VA follows FHA leads so these numbers also are accurate for VA loans.
PREPARING
Whether you're anticipating a total solar eclipse or a future home, both require preparation to get what you want out of the moment and save yourself from future headaches.
Here are two scenarios where I typically offer advice when given the time (61-90 days) to make the loan happen.
You're self-employed.; Move the money you are using for the purchase of a home to your personal account. If you have down payment in your business account, you can use it; however, the lender will want to "source" the funds in your business account(s). This means if there is anything private, like account numbers or client names in the bank statements, you may be revealing more than you desire. By having the funds transferred to your personal account more than 60 days before you go to underwriting, lenders can stay out of your business.
You're getting a gift for the down payment. If they love you enough to give you the money, perhaps they trust you enough to give that money 61 days ahead of underwriting. Of course, gifts are allowed on many loan programs if the transfer is documented and you have a gift letter; however, if the funds are already in your account for two months, the money is no longer considered a gift. This actually improves your qualifications in underwriting because a loan using your own funds for the down payment is considered a less risky than a loan with gift funds. If it is yours for 60+ days, it is no longer a gift.
As a last tip, I offer Fully Underwritten Loans WITHOUT a contract. In other words, we can turn your offer into the equivalent of a full cash offer pending the appraisal and title work. This is a powerful option at your disposal for those hard to obtain homes. Please let me know if I can help you purchase a home in Georgia.
*Eclipse photo taken near Dillon, GA on August 21,2017 using Canon Rebel T6, 300mm lens.
If you encounter an error on your credit report, you can take several steps to correct the matter. Below is a step-by-step guide to get you through this project. Be patient. It can take up to 60 days sometimes to get the entire report corrected.
1. First, get a copy of your credit report from each of the three major Credit Reporting Agencies (CRA): Equifax, http://www.equifax.com; Experian, http://www.experian.com; and TransUnion, http://www.tuc.com.
3. Send your letter by certified mail, return receipt requested, so you can document what the CRA received.
4. The FCRA mandates that all CRAs reinvestigate the items in question — usually within 30 days. They also must forward all relevant data you provide about the dispute to the credit card company. After the credit card company receives notice of a dispute from the CRA, it must investigate, review all relevant information and report the results to the CRA.
5. If the disputed information is found to be inaccurate, the credit card company must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file.
6. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the credit card company verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the credit card company.
7. In addition to the CRA, you should also write to the credit card company about the error. Again, include copies of documents that support that they made an error. Further, at your request, the CRA must send notices of corrections to anyone who received your report in the past six months.
The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Under the FCRA, both the credit reporting agency (CRA) and the creditor must correct any errors or incomplete information in your report.
If you need further guidance in this endeavor, please feel free to reach out to me at Elizabeth@NewThresholdMortgage.com.
Appraisals at work in your mortgage
On most loans, lenders depend on an independent evaluation of the home to ensure the home’s value before they front the majority of the funds needed for the financing of a home.
How does the Appraiser decide the value?
The appraiser decides value of the property by reviewing sales of similar homes in the area, the floor plan, overall maintenance and square footage. The appraisal report is a summary of their conclusion.
What is the Lender looking to know?
The lender wants to know what the property is worth. The impact of the appraisal value is more when the down payment is less. For example, if you are putting 5% down and the appraisal comes short, it will strongly impact the structure of your loan; however, if you are putting 25% down, the loan may not be affected at all.
Can the borrower have a copy of the Appraisal?
Borrowers have the right to receive a copy of the appraisal three days prior to closing. You do have the ability to sign away that right at the very beginning of the loan process so you can close without waiting the three days, but always make sure you get a copy of the appraisal before you close. Just so you know, the lender owns the appraisal even though the borrower pays for it so it is not possible to take the appraisal and use it with another lender.
Should I clean up?
A professional appraiser will usually inspect the property’s interior and exterior. While it is always nice to give a spiffy appearance to the house, the appraiser does not look at dirt, so don’t postpone the appraisal until you get a chance to "clean up a little." Delaying adds time to the one item in the mortgage process that takes the longest.
Who pays for the Appraisal?
The borrower pays the appraisal upfront directly to the management company, and a credit card is the best and easiest way to process the transaction. The typical appraisal costs around $475, or more if the property is complex.
In conclusion, an appraisal is definitely helpful to the lender, but it also can be helpful to the borrower for personal knowledge as well as for home insurance. Use your appraisal to learn about your home. It’s a great summary of most people's largest personal investment.