Your Questions About Mortgage Loan Process

Lisa asks…

What do you know about taking over someones mortgage payments?

I am currently in the process of moving and can’t help but notice all the adds online for taking over someones mortgage and getting a house with the deed in your name for a cheaper monthly fee than I am currently paying. To me it seems like a great investment opportunity without having to go through the loan process. Does anyone have any experience with this type of thing, advice is needed ASAP as I have 30 days to move out of my current location.

John answers:

Be very careful. You can’t take over someones mortgage without the mortgagee’s (lender) approval. Also, many mortgages have a “due on sale” clause. That means if ownership changes they can call the loan due.

Realtor.sailor

Betty asks…

What do loan officers look for in your past bank statements?

As I’ve been doing homework on the loan process for a first-time mortage, it struck me as peculiar that it is recommended (required??) to bring six months of bank statements to your loan visit. This seems to me to be a little invasive on privacy, yet I’m not sure what the purpose is. What do they look for specifically? Is it to verify income, or do they actually look at every single item? What if I have multiple accounts/banks, should I bring six months worth of statements from each bank? Is this the same with bank loans as it is with mortageg brokers? Always, thanks for your answers!

John answers:

First off, intrusive, is an understatement, the 1003 loan application, is the single most invasive document known to man. You are asking to BORROW, more then $200,000 (AVERAGE) and you think that wanting to see an account history is intrusive?man, you are in for a shock!! First off, LO’s and the BANK’s underwriters, want to see (in an account history) a surplus of funds, a seasoning of funds(no large and anonamous deposits) a consistancy of funds, and that you have (in reserve) the required amount of funds to close, and still have a certain amount of Cash on hand, after the closing(PITI RESERVES) but, since this is your first house, its a little differant, if your credit is good, you may get away with REDUCED DOCUMENTATION programs(you dont have to prove as much on paper, these are callled STATED programs,and no verification programs). But if this is you first mortgage, you may have to prove an enourmaous amount of information, it depends on many many variables that are specific to your situation. Loan amount, down payment, loan to value ration, debt to income ratio, reserves, assets, credit HISTORY, not just your score. If you would really like to figure out what to do, then give me a call at 203-729-8900 or 203-410-4427 ask for david powell, and i will take you through this step by step, no application fees, no consultatio fees, i will just present with some options(out of hundreds of custom tailored loan programs, i will find the one that will fulfill the largets amount of YOUR goals(retirement, investment, equity building, early payoffs so that you can own your house 10 years sooner) or if you will only be keeping the property for a short time like 3 to 10 years , there a re completely differant programs for that, with their own benifits and perks, i’m really very good at what i do, so if you want more info, or would just like me to put a program together for you at no cost(i’m talking very real hard numbers not speculation or quotes, or guesses) if you like the loan, i can help you further. Might as well talk to an expert. Call me, lets get started.

Chris asks…

What will a bank ask in an employment verification process?

In terms of a mortgage loan, what will the bank call to verify? They can’t ask how much the salary is, can they?
I was thinking it would consist of Job Title and duties & Length of employment. Can anyone elaborate on this in detail?

John answers:

Well I don’t know where the rest of these guys have been or how they verify income ,but when I send out a verification of Income to your employer I ask.

#1 yearly income

#2 No of years been employed by this company

#3 Title and positon held by this applicant

How else is a mortgage company gonna figure out if you are qualified to get a mortgage if they can not get the rexact amount you earn yearly.

There is a formula used to determined if you are qualified to get a mortgage. In the mortgage industry we call it the front and back ratios.

To get this formula correct we can not have you employer give us an estimated amount of your yearly income. We need the exact amount earned.

If you don’t want the mortgage broker to send out the varification o fimcome, you may provide 2 years of W-2 for all your employers you work for. You will have to back this up with current paystubs from all employers. These documents have your exact weekly or monthly earnings on them.

Now if you can not back up what you need to get a house you should not purchase a house. There is a thing called No income verification, your mortgage broker just verify your assests.

Doing a no income verification loan will increase your interest rate which will increase your monthly payments. You will also need a higher credit score, but these loans are still available .

I hope this has been of some use to you, good luck.

“FIGHT ON”

Robert asks…

What happens to an FHA loan when you move from a house to an apartment?

What happens to an FHA loan when you move from a house to an apartment? Can you get out of your FHA loan and get the value you’ve put into it (principal) out? How does this work? Sorry, I’m new to this whole loan process. :)
I am not foreclosing. I am currently in an FHA loan, and am refinancing for a lower monthly payment (with closing costs paid by the bank). I just wondered what would happen if in a few years if I decided to downgrade.

John answers:

Here’s the simple version: Don’t buy a house unless you will live in it for at least 5 years.

Here’s the slightly longer version: Get some help from someone who can talk to you directly, because you so completely misunderstand the purchasing process that I’m very concerned that you are going to end up in a bad situation with your purchase.

Here’s the much longer version: Let’s say you buy a house for $100,000. That’s 100k. (k=thousand). Your closing costs will be about 5k. Those are the costs to buy the house. (Lawyer, inspector, etc.) So you need to pay 105k to buy the house. You put down 10k down payment. You get a loan for 95k. (95+10 = 105)

Over the next 5 years, you pay your monthly mortgage bill. Most of this money goes toward paying interest on the loan, so your loan balance (the amount you owe) doesn’t decrease much. So after 5 years, you owe about 90k.

You decide you want to live in an apartment. You sell the house for 100k. About 8k goes to the realtor and for closing costs. So you get 92k (100-8=92).
The bank takes 90k to pay off the loan, leaving you with 2k. Two thousand dollars.

Did I mention that during those 5 years, you are paying for all repairs to the house out of your own pocket?

Let’s say you don’t keep the house up so well. You sell the house for 95k. 8k to realtor and closing costs, leaving 87k (95-8=87)

The bank takes that money and wants an extra 3 thousand from you to close the loan, or they won’t let the deal go through. You owe 90k, and with 87k net from the sale, that leave 3k for you to pay.

Sharon asks…

How can I take my name off my mortgage loan? W/o refinancing?

How can I take my name off mine & my husbands house/mortgage loan w/o having to refinance or pay the bank’s processing fee’s (min $500, plus additional cost) I already looked into it w/them.

A Co-wrkr suggested using a notary w/a written letter stating I gave him the house? Is this true? But wont my name still be on the mortgage loan? I need my name off the bank loan.

Thank you in advance.

Serious answers only-Thanks

John answers:

No, you can’t just write a letter and expect to keep the banks money. You borrowed that money, it has t be repaid, either in cash or another loan. You can give hubby the house, but you still have to repay the loan you used to obtain it.

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