Mortgage Blog

Before applying for a Pa mortgage loan, Do Not make Major Purchases of any kind or take on any unnecessary debt if you can avoid it. Reason being that bills for appliances, jewelry, ,furniture, vacations, cars orany of these expenses that may show up on a credit report can affect your DTI. (debt ratio) A 0% interest free loan for a year on some appliances from Home Depot still may need to have a monthly figure attached to it on your credit bureau, often 5% of total balance. That seemingly insignificant amount could be the difference on what rate your lender is able to approve you at, or worse yet, whether you get approved for the mortgage loan at all. Better safe then sorry. Get the loan then buy the appliances (or whatever else) later. You'll be glad you did.

Keep your funds where they're at. That includes checking, savings, money markets, CD's, retirement funds, 401k savings, mutual funds or stocks. Remember that a loan officer may need a paper trail of each account and transaction you make and it can be very messy. All loans require proper documentation especially these days. Lenders, banks and credit unions triple check every loan file for quality control, accuracy and fraudulent activity so leave your cash parked where it's at until you get solid advice from your lending professional. And by the way, consider not changing banks either.

Pa Mortgage Broker information

The Pennsylvania Department of Banking  regulates the Mortgage Bankers and Brokers and Consumer Equity Protection Act pertaining to the Mortgage Brokers within the Commonwealth of Pennsylvania. A Pennsylvania Mortgage Broker is considered to be any person or company who, for a fee, arranges or negotiates a first mortgage loan. Performing these services and not being licensed is a felony of the third degree.

Pennsylvania Mortgage Broker licensees

Licensees are handled through the National Mortgage Licensing System. Pre licensing requirements include approved courses that are 20 or more hours and contain 3 hours of Federal Law, 3 hours of Ethics, 2 hours of Non-traditional Mortgage Lending plus 12 or more hours of electives. This may be in addition to Pennsylvania-required content. Continuing Education Requirements include at least eight hours of NMLS approved instruction. The licensing fee for NMLS Mortgage Broker is $1,100

Pennsylvania Mortgage Brokers surety bond requirements

Pa Mortgage Brokers must supply a surety bond by a company authorized to do business in Pennsylvania, in the amount of between $50,000 and $150,000, depending on the volume of business that they do. Pa Mortgage Brokers who intend to collect advance fees must provide a Penal Bond in the amount of $100,000 from a surety company authorized to do business in Pennsylvania. Applicants need to provide both Pennsylvania Criminal Record Checks and National Criminal History Record Information (including Fingerprint Cards). A complete criminal records check will be obtained on the applicant.

Pa Mortgage Broker locations

Pa Mortgage Brokers must maintain their principal place of business in Pennsylvania. Proof that all telephone lines are in the Pa Mortgage Broker's name is required. The Pennsylvania Association of Mortgage Brokers (PAMB) , is an affiliate of the National Association of Mortgage Brokers (NAMB). Both organizations aim at providing top-notch real estate education and legislative support for those who choose to obtain a Mortgage Broker License in Pennsylvania.

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	Mike Kohler is a Mortgage Loan Broker who serves all of Pennsylvania, including Philadelphia, Pittsburgh and all surrounding areas with home loans, refinance, and mortgage products.
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Getting the best mortgage rate

When people call a bank or brokerage and ask what’s the best rate available, we’re usually going to need some information to determine that. One key factor that makes shopping for the best mortgage rate so challenging is that many banks rates change twice per day and some more than that. Add the number of banks you’re trying to compare mortgage rates for, and it gets tricky in a hurry.

Mortgage rate quotes online

Most online mortgage rate quotes are based on the best case scenario, which hardly reflects the average person’s financial situation, especially in today’s economy. There are many important factors that will influence the final interest rate charged. Here is a short list of basics.

Debt to income ratio (Front end)– How much of your monthly income is being spent on the mortgage, taxes and insurance expressed as a percentage. i.e. 28%

Debt to income ratio (Back end) – How much of your monthly income is being spent on the mortgage, taxes and insurance, plus other recurring monthly expenses like credit card payments, car loans, student loans, home equity loans, but not electric, cable, groceries, etc. i.e. 36%

Loan to value ratio- The percentage of the loan amount as compared to the purchase price or appraised value of the property. Typically 80% is a conventional loan standard but there are lower rates available for borrowers who are borrowing less than 60% of the value of the property. Borrowing 95% is generally going to get you a higher rate of interest due to the greater risk to the lender.

More mortgage rate criteria

Credit Scores- The middle score pulled from a bank or broker from all three major credit reporting agencies. Transunion, Experian, and Equifax. Often these scores will differ from scores you pull yourself from online services. A middle score above 740 will generally see the lowest rates. Remember also that if there is a co-borrower, a lender will use the lower of each applicants middle score.

Job history- Lenders are looking for a stable job history and documentable income. 2 years tax returns, a month’s worth of pay stubs, and 2 years W-2’s or 1099’s is a standard underwriting criteria today.

So those are the biggies. Where it gets confusing is when you mix all those criteria together. For instance, a borrower may have perfect credit and an 800 mid score, tax returns, documentable income, verified employment, which is great. But he may have a higher than normal debt to income ratio and a lender is going to price that added risk into their interest rate. He could pay anywhere from a ¼ to a full point higher depending upon loan term, amount financed, etc. Watch a short video  

Best interest rates

Still other considerations that figure into the  calculation are: Loan type: Conventional, FHA, Home equity? Is the borrower paying points to lower their rate? Are you escrowing your taxes and insurance with the lender? If not, expect to pay ¼ to a ½ point higher than the lowest market rates, even if you qualify perfectly in every other category.

So as you can see,

Getting the best mortgage rate

is unfortunately not a simple process. Use the rate shopping you do online as a guideline since there are many components to the formula that will affect your rate. Our Net Equity Loans brokerage shops dozens of wholesale banks rates every day and we realize how confusing this can be. Your best best is to speak with a qualified mortgage professional about your borrowing needs. Our mortgage experts will be able to determine how you will qualify and then shop rates and programs for you through many different banks. This approach will save you time, and give you the flexibility of selecting a loan program and terms that are right for you. Rather than winning the rate war, your most important goal should be to be in the right loan program that fits your needs and that you can afford.

Click here For a Free Online Mortgage Quote

Or call us at 800-757-1990 for a Free Consultation.

Smart Tips for First Time Home Buyers

Hire a buyer’s agent to save you time and money

If you are considering buying a home, hire a buyer’s agent. An agent will save you time in finding a home that meets your needs. They can send you listings to view the details and photos before actually setting foot out the door. Also, agents often know of new listings that aren’t on the market yet. Besides, the seller is the one that will end up paying the commission, so take advantage of having some representation on your side, it doesn’t cost you anything.

Set up the financing for your new home purchase

Think about getting the loan before buying a home. It is smarter to go house shopping with a preapproval letter in your hand. When that day comes along that you want to make an offer, it will make your offer a lot stronger when the seller doesn’t have to worry so much as to you having to get financing. Get preapproved now!

Negotiate a successful deal that benefits both parties

Make sure your buyer’s agent gives you a list of comparable sales in the area. This will help you determine how much to bid on the home. The last 3 months sales are a good gauge for you to determine what to bid. Remember there are always more details to the offer than just the price. Examples are: how soon you want to move, having a pre-approval, seller’s assist, the items you want them to leave in the house. There are many details so be sure so sit back and think of the things that are important to you.

Make home inspections part of the plan

You may want to make your offer contingent on the home inspection. If you find out the home has foundation issues, you may decide against buying it. Having a home inspection will let you know exactly what you are getting into. Some people hate to spend another $300-$500 on the inspection, but it does give you the opportunity to address with the seller the problems of the home. Also, it lets you negotiate the items you would like them to address.

Remember buying a home is a step by step journey, there is no easy way there. There are many hurdles to go over to end up living in your dream home, but if you take them one step at a time, you’ll be well on your way to home ownership in no time. 

Everyone will have their own reasons for each side of this one, but the real question is, if you've been thinking about buying, reading up on the market, maybe even found several homes that might suit you, what is it exactly that you are waiting for?

Sure, it's possible that prices may go lower, but that risk really never does go away and you have no way of knowing the answer. In the housing market, prices can stagnate away for a number of years, and then all of the sudden, boom, houses go up, just like they've gone down for the last several years. However with the current combination of low mortgage rates, FHA low down payment programs, and home prices being as low as they've been in a decade, it seems like a lot of people are waiting for the market to go back UP!!  Of course the smart money that finds the right home, with the right mortgage is the genius seven years from now who has enjoyed the use of their property all this time, bought it right, still has a low fixed rate even though rates are back up to 7%, and has been building equity all this time and paid off nearly half of that 15 year mortgage, plus got a few tax breaks along the way for mortgage interest.

If you are ready to get off the sidelines and find that dream home, you can find current listings for sale or request a free mortgage quote right here.

Getting a mortgage loan, whether FHA, refinancing, or conventional can take a little doing, but here are a few tips to prepare for the process.

1) Gather all your financial information in one place. Current W-2's (or 1099's), at least last years tax returns, preferably the last 2 years, current mortgage statements, 1 month of pay stubs for all borrowers, a copy of your hazard insurance declarations page and agent number.

