Don't Accept just a Pre-Approval Letter

Why a buyer needs to get "DU" (Desktop Underwriting) Approved rather than just pre-approved. There is a big difference between the two:

Without good preparation, many buyers think that if a lender pre-qualifies or pre-approves them for a mortgage its a done deal for them to obtain a home loan. Unfortunately, there's a world of difference between these two terms. If you've ever been confused by the two, we'll bring you up to speed on how these terms differ - and why a misunderstanding can mean disaster for borrowers.

With a Pre-approval:

• You'll complete an official mortgage application
• You'll supply the lender with the necessary documentation
  
• The lender will perform an extensive check on your current credit rating

From this point, the lender can tell you the mortgage amount for which you are pre-approved. You'll also have a better idea of the interest rate you will be charged on the loan. With pre-approval, you will receive a pre-approval letter with a specific max purchase price allowing you to look for a home at or below that price level.

DU is where it's at --- It's a Powerful Automated Underwriting System

DU (Desktop Underwriter) as well as Loan Prospector are two computer applications that are used when analyzing your loan application and credit. Basically, all of your financial, personal and work information is fed into DU, and it analyzes it and returns a recommendation as to whether or not your loan meets minimum guidelines.

• DU helps lenders make informed credit decisions on conventional conforming, non-conforming, and government loans.
  
• For certain loans submitted to DU, Fannie Mae will also waive some underwriting requirements that are typically required of lenders when loans are delivered to Fannie Mae.
  
• Compensating factors are allowed if DU gives you a favorable recommendation. For example DU may allow a little higher debt ratio if the borrower/buyer has extra cash reserves in the bank or they might be putting a larger down payment.
  
• If the recommendation is a "refer", which means the loan does not qualify under the guidelines, DU will specify why the loan did not meet minimum criteria.

Having a DU Could Give You the Edge on Getting Your Offers Accepted

• When submitting your offers to purchase a home and including not only a pre-approval letter, but a DU Approval, this will show the seller that your financial situation does meet guidelines
  
• It shows them that you are working with a lender that goes the extra mile to make sure you are well qualified.
  
• Sellers feel that getting offers from buyers with DU approvals the "fall-out" is less likely

Although, having a DU approval does not always guarantee for FULL loan approval.... it's always subject to a preliminary title report on the property, appraisal and all information must be verified by a real underwriter. If the information that was fed into the system was incorrect then it could result in a decline.

So buyers... Realtors..... ask your lender for a DU approval! Or better yet, call me, this is standard practice with my team!

Julie Chroust

Senior Mortgage Consultant

Prospect Mortgage

6601 Owens Drive, Suite 155, Pleasanton, CA 94588

Office: 925-516-5809

Cell: 925-381-1481

Fax: 925-516-7555

Email: Julie.Chroust@ProspectMtg.com

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Preparing to Buy a Home

If you’re considering purchasing a home, here’s what you need to do.

• Make a list of items most important to you. For example, the type of home: a single- or multi-family unit, the number of rooms, the location, and the proximity to schools, if you have or plan to have children. Also, think about how long you want to reside in the home. Increasingly, homebuyers tend to move in and then move up.

• Prepare yourself financially. Avoid any major purchases until after closing, regardless of your credit standing. Any increase in debt-to-income ratio reduces your purchasing power. Things like an expensive monthly car payment could make a bank decide you cannot afford the home. Also, you want to preserve any cash reserves you have. Banks prefer a consistent cash cushion of approximately three times the amount of your monthly payment. Review your credit reports at the major credit bureaus (Equifax, Experian and TransUnion) and search for anomalies. Avoid consolidating bills and closing credit cards. This can lessen your cumulative credit history and lower your FICO score. Don’t change jobs. Lenders prefer that you’ve been working at least two years for your current employer.

• Get the necessary paperwork in place. When you apply for a loan, you’ll be asked to provide the last three months of deposit account statements for bank accounts, stock or mutual fund accounts, pensions and other retirement accounts such as a 401(k), IRA or ROTH IRA. Other important documents include tax returns and W-2 forms for the last two years and, if applicable, divorce papers. If you’re renting, prepare copies of the last 12 months of rent payments.

