Mortgage California Blog

Mortgage News Roundup

November 6th, 2014

shopping cart and houseHousing prices have leveled off. Mortgage interest rates are still affordable. But they won’t stay that way for long. The Feds continue to ease up on purchasing bonds so rates are slowly creeping up again.

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.6% in the group’s seasonally adjusted composite index for the week ending October 31. That followed a drop of 6.6% for the previous week. Mortgage loan rates rose during the week on three types of loans and remained unchanged on two others.

Now is definitely the time to talk with a professional loan officer to find out what options you have.

Here are five things sellers commonly try to hide during the sales process, and the questions you can ask to find out the truth about your soon to be dream home before it becomes a nightmare.

  1. Leaks – roof, faucet, ceilings, whatever you can think of. If it can leak, you can bet it will be hidden or repaired just enough to not show.
  2. Pests – termites, rats, ants. Some states require by law that the seller disclose, but if they don’t officially know, they don’t have anything to officially disclose.
  3. “Emotional defects” – Is the house haunted? Was there a murder? Under California Civil Code Section 1710.2, if someone dies on the property, it’s a material defect and must be disclosed but only if the death occurred within three years of the date you make an offer to purchase or rent the home.
  4. Problems with the foundation or roof – some damage may be hidden behind sheetrock
  5. Age of systems – HVAC, water heaters, electrical

Always get a reputable home inspector in to do a thorough evaluation. You can also hire people do do deeper searches on the history of the home if you have concerns about if there were deaths.

How long to refinance a mortgage

USA Today answered this question. Generally between 30-45 days. It can be sped up if the borrower returns documents, disclosures and requests for information.

You Make Boatloads of Cash, but Still Can’t Get a Mortgage?!

When you apply for a mortgage, there are a few no-brainer items almost every borrower knows the lender will look at: your credit scores, your income and your debts.

But a mortgage lender looks at more then just the numbers. They review your income as a means to offset your mortgage payment liability. As a rule of thumb, the lender will want your income to be 55% greater than your outgoing mortgage payment, plus other liabilities such as car loans, student loans, or credit card payments. The lenders look at your ability to consistently pay on your obligations.

So, if you have alternate income, here’s how to make it work for you.

  • If you intend to rent out a room, that won’t count towards your income. The only way it will is if it’s a multi-unit structure where the second unit has a bedroom, bathroom, and an honest to goodness kitchen. Mother-in-law units could work.
  • Cash from side jobs or any other income that you receive but don’t report to the IRS won’t be considered real income. Lenders will expect to see your last two months of asset statements.
  • The biggest mistake self-employed borrowers usually make when they apply for a mortgage is thinking they earn more money than they really do.  Lenders don’t use gross receipts to qualify a borrower. They use the net income figures after expenses including depletion, depreciation, business use of the home and net profits.

A reputable loan officer will be able to work with you to provide the best documentation for your situation.

 

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