Blog — James Whitener - Whitener Team

The Do’s and Don’ts of Getting Approved for a Mortgage Quickly

The Do's and Don'ts of Getting Approved for a Mortgage Quickly If you’re ready to buy a home, getting approved for a mortgage is a critical step that you can’t skip or rush. And although it may seem like the lenders can be a bit arbitrary in their approvals, there’s actually a detailed set of criteria they look for when approving or denying an application.

So how can you ensure your mortgage gets approved quickly and without any hassles? Here’s what you need to know.

Do: Have All Your Documents In Order Right Away

Processing the paperwork on a mortgage approval is one of the most time-consuming parts of getting a mortgage. And if you forget to include a form or fill something out incorrectly, it may take your lender days or weeks to sort out the problem. So before you go to your lender to get approved, make sure you have all of the necessary documents and that they’re all filled out correctly – it’ll save you a great deal of time later.

Don’t: Accept A New Job Or Start A Business While Closing

Once it comes time to close on your mortgage loan, you’ll want to keep your finances as consistent as possible until after the closing. Any change to your financial situation can throw a wrench into the approval process and delay your loan. If you’re planning to quit your job to start a business, accept a new job, cut back your hours, or go on parental leave, wait until after the home sale closes.

Do: Get Pre-Approved With Your Lender

One simple thing you can do to greatly speed up the approval process is get pre-approved. If you’ve already been pre-approved for a mortgage through a certain lender, then securing a mortgage through that lender will be a very smooth process – and in some cases, a pre-approval can speed up your mortgage approval by a week or even more. With a pre-approval in hand, the only issue that remains to be settled with the lender is providing them with your new home address.

Don’t: Co-Sign A Loan For A Friend Or Relative

Any major purchase or new debt of any kind will read as a serious red flag for your lender, one that will take time to sort out. Your lender will do a second credit check just before closing the mortgage, and any new loan amounts can delay or stop the approval. So if a friend or relative asks you to co-sign their loan, wait until after your mortgage is approved.

Getting approved for a mortgage can seem challenging, but by following a few simple rules, you’ll make it easy for your lender to sign off. For more mortgage approval advice, contact your trusted mortgage professional today.

January 5, 2022/by whitenerteam_admin

An Overview Of Mortgage Points

Mortgage

An Overview Of Mortgage Points There is a lot of terminologies involved in the mortgage application process, and one common term people come across is a mortgage point. What exactly is a mortgage point, and how might impact the price of the loan?

What Is A Point?

Points represent fees due at signing. Some lenders charge points while others do not. In some cases, applicants are given the option to pay points in exchange for a rate reduction. A single point is the equivalent of one percent of the loan’s value. If the home loan is $200,000, then a single point is $2,000.

Origination Points And Discount Points

There are two common types of mortgage points. The first is called an origination point. The second is called a discount point. An origination point is charged to cover the cost of creating the loan. Typically, origination points are directly tied to the compensation the loan officer receives for writing the loan. The other type of point, the discount point, is used to reduce the interest rate of the loan itself. While each lender has its own standards, one discount point paid usually translates to an interest rate reduction of 0.25 percent for a fixed-rate loan or 0.375 percent for an adjustable-rate loan.

Is One Point Better Than Another?

Applicants might save money on taxes if they pay discount points instead of origination points. Discount points could be claimed as a tax deduction on Schedule A, but it is important for any homeowner looking to save money on taxes to speak to a tax professional for clarification. Sadly, origination points are not deductible. Most lenders give homeowners options regarding discount points, so homeowners need to think carefully about whether it is in their best interests to claim discount points.

Should Homeowners Take Discount Point Offers?

Some homeowners might wonder whether it is better to keep the cash and pay no points or take discount points to buy down the rate. This is a personal decision, and homeowners need to think about the best way to use their money. It might be better for some homeowners to pay discount points in exchange for a lower interest rate. It could be better for other homeowners to keep their cash and use it pay off other loans.

January 4, 2022/by whitenerteam_admin

What’s Ahead For Mortgage Rates This Week – January 3, 2022

Financial Reports

What's Ahead For Mortgage Rates This Week - January 3, 2022

Last week’s economic reporting included readings from S&P Case-Shiller Home Price Indices and the National Association of Realtors® released its monthly report on pending home sales. Weekly reports on mortgage rates and jobless claims were also released.

