Jay Beckingham

Maybe,

or

Maybe not!

I mean I'm a loan officer with over 25 years of experience and some of this terminology throws me for a loop.

To me the question to ask if you hear that a loan is

"clear to close"

is when will the closing package be sent out.

If there is dead silence or a long pause, prepare yourself. You're probably about to receive an explanation as to what else needs to be done. If that involves any conditions involving something needing to be done by the buyer than I'm reaching the conclusion that it's not really

"clear to close"

at least not as I would expect any normal, non underwriting, or closing department person, to determine the meaning of "clear to close" to be.

The next step involves an individuals definition of "clear to close." Does it mean that a closing package is being prepared for the signatures of the buyer and seller, or does it involve the ability to be funded? That's a whole different discussion.

To me I think it's safe to say that when you're told a loan is "clear to close" that it has cleared the underwriter and is headed to the closing department, but it might actually mean it's "clear to close."

Actually it's a mystery!

So, does "clear to close" mean you can close?

Well;

Maybe

or

Maybe not!

To the Buyers;

It's kind of interesting, to a certain degree, that the house that you can purchase today for $100,000 once sold, or could have sold 2,3, or 5 years ago for $250,000. It's really great that you don't have to pay that for the house, because maybe you couldn't or wouldn't have tried to buy it. But in regards to what it might have been worth previously as compared to what you can buy it for today;

It just really doesn't matter!

All that matters is today's value.

To the seller;

You paid $250,000 for a home 2,3,or 5 years ago and it isn't worth more than $100,000 today and you really must sell it today. Yes I will concede, particuarly if you are selling short, that the difference has some relevance, but that fact alone doesn't change what the value of the home is today, the market does. So when it comes to what it is worth today, what you paid for it really;

It just really doesn't matter!

To the mortgage holder;

Whether you acquired the property through foreclosure, or are considering a short sale, and originally the property sold for $250,000 and you accepted a $250,000 mortgage, you foolish creatures. In regards to the value of the property today;

It just really doesn't matter!

The point here, that I am attempting to make, is that all that matters in regards to the value of the property today is what is the actual value of the property today, supported by comperable sales, today's comperable sales.

When it comes to the historical value of the property and its relationship to what it is worth today.

It just really doesn't matter!!!!!

Well I started looking for a home, and my Realtor told me I had to be preapproved. Since Pre means before I took it to mean I had to be checked out before I was to be approved, which as it was explained to me would take place after I signed a contract to purchase. I gave them my social security number, birthdate, paystubs, and bank statements, and in return I was given this really nice letter saying I had been preapproved for x amount of money for a mortgage.

Best I could figure the preapproval was a license to shop.

Okay, good start, let's go looking.

I found a house, made an offer, and it was accepted.

What now?

I met the loan officer, nice person, signed about 60 pages worth of documents, forked over some more personal and financial data, and went home to wait.

What next?

I was contacted by a person called a processor, who requested additional information. I really didn't think I had any additional information, but she found some. I forked over $$$ for an appraisal, and sat back and relaxed.

They couldn't possibly want any additional information, could they?

The processor called in about 2 weeks and told me that my file had been reviewed by the underwriter, and I was approved, with conditions. When I reviewed the conditions I came to the conclusion that the underwriter was a very creative human being who had somehow found some more information, which they just had to have. I sent in the information and the underwriter signed off on the conditions.

That means I'm approved right?

Well kinda, the file is going to the closing department and I'm told that we have some closing conditons. We can close when we satisfy these conditions.

Everyone involved is assuring me that I'm approved, but I don't feel approved.

So, while I'm not totally sure.

I'm approved, I think!

The Va Loan Program for eligible Veterans is just flat out a great program and a wonderful opportunity for qualified Veterans and;

They EARNED it!

I mean we're talking about

100% financing with no monthly MI

Here's some of the requirements;

181 days of active duty during peacetime

90 days of active duty during wartime

6 years in the reserves or National Guard

spouse of a service member killed in the line of duty

Other Veterans may qualify under special circumstances such as being discharged early due to a service related diasability.

Funding fee;

This is a one time upfront charge, traditionally financed with the loan.

2.15% on 100% financing for the first use

3.3% for 100% financing on second or subsequent uses

1.5% for up to 90% financing

1.25% for 90% financing or less

a higher rate applies to reservists and National Guard eligible Veterans

Traditionally we would not see a Veteran making a downpayment, however in today's world with either the total lack of conventional financing below 80% loan to value or high MI premiums, this option should be considered for those wishing to make a downpayment on a home.

Exempt;

In most cases a Veteran will be exempt from the funding fee under the following circumstances;

service connected disability

those who would qualify for disability status, but do not receive disability due to receiving retirement pay

surviving spouses

Income and Credit qualifying;

This is an earned benefit and the Veteran's Administration wants the Veteran to be able to use their entitlement. But they do not want to put a Veteran in a bad position right from the start. As with ALL loans in todays market the lenders have their own point of view. Remember

the Veterans Administration Guarantees the loan they do not Fund the loan!

That being said the guidelines are more relaxed than for most other financing options.

Credit for the last 12 months carries the most weight.

the income ratio is 41%, but may be expanded with compensating factors

the VA also uses a residual income formula, a 120% residual ratio is a HUGE factor towards approval.

The residual formula, in it's simplist form, is based on what's left for monthly income after all the bills are paid. The VA has standards based on family size.

WHY?

First, it's the right thing to do! there should not be any limit to what we will do to support and thank OUR Veterans.

Second, it WILL generate more sales, and that's our job.

Never, never , never forget how a Veteran acquired their eligibility.

They EARNED it!!!!!

In the Beginning, from the Moody Blues, tells us to face piles of trials with smiles.

Great Advise, wouldn't you say.

We're experiencing a "new beginning," some refer to it as a recovery, some say we're not there yet.

We have a new market, or maybe that's markets, as some bare no striking resemblence to others.

New rules, to some of them we say yuck!

To many of us it feels like our leaders and our financial markets are taking advantage of us, kicking us when we're down. Well get back up!

Here's the rest;

there you go man, keep as cool as you can

face piles, and piles, of trials with smiles

it riles them to believe, that we can perceive,

the webs they weave,

and keep on thinking free

Great stuff!

Ages real well.

To me it's very applicable; keep on doing the best that you can despite any/all obstacles that you may encounter. Don't be beaten down. Beat the odds!

Be the BEST Realtor, Loan Officer, Title Agent, Blogger, etc. etc. etc. that you can be.

Let nothing stop you from being successful, from giving your clients the best representation possible

ALWAYS!

Face piles, and piles, of trials, with smiles.

and keep on thinking free.

thanks Moody Blues!