Tag: home loans

Appraisal Shortage Causing Delays In Home Sales

CNBC published an article on their Real Estate blog entitled, “‘Massive’ shortage of appraisers causing home sales delays”

Below are a few quotes that summarize the story quickly, in case you don’t have the time or patience to read the article yourself.

“The appraisal shortage is massive. You’re seeing significant delays, you’re seeing cost increases, you’re seeing rate [locks] expire,” said Brian Coester, CEO of Rockville, Maryland-based CoesterVMS, a national appraisal management company.

…when the U.S. housing market came crashing down, the number of appraisers has shrunk by 22 percent, according to the Appraisal Institute, an industry association. With so few new cadets, the current population of appraisers is aging. More than 60 percent are over the age of 50.

…the decline in new appraisers is largely due to new regulations…

…appraisers no longer see a need to pay apprentices, but at the same time, licensing requirements to become an appraiser include 2,500 hours of appraisal experience to be completed in two years as an apprentice.

In some of the nation’s hottest housing markets, where sales are up double digits compared to a year ago, the shortage means searching far and wide for an appraiser.

[Home] Prices could change in the course of two months, the delay time it is now taking in some markets to have an appraisal done. Mortgage rates are also starting to move in a wider range, and that makes rate-locks ever more important.

How Does Benchmark Respond?

Our 5 Core Values have served us well. We believe that they will continue to enable us to thrive, even in a complicated market.

We built our reputation and our business on these Core Values, one of which is Relationship. Another complimentary value that we hold dear is Positive Attitude. The combination of these can go a long way in ways you may never expect. So what is our approach?

To be as clear and transparent as possible in building relationships with partners in helping our mutual clients to get their new home as smoothly as possible. Just like we pride ourselves on being thorough and courteous for our clients, we strive to be open and thorough in our communications with partners.

We have an experienced staff who search daily to ensure coverage. We foster a positive relationship with our panel of appraisers.

Our appraisers prioritize us because we pay them generously and pay them quickly.

We have an advantage over appraisal management companies, as our appraisers receive the full fee, rather than just a percentage, and we have control over both the fee and the due date.

We have clear channels of communications with our appraisal department to quickly and efficiently resolve disputes and revisions.

Service is Our Trademark

For years, we have made the mortgage process look easy to those who have entrusted us with their home loans.

…efficiency and customer service is second to none.

Tom and his team make you feel like family and not just a number. He walks you thru all of your options and helps guide you thru the whole process. The attention he gives to his clients is untouchable. You will not get service like you get from him anywhere. 5 star all the way

…the Benchmark Mortgage Team are outstanding! From start to finish they kept us informed of the process, progress, and approvals. By far the most professional and expedient loan process I have ever been through.

We take service seriously. These are just a taste from a small collection of genuine testimonials giving by our Benchmark clients/fans. I encourage you to view more testimonials my testimonials. If you love being taken care of and like what you see, call mefind your branch or apply now

What is a Mortgage Payment?

by bmadmin

One of the best long-term decisions that a person can make is purchasing a new home. While the value of a home may go up and down over a short period of time, home values have always increased over the long-term and have proven to be a great way to build personal equity. To purchase a home, most people will have to take out a mortgage to finance the majority of the purchase price. When getting a new mortgage, many people can be confused as to what their mortgage payment is and what it covers.

If you are wondering what your mortgage payment is, the first thing to understand is what impacts your mortgage payment.

The three factors that impact your mortgage payment is the amount of money that you are going to borrow, the interest rate that you are charged, and the amortization rate that you receive. The amount of money that you will borrow depends on the purchase price and the down payment you put forth. The interest rate that you receive is typically assigned by the bank or mortgage lender. Most borrowers choose a 30 year amortization, but there are plenty of other options to pay your mortgage off sooner than that. The longer your amortization is, the lower your payments will be, but the longer it will take to pay off the loan.

For those that are asking what a mortgage payment is, here’s what the typical mortgage payment covers:

First, it will cover your principle and interest payments. Interest is the amount of money that goes to the bank each month for providing you the loan. The principle payment is that amount of money that goes to the bank to pay down the loan balance. Each month, a little bit more money goes towards principle and a little less goes towards interest. Reduction of principle is what allows you to build equity over time.

Depending on your loan agreement, your monthly mortgage payment may also cover your tax and insurance payments. Many lenders require you to pay into real estate tax and insurance escrows every month. Then, when your tax or insurance payments are due, they mortgage lender will send the money due to the taxing authority and insurance companies. This will ensure that you don’t miss a payment and stay covered.

