on Friday, February 3rd, 2012 at 12:32pm.
Getting a mortgage in 2012 is a little more complicated than it has been in the past due to the challenging economy and increased government regulation of the mortgage industry. In fact, it's like a giant hurricane has swept through the housing and mortgage markets, leaving chunks of debris and danger in its wake. But never fear; that's why I am here! As your Certified Mortgage Planning Specialist, my role is to walk by your side, be your personal guide, and set you up for success every step of the way. Here are a few of the challenges that we will tackle together as we navigate the danger zone known as the 2012 mortgage process! New Good Faith Estimate The US government has created a new version of the disclosure form known as the Good Faith Estimate (GFE). The old GFE itemized all your closing costs and illustrated your "cash-to-close" - the amount of cash you would need to bring to the closing if you are buying a home, or the net proceeds you would receive at the closing from a cash-out refinance. The new GFE lumps in your closing costs under certain categories instead of itemizing them, and does not illustrate your cash-to-close. Also, if the seller is paying closing costs or points on your behalf, this is not reflected on the new GFE. In other words, it will look as though you are paying these fees even though the seller is paying them. As your Certified Mortgage Planning Specialist, I go above and beyond the government's minimum requirements for my clients. In fact, I have created special systems and easy-to-understand forms to help illustrate the total costs associated with the loan options available to you. Please contact me for more details. New Appraisal Guidelines Most mortgage loans these days are either insured by the Federal Housing Administration (FHA) or sold to Fannie Mae or Freddie Mac. This means that mortgage banks and brokers need to follow the rules set by Fannie, Freddie, and the FHA. In 2009, Fannie and Freddie adopted new rules surrounding the home appraisal process. In 2012, the FHA followed suit and implemented many of the same guidelines. What this means for you is that the appraisal process is going to be more stringent and inflexible, costly, and time consuming than it has been in the past. Standardizing the mortgage planning process through participation with the CMPS community of experts. How to Successfully Get a Mortgage in 2012 In fact, many appraisals now go through multiple layers of screening and are handled by Appraisal Management Companies, resulting in higher costs and fees. Also, loan originators are prohibited in most cases from ordering appraisals or communicating directly with appraisers. Even so, it is important to keep in mind that an appraisal is simply somebody's opinion of what your home would sell for in today's market. Appraisers are required to consider the selling prices of short sales and foreclosures in the local market when determining the current market value of your home. This may result in a value estimate that may not agree with your own opinion of what your home may be worth. You and I are entitled to disagree with the appraiser and have a different opinion, but the lending guidelines that we need to follow require us to use the appraiser's opinion when calculating your loan amount and strategy. As your Certified Mortgage Planning Specialist, my commitment to you is that I will help you understand the appraisal report once it is completed. If there are any errors, I will do what I can to get them corrected. Most importantly, I will work hand in hand with you to adjust the mortgage strategy as necessary if the appraiser's opinion of value comes in below what you or I think your home may be worth. New Disclosure Rules The US Congress has enacted some new laws, and the Federal Reserve Board has issued some new guidelines that could delay the loan process. For example, if the APR on your loan changes by more than 0.125% before the closing, the lender needs to issue new disclosure forms and give you time to review the new forms. Here are just a few examples of what could cause the APR to change: You decide to lock in your interest rate or get a rate lock extension You decide to reduce your loan amount You are getting an adjustable rate mortgage and the index value changes Your credit score changes before closing, resulting in a higher rate or higher fees You decide to pay more or less points than what you initially requested As your Certified Mortgage Planning Specialist, my commitment to you is that I will help you avoid costly delays to the best of my ability by planning with you ahead of time and setting you up for success. While I can't control everything that happens during the loan process, I do have the experience to know what pitfalls to look out for and help you plan accordingly. Standardizing the mortgage planning process through participation with the CMPS community of experts. How to