Tag Archives: mortgage

What you need to “know before you owe”

As I blogged about last week, the mortgage process is changing and one of the main changes is that four forms required by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) will be consolidated to 2 forms, the Loan Estimate form and the Closing Disclosure form.

Also, where in the past your HUD1 statement could change on the day of closing, lenders will now be required to provide 3 business days for your review if there are any changed circumstances. Primarily this includes…

  • An increase in the APR
  • The addition of a prepayment penalty
  • A change in the loan product (ex: fixed rate to adjustable rate)

Please contact me with any questions and I will be happy to put you in touch with a trusted mortgage professional.

You or someone you know looking to buy or sell?

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The Mortgage Process is a-Changin’

Approximately one month from now new rules known as TRID or “Know Before you Owe” will be going into affect that change the way the mortgage process has worked in the past. Whether you’ve bought and sold a number of houses, or have never purchased before here’s a quick outline of some of the new rules…

  1. The application process begins with a Loan Estimate
  2. You must indicate your intent to proceed before you are changed any fees
  3. You must receive your Closing Disclosure at least 3 business days prior to closing
  4. Changed circumstances may mean a revised Loan Estimate, Closing Disclosure, and an additional 3 days

Over the coming weeks I’ll be blogging a little more in depth about these topics. For now, if you have any questions about buying a home, including the mortgage process, please contact me.

You or someone you know looking to buy or sell?

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Short Sale

It happens more often than you may think: You get a home search result in your email inbox or see a listing on FreedomRE and the price just seems too good to be true.

Before you get overly excited, be sure to check the description for words like “short sale”, “subject to bank approval”, or “pre-foreclosure”. You should also contact me so we can clarify the situation since the information may only be available to a licensed Realtor.

The reason I’m pointing this out is that a short sale is very different from a conventional or even foreclosure sale… which makes it all the more important to work with a Realtor.

Simply put, a short sale is an attempt to sell a house for less than the current owner owes on their mortgage.

For example, a homeowner purchased a home with a $200,000 mortgage but now because of either a bad loan choice or a bad market, the home is now only worth $185,000. They still owe $195,000, and are unable to make the monthly payment on the mortgage. If they sell the home for $185k, they are still “short” $10k.

In this scenario the seller would typically need to come up with $10k to pay the bank. However, in a short sale the seller is attempting to get the bank to “forgive” the difference hoping that the bank will be satisfied with not having to go through the time and expense of a foreclosure.

What makes a short sale so frustrating to all parties involved is the time it can take to get a sale approved and the headache of often not having the sale go through at all. The reason this can happen is that there are often other parties (building contractors, a HELOC, etc) interested in the sale who aren’t willing to forgive their interest in the loan.

The best advice I can give you regarding a short sale is to not get hung up on, or emotionally attached to the home in question. If you have a short time frame to buy a home – don’t even bother. However, if you do want to go forward, let me help guide you through the process and try to make it as stress free as possible.

You or someone you know looking to buy or sell?

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