Posts Tagged ‘mortgages’

Answering a Common Question: Mortgage Refi FICO Scores

If you use a credit card or Billerica bank checking account’s online system, you may have noticed the appearance of a free service: FICO score tracking. You find it as a clickable area with a link title like “Your FICO® score” or just “FICO®.”

For many years, each of the major credit reporting agencies was mandated by law to honor any consumer’s request for a copy of their credit scores—but it was a once-a-year deal. For access to regular updates, you had to pay for a subscription. Particularly for consumers working to improve their credit scores, the paid services became a prudent monthly expense. The arrival of anytime free FICO score reporting eliminated much of that need.

Of course, tracking your FICO score is only useful if you know how the lending institutions will view it—and the answer to that is anything but clear-cut. Not only does each lender has their own confidential requirements, but since there are three separate reporting agencies, Billerica consumers have three FICO scores (and they’re rarely the same).

Even so, let’s face it: the single piece of information most everybody wants to know is what FICO score is needed to buy a home? or to refinance a home? Even if the answer is imprecise, it’s human nature.

To quell that curiosity, at least one source is willing to report what amounts to an average of approximations: it’s called EllieMae®. Ellie is a company that serves banks, credit unions, and mortgage companies by providing a raft of automated tools—but those are for industry insiders. As a sideline, they also put out a monthly Origination Insight Report with statistics drawn from the home loans processed through their systems—including some that most future Billerica home loan applicants will be interested to learn:

Average FICO score for conventional mortgage refis closed last month: 732

Average score for conventional purchases: 752

Average for FHA purchases: 681

Average FICO score — all loans: 724.

Average time needed to close: 43 days.

The percentage of mortgage refis grew to 39% of all loans, probably because interest rates decreased “for the sixth straight month” to 4.2%. EllieMae reckons that constitutes “a new 2017 low”—something Billerica refi and home loan applicants will be interested to know!

Those bargain basement interest rates continue to create a terrific opportunity for Billerica real estate. Call me for a no-obligation discussion about how you might take advantage of the current real estate environment!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

Bedford Mortgages & the Student Loan Phenomenon

All of a sudden last month Bedford readers might have come across a number of new articles dealing with the same topic: the problem young first time home buyers are encountering due to outstanding student loans.

The target group is the millennials—everyone born between the early 1980s and 2000s. If you are one of them, you are frequently reminded that there are millions and millions of you out there. And millions who also share the same student loan problem.

There are conflicting accounts of the precise size of the issue, but it seems that the average college graduate now carries somewhere between $30,000 – $50,000 in debt upon graduation. The Federal Reserve says that the amount of student debt has more than doubled since 2007, to something like $1.3 trillion, at this point!

Nobody would deny that this appears to be a roadblock to young adults contemplating applying for their first Bedford mortgage. Dealing with banks or any lending institutions for the first time always has the aura of stepping into alien territory. A major unknown is the detail known as the debt-to-income ratio.

Apparently many would-be first-time homebuyers who are thinking about qualifying for Bedford mortgages automatically assume that their own debt-to-income ratios disqualify them from consideration, even though that’s not necessarily the case. At least according to the folks at Equifax, the debt reporting company, that perception is at odds with the reality.

The debt-to-income ratio is the monthly dollar amount an individual must produce in order to service his or her combined debts in relation to their total income. It is not the total amount of debt (no matter how soberingly large that number might be). Rather, it’s the ratio between the cash in and cash out per month. That becomes a considerably less daunting proposition because it’s a measure that can be improved much more rapidly. A recent survey showed that most respondents assumed that they had to reduce their debt payments by more than $300 per month in order to qualify for a mortgage, but an actual analysis showed that the real number was most often less than $300—and sometimes as little as $150.

Qualifying for Bedford mortgages differs for everyone, so the takeaway for Bedford Millennials (as for every other first time home buyer) is that assumptions shouldn’t get in the way of real fact-finding. Give me a call if you’d like to get a broad view of today’s Bedford starter home offerings. It could be that you are closer to moving into a home of your than you think!

 

Are you a healthcare professional? There is a loan program designed for you.

There are so many loan options on the market and it takes a mortgage professional to tell us about them.  Woods Real Estate stays close to its mortgage professionals to keep abreast of these options – incuding sometimes little know options – for our clients.

Here is a program from Leader Bank – sent to us by Kevin Buckley (kbuckley@leaderbank.com ) – Healthcare Professionals Home Loan Program

Eligible employers are

        *  Beth Israel Deaconess Medical Center

  • Boston Shriners Hospital
  • Brigham and Women’s Hospital
  • Cambridge Hospital / Cambridge Health Alliance
  • Boston Children’s Hospital
  • Dana Farber Cancer Institute
  • Harvard Pilgrim Health Care
  • Harvard Vanguard Medical Associates
  • Joslin Diabetes Center
  • McLean Hospital
  • Massachusetts Eye and Ear Infirmary
  • MGH / Partners Health Care System
  • MGH Institute of Health Professions
  • Massachusetts Mental Health Center
  • Medical, Academic and Scientific Community Org.
  • Mount Auburn Hospital
  • Spaulding Rehabilitation Hospital
  • The Center for Blood Research
  • The Schepens Eye Research Institute
  • Veterans Administration Boston Healthcare Systems

