Here you can find great information about the mortgage world.
Shopping for a new home can be equal parts exciting and daunting. But it’s just as important to make sure your current home is ready to list. Here are some tips that can help.
Make a positive first impression
Buyers often decide whether to look at your house before they even get out of the car. Little things like washing windows, repainting trim, planting flowers and fixing screens can make a big difference. For even more impact, you may want to consider larger projects like replacing siding or adding a patio or deck. The added value for these larger projects won’t yield as high of a return on investment, but may help your house stand out from the rest. Weigh your options and ask your REALTOR® for advice before starting a big project.
Roll out the welcome mat
Make sure your entryway is inviting. Add a fresh coat of paint to your foyer or a wicker chair and table outside the door. For even more impact, replace old light fixtures and update the floor in the entryway.
Sparkle up that old bathroom
Remodeling an old bathroom can make a big impact. For very little money, you can add a new faucet to your sink, a new medicine cabinet on the wall, and even new paint or wallpaper. For a little more oomph, you can update the bathtub, add a double sink or re-tile the floor.
Add a second bathroom
The number of bathrooms is always a big sticking point for potential buyers, especially families with two or three children. Although adding a bathroom costs more than simply fixing up your old one, it also increases the value of your house more. Plus, having that second bathroom may help you sell your house faster.
Turn up the heat in the kitchen
Renovating an outdated kitchen is a great way to improve your home and its value. Focus on the basics: installing new flooring, adding a backsplash and a new coat of paint, re-facing existing cabinets, installing new counter tops, and possibly installing new appliances. These go a long way to making potential buyers feel right at home.
While this may not be a comprehensive checklist of things to do before you move, it’s a start. Tasks listed here may remind you of other important details.
Four weeks prior to move
- Invite family and friends to help you with the move.
- Have a garage sale.
- Donate un-needed furniture to charity.
- Contact insurance company to transfer policies (life, auto, homeowners).
- Contact doctors, dentists and other care providers for copies of medical records,
- Contact schools for copies of student records.
Three weeks prior to move
- Review tax deductions on moving expenses.
- Arrange cut-off date for utility companies.
- Request change of address kit from post office.
- Check out voter registration information for the new area.
Two weeks prior to move
- Transfer stocks, bonds, bank accounts and contents of safe deposit boxes.
- Prepare a list of clothing and essentials that will not be packed.
- Confirm what time family and friends should be available to help.
One week prior to move
- Find or purchase boxes for the move.
- Label all sides of boxes for easy reference later.
- Include room identification in the labelto make the unloading process easier.
- Label items you will need to access easily and place them in a separate area.
- Clean out your refrigerator and let it air out at least 24 hours before moving.
- Drain outdoor equipment: Water hoses, propane tank from BBQ grill, gas and oil from lawnmowers.
- Properly discard aerosols, paint, oils and other flammable or toxic chemicals at your local hazardous waste center.
- Schedule with utility companies to have utilities turned on at your new home.
- Get snacks and water for family and friends to munch on during the move.
- Remember, items packed last will be unloaded first, so if you’ll need to access something right away pack it last. Definitely remember to have bathroom tissue and paper towels in a convenient place.
- Include time for snacks, water, and food during the day for you and helpers.
- Conduct a final review of the house, including attic, stairwells, closets, cupboards, storage, garage and behind doors.
- If nothing else gets put away, at least set up beds in each room. After a long day of moving, you’ll want a comfortable, familiar place to sleep.
Uniform Residential Loan Application.
A loan you get to build your house, a loan to buy your house or any loan you take out to substantially improve your home. Interest paid on such a loan is generally tax-deductible.
Automated Underwriting System; A computer application that streamlines the processing of loan applications and provides a recommendation to the lender to approve the loan, or to refer it to manual underwriting. Also referred to as DU (Desktop Underwriter), DO (Desktop Originator) and LP (Loan Prospector). DU and DO are driven by Fannie Mae guidelines and LP is driven by Freddie Mac guidelines.
The total of all monthly financial obligations, divided by the total gross monthly income. Also referred to as DTI (debt to income).
Combined Loan-to-Value ratio; The overall mortgage debt, expressed as a percentage of the home’s fair market value. This is calculated by dividing the combined loan amount by the purchase price or the appraised value (whichever is less).
Example: Someone with a $50,000 first mortgage and a $20,000 home equity loan secured against a $100,000 house would have a CLTV ratio of 70%.
A lien, charge or liability against a property that affects or limits the ability to file a fee simple title, or affects the value of the property, for example, mortgages or easements.
Freddie Mac; Federal Home Loan Mortgage Corporation.
Fannie Mae; Federal National Mortgage Association.
Total monthly primary housing expense divided by the total gross monthly income.
Homeowners Association; An elected group that governs a subdivision or planned community. It collects fees from owners to maintain common areas and enforce covenants, conditions and restrictions set by the developer and the association itself
A trust-like account established by a lender to accumulate funds for payment of property taxes, hazard insurance, and mortgage insurance. The funds are collected monthly with the mortgage payment and the taxes/insurance are paid, when due, by the lender.
