best cure for bad credit.  If a foreclosure is on your credit your score will get better after three years and it has to be removed after seven years.  A Chapter 7 bankruptcy has to be removed after ten years.

With the frequency of identity theft, I would also recommend checking your credit often because credit fraud is difficult and costly to correct.

Related articles on credit

• How to Remove Unauthorized Hard Inquiries (bargaineering.com)
• 5 Ways To Kill Your Credit Scores (creditra.blogspot.com)
• Credit, Risk Assessment Score and Budgeting (slideshare.net)