Feel free to reach out if you have any specific questions about what a mortgage is and what’s covered by your monthly mortgage payment.

Assets and Your Mortgage Application

by bmadmin

When lenders evaluate mortgage borrowers, we look at four things: income (the ability to repay), credit (the willingness to repay), collateral (appraised value and property condition) and assets (cash in the deal and cash reserves after closing, mostly). Of the “four legs of the table”, assets are the least discussed, and yet may be the most important.

What do we mean when we talk about assets?

Monies needed for the down payment (the difference between the purchase price and the loan amount which may or may not be the same as the money deposit at contract signing)
Monies needed for closing costs (fees to the lender and third parties for things like appraisals, title insurance, settlement services, and so on)
Monies needed for Pre-Paids (homeowners insurance, flood insurance, real estate taxes, etc.) and establishing escrow accounts for future payments
Monies for Reserves– the money you still have left after closing. Monies that would be available, if a problem were to arise

Why do we care about assets?

Assets may be the truest reflection of a borrower’s fiscal strength. Their ability to save and properly budget could be a significant indicator to their future paying habits
The source of the assets is important. Savings? Gift or inheritance? Lottery victory? Insurance settlement? Sale of a baseball card collection? Each reflects differently on the borrower.
Many people don’t show all their income on their tax returns (it’s just a fact). Undocumented income can’t be used to qualify; however, often assets become a truer representation of a borrower ability to pay than their 1040s.
Reserves are an issue. A client with $50 in the bank after closing is riskier than one with $50,000. Also, clients who have money in the bank but have some sporadic lates on their credit are looked at differently than those who didn’t have the money to make the payments.

Common Asset Issues in Mortgage Packages:

Large deposits (defined as those which are excessive for the income level) raise an underwriter’s eyebrows. Where did the money come from? Maybe the borrower took a loan that doesn’t yet show up on their credit report.
Cash deposits are another red flag. In this day and age, people keep their money in the bank, not under their mattress. Where did the cash come from?
Gift monies and seller’s concessions, while considered as borrowers assets when doing calculations, will give an underwriter pause when assessing the borrower’s real ability to replay.

Guidelines have tightened. When borrowers are paying off credit cards to get their ratios in line, lenders are asking where that money came from now. That act has nothing to do with the home purchase, but may be a sign of something fragile in the borrower’s financial make up.

The best advice is to consult a loan professional to discuss the proper way to position your assets and the timing of it that will put you in the most favorable light.

3 Tips to Getting the Best Home Insurance

by bmadmin

If you’re a first-time homeowner, you might be a bit intimidated by the prospect of looking for the best home insurance coverage to protect your investment.

With all of the different insurance companies out there, it can be confusing to know which coverage options you need and how to get them at the lowest possible rate.

What follows are three tips that will help you compare home insurance so you find the policy that’s right for you.

Find out what the policy covers and for how much you’ll be covered. For example, if you live in an area that’s at risk for tornadoes, you need to check to see how much coverage you have for wind damage.
Review the policy carefully to see if you need additional insurance for floods or valuable possessions. Homeowners insurance doesn’t typically include flood insurance, so find out how to include that in your policy. In addition, if you have a lot of valuable possessions, such as a collection of antiques or art, find out if the policy offers enough coverage, or if you need additional insurance.
Rates are always an important point when it comes to insurance. Check the annual and monthly premium amount to see if it’s viable for your situation. Also check the deductible amount to see how much that is. Remember, you always have to pay the deductible amount yourself, so you’ll have to have that money available in the event of a claim before your insurance coverage helps out.

House Prices Through 2015

by bmadmin

Everyone seems to have an opinion on where home prices are headed. Housing bulls are saying prices may start rebounding as early as later this year. Some housing bears are saying that prices may still drop another 10-15%. What actually is going to happen? No one knows for sure.

However, Macro Markets, a financial technology company, actually surveyed 108 economists, real estate experts, and investment and market strategists for their June 2011 Home Price Expectations Survey. They then averaged all 108 opinions. Here is what the report says about house prices over the next five years:

2011: prices will depreciate 3.52%
2012: prices will appreciate .46%
2013: prices will appreciate 2.18%
2014: prices will appreciate 2.92%
2015: prices will appreciate 3.47%

Accumulative appreciation (including this year’s projected depreciation) will stand at 5.71% in 2015.

Bottom Line

The experts say home prices will begin to see appreciation next year and return to historic levels of annual appreciation by 2015.

Post courtesy of KCMBlog.com