Terms and Conditions

 – Maximum loan amount of $1,200,000

– Property located in Commonwealth of Massachusetts

– Maximum CLTV of 90%
– Maximum debt to income ratio of 40%
– Minimum FICO of 720
– Eligible properties include single family primary residences and warrantable condos
– US Citizens and Permanent Residents only
– Must be employed by one of the institutions listed

If you work at one of these healthcare companies and meet these requirements, give Kevin Buckley a call

 

Joan Parcewski, Realtor and Notary, Woods Real Estate (veteran owned and family operated real estate agency)

MRP, SRES, GRI, CBR, GREEN, E-PRO, LMC, SFR, CDPE, CIAS

Joan@woodsre.com     O 978-262-9665      C 978-376-3978       http://www.JoanParcewski.com

 

 

 

 

Buyers/Sellers – Some Documents You Will Need for the Process

This information is taken from Trullia:
Home buyers and -sellers alike often bristle with anticipatory irritation at the mere thought of all the paperwork they expect they’ll have to come up with to do their transaction, above and beyond the basic loan application, contract, disclosures and closing docs. And these worries start way in advance; it’s as though, before they even start visiting open houses, buyers begin to visualize – and dread – spending hours upon hours in the dank catacombs of the Vatican (à la Da Vinci Code) combing through ancient files, seeking some rare and precious artifact documenting their childhood dental history or genealogy.

In some respects, this vision of the experience of obtaining a home loan might not be far off – there are oodles of hoops through which to jump and, occasionally, the loan underwriter requests something sort of bizarre. But more commonly, there’s a pretty finite universe of documents you’ll really need to scrounge up to get your home bought – or sold. Here they are:

ID (e.g., driver’s license, state-issued ID, passport). Who must produce it? Buyers and sellers. Why? Uh, hello!?! Lender wants to know that you are who you say you are, buyers, and the title insurance company wants to make sure, sellers, that you actually have the right to sell the home. Funny enough, this commonly goes unrequested until you get to the closing table, when the notary requests to see it before signing, but some mortgage brokers and even some real estate brokers and agents may ask to see it earlier on.
Paycheck Stubs. Who must produce it? Any buyer financing their purchase with a mortgage. Sellers, usually only in the case of a short sale. Why? Buyers’ purchase price ranges are determined, in part, by their income. And short sellers have to prove an economic hardship.
Two months’ bank account statements. Who must produce it? Buyers getting financing; sellers selling short. Why? Buyers’ lenders now require proof of regular income and proof that the down payment money is your own. Short sellers? It’s all about the hardship.
Two years’ W-2 forms or tax returns. Who must produce it? Mortgage-seeking buyers and short selling sellers. Why? Banks want to see a stable, long-term income. They also limit you to claiming as income the amount on which you pay taxes (attn: all business owners!). And in short sales, again, they want documentation of every single facet of your finances.
Updated everything. Who must produce it? Buyer/mortgage applicants. Why? Because things change, and because the time period between the first loan application and closing can be many months – even years! – on today’s market. During the time between contract and closing it’s not at all unusual for underwriters to demand buyers produce updated mortgage statements, checks stubs, and such – and its quite common for them to call your office the day before closing to request a last minute verification of employment!
Quitclaim deed. Who must produce it? Married buyers purchasing homes they plan to own as separate property. Married sellers selling homes that they own separately, or joint owners selling their interests separately. Why? With the Quitclaim Deed, the other spouse or owner signs any and all interests they even might have had in the property over the the selling owner, making it possible for the title insurer to guarantee clear, undisputed title is being transferred in the sale.
Divorce decree. Who must produce it? Buyers and sellers who need to document their solo status or the property-splitting terms of their divorce. Why? Again, to ensure that the seller has the right to sell. Recently single buyers might need to prove that they shouldn’t be held to account for their ex’s separate debts or credit report dings.
Gift letters. Who must produce it? Buyers using gift money toward their down payment. Why? The bank wants to be sure the gift came from a relative, and is their own money to give. They also want the relative to confirm in writing that it’s a gift, not a loan – a loan would need to be factored into your debt load.
Compliance certificates. Who must produce it? Usually sellers, but sometimes buyers, by contract. Why? Some local governments require various condition requirements be met before the property is transferred, like some cities which require a sewer line be video scoped and repaired, cities which require a checklist of items be met before a certificate of occupancy be issued (usually relevant to brand new and really old homes, the latter of which are often subject to lead paint concerns) and energy conservation ordinances which require low-flow toilets and shower heads to be installed. Ask your real estate pro for advice about which, if any, such ordinances apply in your area.
Mortgage statements. Who must produce it? Any seller with a mortgage. Why? the escrow holder or title company will need to use them to order payoff demands from any mortgage holder who has to get paid before the property’s title can be transferred.

By no means is this an exhaustive list. Agents: what documents do you see buyers and sellers struggle to scrounge up during their home buying transactions?

%d bloggers like this: