Category: Mortgage Companies

New Consumer Protection Rule Requires Lenders to Disclose Appraisals and Valuation Data to Mortgage Applicants

Posted on by Jenny Zamora

January 18th saw the kicking in of new appraisal disclosure regulations – strengthening the sentiment of prospective property buyers and sellers alike. This new consumer protection law may help the Orlando real estate market to bloom further and listing agents in Orlando and other emerging US real estate and property markets are looking forward to witnessing the change.

Under the new rule, prospective buyers have the right to demand and receive a free copy of the appraisals, reviews, and details of computer valuations used for their mortgage applications from their lenders.

And what does this mean for consumers? They can make use of increased information and insight about the processing of their mortgage applications to their advantage. For instance, homebuyers who feel they were unjustly denied an appraisal would now have better proof, more time, and stronger ammunition to challenge the erroneous appraisal.

Key aspects of the new disclosure rules

The new rules currently apply only to first loans. Home equity loans or second mortgages are not covered under the appraisal disclosure rule but reverse mortgages and construction loans fall in its jurisdiction.

Central Florida and Orlando realtors are hopeful the new rule will help buyers contest wrongful processing of mortgage applications and increase their purchase power.

Key features of the new rule include:

* Lenders must inform mortgage applicants that they would promptly receive a copy of any appraisal that is valued for them, within three days of receiving the mortgage application from the consumer.

* Consequently, lenders must provide free copies of such appraisals and valuations.

* They have until three days before the closure of the loan, to provide the free copies of appraisal reports, valuations, and other proceedings. The Consumer Financial Protection Bureau however suggests reports to be sent as soon as they are completed, or three days before the loan is due to close, whichever comes earlier.

* This essentially means, home buyers are entitled to receiving their copy of the valuation and appraisal report, even if lenders fail to close their loans.

The Bureau provides lenders the option of asking a consumer to opt-out of the 3-day deadline. A consumer who agrees would thus receive his copy of the report at the time of closing of the mortgage. On the other hand, a customer who does not waive the deadline must be provided with his copy, within the stipulated time.

Orlando real estate agents feel the new law will help Orlando residents review the data used by the appraiser and contest faulty appraisals – increasing their confidence in seeking mortgages to purchase the property.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

FHA’s Back To Work Program Giving 2nd Chances

Posted on by Jenny Zamora

 

 

FHA’s Back To Work Program

As an Orlando realtor, part of my job is to help potential home buyers get approved for a mortgage. Unfortunately, aren’t always able to qualify for the best mortgage programs like an FHA [Federal Housing Administration] loan because of negative credit events like having a foreclosure or short sale on their record.

Recently there’s been some great news for ex-homeowners that find themselves in this situation. FHA, formed in 1934 and part of the U.S. Department of Housing and Urban Development is waiving its 3-year foreclosure awaiting period. All homeowners with FHA case numbers assigned after Aug. 25th of 2013 that have gone through a bankruptcy, short sale, foreclosure, loan mod, or a deed-in-lieu can now apply and potentially get approved for an FHA mortgage.

The FHA has the role of being the insurer of mortgages made by lenders that are FHA approved. Since the FHA’s inception, it has insured loans in the entire U.S. in addition to U.S. territories as well as the District of Columbia and holds the record as the world’s largest insurer of loans at thirty-four million loans.

Basic FHA Mortgage Guidelines:

1- Loans must be made by an FHA approved lender

2-Borrowers must be U.S. citizens

3-Borrowers must have a  minimum credit score of  at least 500

4- A down payment of at least 3.5% of the contract price is required on a purchase

5- Income is verified via W-2 or federal tax returns

Within the last several years the FHA has been steadily tightening their requirements since the housing downturn. However, since August 15 of 2013, the FHA has made the decision to ease up on their requirements when it comes to borrowers that have ” experienced periods of financial difficulty due to extenuating circumstances”. Now known as the “Back to Work Program”, the FHA has gotten rid of it’s former waiting periods that were typically followed after a negative credit event.   Here are some examples of negative credit events that can affect someone trying to get approved for an FHA mortgage loan.

* Foreclosure

* Short Sale

* Deed-in Lieu

* Bankruptcy Chapter 13

* Bankruptcy Chapter 7

* Loan modification

* Forbearance agreements

It seems that there are actually some compassionate people running this company. The FHA has come to the realization that sometimes bad credit situations are beyond the homeowner’s control and that someone’s credit doesn’t always reflect a person’s willingness or ability to pay there mortgage. One can only hope that other lending organizations will follow the FHA’s lead.

 

 

Orlando short sale expert

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

How Does Your Credit Score Affect Your Mortgage?

Posted on by Jenny Zamora

 Before you apply for a mortgage to buy your dream home, check your FICO score. It is a key determinant of the interest rate that lenders are likely to offer you. A good FICO score makes you a less risky borrower in the eyes of lenders. Naturally, they’re willing to earn your business by offering you a competitive rate of interest. A lower interest rate translates into savings amounting to thousands of dollars over the life of your loan. So, pause, and think if you should improve your credit score to become a favored borrower, or go right ahead as your credit history is nothing short of impeccable. To make this decision, these tips may come in handy.

