We are officially in gift-giving season. The post-Thanksgiving Black Friday, “Cyber Monday” scrum turns eyes to shiny-new electronics, toys, gadgets, clothes, and retail shelves.
Mortgage insurance is a monthly fee that is built into your monthly loan payments. Luckily, borrowers have the ability to refinance their loan and eliminate or reduce mortgage insurance fees, thus saving up to hundreds of dollars on monthly payments. Read more
Central Coast Lending is a mortgage lender based on the California Central Coast. The Refinance for a Purpose articles are part of our Mortgage Process Explained series, which walks readers through the loan process step-by-step.
If you’re looking to refinance your home, an appraisal of the property is generally required to determine that the house is adequate collateral for the loan. Although there’s not much you can do to drastically increase your homes’ appraised value (without making significant home renovations and improvements), there are some basic tips homeowners should follow to assure the appraisal will run smoothly:
- De-clutter the house.
Although it may seem like a no-brainer, having a clean, de-cluttered house with all rooms and areas easy for the appraiser to access makes the process run a lot quicker.
- Spruce up the yard.
Similarly, have a nice looking yard gives the appraiser a good first impression of the house. Simple things like mowing the grass and sweeping the sidewalk show that the property is maintained and taken care of.
- Research similar properties in the area that may be on the market or have sold recently.
This can help aid the appraiser with comparable properties to base your appraisal off of. It’s also good to be informed of the local housing market to make sure your home is getting a reasonable appraisal.
- Prepare a list of any recent improvements made to the home.
These can increase your home value, and it’s good to make sure the appraiser is aware of them.
- Have the proper documents on hand before the appraiser arrives. These include:
- A survey or plot map of the home (if available)
- A copy of the title policy (if available), with information on encroachments
- Your most recent real estate tax bill and/or legal description of the property
- Any recent inspection reports, such as septic, termite, etc.
- If your home is a condo, a copy of the “Homeowners Associations” agreements
- Be sure your home meets all state housing laws and regulations.
For instance, a CO2 sensor is required by law in all homes. This needs to be installed and working in order for your home to pass an appraiser’s inspection.
Following these basics steps can assure your appraisal goes smoothly, and your refinance loan processes in a timely manner. And, considering the recent changes to the appraisal process, any steps a homeowner can take to assure the appraisal process is hassle-free will certainly be appreciated by all parties involved.
We’ve talked before about how proper documentation is crucial for the loan process to run as quickly and hassle-free as possible.
Here’s a rundown of the basic paperwork you’ll be asked to provide in order for your loan to file (you can print your own checklist HERE):
- 2011 and 2012 signed federal tax returns
- 2011 and 2012 W-2s and/or 1099s
- Pay stubs covering the most recent 30-day period
- Bank account statements covering the most recent 60-day period (all pages even if blank)
- Homeowners insurance declarations pages and most recent mortgage statements for all real estate owned (if applicable)
- Pension/annuity award letter (if applicable)
- Social security/disability award letter (if applicable)
- Corporation, Partnership and/or LLC tax returns and K-1s for 2011 and 2012 (if applicable)
- Dissolution of Marriage and/or Separation agreements (if applicable)
- Photo ID’s
- Copy of 2nd Lien Note or HELOC Agreement (for subordinations)
As always, the exact paperwork you need to submit will vary based on the loan program and type of loan you are receiving. Any questions you may have about submitting paperwork, or just about your loan in general, can be emailed to your loan officer, or you can give us a call at 805.543.5626.
Your can learn more about the loan process HERE.
Though conventional loans are the most popular for home purchase and refinance, we have a slew of other loan programs available for unique property and financial situations. Some of these programs- namely FHA, VA and USDA- have mortgage insurance fees associated with them. Below, we have outlined these fees for each loan program, and offer a graph to show the variance in mortgage insurance between loan programs.
This is part 2 of 3 in our series on mortgage insurance. You can learn about the basics of mortgage insurance HERE and mortgage insurance for FHA, VA, and USDA loans HERE. This article covers mortgage insurance options for conventional loan programs.
Although FHA, VA and USDA loans all have associated mortgage insurance fees, a conventional loan is the most common choice for people looking for a purchase or refinance loan. This “go to” loan program has three different mortgage insurance payment options to suit different financial situations:
The borrowing process has become more challenging, but proper documentation will save time (and avoid headaches) during the loan process. In years past, lenders required less documentation and allowed for exceptions. Today, we find that lenders are the exact opposite – they require fully documented files with little room for deviation. Following are a few tips to avoid documentation troubles:
Mortgage insurance can be a tricky topic in the finance world. Lender paid, borrower paid, up front fees, monthly payments…it all gets a little confusing if you don’t know what questions to ask. In this three part series, we’ll ask (and answer) those questions for you, as we go through the basics of mortgage insurance so you can better understand why you need it, what fees are associated with it, and which loan type and payment option is best for you.
Mortgage Rate Movement
A quick, dirty way of tracking mortgage rates is to watch the 10-year U.S. Treasury bond.
For some background, each government bond has a price of purchase (say $100), a “yield” (say 2.000%), and a term (say 10 years). The “yield” refers to the annual interest payment that the government pays to bond holders.
When these bonds are traded on the secondary market, the purchase price and the yield shift according to the laws of supply and demand.
Relationship between supply and demand.
During times of high demand, the cost of purchase increases (say, to $110), while the yield decreases (say, to 1.75%).
The past years of economic turmoil have been a boon for the bond market, as investors purchase the “safety” of U.S. government bonds rather than opening up to the risk of stocks. The Federal Reserve has also committed to mass U.S. Treasury purchases, guaranteeing a source of demand in the bond market.
As a result of this activity, mortgage rates dropped to record lows. But as the stock market continues to increase and economic data improves, investors are inclined to move back into riskier, but potentially higher-yielding stocks. This is what we have seen lately.*
Treasury yields hit an 11-month high on Friday, March 8 as leading stock indexes reached record levels.
The 10-year Treasury yield hit 2.07 percent early in the trading day, well above the mid-1.80 levels from early this week.
* This is all a simplification, but in general a useful one to understanding why (and when) mortgage rates move.
Central Coast Lending is a California mortgage brokerage based in San Luis Obispo County. With offices in San Luis Obispo, Morro Bay, Paso Robles, and Arroyo Grande, Central Coast Lending is the top source for Central Coast mortgage, real estate, and home loan needs. To see why using a broker offers lower rates and superior service, click HERE. For a free, hassle-free online pre-qualification click HERE or call 805.543.LOAN to talk to one of our expert loan officers.