A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation, e.g., mortgages, judgments, taxes, deed of trust, etc. One who holds a lien has the right to sell the property to obtain the money, or to recover the money when the property is sold. Valid liens are filed with county recorders’ offices.
Loan-to-value ratio; The percentage of the home’s price that is paid for by a mortgage. This ratio is calculated by dividing the loan amount by the purchase price or the appraised value (whichever is less). Example: On a $100,000 house, if the buyer makes a $20,000 down payment and borrows $80,000, the mortgage is 80% of the price of the house. Therefore, the loan-to-value ratio is 80%. When refinancing a mortgage, the loan-to-value ratio is computed using the appraised value of the home, not the sale price.
Mortgage Insurance; A policy that protects the lender by paying the costs of foreclosing on a house if the borrower stops paying the loan. Although mortgage insurance protects the lender, it is paid monthly by the borrower. Mortgage insurance usually is required if the down payment is less than 20 percent of the sale price. Also known as PMI; Private Mortgage Insurance.
A term used to describe the difference between a borrower’s current housing expense and the proposed housing expense, when the proposed expense constitutes an increase in monthly debt obligation for housing.
Principal and Interest; The portion of a borrower’s monthly mortgage payment that represents repayment of the amount borrowed plus interest charges.
Acronym for the elements of a mortgage payment: principal, interest, taxes and insurance, representing the total sum of these components. This amount would also include any HOA dues.
Private Mortgage Insurance; See MI.
1. The amount of interest paid at the time of closing to cover the period from the day the loan is funded through the end of that month.
2. Interest that a borrower pays before it is due, usually to save taxes.
Planned Unit Development; A real estate project in which individuals hold title to a residential lot and home while the common facilities are owned and maintained by a homeowners association.
Total loan-to-value ratio; See CLTV.
Trust Account; A legal entity set up to transfer assets/property/income from the Trustor (creator) to the beneficiary. The administration of the transfer is done by a third party (Executor or Trustee).
Verification of Deposit; A form completed by a banking institution to confirm a borrower’s account balances and history, including information such as the current account balance, average balance, and the date the account was opened.
Verification of Employment; A form completed by a borrower’s employer to confirm the borrower’s employment history and salary, including information such as the borrower’s rate of pay, current year-to-date earnings, position and date of hire.
Verification of Mortgage; A form completed by a lender to confirm information regarding a borrower’s mortgage, including the borrower’s payment history, monthly payment, interest rate, etc.
Get pre-approved for a mortgage and know in advance exactly how much payment you can afford. Completing this step will also increase your negotiating power since you’ll be viewed as a “cash buyer.”
Put yourself in the hands of an experienced mortgage professional, someone who will help you to determine which financing options best suit your needs today and in the future.
It’s crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts, as well as assets and income should be included.
Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years’ tax returns and account statements verifying the source of the down payment, funds to close and reserves.
Begin shopping for a house. Once you find the right one, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought.
Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.
This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.
While most purchase loans do not require a formal inspection for termite and water damage, some loans (especially government loans) allow for the possibility. If problems are found, repairs may be necessary.
All pertinent information will be packaged by your mortgage professional and sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
Based on the information put together by the loan professional, the underwriter makes the final decision regarding whether a loan is approved.
Many lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan.
Approval, Denial or Counter Offer
In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
Lenders require fire and hazard insurance (often referred to as Homeowners Insurance) on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.
During this step, final loan and escrow documents are signed.
At this point, the lender will send a wire or check for the amount of the loan to the title company.
Confirmation of Funding
The lender authorizes the disbursement of loan proceeds.
Documents transferring title will now be officially recorded by the County Recorder.
12401 S 450 East F1 2nd Fl | Draper, UT 84020 | Office: 801.448.0066
Sunrise Lending Co. and its loan officers are not liable for information, claims, or agreements made by/between the public and third-party entities. These third-party entities may include but are not limited to real estate agents/REALTORS®, builders, or developers. Any information from independent vendors and data feeds may contain errors, outdated information or purchase conditions, promotions, incentives, and/or possible omissions. Sunrise Lending Co. makes efforts to update the information contained but cannot guarantee the accuracy of the information provided. We encourage buyers to complete their due diligence in deciding to build or purchase a home. We suggest that you seek the professional representation and/or advice of a licensed REALTOR®, as well as any other licensed professionals that are appropriate to your purchase decision, including but not limited to attorneys, accountants, or certified financial planners. Visitors to this site are responsible for the use and decisions made regarding the purchase of a home with regard to the information contained herein.
No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value (LTV) requirements, and final credit approval. Borrower approvals are subject to program guidelines, interest rates, and underwriting guidelines and are subject to change without notice based on the applicant’s current eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan, and a reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant.