{"id":12568,"date":"2010-04-21T11:59:03","date_gmt":"2010-04-21T17:59:03","guid":{"rendered":"http:\/\/template.lenderama.com\/?p=682"},"modified":"2010-04-21T11:59:03","modified_gmt":"2010-04-21T17:59:03","slug":"seven-things-your-agent-should-know-about-your-mortgage-approval","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/seven-things-your-agent-should-know-about-your-mortgage-approval\/","title":{"rendered":"Seven Things Your Agent Should Know About Your Mortgage Approval"},"content":{"rendered":"

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Seven Things Your Agent Should Know About Your Mortgage Approval…<\/p>\n

While many experienced real estate agents <\/a>have a general understanding of the mortgage approval process<\/a>, there are a few important details that frequently get overlooked which may cause a purchase to be delayed or denied.<\/p>\n

New regulation, updated disclosures, appraisal guidelines, mortgage rate pricing premiums, credit score<\/a>, secondary approval layering, rescission deadlines, property type, HOA insurance requirements<\/a>, title and property flip rules are just a few of the daily changes that can have a serious impact on a borrower’s home loan financing.<\/p>\n

With today’s volatile lending environment, it’s obviously important for home buyers to get a full loan approval<\/a> which clearly defines all contingeas they pertain to each unique home buyer’s scenario prior to spending any time looking at new homes with an agent.<\/p>\n

Either way, we’ve listed a few of the top things your agent should keep in mind while showing you new properties:<\/p>\n

Caution – Agents Beware:<\/h2>\n

Property Type – <\/strong><\/p>\n

High-Rise, Condo, Town House, Single Family Residence, Dome Home or Shoe House<\/a>… all have specific lending guidelines that can influence down payment<\/a>, credit score and mortgage insurance requirements.<\/p><\/blockquote>\n

Residence Type<\/a> – <\/strong><\/p>\n

Need to sell one home before moving into another?<\/a> Is a property considered a second home if it’s in the same city?\u00a0 What if I’m buying a home for my children to live in, it is still considered an investment property?<\/p>\n

These are just a few of several possible residence related questions that should be addressed by your agent and loan officer at the initial loan application.<\/p><\/blockquote>\n

Rates \/ Locks<\/a> – <\/strong><\/p>\n

Mortgage Rates are typically locked for a 30 day period, and one of the only ways to get a new rate is to switch mortgage lenders.\u00a0 Rates also have certain adjustments for property \/ residence type, credit score and down payment which could have a big impact on monthly payments and therefore approvals.<\/p>\n

A 1% increase in rate could literally mean the difference between an approval or denial.<\/p><\/blockquote>\n

Headline News \/ Employment<\/a> – <\/strong><\/p>\n

Underwriters watch the news as well.\u00a0 Borrowers who work in a volatile industry during hard economic times may have to jump through a few extra hoops to prove that their employment and income is secure.<\/p>\n

Job changes, periods of unemployment or property location in relation to the subject property are other things to consider that may cause a speed bump in the approval process.<\/p><\/blockquote>\n

Title \/ Property Flip – <\/strong><\/p>\n

A Flip<\/a> is considered a property that has been purchased by an investor and quickly sold to a new buyer within a 30-90 day period.\u00a0 Generally, an investor will do a little rehab<\/a> work, fresh paint, landscaping…. and try to re-sell the property for a significant profit margin.<\/p>\n

While it seems like a perfectly fair transaction, many lenders have strict guidelines in place that prevent borrowers from obtaining financing on properties that have a previous owner with less than 90 days of documented ownership.<\/p>\n

These rules change frequently, and are specific to particular property types, so make sure your agent is aware of all the boundaries associated with your approval letter.<\/p><\/blockquote>\n

Homeowner’s Association Insurance<\/a> – <\/strong><\/p>\n

Some lenders require Condos and Town House communities to have sufficient insurance and reserves coverage pertaining to specific ratios on units that are owner occupied vs rented.<\/p>\n

It may also take a few weeks and cost up to $300 to receive an HOA Certification, so make sure your Due-Diligenc<\/a>e period is set accordingly in the purchase contract.<\/p><\/blockquote>\n

Appraisal Ordering Procedures<\/a> – <\/strong><\/p>\n

Appraisal ordering guidelines are changing quite frequently as regulators implement many new consumer protection laws created to prevent future foreclosure epidemics.<\/p>\n

Unfortunately, some of the new appraisal regulations have proven to slow the home buying process down, as well as confuse lenders about the true estimate of neighborhood values.<\/p>\n

VA, FHA and Conventional loans programs<\/a> all have separate appraisal ordering policies, so make sure your agent is aware of which loan you’re approved for so that they document any anticipated delays in the purchase contract.<\/p>\n

For example, if an appraisal takes three weeks and the average time for an approval is two weeks, then it probably isn’t smart to write a purchase contract with a four week close of escrow.<\/p><\/blockquote>\n

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Related Articles – Home Buying Process:<\/h2>\n