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Below you'll find a list of actions to avoid during this critical time of your home purchase. Many of these come from real situations. Don't be an honorable mention here!
Don't buy big-ticket items. It doesn't matter if they are on sale because you won't have anywhere to put them if your loan is declined. This includes appliances, electronics, vacations, cars or expensive furnishings. Just hang on, or call me first so I can talk you down.
Don't go job hunting. Consistency in your career history is a good thing to lenders. However, switching jobs in the middle of the approval process may affect your approval. Just don't give notice or accept the new position during the purchase. Period.
Don't switch banks or move around cash. While this won't kill a file (if the funds can be documented), you might want to kill me because the paper trail will be thorough. Most lenders will instruct the submission of recent bank statements of all of your accounts: savings, checking, money market, and other liquid assets. The lender looks for a consistent rise and fall of your money over the month, in order to avoid fraud. Even for innocent purposes, moving around cash or switching banks will be verified in your account history, and while that seems easy, sometimes it opens up examination of other items in your statements. Please avoid it!
If you are refinancing, make sure your floors have flooring and wires are within code, and your deck is not rotting off the side of the house to the point it is unsafe. Yes, really. While the appraiser is there to assess for value, blatant code violations will be noted in your appraisal, and re-inspection will be necessary and costly, typically $100-$150. Don't give the appraiser a reason to come back.Both Alimony and Child Support are debts deducted from income. Unfortunately, this is not a game of don't ask, don't tell. I think of these items as debts so when I ask for debts, just go ahead and mention all of them. By avoiding the mention of any debts, you are putting your earnest money at risk as well as everyone's time.If something big is coming down the pike, let me know. Getting a loan, strangely enough, is an art form. Sometimes things are more complicated and time consuming than originally thought. If your job is changing to part-time in a few months, you need to look at how you are going to qualify at that time. Please don't wait until we are in the middle of the transaction and no longer qualifying to make mention of these life changes.Have you filed your tax return? Yes, we will need an official extension with estimated taxes paid . Even if I don't request your tax return, the lender is going to the IRS to get a record of your filing. If it is not filed and not extended, we have a closing delay. Just know, the topic is not avoided even if the return is not in your loan file.
Read your tax return before you sign it. It is hard to believe that even accountants make errors, but they do! I should not be the first person to read your tax return and finding the error. It's a big deal because if you need that return to qualify and have to file a corrected return, we cannot proceed until the IRS records it, typically a minimum of three weeks.
Big Cash Deposits in the Bank can not be documented 90% of the time Do you have any large deposits (and by large, I mean over $1000) that might be easy to explain but hard to document? Let me know so we can tackle this issue early on. The underwriter will "take" that money out of your asset figures which could be disastrous for your loan.Send in your paperwork early. Sometimes things start moving really fast and the last item on your agenda is sending in the paperwork for your loan. If what you thought it said is not what it actually says, we could have a problem to solve. Getting information early on is the best way to prevent delays at the finishing line.Ok--this is not every crazy thing that happens in this business, but let's avoid pitfalls and keep your file on track.
QUICK THOUGHTS WHILE QUALIFYING A BORROWER
I was running figures from someone considering a sales price of $425,000 and putting 5% down. Since we are early in the process and rates are trending upwards, I popped in a rate of 6%. The payment, with all the taxes, insurance and Private mortgage insurance, came in at $3130. I then replaced the 6% with a modest 3% rate. The payment went to $2412. That's $718 more per month for the same house as the interest rates rise.
Two weeks ago Freddie updated their Area Median Income charts. This may not seem like a big deal, but this will enable thousands of people either lower housing payments or they qualify for a larger purchase. For example, the 100% median income level for DeKalb County where I live is $95,700. This means the Home Possible limit is now $76,560 in DeKalb County, GA.
If you want to know exactly what income level a specific home is eligible for, use this link to put in your address.https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible-eligibility-map to see if you're income level is eligible then call me to find out the eligible benefits. If you want help securing the best financing available under this or other programs, give me a call.
Thank you!
Elizabeth Washburn
June 15, 2022 The U.S. Federal Reserve has confirmed a 0.75% increase in the federal funds rate.* This will be the third rate hike initiated by the Federal Reserve so far this year, with possibly another expected to follow as soon as the next meeting on July 27th. It's important to note that while the purchase market is still strong, home listings are showing declining aggressiveness in their asking price.
The government is pushing the economic breaks hard so I hope you are wearing your metaphorical seat belt. Everyone is saying, lock it!
*Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220615a.htm
Of course not! Did you know only 16% of the loan officers doing loans in the state of Georgia, actually live in the state of Georgia. That's crazy! By supporting a small business, you get the benefits of using someone who knows Georgia homes and can refer local companies to assist you in your purchase or refinance. As a local, it is my goal to assist clients with not only their finances, but provide connections that help them with their life. Do you need a good plumber, electrician, financial planner or even Realtor? I have been in Atlanta for 52 years. I know some good folks who can help, and I have access to local firms so you get great financing too. Trust local!