S&P Case-Shiller Reports Show Slower Gains in Home Prices

October home price readings from S&P Case-Shiller Home Price Indices showed slower home price growth in October than for September. Nationally, October home prices rose 19.10 percent year-over-year as compared to 19.70 percent year-over-year home price growth in September. October’s reading was the fourth highest since the inception of the National Home Price Index 34 years ago.

Case-Shiller’s 20-City Home Price Index reported 18.40 percent home price growth year-over-year, as compared to September’s reading of 19.10 percent year-over-year home price growth in September. Home prices for cities included in the 20-City Home Price Index rose by 0.80 percent between September and October. Phoenix, Arizona held on to first place in the 20-City Index with year-over-year home price growth of 32.30 percent; Tampa, Florida followed with year-over-year home price growth of 28.10 percent. Miami, Florida reported year-over-year home prices rose by 25.70 percent in October.

All 20 cities posted double-digit year-over-year gains in home prices. The two cities tied for the lowest year-over-year home price growth rate of 11.50 percent were Chicago, Illinois, and Minneapolis, Minnesota. Analysts said that while home price growth is slowing, prices will continue to rise in 2022.

In related news, pending home sales fell by 2.20 percent in November and were 2.70 percent lower year-over-year. The Midwest posted the largest year-over-year decline in pending home sales with a reading of -6.30 percent.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher mortgage rates last week as rates for 30-year fixed-rate mortgages rose by six basis points to an average of 3.11 percent. Rates for 15-year fixed-rate mortgages rose by three basis points to an average rate of 2.33 percent. Rates for 5/1 adjustable rate mortgages averaged 2.41 percent and were four basis points higher.

Discount points averaged 0.70 percent for fixed-rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.

Initial jobless claims fell last week to 198,000 first-time claims filed; analysts expected 205,000 new claims filed based on the previous week’s reading of 206,000 initial claims filed. Continuing jobless claims also fell with1.72 million claims filed as compared to the prior week’s reading of 1.86 million ongoing jobless claims filed.

What’s Ahead

This week’s scheduled economic reporting includes readings on construction spending and labor sector readings on jobs growth and the national unemployment rate. Weekly reports on mortgage rates and jobless claims will also be released.

January 3, 2022/by whitenerteam_admin

Do You Need Mortgage Insurance Even If It’s Not Required By Your Lender? Let’s Take A Look

Home Buyer Tips

Do You Need Mortgage Insurance Even if It's Not Required by Your Lender? Let's Take a Look Finding a proper mortgage loan and understanding the processing procedures behind the loan is the basis of good research. The down payment on a mortgage loan is typically significant when dealing with mortgage insurance.

Most loan applications with less than 20% down payment are required to include mortgage insurance with the loan. However, mortgage insurance may still be required even if it’s not typically required by your lender.

Underwriting Requirements

Most home mortgage applications undergo a strict set of standards for approval. These standards are known as underwriting and make up the bulk of time spent on a mortgage application. Unique situations in employment or credit history may require an additional down payment percentage to avoid PMI or private mortgage insurance.

Most underwriting requirements require adequate information on the borrower’s credit and employment history for complete application. Self-employed individuals or those with alternative forms of credit may need a few additional hoops to jump through when dealing with mortgage insurance requirements.

Lender-paid Mortgage Insurance

Lender-paid mortgage insurance is a popular option with potential homeowners that seek to avoid the cost of a PMI or FHA-backed insurance on a home loan. Most lenders incorporate payment of private mortgage insurance in exchange for a slightly higher interest rate.

This is one example of the points system on a mortgage application that eliminates the cost of PMI. The increase in interest rate may or may not warrant the need for a lender-paid mortgage insurance arrangement.

What’s Involved With Risk Assessment?

Strict lending requirements and banking policy now limit the number of mortgages with zero down payment options. Conventional mortgages and FHA both require private mortgage insurance if it is less than 20% down payment. However, FHA loans can be more flexible with the initial down payment requirements with adequate credit. FHA mortgage costs are now for the life of the loan. Lenders will look at mortgage insurance as risk protection.

The risk protection process may or may not require mortgage insurance in your home loan. For example, VA and USDA loans do not usually require mortgage insurance if the borrower’s credit and employment history are adequate.

Conventional loans have a reduction in risk once there is at least 20% equity in the home compared to the principal of the mortgage. Don’t hesitate to contact your trusted mortgage professional about potentially dropping mortgage insurance in the future to reduce overall loan costs.

December 29, 2021/by whitenerteam_admin

Major Mistakes Which Are Sure to Increase Your Closing Costs

Home Mortgage Tips

Three Major Mortgage Mistakes Which Are Sure to Increase Your Closing Costs When shopping for a mortgage, it is important to take closing costs into account. While some closing costs are the same for all lenders, different programs may add or reduce some of the burden borrowers face when closing on a home loan.

Let’s take a look at some major mistakes that could result in borrowers paying more than they need to in closing costs.

1) Failing to Take Property Taxes Into Account

Property taxes are generally put into an escrow account that is established prior to closing on the home loan. In most cases, a homeowner will have to pay 12 to 14 months’ worth of property taxes prior to close.

This can represent several thousands of dollars or more depending on the property taxes associated with a property. While everyone has to pay property taxes, finding a home in a low tax area can significantly reduce the cost of closing on a loan.

2) Failing to Ask Lenders for Credits Toward Closing Costs

A lender may have a program in place that enables them to give a borrower a credit toward applicable closing costs. While this generally may not count toward the down payment, it can still be a significant help for first-time buyers or anyone else who may not have thousands in a bank account ready to pay for lawyers or titling fees.

Depending on where the property is purchased, there may be programs available that provide funding for those who promise to stay in the property for a certain amount of time.

3) Failing to Ask the Seller for Concessions

The seller of a property may offer up to 6 percent of any closing costs associated with the sale of the property. While a seller does not have to offer any concessions, they could potentially provide hundreds or thousands of dollars that may not need to be repaid.

In addition to closing cost support, a seller could also provide appliances or other items that can further save a buyer money during and after the purchase is finalized.

A home buyer can save a lot of money by taking simple and common sense actions. By doing research into cost saving programs and credits toward closing costs, those who may have felt that home ownership was beyond their reach may be able to achieve their dream. To learn more about closing costs, you may wish to talk to a mortgage professional in your area.

December 28, 2021/by whitenerteam_admin

What’s Ahead For Mortgage Rates This Week – December 27, 2021

Financial Reports

What's Ahead For Mortgage Rates This Week - December 27, 2021 Last week’s scheduled economic reporting included readings on sales of new and previously-owned homes along with weekly data on mortgage rates and jobless claims.

Home Sales Increase in November

Sales of new and previously-owned homes rose in November. The Commerce Department reported sales of new homes rose to 744,000 sales on a seasonally-adjusted annual basis. October sales of new homes were revised to a year-over-year reading of 662,000 new homes sold, which was the lowest reading since the worst stage of the pandemic in April 2020. Analysts expected a year-over-year reading of 766,000 new homes sold for November. The median price of new homes sold in October reached a record high of $416,900.The number of homes for sale fell by 8.50 percent between October and November and represented a 6.50 month supply of new homes for sale.

Sales of previously-owned homes also rose in November with 6.46 million sales on a seasonally-adjusted annual basis. November’s reading fell short of the expected reading of 6.50 million sales of previously-owned homes but surpassed October’s reading of 6.34 million sales.

Rising numbers of mortgage applications indicated that demand for homes remains high, but mortgage rates are expected to rise in 2022. Given rising home prices, the additional challenge of higher mortgage rates will negatively impact affordability for some prospective home buyers.

Mortgage Rates Fall, Jobless Claims Data Mixed

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by seven basis points to 3.05 percent. Rates for 15-year fixed-rate mortgages averaged 2.30 percent and were four basis points lower than for the previous week. Rates for 5/1 adjustable rate mortgages averaged 2.37 percent and eight basis points lower. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims held steady at 205,000 new claims filed last week. Analysts expected a reading of 206,000 first-time claims filed. Continuing jobless claims fell to 1.86 million ongoing claims from the previous week’s reading of 1.87 million continuing jobless claims filed.

The University of Michigan’s Consumer Sentiment Index rose to an index reading of 70.6 and exceeded the expected reading of 70.4, which matched November’s reading.

What’s Ahead

This week’s scheduled economic reporting includes S&P Case-Shiller Home Price Indices and data on pending home sales. Weekly readings on mortgage rates and jobless claims will also be released.

December 27, 2021/by whitenerteam_admin

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