Logan Utah Mortgages and Real Estate

Please join us on Monday, March 15th from 7:00 pm to 8:00 pm for our free home buying "solutions 101" seminar. The class is free so bring family and friends. Instructors will be Bryan Nelson and Ted Chalfant from @home Realty and John Neil from Wasatch Mortgage Solutions. To register please call 435-890-2434 or 435-770-2709. Hope to see you there!

The USDA issued this statement today regarding funds for their residential mortgage program...

"This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments "subject to receipt of appropriated funds." This is because it is not certain when additional funding will be available."

It's not like Rural Housing hasn't run out of money in the past. However, in the past they would issue "conditional commitments" meaning that the lender could still fund the loan and when Rural Housing got funding again they would "guarantee" the loan.

What this means is that somebody who is going through the process of getting a Rural Housing loan could show up to their closing and receive the news that the lender will not go through with the transaction because the Rural Housing department has exhausted their "guarantee" money.

Rural Housing is an excellent loan. You can't get much better than 100% financing with no monthly mortgage insurance. If you are in the process of getting a Rural Housing loan to purchase a home and you are scheduled to close towards the end of April, I would highly recommend that you have a back-up plan.  An FHA loan, although not the better option, may prove to be an excellent alternative should Rural Housing run out of funds.

The Rural Housing loan has become a much more popular loan in Cache Valley, Utah over the last couple of years as conventional 100% financing programs have gone away. Hopefully the department will get more funding soon but if not than FHA could become an even bigger player in the real estate market.

If you are looking to purchase a home in Logan, Utah or surrounding areas, give me a call at 435-755-2177 and I would be happy to go over your mortgage options with you. For more information you can also visit my website at www.loganutahmortgages.com or www.mortgageloganutah.com 

Everybody knows that there is a 30 year fixed rate and a 15 year fixed rate but most people are surprised when I tell them that they could also do a 10 year fixed rate.

I'm not talking about a 10 year ARM that is amortized over 30 years.  This is actually a 10 year fixed rate amortized for 10 years and paid off in 10 years.

This is a loan program for those that hate debt and want some forced discipline to pay the loan off extremely quick. The interest rates on this program are great also.

Today the 10 year fixed rate is 4.0% (APR 4.122%).

This could be a great loan for somebody that only has 10 years left on their 30 year mortgage but is paying a much higher interest rate.

If you are interested in exploring what the 10 year mortgage can do for you, call me today at 435-755-2177. I look forward to exceeding your expectations.

For those people that are thinking of buying a home in Logan, Utah with an FHA loan, there is a change occuring on April 5th that will make your FHA loan a tad bit more expensive.

Effective on all FHA case #'s assigned on and after April 5th, the upfront mortgage insurance premium is increasing from 1.75% to 2.25%. On a $100,000 mortgage, that is an extra $500 dollars on your mortgage.

The FHA upfront mortgage insurance is the only closing cost that can be rolled into the mortgage and this won't change but the increase will mean that your monthly payments will be a little bit higher than with the previous 1.75% Upfront fee.

The president of HUD said that this change is necessary to help FHA shore up some of the losses that they have incurred due to foreclosures.

Personally I don't think that this will affect the market very much, if at all, and FHA will still be the best option for many borrowers.

Although the homes in Logan, Utah, Cache Valley and surrounding areas haven't depreciated as much as most of the nation (see California and Florida!) I think most real estate agents would agree with me that most every home has depreciated a little. One of the consequences of this depreciation is that it has made it difficult for some borrowers to refinance.

A borrower might have amazing credit and stable employment but if they have lost much of the equity that they once had in their home it can make it difficult for them to refinance, because the bank uses the home as collateral for the loan. However, there is hope with a program that the government has sponsored called "Making Home Affordable" or the Fannie Mae and Freddie Mac Relief Refinance Program.

This program works just like a conventional loan program except it allows for borrowers to refinance even if they have lost all the equity that they had in their homes, up to 105% LTV. This is great news for borrowers that want to take advantage of the lower interest rates right now.

To be eligible for this program...

