Mortgage advisors are out there telling you how to live your life. This has to stop.

Mortgage Myth #1
“Don’t change jobs while applying for a mortgage”

Bullsh!t. You can switch jobs during the process.

Don’t let a mortgage advisor tell you not to make more $$ or take a promotion. You can close on a purchase of a new home with an offer letter from your new job.

You will need to be prepared with a fully signed offer letter and the contact details of your new hiring manager. You may also need to allow for a few days to have your new job verified by the underwriter. …

A fast run-down of the top mistakes to avoid when applying for a home loan.

A mortgage is a loan secured by your home. It’s the financing we need to buy a house. There are many options when shopping for a home loan. What matters is that you’re qualified and that your rates are great. It’s important to speak to a mortgage advisor who can guide you through the process and answer any questions you might have.

Mistake #1: Applying for an Unsuitable Loan

Do you wish to avoid getting a loan that is beneath your expectations? Is your mortgage advisor asking you how long you plan to live in the house? Is this a long term purchase? Do you think you…

Unidentified person going up a climbing wall.

When investing in real estate — it’s all about the cash flow.

I can see why investors don’t use the awkward acronym — CoC.

Cash on Cash returns are used in real estate transactions to calculate how much you are making on the amount of cash you invested in a property. This calculates a pretax return on your investment.

To calculate the cash on cash return on an investment, divide the property’s annual cash flow by the total cash you invested. For example, let’s say you put $100K into a property that is netting you (positive cash flow after all…

Yeah, the house looks great. And the price seems fair. But will it make any money? Will it make enough money to justify the expense of buying it? How do you know?

One method to estimate the profitability of an investment property is to calculate the Capitalization Rate — Cap Rate. This will provide you with the profit margin on the investment — or rate of return.

The first step in calculating the cap rate is to determine the value of the property. …

It’s not gonna make you fabulously wealthy — not any time soon anyway. You won’t be on Twitter’s sexiest investors list. You won’t have much to brag about at backyard BBQs. What you will have is a growing portfolio of rental properties that are cash flow positive.

It’s the boring, tried & true real estate investment method that just simply works.

BRRRR stands for Buy, Renovate (Rehab), Rent, Refinance, Repeat. It’s a method of real estate investing for the small investor. Someone who has saved a down payment, and enough to do minor renovations. …

How much do you qualify for? How much mortgage can you get? What’s home price do you qualify for?

Great questions, and a good starting point of the homebuying process. You’ve seen some houses online, you have an idea of the price of homes you like. Now what?

Can you afford it? Do you qualify for the mortgage with your income?

These are two different questions.

The first — can you afford it? — is a bit more of a personal decision point. You may be used to paying 50% or more of your monthly paycheck for rent or for…

EMD stands for Earnest Money Deposit in real estate. It’s the good faith deposit a buyer puts up when signing an agreement to buy a house. It shows the seller the buyer is earnest in buying the home so the seller will take it off the market.

When the buyer goes for a mortgage, they are told to supply paperwork proving the money they put up when they agreed to buy the house was theirs, or from a source acceptable to a lender — mom & dad, etc. Mainly this is a requirement placed on lenders to police money movement…

On 4/8/2021, Fannie Mae and Freddie Mac, the two biggest players in the US mortgage market, who buy most of the mortgages originated announced that all mortgage applications with a date of 6/30/2021 or beyond must conform to the revised qualified mortgage (QM) rules. They will no longer accept loans under the current QM patch rules.

This flies in the face of recent CFPB proposals to delay implementation of the revised QM rules until 10/1/2022.

What is QM?

In the aftermath of the global financial crisis, many new regulations were implemented designed to ensure that mortgage lenders made a reasonable…

Two hands with a notepad, charts and a calcultor

Loan level pricing adjustments are set by the Government Sponsored Entities (GSE) — Fannie Mae and Freddie Mac — or their regulator — the Federal Housing Finance Agency (FHFA) at the loan level. This are charged to the lender when the loan is delivered to the GSE for purchase and often, if not always, passed onto the borrower.

Many factors are calculated into your mortgage interest rate, some are fairly straightforward -the loan to value, loan amount, your credit score. …

A couple with papers and a calculator in the kitchen figuring out the numbers.

On page 2 of the Loan Estimate, where it breaks down all the various costs and fees for your home loan, on the right side in Section F, there are prepaids.
There are a few things a lender will require you to pay in advance. What you would normally pay anyway in due time, the lender wants you to pay upfront so they are paid up to the next due date. These are mortgage interest, property taxes and homeowner’s insurance.

Jeffrey Loyd

Mortgage Broker licensed in CA, CO, FL & NJ. For today’s rates:

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