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Generational wealth, enough for the children and the grandchildren, is a nice goal. I certainly have wanted my expenses covered by a long lost deceased relative who liked to save. Unfortunately, planning our finances around such a boon would be foolish. Just as foolish is to tie down your earnings so tight because you want to provide for another generation when your life is not finished.
The reverse mortgage (HECM) has come a long way since it initial launch in 1961. A HECM is a normal mortgage lien against the property, similar to an equity line, where you can access part of the home equity with no monthly principle and interest payment. The intent of the reverse is to improve the senior’s life through increased cash flow and allow the senior to age in place without being a burden on their family. Properly structured, the borrower can also protect the remaining equity so they can leave it to their children if that is what all involved want to do.
Balancing your life versus paying off debt is tricky, especially on something as expensive as a house. As a mortgage broker, I do my best to listen to all factors so clients can balance their debt-free desires with having a life well-lived. If you would like to learn more about this program, please reach out to me for a personalized discussion.
HAVE YOU FILED FOR HOMESTEAD EXEMPTION??
Madeline is asking!
Comment on this post once it is done!
If you bought a property anytime and you still owned it on January 1, 2022, I am talking to you!
You must apply for Property Exemption(s) before March 31, 2022 if you never have before.
Search online - "Your county" Homestead Exemption
99% of All Filings are Online Now.
If your home is owner-occupied, you automatically qualify for a Homestead exemption and assessment freeze.
This is one of the few middle class tax exemptions left.
For example, the standard tax on a 2 bedroom home may be about $4400/yr. With the Homestead Exemption it is closer to $2400/yr. In addition, there are several other exemptions for senior citizens, disabled people, widows of police, fire and military killed in action, etc. Go to your county website and make sure you file by March 31st. Links for several of the metro county webpages are on my webpage at https://newthresholdmortgagecorp.proiwebsites.com/NewThresholdAtlantaExpert
See the DeKalb list of all possible exemptions here: (https://dekalbtax.org/exemptions) Other than the Homestead Exemption, you have to apply in person for these others. exemptions. The process is not difficult but it must be completed before March 31.
Photo model: Madeline Washburn circa 2009. She now attends UGA as a freshman. Time flies!
VA follows FHA leads so these numbers also are accurate for VA loans.
LOAN THIS MONTH: CAN I PURCHASE WITH NO MONEY?
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My client thought the best program would be the USDA loan which requires no down payment, but the USDA program looks at household income, not borrower income, so they were quickly disqualified. Instead, by working hand in hand with some awesome sellers, we were able to offer my client a FORGIVEABLE second mortgage at ZERO interest for three years with NO payment and no funds at closing. They paid for an appraisal and credit report only. Sound too good to be true? It’s not!
Here are a few guidelines
If this sounds like something that *might* work for your purchase in Georgia, let’s brainstorm as to whether you're a fit. Send me a text or call me at 678-467-2330. Elizabeth Washburn
The greatest fully authenticated age to which any human has ever lived is 122 years 164 days by Jeanne Louise Calment (France) and she has a great real estate story to share.
She was born on 21 February 1875, around 14 years before the Eiffel Tower was constructed (she saw it being built), and some 15 years before the advent of movies. The year after her birth, Tolstoy published Anna Karenina and Alexander Graham Bell patented the telephone. Jeanne Louise Calment lived a quiet life in France, but an unprecedentedly long one.
Her marriage to a wealthy distant cousin, Fernand Nicolas Calment, in 1896 meant that Jeanne didn’t have to work for a living. That may have played a part in her extraordinary longevity: she was free to swim, play tennis, cycle (she was still cycling until the age of 100) and roller skate, all of which promoted excellent good health. Inevitably, in due course, those around her passed away – including her husband (poisoned by some spoiled cherries, aged 73), her daughter Yvonne (who died from pneumonia in 1934) and even her grandson, Frédéric (who died in a car accident in 1963). But not Jeanne.
As she was without heirs, in 1965 a lawyer named André-François Raffray set up a “reverse mortgage” with Jeanne. According to this arrangement, he would pay her 2,500 francs every month until she died, whereupon he would inherit her apartment. It must have seemed like a good deal for Monseiur Raffray (then aged 47) – after all, Jeanne was 90 at the time. Incredibly, however, Jeanne outlived him. He died thirty years later at age 77 but his family continued the payments. By the time of Jeanne's death, they had paid Jeanne more than double the value of her apartment.
DACA Status Recipients Eligible to Apply for FHA Insured Mortgages
Effective today, January 19, 2021, the Federal Housing Administration (FHA) is making FHA loans eligible to DACA individuals.
These individuals are classified under the “Deferred Action for Childhood Arrivals” program (DACA) with the U.S. Citizenship & Immigration Service (USCIS) and are legally permitted to work in the U.S. Congratulations! Ready to own? Call me!
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Rates are incredibly low right now. If you have plans to stay in your home for the next three years, call me.
This is especially true if you have a VA loan.
That's my entire blog this week!