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From Application to Closing
Once you’ve submitted your mortgage application and received a decision, the steps leading up to your closing will be unfamiliar. We want you to know what to expect. Prior to closing on your new home, you’ll need an appraisal, a home inspection, home insurance and title insurance.
PreApproval
Upon application credit check, and submission of your supporting documentation, your lender will have discussed what you can qualify for and have a preliminary plan for financing. It is preliminary because you may find a home at a different price or the rates may change. Your lender will be ready to issue a Conditional Approval letter upon the location of a home on which you’d like to make an offer.
Finding A Home
At this point, you’ll go home searching based on our preliminary financing plan. Your Realtor may want basic information on the financing plan as the Purchase contract does require some of this info. Once you have a home you’ll provide the lender with a contract.
Your Option Period
Your contract will give you an Option Period to get additional information on the home and decide to continue with the purchase. This usually includes your inspections and time for the Realtors and Sellers to get you information such as the survey, restrictions, and other info.
Appraisal
Upon the completions of your Option Period and your decision to proceed with the purchase, the lender will order an appraisal from a professional appraiser to determine the value of your home. Most loan programs require an appraisal to make sure the sale of the property would provide enough funds to repay the mortgage balance. This protects the lender in case of default, and can also help you make sure you don’t overpay for the home. An appraiser will give a professional assessment of the property’s value based on a number of factors, including:
- Square footage, overall condition, special features and amenities
- A review of the sales prices of comparable properties that have sold recently in your area.
Home Inspection
A professional home inspection can help put your mind at ease by identifying any potential issues with the home. In some cases, a home inspection may be required as part of your loan approval process. A home inspector will give a professional assessment of the property’s physical condition and notify you of any existing or potential problems. At minimum, the inspection should cover all the home’s major systems and structural elements, including the foundation, electrical system, heating and cooling systems, insulation, roofing, plumbing and all exterior features.
You should make every effort to be present during the inspection, so you can see any problems first hand. Accompanying the inspector can make the inspection report easier to understand, and you may even get some valuable maintenance tips. Your Realtor can make suggestions on Inspectors.
Home Insurance
Home insurance will protect the investment you’ve made in your home. Your policy will compensate you for damage done to your home or its contents by natural hazards such as fire and wind and will protect you from liability if someone is injured on your property.
Before you close on your mortgage, you’ll be required to show proof that you have purchased home insurance. Your lender will probably require you to purchase a minimum amount of coverage, usually equal to your loan amount. You may, however, want to purchase a larger policy to make sure you’re protected from additional losses.
Title Insurance
There are two types of title insurance: one protects the lender and one protects the borrower.
Title insurance is purchase as protection from claims against your ownership of the property. Such claims may be made by undisclosed spouses, heirs of previous owners, creditors holding liens against previous owners or other parties.
Your lender will most likely require you to purchase a title policy, which will cover their interests in the property. It’s up to you to purchase a policy to protect your interest in the home. Your home mortgage consultant will be able to recommend a title insurance company who can provide additional information about the policies available in your area.
BREAKING NEWS
Provided by IMMAAG
On August 16, 2010, the Federal Reserve Board (for reasons that are not completely clear, but possibly in a defensive move to preempt any chance for the new Director to do things his or her way) announced FIVE ACTIONS in almost 1,200 pages:
- An interim rule revising closed-end mortgage disclosures (71 pages)
- The final rule to protect borrowers from unfair practices (so much for the new bureau’s role or chance to weigh in) (113 pages) (Note – this is the rule that closed comments on 12/24/09.)
- The final rule regarding mortgage sale notification requirements (63 pages)
- A proposed rule enhancing consumer protections and disclosures (930 pages!)
- A proposed rule revising escrow requirements for JUMBO Loans (16 pages)
Check out the following links to learn more:
August 19th 2010 | Posted in Ann Jones News, Blog | has no comments yet!Read More
I heard on the news the other day–didn’t hear the source- sorry. Austin is rated #3 in the nation for good places to be single. New Orleans and Miami where ahead of us–the in this case it’s great to be #3!
August 1st 2010 | Posted in Ann Jones News, Blog | has no comments yet!Read More
REBOUND OR DOUBLE DIP? DOTZOUR’S 2011 FORECAST
COLLEGE STATION (Mays Business School) – As much of the nation ponders whether the country is in rebound mode or headed for a “double-dip” recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
“There are signals that the economy is trying to turn the corner,” Dotzour said. “Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory.”
He says the most important positive indicator is that corporate profits have rebounded.
“In a free-market, capitalistic system like America, profit growth is the key indicator,” he said. “When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability.”
So why aren’t they hiring people?
“The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to ‘cap and trade.’ The prospect of new and increased government regulation makes it hard for business to see clearly into the future,” he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to “insure” against uncertainty–and that is to hoard cash.
“There is now nearly $3 trillion sitting in cash on business balance sheets,” he said. “They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined.”
