FINDING THE BEST MORTGAGE LENDER FOR YOU

 Finding a mortgage lender for your next new home purchase may be daunting, but here are five tips that will make the journey to home ownership more relaxed.

1. Get your finances in good shape.  It is understood that before you commit to purchasing a new home it is best to solidify your financial position.  A good credit score goes a long way to securing the choice of lender programs and lower interest rates.  Remember, your ideal debt to income ratio for a mortgage is under 36%.  Reducing your debt payments will help free up money you will need for a down payment and closing costs.

2.Research what kind of mortgage is right for you.  There are a number of mortgage programs available.  Whether you seek a VA, FHA, Conventional, or Jumbo loan, it is important to review all programs to determine which loan product is right for you.  Since loans terms vary in length from 15 or 30 years and rates are either fixed or adjustable, research is essential when packaging your loan.

3.Compare rates with more than one lender.  Rates matter in the long term. What is the total interest paid over the life of the loan? Should the current rate decline, is there the option to refinance for the better, lower rate? Things to consider when shopping for the best rates and terms.

4. Get pre-approved.  Get preapproved early rather than later.  Buyers who are not preapproved often lose out on great deals while waiting for preapproval.  Shop several lenders and get preapproved by more than one.

5. Compare loan estimates and select the ideal deal. A loan estimate is a document a lender must provide your after applying for a loan.  The document outlines key details about the loan, including the interest rate, monthly payments and estimated closing costs.

Bottom Line:  Buying a home is a momentous event that should not be rushed.  Read carefully all the documents before signing, ask questions on items not immediately understand, and never feel pressured into signing.  

THE NECESSITY OF PRE-APPROVAL FOR A HOME LOAN

 If you have been following the housing market during the time of this writing you will most certainly have noted that housing prices are higher and interest rates are too. How can a buyer position themselves to be in an excellent position to purchase a home? A buyer needs a pre-approval letter from a lender to validate proof of funds to a seller.

Basic requirements for a pre-approval letter from a lender.

1. Proof of income: Most lenders want potential homebuyers to provide W-2 wage statements and tax returns for the past two years, current pay stubs and proof of any additional income.

2. Proof of assets: A bank or investment statement showing they have the funds required for the down payment, closing costs, and cash reserves.

3. Good Credit: Most lenders require a FICO score of 620 or higher to approve a conventional loan; while a score of 580 for Federal Housing Administration loans.

4. Employment verification: Lender require the buyers to provide pay stubs but will in most cases contact the employer directly to verify employment and salary.

5. Other documentation: Personal documents and identification required for pre-approval include the borrower's driver license, Social Security number, and authorization to run a credit report.

Bottom Line:

Based upon the information provided by the borrower, the lending institution will provide a decision to either pre-approve or pre-approve with conditions the loan.  If denied, the lender will explain why and offer options to improve the borrower's chances for pre-approval.

HOME TITLE FRAUD

"Home title fraud is where a criminal steals a home by forging a deed," according to David Chang.  Chang continues by stating they illegally transfer ownership of the home without the real owner's permission and either sell it or take out a loan against it.  Then when the mortgage is not paid, the property enters foreclosure.  

According to the FBI, criminals find a vacant home, like a rental property or a vacation home and find out who the owner is by doing a little research.  They then steal the owner's identity, transfer the title to their name, and pocket the proceeds from selling the property or getting a Home Equity Line of Credit.  Home title fraud combines two crimes: identity theft and mortgage fraud.

The FBI reported that in 2017 there were 9,654 cases of real estate fraud, resulting in more than $56 million in losses.  In 2021, 11,578 cases were reported totaling more than $350 million.  

How to protect your home against home title fraud.

1. Be vigilant, open any letters you receive from a mortgage company, even if your name is not on it.

2. Periodically check all information pertaining to your property through county records.

3. If you own vacation property, have someone check the home regularly for sale signs or unauthorized activity at the property.

What to do in the event you are a victim.

1. Act quickly and contact the financial institutions so they can freeze any funds that the criminal might try an access.

2. Contact the county deed recorder and send then any documentation they need.

3. Contact the local authorities, including the FBI and Federal trade Commission.

4. Contact your attorney to begin taking whatever legal steps are necessary.

5. Focus on protecting yourself, monitor your credit, and be on the lookout for suspicious documents.

Bottom Line:

Home title fraud is a silent crime that you may not even know has occurred. It is important to be diligent and alert to all activities which may jeopardize your home's title.