Saving Money Must not be for You

A common situation I run into on a daily basis would be when a potential client has a former (and unfounded) relationship with their bank or credit union, it’s a relationship that is usually acquired through a family member or familiarity.

Familiarity can end up costing you a lot of money though.

So I always ask them, “Does the bank / credit union pay your mortgage, or do you?”

The ultimate goal is to show someone that the banks and credit unions don’t always have the best rates and cost.  Most of the time someone is open to seeing what Executive Mortgage offers, then they end up going with us; because our rates and cost are typically lower than the competition.

But there are always the ones who are satisfied not knowing what we can offer, and those are typically the ones who over spend every single month; for 30 years.

Let’s break it down on a very simple level, if you purchased a $200,000 house.

The Bank is offering 4.375% for 30 years

Executive Mortgage is offering 4.125% for 30 years.

The payment on the Banks Mortgage is $998.57 per month,

The payment on Executive Mortgage’s loan is $969.30 per month.  That is $29.27 LOWER.  Over 30 years that is $10,537.20.

Kind of a lot right?

Now it is not uncommon at all that we can undercut rates by this much, even without have the client pay points.

Aside from the $10,000 savings and the lower rate, a distinct advantage we have at Executive Mortgage is the fact we are accessible and knowledgeable, If you have a question after 5:00 pm, or during the weekend; you have our cell phones, that is a service you simply not get at a bank or credit union.

So, lower rates, bigger savings and better service?  Please feel free to contact us and see for yourself.  It’s pretty simple, it takes no money, and very little time to get a quote based on your credit profile; and with that information you would be able to identify if working with us is right for you.

 

To find out, feel free to call!

Justin Scott

NMLS878581

(920) 530 4484

Why WHEDA?

If you are a Wisconsin resident and meet a few pieces of criteria, you are probably eligible for a great alternative to regular conventional financing; a WHEDA mortgage.

WHEDA has many advantages:

  1. Low or No Mortgage insurance (without 20% down)
  2. Low 30 year fixed rates
  3. Low or No Down payment required
  4. Serviced here in Wisconsin. Locally.
  5. Lower Monthly Payments
  6. Do not have to be a first time home buyer

Nothing is without some disadvantage though, here are some things you may consider to be a down side to a WHEDA loan:

  1. You cannot have another mortgage while owning a WHEDA loan
  2. You cannot flip homes with WHEDA
  3. Your income is restricted to certain household limits
  4. Regardless of who is on the loan, all household income must be taken into consideration.  I.E Child Support / Alimony / Social Security, non borrowing family members regular income.  Etc.

These unique limitations tend to cater a WHEDA loan towards first time buyers, because they are more sensitive to the lower payment up front.  Everyone wants the lowest payment which is what makes WHEDA exceptional for everyone regardless of the number of homes they’ve bought.

WHEDA also has the distinct advantage of allowing it’s users to finance the 3% down payment in a 2nd mortgage.  The first mortgage is a 30 year fixed, the 2nd mortgage is a 10 year fixed at the same rate.  There is no pre payment penalty on any of these loans, which is another attractive aspect.

The bottom line is you should compare your options against one of these loans, we have been a bulk provider of WHEDA for a number of years and easily do the majority of them in the North East Wisconsin area, this has given us quite a bit of practice in a unique program that many other lenders are not as familiar with.  So if you are interested in a lower payment, no mortgage insurance and want to speak with a professional about your options, please call.

 

Justin Scott

NMLS 878581

(920) 530-4484

Jscott@execmort.com

 

Real Estate Taxes and How They are Paid in Wisconsin

This time of year in the state of Wisconsin people receive notice that there real estate taxes are due.

 

State of Wisconsin Will send out a receipt that looks like a bill. I find I get several calls this time of year asking if clients have to pay this out-of-pocket, The answer is generally no, the Majority of clients escrow their taxes and insurance; this means the lender will automatically send out your real estate tax bill to the treasurer.  Can expect the same for your homeowners insurance when it comes due one year after closing.

You will receive what looks like a bill, but in fact it’s a receipt.

 

You can also check the status of your tax bill by logging onto Brown county land records, here is the link

 

http://www.public.applications.co.brown.wi.us/treas/landrecordssearch/entryform.asp

 

Here you will be able to type in your address and check the status of your taxes if they are paid.

 

You have further questions about your escrow account for how taxes are paid in the state of Wisconsin, please feel free to reach out to me.

 

Justin Scott

Loan Officer

NMLS 878581

 

(T) 920-530-4484

The Rule of Two

If you’ve read any of the other blog posts, you will have a general idea regarding documents you will need to provide for a mortgage.  Things like Taxes, paystubs and bank statements.  Depending on your history over the last 3-4 years, you may be required to provide things like a divorce decree, bankruptcy paperwork or additional letters of explanation.

A very common problem when provided the aforementioned documentation is the completeness of it.  Often times bank statements, or 401(K) statements have a blank page at the end, that is intentionally left blank for security purposes.  I often see clients not handing this page in because they feel it serves no purpose.

Truth is, even if it’s blank it will be asked for and cause a hold up in your loan.   So the point is, when you are providing documentation, please provide all pages even if some are blank.  If there is a number on it, it’s needed.

What I call “The Rule of Two”  always applies.  This is a simple rule to keep in mind when providing financials.

2 consecutive copies of EVERYTHING.

2 Years Tax Returns/ 2 years W2’s / 2 Pay stubs / 2 Bank statements / 2 months 401K proof.

The rule of two always applies because the underwriter wants to establish a pattern in your financial history, and when you have two of something it is easier to do that.

 

So in the future when applying for a mortgage, always remember the RULE OF TWO.

If you have further questions, or you would like to capitalize on our low down payment loans and low rates, please call.

Justin Scott

NMLS 878581

(920) – 530 -4484

What is a Home Inspection and What is an Appraisal?

Mortgages  can be confusing enough, when you’re dealing with multiple terminologies, contingencies and a massive stack of paperwork.

So let’s clarify the difference between the home inspection and the appraisal.

The home inspection is an optional Service the homebuyer can elect.  It is not mandatory, but it is recommended to ensure you are getting a sound investment.

Home inspections are typically priced according to age of the house and square footage.  A home inspector is going to go through your potential purchase and identify any serious flaws that could affect your home structurally.  I hope inspector will also point out minor things that might need attention in the future.

Remember, it’s a home inspectors job to identify the problems with the house, should understand that not all these problems are actually serious.  It’s common for buyers to get nervous about the results of their inspection because things are pointed out.  Remember a house is a complex structure and regulations are always changing, so it’s no uncommon to need to update things periodically.  Ensure you don’t get freaked out over something like an update to the electric panel, or the water heater is 10 years old.

The Appraisal:

This is where many buyers get confused, because the appraisal is also called an inspection, but it’s an inspection issued by the lender to assess the value of the property.  This, unlike the home inspection, is mandatory.

The appraiser will do some inquiring as to the condition of the property, but they are looking for things subjective to the loans requirements.  Things like GFCI outlets, no signs of peeling paint, the roof condition, etc.

The primary focus of an appraisal is to determine a properties value, so the lender can comfortably lend the money knowing the collateral is worth it.

 

In summary, you will have the option to acquire a home inspection, you will not have the option to acquire a home appraisal (in most cases)

The home inspection is the buyers report, and the appraisal is the lenders report.   Although the buyer pays and receives both.

 

If you have further questions regarding your home inspection, or a prospective home inspection you may order; please feel free to contact me via email or telephone, listed below.

 

Justin Scott

Loan Officer

NMLS 878581

(T) 920-530-4484

jscott@execmort.com

 

 

Thank you

Rates in the Upcoming Months

You may or may not follow the news pertaining to the Federal Reserve, but in February the current Chairman, Janet Yellen, will be relinquishing her position.

The Trump Administration nominated Jerome Powell, a current board member of the Federal Reserve to take her place.

There is quite a bit of controversy about how Powell will handle the upcoming years and monetary policies when it comes to dictating interest rates.   It has been suggested that Powell wants the ability “to respond decisively and with appropriate force” to new threats to the economy.

I am not one to make interpretations on how he will handle his position, his background as an investment banker will give him some insight as to how these things work, but there is skepticism because he is the first non-economist to run the Fed.  His predecessors , Ben Bernanke and Janet Yellen, has a softer approach to the recession.  It’s been said that Powell has urged Bernanke to ease his quantitative easing program after the 2008 bubble.  It’s been noted that Janet Yellen has continued this policy, slowly easing up on the purchase of bonds in the market.

With a strong economy and Powell at the helm, it’s created some controversy that historically has a rising affect on rates.

When investors are uneasy or uncertain about the future, they tend to be more conservative with their money, and we see a rise in rates.  With the upcoming change in authority we are expecting the investors to react similarly as they have in the past.

Considering Janet Yellen resigns in February, and Powell takes over at the same time, I would not be surprised to see rising rates before Christmas time.

 

 

 

Mortgage Loans and the Holidays

As you may have noticed from previous articles, mortgages can be difficult regardless of the time of year.  They require planning and proper execution.

This is even more important when you are trying to close your home around the holidays.

Because lenders require verification of employment from your employer, and potentially past employers, they send requests to the human resources departments.  What we typically find around the holidays is that people take time off.   If your HR department so happens to take some time off around the holiday it could delay the lender from receiving this form, which could inevitably delay your closing.

Human Resource personnel are not the only ones taking vacations around this time of year either;  appraisers , underwriters, title companies, even the lenders themselves may be taking time off from their busy schedules to appreciate life, and these are are pivotal components of your mortgage loan.

So my advice for ensuring a smooth closing around the holidays would be to get your documentation in as promptly as possible, respond to all parties involved with your transaction as quickly as possible, and try to schedule your closing as far ahead of time as possible.

The most difficult times to close a loan are Thanksgiving, Christmas, Labor Day and Memorial Day.   These are banking holidays and long weekends, and are the times the aforementioned parties are likely “off duty”

Also a notable side effect of the holidays are rising rates, we have seen rates are likely to rise just before a holiday,

 

To see what your rate would be this Holiday season.  Click Below!

http://yourratequote.clixonit.com/

Your Work History and a Mortgage Loan

If you are applying for a mortgage, you most likely have a job.  Which means you probably have a work history.   Work history is a very important facet of lending money, they will want a 2 year history of employment that displays any gaps or inconsistencies in your job performance.

People that have been on their jobs for many years and make a consistent salary are the easiest, but what is the effect of someone who has several jobs over the last couple years?

Lenders will verify your employment with each job that you have had in the last two years, they are concerned about the following

  1. Did you work for the company?
  2. How long did you work for the company?
  3. How much did you make at this company?
  4. What was your position at your company?
  5. Why did you leave the company?
  6. Was there overtime pay?
  7. Are / Were you paid commission, salary , hourly. etc.

With the above information they can piece together a picture of your job history, and match it to the application of information you provided.  They want to know what type of positions you’ve had in the last several years, and if they all correlate to one another, or did you switch industries multiple times?

If your transitions between companies have been beneficial (I.E more pay, better benefits , closer to home , etc) they make sense and cause no issues.

But what about when the verification forms show the opposite?

If you have a habit of switching jobs for no real benefit, it could potentially show a lack of responsibility, and that makes an underwriter question how you might pay back your debts.

For example, if you Worked at Target for 6 months, then transitioned to a construction company; a totally different industry, for the same pay; it would raise questions as to what motivated the move.

It’s not necessary to be on a job for many years to qualify, but it is necessary to be conscious of the past several years job history and how you would reasonably explain that to someone lending you money.

The only way to find out is to talk to an experienced loan officer that could assist you in piecing your job history together in a way that makes sense to the lenders.

To find out, please click here:

http://executivemortgagellck.clixonit.com/

Justin Scott

NMLS 878581

(920) 530-4484

Why is Communication so Important in a Mortgage Loan?

One of the most common reasons a mortgage loan goes awry is a simple lack of communication.

Everything in the financial world is time sensitive and a mortgage is no different.   Once you have an accepted offer on a home your timeline starts.   You are bound to certain time lines within that contract and must adhere to them.   This is why it’s important to have a loan officer ,real estate agent and client that are all on the same page.

You are going to want to furnish a letter of Pre-Approval upon submitting an offer, so immediately it’s important to have a loan officer that can provide this to you and your real estate agent in a timely fashion, a lack of communication can delay the letter and make your offer look unofficial; and the seller could potentially pass on your offer.

After the offer is accepted you are required to submit your earnest money check, this typically has a 3 day window and it’s best to keep an open line of communication with your real estate agent to ensure you provide this within contract guidelines.

The next contingency will be the home inspection, you have between 5-15 days to provide a home inspection and request any repairs you wish.  Keeping an open line of communication with your real estate agent and lender at this time is very important as it can affect the numbers in the loan.

While you’ve been working on the previous two contingencies for the sales contract, your lender will be requesting you to sign documents that outline the prospective loan you are applying for.  They will need income documentation and explanations on certain things, to ensure the loan closes by the contract date it is important to provide this documentation as quickly as possible.

 

So now you have the home inspection, earnest money and documents signed, you are in underwriting.  This is the hurry up and wait part of any mortgage loan.  The underwriter is reviewing your file and conditioning for more questions.  This is usually the part of the loan that most buyers get concerned about, because they’ve hurried for the past week getting the aforementioned items completed, now there is nothing to do but wait.

 

During this period the lender and realtor have a close hand-in-hand relationship that works through things like ordering the appraisal and reviewing the file, when they need something they will happily reach out to request it.

This is the where a good lender and real estate agent really shine, during the time you are waiting for approval, you will most likely be nervous, a good lender will have no problem taking your calls to put you at ease.  Remember, no news is good news in a mortgage.

At this time in the loan you are probably about 2-3 weeks in, and a little over half way to closing day.  When you have an approval on your loan and your lender requires more documentation, it’s imperative to provide them quickly.  Underwriting can take anywhere from 3 days to a week on certain files, and if you don’t get the information in quickly it can hold things up.

So when your agent calls, or your lender calls and needs something from you, take the call and provide it as quickly as possible to ensure a timely transaction, in return your lender and agent should be providing the same service to you as well.  Making sure you are comfortable will all aspects of the process.

Professionals that have been in the business understand the emotions that you feel when buying a home, it’s a stressful and exciting time, a good lender and agent will console and understand this.

If you want to find a good lender that works with you

http://executivemortgagellck.clixonit.com/    <— Click here

 


Justin Scott

NMLS 878581

(920) 530 4484

Be Aware of Your Deposits

Applying and closing on a mortgage can be a simple process if you are prepared for it, if you are not prepared it can be a significant amount of paperwork and questions.

One way to cut down on these seemingly endless questions about your personal finances is to be aware of the deposits entering your bank accounts.

An underwriter will generally question deposits that meet or exceed 50% of your gross monthly income, or if there is an unusual deposit that doesn’t “fit” into your normal pay scale.  To avoid this you can follow these few rules:

Season your money:

What does “seasoned money” mean?  It is a term used for money that has been in your bank account for 60 days , or two whole bank statements.   If you have deposited a large amount of cash into your savings account, it will show up on your next bank statement.

But if you have two full bank statements that do not show this cash deposit, it’s considered “seasoned money” and the underwriter will not ask about it.  So if you are planning on buying a home this upcoming year and you have a stash of cash, make sure you put it in sooner than later so you don’t get questioned about it.  Because Cash is untraceable, therefore it is unusable.

 

Be prepared to source your deposits:

Quite a few people get gifts from relatives, or withdraw from their 401(K) for the downpayment.  This is completely acceptable, but again if the underwriter witnesses a large deposit, they will require you to source it.

Gifts can be sourced with transaction histories, gift letters and bank statements.   401(K) deposits will be sourced with quarterly statements, transaction histories and a withdrawal request from your financing company.  So be prepared if you are considering using any of these sources, again it’s totally acceptable, but will require some additional documentation.

 

Don’t sell assets like cars and motorcycles to get cash

First off, this is an acceptable form of money, but it becomes incredibly tedious to properly source it.

If you sell a car to get the money you need for a down payment, the underwriter will require numerous things to verify the money came from said car sale.   Typically it will be things like this:

  1. Picture of the automobile
  2. Bill of Sale
  3. Appraisal / Bluebook value of automobile to justify value
  4. Letter of Explanation about the sale and how you came across the money
  5. Copy of the check used to buy the automobile
  6. Title

As you can see, it can get pretty hairy if you are selling unsecured assets.

 

You can take out a collateral loan:

Another common way some people have received a down payment is taking out a collateral loan on a secured asset they own.  Something like a car / truck, Home equity line of credit, a boat, or other asset.

They will need to source this as well with all the loan documentation and a transaction history showing the money entering your account.  They will be concerned about the new payment required to satisfy the new loan, and it will be counted against your debt to income ratio.

 

There are loans that require NO down payment:

As mentioned in previous blogs, there are loans that require no down payment, but they are subject to different guidelines.  For example if you are to do a WHEDA loan, you are held to stricter income standards, you cannot make too much money, or too little.

If you are to pursue a VA loan, you will have to be a veteran.

If you want to pursue a USDA loan, you will be purchasing a house in a more rural community, and you are subject to income guidelines.

 

The best way to identify your best course of action is to meet with a qualified loan officer prior to buying a home, explain your situation and come up with a plan.  If you execute the plan well, you can ensure a smooth, easy close.   It’s always recommended you take your loan officers advice when they suggest how to go about things.  A good loan officer will go over multiple options that can best be suited to you and your family.

 

If you want to figure out a plan for yourself, and buy a home in the future. 

http://executivemortgagellck.clixonit.com/     <– Click here

 

Justin Scott

NMLS878581

(920) 530-4484

Executive Mortgage LLC

NMLS271650

909 E. Walnut Street, Green Bay WI 54301

Get Pre-approved for your next mortgage loan in the Green Bay, Wisconsin Area