To read more, visit the Mays Business School website.
REBOUND OR DOUBLE DIP? DOTZOUR’S 2011 FORECAST
COLLEGE STATION (Mays Business School) – As much of the nation ponders whether the country is in rebound mode or headed for a “double-dip” recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
“There are signals that the economy is trying to turn the corner,” Dotzour said. “Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory.”
He says the most important positive indicator is that corporate profits have rebounded.
“In a free-market, capitalistic system like America, profit growth is the key indicator,” he said. “When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability.”
So why aren’t they hiring people?
“The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to ‘cap and trade.’ The prospect of new and increased government regulation makes it hard for business to see clearly into the future,” he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to “insure” against uncertainty–and that is to hoard cash.
“There is now nearly $3 trillion sitting in cash on business balance sheets,” he said. “They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined.”
To read more, visit the Mays Business School website.
July 29th 2010 | Posted in Ann Jones News, Blog | has no comments yet!Read More
EDUCATION REALTY TRUST RUSTLING UP LONGHORN HOUSING AUSTIN (REBusinessOnline) – The 1.43 acres leased to Education Realty Trust for 60 years at 600 W. 24th St. could soon be home to a new high-rise student housing community near the University of Texas at Austin campus, pending city approval. The University of Texas System Board of Regents has approved Hensel Phelps Construction Co. to build the property, which will be designed by Page Southerland Page Architects.
July 27th 2010 | Posted in Ann Jones News, Blog | has no comments yet!Read More
If you haven’t refinanced or are thinking of buying, I saw 4.5% (4.61APR on $200K) this am for a 30 year. This is not for everybody–you must be a #1 borrower with 740 Ficos, equity and job stability- My first house was at 13.5% fixed!!! Call if I can help.
(Austin Board of Realtors) – Demand for existing homes in the Austin area has remained stable despite the expiration of federal homebuyer tax credits, according to the latest report from the Austin Board of Realtors. The volume of Austin area home sales in June 2010 was 1,987, down 4 percent from the same month in 2009, the board reported, using the most recent MLS data. The median price of real estate in Austin increased 4 percent from June 2009 to $208,750 for June 2010. Despite a decrease in the volume of homes sold in June 2010, the total dollar volume of real estate sold increased 6 percent compared with June 2009, primarily from increased demand for properties in higher price ranges. In June 2010, homes remained on the market an average of 70 days, a 14 percent decrease from the same month in 2009. In the same period, pending sales decreased 23 percent to 1,610, new listings increased 2 percent to 3,287, and active listings increased by 16 percent to 11,749.
July 26th 2010 | Posted in Ann Jones News, Blog | has no comments yet!Read More
What does my credit score affect? These are the times bad credit will hurt you and how.
You want to rent an apartment–they’ll want good credit.
You want to buy a car–do you want a 5% rate with $0 down or a 9% rate with 20% down?
You want car or home insurance–it’ll cost you more each year with less than stellar credit. The thinking here is that someone who doesn’t pay their bills stistically has more claims.
You want a home mortgage–do you want a 5% rate with 5% down or do you want a 6.5% rate with 20% down?
Your current credit card was at 9.99%–now it’s at $27.99% because your credit is not good and they monitor that.
Other things that can hurt your credit–unpaid medical bills–the ones you’ve never seen or are mad the insurance company didn’t pay…? Yes, they will go to collection and they will cost you more than that $100 that the Dr. say you owe. How about the last time you moved? What about that final electric bill that didn’t get forwarded? Yes, the City of Austin will place it for collection! And sadly collections hurt a lot, even if they’re little. And even after you pay them, they’ll still affect your credit score for a while.
Really obscure things that hurt your credit: Applying for credit. (an Oxymoron, don’t you think?). Don’t apply for a lot of credit all in the same time period. Don’t close old accounts, use them once a year and pay them off. Don’t let a lot of car dealers or mortgage lenders pull your credit. This can cause your score to fall.
Don’t cosign for someone unless you are ABSOLUTELY sure they’ll pay the debt. You will owe that money if they don’t pay and you won’t know it until it’s really hurt your credit. By their nature people who need cosigners typically have bad credit for a reason. Of course there are exceptions!
More on Credit Score s#4
What do they (the credit bureaus that give you the score) look for? They basically want to see that you use credit and use it wisely, that you are able and willing to pay back all debts owed by you.
The obvious: Do you pay your obigations on time?
The not so obvious: Do you have a lot of (or no) outstanding credit? You should have at least one major credit card (MC,VISA, AMEX) and at least 1 other creditor that reports to the credit bureaus. Your credit card balances should be less than 40% of your limit. For instance if you have a $1000 credit limit, you shouldn’t have more than $400 on it card for maximum credit ratings. If you have a number of credit cards then spread your debt out. Using the department store cards can cause a bit of a problem. Ususally people who use themhave a number of them, with $600 balances, but their Limits are only $1000.
More to come in Credit #3