    1. Your current mortgage must be owned by Freddie Mac or Fannie Mae. Find out here!
     2. Your loan can't currently have mortgage insurance.
     3. The balance on your mortgage can't be more than 105% of the value of your home.
   

My company is currently originating a lot of loans with this loan program. If you live in Logan, Utah, Cache Valley, or surrounding areas and your current loan is serviced by Bank of America, Wells Fargo, Flagstar, Chase, or Citimortgage, there is a good chance that I can help you refinance to get a lower rate.  Give me a call today at 435-755-2177 for a free consultation.

Your debt-to-income ratio is one of the key variables in determining whether or not you will be approved for a home loan, but it is also a tool that you can use to decide if a potential mortgage payment is affordable or not.

The debt-to-income ratio refers to how much of your gross monthly income (income before taxes) is being spent on your debts (e.g. home mortgage, car loans, student loans, credit cards) and the industry standard is that no more than 41% of your total income should be spent on your debts.

For example if you make $4,000/month, you should not be spending more than $1,640 on your mortgage payment and other debts. Anything higher than that and you could be seriously strapped financially and are considered a higher risk to a mortgage lender.

It is possible to be approved with a higher debt-to-income ratio than 41% if there are strong compensating factors such as excellent credit or if you have significant cash reserves. This can be helpful for situations in which an underwriter cannot count all of the income that a borrower actually makes due to certain underwriting guidelines that limit part-time, bonus, commission, or self-employed income as a result of lack of time on the job.

There are ways to bring down your debt-to-income ratio.

I have a borrower that I am working with right now who is trying to get approved to buy a home but she has a debt-to-income ratio of 48%. She wanted to put down $10,000. Because her debt-to-income ratio was too high I recommended that she  make a down payment of only $8,000 and pay off a student loan of $2,000 which would bring her debt-to-income ratio down to 41%, a much more realistic number for approval.

The debt-to-income ratio is not only an important # for the bank but also for you and the fact of the matter is even though you might be approved for a certain debt-to-income ratio, it doesn't necessarily mean that you will be comfortable at that #. A loan officer can guide you but only you can know for certain what you are comfortable with.

If you are looking to purchase a home in Logan, Utah give me a call at 435-770-2709.  I look forward to exceeding your expectations.

If you are buying a home in Logan, Utah a FHA mortgage can be a great option. Here is why...

     1. Only 3.5% down payment required
     2. The interest rates are not credit score driven. This means that whether you have a 620 credit score or 800 credit score, your interest rate will be the same. If you have less than a 700 credit score, FHA may be your best or only option.
     3. The interest rate on a 30 year fixed FHA loan is at 5.0% today (APR 5.566%).
     4. Unlike conventional loans, FHA loans are assumable. This means that somebody buying your home in the future can assume your 5.0% FHA loan with minimal closing costs. This could be an amazing selling feature in the future if interest rates go up like most experts predict they will.
     5. FHA has more lenient guidelines than conventional loans.

A FHA loan probably does NOT make the most sense for you when...

     1. You have a 700 credit score or better and want to put 20% down. Conventional would make more sense in this case because you won't have to pay mortgage insurance.
     2. You are buying a fixer upper that won't qualify for FHA.(Consult with your Realtor and Loan Officer to see if it qualifies.
     3. You are buying a home in Smithfield, Hyde Park, Nibley, Hyrum, or anywhere in Cache Valley besides North Logan, Logan, River Heights, and Providence. If you buy in those areas, you could do a Rural Housing loan which is 100% financing and does not require monthly mortgage insurance.

Other things to be aware of with FHA...

     1. If you are buying a home before 1978, the seller must repair any chipping paint before FHA will allow you to purchase it.
     2. FHA will require safety issues to be repaired before closing (e.g. Missing hand rails, broken windows, other repairs that the appraiser notes on the appraisal report).
     3. You must pay monthly mortgage insurance for a minimum of 5 years. After 5 years, once your loan balance reaches 78% of the value of the home, the mortgage insurance will fall off.

If you are looking to purchase a home in Cache Valley, Utah or surrounding areas, give me a call at 435-770-2709. I look forward to working with you!

Unless you live in a cave on a remote island somewhere you have heard that it is more difficult to get approved for a home loan than it used to be. Things are no different here in Logan, Utah. Your pay stubs, W2's, and tax returns are going to be looked at very closely to make sure that they match the gross monthly income that you put on the loan application.

For self-employed borrowers (if you own 25% or more of a business)  you will have to provide your last 2 years of tax returns (also for all FHA loans) because your history of income is looked at more closely than if you were an employee getting paid a salary.

If you made more income in 2009 than in 2008 and the loan approval depends on that increase it is imperative that you file your tax returns quickly and also that you file it through the closest IRS office. The closest office to Logan, Utah is in Ogden at 324 25th St (See directions below). By filing directly at the office, your transcripts will be available within a few days rather than the weeks or months that it can take if you e-file or send in your tax returns through the mail.

The underwriter orders transcripts directly from the IRS to verify the #'s on your tax return. If your transcripts aren't available than the underwriter can't verify your income and this will delay your loan approval.

Why does the underwriter need to order tax transcripts (Form 4506T) directly from the IRS you say? For this we can thank those few dishonest ones that would send in a different tax return to the IRS than the one they gave to their loan officer.

If you are a first time homebuyer and you need to use your 2009 income, this little detail could be the difference between getting your $8,000 tax credit or not getting it.

Directions for IRS office at 324 25th St. in Ogden, Utah.

Over the past couple of years I have written my fair share of pre-approval letters for borrowers here in Logan, Utah who are making an offer on a home, and it seems like the majority of the time they ask me to put that they are qualified for only the amount that they are offering.

I was thinking about this the other day. It's obvious that the mindset of the borrower is that they don't want the sellers to think that they are approved for a higher amount because they are scared that the sellers will think, "well, if they are qualified for a higher amount, let's counter-offer for that amount".

A real estate agent here in Logan, Utah might have a better feel for how this should work but I'm starting to think that this mindset might be counterproductive, especially in our current mortgage climate where it is more difficult to qualify for a mortgage than it has been in years past.

Put yourself in the shoes of a seller for a minute. Let's say you have your home listed for $200,000 and you get two offers for 190k each from different buyers. One of the 190k offers is accompanied by a pre-approval letter that states the buyer is pre-approved for an amount up to 250k. The other offer is accompanied by a pre-approval letter which states that buyer is approved for only 190k. Which offer would give you more confidence that it would close?

Wouldn't you as a seller be more willing to negotiate with someone that won't have any problems getting qualified for the loan than a borrower that can just barely qualify? I think that in this market where more loans are falling through than normal, that the answer is a resounding "YES".

I'm curious to hear what your thoughts are on this? Do you think the pre-approval letter should state the borrowers are pre-approved for their offer price, the list price, or the maximum amount that they are approved for?

If you are looking to purchase a home in Logan, Utah or Cache Valley, call me at 435-755-2177. 

I sent out a pre-approval the other day to a borrower of mine here in Logan, Utah and for the first time I had the sellers real estate agent call me to ask if I had reviewed their income and asset documentation. I thought that this was interesting and it was obvious to me that this real estate agent must have had an experience where he wasted a lot of time with a borrower who he thought was pre-approved when in fact they were not.

When I first started working as a loan officer it was acceptable to simply fill out a loan application with a borrower and use the information that they gave me verbally to get a loan approval and give a pre-approval letter. Well, times have changed.

For a true pre-approval the loan officer should not only take a full loan application, pull a credit report, and import the loan into an automated underwriting engine, but they should also review the required documentation such as tax returns, W2's, paystubs, and checking and savings account statements. Only when these 4 things take place should a loan officer issue a pre-approval letter.

For a true pre-approval the loan officer should...

     1. Complete a full loan application
     2. Pull a credit report
     3. Submit the credit report and loan application through an automated underwriter
     4. Review necessary documentation such as tax returns, W2's, paystubs, and asset account statements

If you are looking to purchase a home in Logan, Utah or Cache Valley, call me at 435-755-2177.