2) Have an idea of what your credit report looks like.  Is your credit perfect, do you have a slow paying account, have you missed a mortgage payment in the last 12 months.  A lender will pull your report from 3 major credit bureau's and have some questions about these issues.  The lender may also guide you in the right direction if your credit is less than perfect on what steps to take to improve it.

3) Be honest and provide accurate information on your application. In today's mortgage market, everything is double and triple checked.  Credit reports, addl sources of income, bank accounts, part time jobs are all verified. It's a lot easier to deal with an issue upfront than find out later in the loan process after you've paid for an appraisal and things are moving along.

4) Respond promptly to any requests for additional information so that you get your approval sooner.

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Chances are, when you first bought your house, you may have been asked by a lender whether you wanted to escrow your taxes and insurance or not.  Usually to the new homebuyer, that begets a puzzled look of...huh?  If you have been escrowing for a number of years, you undoubtedly know by now that your mortgage payment has gone up. Reason being, once per year, your mortgage servicer is required by federal law to update your account and make sure that they are not over collecting monies from you. Is there is a significant overage, they must return the overage to you.  Generally this is not the case. What normally happens is that taxes go up, homeowners insurance usually goes up. You just forward the bills to your servicer, they pay them, and every once in a while your payment goes up 20 or 30 dollars.  Your first reaction is WTF?  You pay it and life goes on and one day you realize that your taxes have gone up 800 dollars and your homeowners 360 bucks. That is the typical experience of escrowing.

On the other hand, for those who don't, or do not wish to escrow, a different situation often plays out. Once you bought your house, you paid the original tax bill and bought a homeowners policy with a check. Hopefully you set out with some type of plan to budget 1/12 of those bills in a special account so that when next years bills come do, you can just withdrawal the money, pay the bill and all is well. What sometimes happens is the "out of sight, out of mind" theory, followed by the "didn't I just pay that".   Yes, you did...last year.  Unless you have iron discipline, it can be challenging to try and save the money each year.  Even if you are successful for a while, things come up. It's there to dip into for car tires, home maintenance, etc all with the good intention of replacing it as soon as you can because taxes arent do for a while yet.

My final word on this one, from my own experiences as both a homeowner who has done both and as a lender is, "When in doubt, go the escrow route." 

If you've had a blemish or two on your credit report (and who hasn't these days) here are a few tips toward improving your scores. 

• Keep your bill payment history on time for 24 months.
• Open several new accounts and use them by making the minimum payment for a number of months.
• Open a secured credit card (Orchard Bank has a good one)
• Don't keep running your credit report. Wait 6 months
• Talk to a qualified professional about your situation.

Generally speaking it is often cheaper to use a brokerage, especially when you figure in the time savings. Reason being, each bank you go to only offers it's own mortgage product. An example. Let's say you're shopping for a 30 year fixed rate mortgage. Each bank only has one version of that product, so in order to get several real quotes, you'll need to either visit more bank branches or fill out a number of online applications, which takes time.  A reputable brokerage who deals with dozens of wholesale lenders can take your single application and price it through many wholesale banks to find the best combination of terms, rate, points, costs, etc and offer you several options to choose from.  Since the brokerage does all the legwork, you save a lot of time, and still get a very competitive loan, usually cheaper since it's through the wholesale channel, and the service is often much better!  If you are considering refinancing, you can apply online and recieve a quote in minutes at http://www.Netequityloans.com/GetpreApprovednow

Will I hurt my credit if I check it too often?

A question I hear all too frequently.  The simple answer is...no, not really.  Now if you are the type that signs up for a service and runs it once a month, you could be hurting your scores.  For starters, it's often unnecessary.  The most important time you'd want to have a look at all three of your scores through major credit providers is if you're about to apply for a mortgage.  If there is something amiss, you will find it then. You may also consider applying earlier than you need to and have a mortgage professional run your credit. They are often able to provide advice on what to do to get an account straightened out before it starts costing you a lot of money or gets you turned down for a mortgage loan. If you need help with this issue, please contact us at 215-741-3131 or shoot an email to LoanDept@NetEquityLoans.com and we'll do our best to help

Smart PA homebuyers are using FHA loans to limit downpayment requirement to 3.5%

by getting the seller to assist with up to 6% of the selling price. This can be used to cover most closing costs and can definitely help the buyer who may be short of cash.  The Federal Housing administration insures these loans generally by charging an upfront mortgage insurance premium UFMIP payable at closing, as well as a small monthly premium over and above PITI. This payment can generally be removed by the borrowers request once the equity in the property reaches 78%