• Get preapproved for your loan before you begin house hunting. Preapproval will determine how much home you can purchase. It will also increase your bargaining position. Getting preapproved sets you apart and signals to the real estate agent and the home seller that you are dedicated and serious, and can afford the home you want.

If you would like to learn more about preparing to purchase a home and getting preapproved, please call me today.

Julie Chroust

Senior Mortgage Consultant

Prospect Mortgage

6601 Owens Drive, Suite 155, Pleasanton, CA 94588

Office: 925-516-5809

Cell: 925-381-1481

Fax: 925-516-7555

Email: Julie.Chroust@ProspectMtg.com

Visit my Naymz Profile to Lean About Me

Website/Blog

Search the Multiple Listing Service for Free

Securely Apply Online

Join My Email list for updates

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The VA Streamline Refinance is an effort to help veterans secure the lowest fixed interest rate available. This loan option is a way for current VA homeowners to lower their interest rate with very little or no out-of-pocket costs. These refinance loans are done with very little effort and can help veterans start saving immediately. The VA Streamline Refinance does not require all the traditional income and asset verification. You can do a streamline refinance even if you just purchased your home in the last few months or several years ago.

VA Streamline Refinance, allows you to refinance your current mortgage to a lower interest rate. This is only available to veterans who used their VA eligibility when initially purchasing their house. "No Cost" Streamline loans let you refinance your mortgage with no out-of-pocket expenses.

There are two different ways we can help you with a VA refinance. One is that you'll get the lowest possible interest rate available and just roll in the leftover fees involved, or you can take a slightly higher interest rate and we pick up all costs.

• No appraisal is ever required....Value is based on the last VA appraisal done
• No Income Verification
• No asset Verification
• You must be current on your existing VA home loan
• You will receive your old escrow account balance back from previous lender
• You are allowed to include up to $6,000 in your refinancing loan for the purpose of energy efficient home improvements. Any other home improvement is not eligible
• No need to provide your Certificate of Eligibility again.

Call me, I'd love to help!

Julie Chroust

Senior Mortgage Consultant

Prospect Mortgage

6601 Owens Drive, Suite 155, Pleasanton, CA 94588

Office: 925-516-5809

Cell: 925-381-1481

Fax: 925-516-7555

Email: Julie.Chroust@ProspectMtg.com

Visit my Naymz Profile to Lean About Me

Website/Blog

Search the Multiple Listing Service for Free

Securely Apply Online

Join My Email list for updates

Follow me on Twitter

Truth-in-Lending and Regulation Z

We all need to be geared for the major changes taking effect on July 30, 2009. This could effect our closing times and we all need to be preparing our clients for this. Below is an outline of the changes.

Types of Loan Covered and Effective Date of Change

• The changes to Regulation Z affect ALL mortgage loans originated.
• The change applies to loans in all 50 states, plus the District of Columbia
• The changes take effect for all new applications taken or received on July 30, 2009 and after.

Initial Disclosure Requirements

• The TILA and Regulation Z require that initial disclosures must be sent to the applicant within three (3) business days of he day the application is taken or received.
• Initial disclosures include the Good Faith Estimate (GFE), the Truth-in-Lending (TIL) Statement, and state specific disclosures.
• The new rules require that a loan cannot schedule to close until at least seven (7) business days after the initial disclosures are mailed to the applicant
• A business day includes Saturdays, but does NOT include Sundays, and recognized Federal Holidays.
• EXAMPLE: Initial Disclosures mailed to applicant on Monday, July 6. Closing may not take place until Tuesday, July 14th or after.

Re-Disclosure of Initial Documents

• If there are changes to a borrower's loan program, loan terms, and/or APR, the initial disclosure package must be re-disclosed to the borrower prior to closing.
• If the borrower's APR increases or decreases by more than .125% for a fixed rate loan, or by more than .250% for an adjustable rate mortgage (ARM), the initial package must be re-disclosed.
• If the initial package is re-disclosed to the borrower, the loan cannot schedule to be closed until at least three (3) business days after the borrower has received the re-disclosure
• If the initial package is mailed to the borrower, then we must wait three (3) business days to assume the borrower received it - then, we need to wait another three (3) days before we schedule the closing
• EXAMPLE: Re-disclosure of initial package mailed to borrower on Monday, July 6th - closing may not take place until Monday, July 13 or after
• If the re-disclosure package package is PERSONALLY DELIVERED TO THE BORROWER by the Loan Officer, then closing may take place in three (3) business days
• Emailing or faxing the re-disclosure package to the borrower does not shorten the waiting period for closing - we must still wait the six (6) business days, and not three (3).

Thanks for reading!

Tom Ferry spoke at a 1/2 day seminar last week in Concord, CA sponsored by Prospect Mortgage and I must say I felt like a little kid in a candy shop. He spoke about ActiveRain and Twitter and making the most of these tools in our industry today. He also mentioned the best way to turn the leads you receive from these avenues into real transactions. It's called HBM (Home Buyers Marketing).

Realtors: You can't pass this up! HBM is a A FREE comprehensive, online solution to finding a new home. Private, password-protected website designed to get the homebuyer involved in their home search process. HBM is a business model to capture ‘contacts,' generate more leads, and save marketing dollars. 8 out of 10 homebuyers are using the Internet to search for their next home purchase. Having a plan for lead generation (ActiveRain & Twitter), capture and conversion is necessary in today's Internet environment (HBM).

Real Estate Agents can monitor buyer's online home shopping activities for better target marketing and track buyer's searching patterns (area, price, type of property). Agents can also track buyers based on their online activity and know who's actively looking to buy soon and focus your marketing efforts. HBM's Email and Multimedia Marketing are the most advanced audio/video technology that is available and for FREE!

Reach the entire pipeline of buyers with one broadcast email or target groups of buyers. Agents logo and website link are on every screen the buyer views. Agents utilize the HBMCONTACT CONVERSION® system with your HBM® Preferred Lender to build buyer loyalty. Working together with your HBM® Preferred Lender to provide a guaranteed, timely response to questions asked by enrolled home buyers. As a partner in your marketing efforts, your HBM® Preferred Loan Officer will cross‐sell your services. Homebuyers will appreciate the high integrity they experience while Home Scouting^TMonline and will refer their friends and family to you.

Click Here to View HBM

After you've watched this, give me a call. Trust me, it's the missing piece to a complete marketing system in today's market.

Julie Chroust

Prospect Mortgage

925-516-5809

Julie.Chroust@Prospectmtg.com

Follow me on Twitter

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Julie Chroust at Prospect Mortgage as a Preferred Lender, the role of the mortgage company is to work with the real estate agent and other business sources in the area of converting lost contacts to sales. The Preferred Loan Officer's role is to assist in determining a comfortable monthly payment and price range for home buyer. The Preferred Loan Officer is neither an employee of HBM nor the provider of the Home Buyers Scouting Report® (HBSR). The Home Buyers Scouting Report® (HBSR) is a free home finding service.

Buyers Marketing II, Inc. (HBMII), a licensed real estate brokerage services company that provides the Report directly to buyers through a secure, password-protected online service.

If you are interested in working with me as your preferred lender to help convert your leads to closed sales give me a call. This is a free service to agents that are serious about increasing their buyer volume. Full-time agents only. Call me to get a demo of this service. Julie Chroust Direct: 925-516-5809 To learn more about me visit my profile.

Prospect Mortgage is America's Best Relationship Lender. Founded in 1989, Prospect Mortgage prides itself on providing choice, value and customer service. Prospect Mortgage is a direct lender and mortgage broker, we can underwrite, draw documents, fund and close loans under one roof. When you apply for a loan with Prospect Mortgage, you'll have access to thousands of loan programs, which means that you'll get a mortgage solution that meets your needs, not ours. We look forward to serving you.