–          A credit score of less than 550 makes you a deep subprime borrower; you may find it hard to get a mortgage or bear a high-interest rate and stringent and/or inflexible terms and conditions

–          A credit score between 550 and 620 makes you a risky, sub-prime borrower

–          A credit score between 680 and 740 makes you a less risky, prime borrower

–          Any score over 740 makes you a super-prime borrower; you are highly likely to be offered the lowest mortgage rates available.

If you’re looking for a home in Orlando, Fl then you should hire an experienced Orlando Realtor to help in your search. We dedicate ourselves to helping people buy and sell Orlando, Fl real estate.

 

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

Cash buyers fueling Orlando Real Estate market recovery

Posted on by John Conde

The Orlando Real Estate market recovery continues on a positive path and some Orlando realtors claim that the tidal wave of cash deals is behind the recovery. “Florida realtor” studies show that fifty-one percent of single-family home sales are all-cash deals. Cash buyers have a huge edge over buyers that need to qualify for a mortgage and they are preferred over traditional buyers by sellers as well as listing agents.

One reason is that cash buyers have their own money and don’t have to wait on any mortgage company for anything. Also,  sellers know that a cash deal means a quick closing, this can mean big savings for the seller who has to make another mortgage payment for every month that their home is on the market. These days a cash offer doesn’t always mean a low ball offer anymore, investors are aware of the competition and a low ball offer could mean losing the deal.

As Orlando realtors,  we are seeing more cash offers for the full listing price of properties than ever before.

Lower-end properties [under 100k ] are being devoured by investors because of the huge demand for rentals right now. Cash investors are able to buy more of the less expensive properties and turn them into monthly cash cows. And although lower-end properties are also being bought and then re-sold for a modest profit, for the most part, we are seeing them end up as rental properties.

Other investors buy properties with the sole intention of flipping them. They want nothing to do with being a landlord and are only interested in getting in and out of a property as quickly as possible.

These buyers usually have to do some rehabbing in order to see some substantial profit and this means that they are usually pretty limited on how many they can do at once. I have investor clients that will buy one or two properties and then have to wait until the houses are renovated and sold before moving on to the next deal.

So what does this all mean for the Orlando Real Estate market?

I believe that all the cash purchases that are happening right now are driving up prices as well as home values in the Orlando real estate market. And the healthier the market is, the less risk there is for lenders to approve more mortgages for traditional buyers. This is all great news for now and hopefully will be for several years to come.

What worries me is that if home prices continue to rise to unjustifiable degrees, banks will then start giving mortgages to people that can’t afford them, then…2007 all over again!

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

How can the citizens of Orlando get approval for mortgage to invest in real estate?

Posted on by Jenny Zamora

The borrowing standards are restricted by the lenders due to the increasing rate of bankruptcy, foreclosure, or short sale. If you’re planning to apply for a mortgage loan, then you’re required to keep some of the qualification requirements in mind. You need to be cautious when you plan to invest in real estate by taking out a mortgage. You’re required to keep some of the important points in mind when you plan to get approval for a mortgage to invest in real estate in Orlando.

Here are some of the important tips that you need to consider when you plan to get a mortgage loan to invest in real estate:

1. Stable Income: A mortgage lender may check whether or not you’ve stable income to pay back the owed amount. If you’re self-employed, then you’re required to provide tax proof to help the lender evaluate your total income. Therefore, you’re required to be ready with your pay stub or income tax return to provide evidence of your stable income.

2. Review your credit score: Before applying for a loan, make sure you check your credit report to qualify for better rates. According to Experian, the average US credit score of a consumer needs to be 750. Your mortgage loan can be approved on favorable terms if your credit score exceeds 750.  If you’re a citizen of Orlando, Florida homebuyer, then ensure that your credit score exceeds 750 to get a loan at a low-interest rate.

3. Save funds for a down payment: The lenders may approve your loan program only if you make a considerable amount of downpayment on the loan. If you don’t have enough money to use as a down payment, then save funds before applying for a loan or taking financial help from your loved ones. You’re required to make a down payment of as much as 20% of the total value of the home.

4. Low Debt-to-Income ratio: If you’re planning to apply for a new loan, make sure your debt-to-income ratio is low. Well, the industry standard for an acceptable ratio is 28/36. So, your primary ratio should not exceed 28% and the second ratio should not exceed 36% of your gross income.

5. Eliminate your debt: Try to eliminate your debt before you plan to apply for a new loan. However, it can be difficult but not impossible to get a new loan with a blemished credit report. But the interest rate on your mortgage may increase because of your blemished credit report. If you want to get the loan on the favorable term, then immediately work on eradicating your debts. Before applying for the loan, make sure you put a large amount of your money to eliminate your debt. You can get your loan on favorable term once you eradicate your debt.

Therefore, you’re required to keep the above-mentioned points in mind when you’re planning to apply for a mortgage in real estate.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields