Dennis' Mortgage Blog

Higher loan limits are back in qualifying counties: $729,750

Question of the week:  In order to get pre-approved you want to run a credit report—doesn’t that hurt my credit score?

Answer:  First, if you are serious about getting pre-qualified or pre-approved for a mortgage you must expect your credit report to be run; personally I will not sign or issue and letter of qualification or approval without a credit report I have obtained for the borrower(s).  Second, no it will not lower your score to have me run your credit report, unless you have had several reports run over the past several weeks from several vendors/lenders.  The credit scoring model takes into account that a consumer may speak with more than one lender to find who they want to work with (it is my hope obviously that those calls begin and end with me, but I am conscious of the reality that more calls may be made!) and as such more than one credit report may be run on a borrower.  If a borrower has two or three, possibly four, reports run in a short time frame of a few weeks all from within the mortgage industry there should be no impact on the borrower’s scores.  If however during the same period there are inquiries from credit car companies, auto dealers, mobile phone providers, it is apparent the individual is applying for credit all over the place—this will impact a score negatively.

When getting prepared for qualifying and getting credit approval for a mortgage please have ready name, addresses (two years), dates of birth, social security numbers, income information (amount, how paid, employer—2 years) and asset information (bank/investment/retirement accounts, numbers and amount in the institutions—as well bring up any large deposits not part of normal income); have this information for all borrowers.  Be prepared to provide pay stubs, most recent year W2s, most recent year Federal Tax returns (all schedules not just first or first two pages—note we do not need the state tax return), and asset statements from the past two months or quarter. 

Alert One item that we have constantly been battling as long as I have been in the industry is the bank statement.  We need all pages, regardless of what is on the pages.  If a statement says “Page 1 of 5” we need all five pages; if page five has no account information on it but is merely the legal language of the bank, if it says “Page 5 of 5” on it we need it.  As well, some banks or investment houses print on two sides—we need both sides.  Verification of funds is one of the number one delays we have in the industry, much of it because we are unable to get the full statements in a timely fashion.

Helpful Suggestion:  Do not like to keep paystubs, bank statements, etc. but thinking about buying a home?  Get a pendaflex or other file or box. Until you close escrow on your new home, whether one month or six, put in the box every financial document you receive during the period.  Do not try to determine if it may be necessary or not, just throw it in the box.  When the time comes I will be happy to sort through your box and pick out exactly what we will need.  When escrow closes you can shred the contents—or bring it by my office and we will put in our shredder bin.  If it has your income or assets on it save it until you close.

Have a question for me?  Ask me!   

Thank you everyone who has contacted me with questions about the HVCC, and other issues, this past week.  Earlier in the week a few members of Congress were carrying an amendment to another housing bill that would eliminate the HVCC requirement.  The industry was hoping it would get dropped before last Friday but obviously it was not, our hopes now rest on members of Congress using the legislative process to amend a bill rescinding the Code.  I will keep you informed.

Believe it or not, many don’t, we had some more positive, or at least less than negative news this week on the economy.  First, while the economy is still shedding jobs it is doing so at a slower rate—not good news if you are the sheddee but from a national perspective good news that the trend is slowing.  Second, while the “stress” test for the banks evidently shows some are still in need of shoring up, most banks are actually doing pretty well and recovering.  I don’t much trust the test since it was easy to establish a criteria that determined the desired result, which creates and excuse for Federal ownership of some banks.  Third, Chrysler may finally be out of our Treasury, perhaps GM is next and perhaps that will stop the run on taxpayer funds propping up private industry…perhaps. All this data led our mortgage investors into sell mode and we saw large losses yesterday.  Thankfully the sell off was after a positive early part of the week and more Fed investment in the mortgage markets. 

For the week we see a slight dip in conforming rates as a result of a good early part of the week holding back yesterday’s losses.  Hi-balance conforming and FHA remain flat.

FIXED RATE MORTGAGES AT COST OF 1 POINT*

30 year conventional  4.75%                 Down 0.125%

30 year conforming-jumbo 5.375%                   FLAT

30 year FHA    5.00%                                      FLAT

Please note that rates quoted are based on average of several lenders for a purchase transaction with 20% down payment and a minimum FICO score of 740; APR is not quoted as it is dependent upon specific loan amounts, lenders and services selected.  Numbers provided are for comparative purposes only.

Happy Mother’s Day to the moms!  I am lucky enough to live with the best mom around and know all the love, happiness and wisdom she brings to our home and our children.  My mom was not a fan of Mother’s Day, “I shouldn’t have to have a special day, every day should be Mother’s Day” she would tell us.  Mom was right!

Have a great weekend,

Dennis

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