Show Summary Welcome back to the show and Merry Christmas!! I’m recording this two-part series that we’re going to share with you over the next two episodes on Christmas Eve! I…
As I recently said in Welcome To Paradise – We’re Living On A Sailboat!, we no longer have our Jeep. Since we are preparing to cruise and will be leaving the marina soon, we no longer have a need for full-time use of a land vehicle. Now, technically we still own our Jeep, but it’s […]
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Saving more money is one of those big goals that a lot of people have, but get stuck. I know this because we use to be right there too.Â The year would fly by and we were nowhere near our goal. With a few months left, weâd scramble to figure out how to knock it out.Â It
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There are many steps associated with securing a home loan. After the preparation, paperwork, pre-approval and appraisal, you’ll find that you’re still not quite ready to pick up the keys to your new property. Final verification from your lender is required to ensure you’re equipped to repay your mortgage in full and on time. This is where the mortgage underwriting process comes into play. During the underwriting stage, your application moves from the loan processor to the mortgage underwriter. The underwriter will ensure your financial profile matches your lender’s qualification guidelines and loan criteria. Then, the underwriter will make the final decision to approve or deny your loan application. The mortgage underwriter plays a crucial role in finalizing your loan, so itâs important to set yourself up for success during this stage. In fact, there are several steps you can take to improve your overall financial health and increase your chances of being approved. What Is the Role of a Mortgage Underwriter? A mortgage underwriter is responsible for analyzing your risk to determine if your loan terms are acceptable. The underwriter will investigate to make sure your application and documentation are truthful, and they will double-check you have described your finances accurately. Mortgage underwriting standards have become more stringent, thanks in large part to new Consumer Financial Protection Bureau requirements enacted in the last few years. This requires mortgage underwriters to look closely at the applicantâs employment and financial history before approving a loan. Depending on your lender, the mortgage underwriter may be part of an in-house underwriting team or a separate processing/underwriting company your lender uses to outsource the underwriting process. The underwriting process may vary slightly among lenders, who can delegate responsibilities to originators, processors and underwriters accordingly. Make sure to check with your loan originator for guidance on what information to send to whom. How Long Does Underwriting a Mortgage Take? Underwriting mortgages is an essential part of the overall home loan process and generally takes about 30â60 days, depending on the type of loan, lender and current volume of borrowers. The underwriting process itself demands only a small fraction of that time, typically only a few days. That said, because authentication and verification of the loan are the primary reason for underwriting, mortgage companies are very thorough in reviewing every aspect of the loan before they are willing to finalize it. This means that if the underwriter encounters an issue, it may delay your closing. Determining Your Risk In order to assess a borrowerâs risk, mortgage underwriters primarily look at the âThree Câsâ of underwriting: Capacity: Do you have the means and resources to pay off your debts? Underwriters assess your available resources by reviewing your employment history, income, debts and asset statements. (Note: If you are self-employed, you may be asked to provide additional documentation such as income and work status.)They will also review your savings, checking, 401(k) and IRA accounts to ensure you can still pay your mortgage if expenses arise unexpectedly. Underwriters will pay particular attention to your debt-to-income ratio; they want to ensure you have enough money to fulfill your current financial obligations, as well as take on a new mortgage. Credit: Do you have solid repayment and credit history? Your credit is one of the most important factors in the loan approval process. The underwriter will review your credit score and determine your ability to make the proposed mortgage payments on time and in full. Collateral: What is the value and type of property being financed? The mortgage underwriter must make sure the loan amount meets the loan-to-value requirements of the product. Otherwise, in the case of a default, a lender may not be able to recover the unpaid balance of the loan. In order to place a value on the property, an underwriter will typically order a home appraisal, which will assess the homeâs current worth.In addition, the underwriter will likely review the type of property you are looking to buy. This is important for several reasons.First, different types of properties carry different risks. For example, many lenders consider an investment property a riskier investment. This is because, historically, a borrower who is in a difficult financial situation is more likely to walk away from an investment property than their primary residence.Second, lenders need to be sure that the property they are helping you purchase doesnât already have any legal claims on it. The lender will likely work with a title company during underwriting; mortgages, liens, claims, easement rights, unpaid taxes, restrictive covenants and pending legal action already attached to the home can derail a possible loan. Performing a title search ensures that the property can be transferred to you once the mortgage is finalized. How You Can Streamline the Underwriting Process Underwriting a mortgage canât, and shouldnât, be rushed. It takes time for the lending company to verify your information and do a final evaluation to determine whether you represent a good candidate for the loan. On the other hand, while the underwriter is ultimately responsible for the approval of your loan, there are a few things you can do to reduce your risk and make the process go more smoothly: Protect Your Credit Score Nowadays, many lenders are required to check the borrowerâs credit twice during the home loan application process: once during pre-approval and once right before closing. Maintaining a good credit score throughout the application process is crucial. Any changes can delay your loan process or adversely impact your ability to obtain a loan. Respond Promptly to Requests for More Information For the purposes of approving or denying your loan, a mortgage underwriter is essentially a real estate and financial investigator. This means they will be reviewing all of your documentation and paperwork in detail and reaching out for more information when something is incomplete. Donât be concerned if they ask for clarification on a late payment, missed signature or large depositâthese are all normal requests. The important thing is to respond quickly and accurately, which will reduce the length of the underwriting stage and improve your chances of being approved. Be Proactive About Your Loan Approval The underwriter will take care of reaching out to the necessary parties, but that doesnât mean you have to sit back and wait. Give your employers or other relevant parties advanced notice that they may be contacted to provide information. Call your lender and/or broker to check on the status of your application to make sure the underwriter is not missing any necessary information. In addition, keep records of your conversations with your lender so you have a record of what documents were provided and when. Do All You Can to Help Your Underwriter With the home you love at stake, the underwriting process can seem very intimidating. However, being prepared by filling out your application and supporting documents carefully and accurately will save you precious time. A Pennymac Loan Expert will be happy to answer any additional questions you may have about the underwriting process. Jump to… Part 1 – Getting Prepared for the Home Loan Process Part 2 – Completing a Home Loan Application Part 3 – Understanding Loan Processing Part 4 – Explaining the Mortgage Underwriting Process Part 5 – The Mortgage Closing Process Part 6 – Transfer of Loan Servicing
Personal finance 101 may not be on your course schedule, but that doesnât mean you canât school yourself on how to manage money. Learn these 10 personal finance rules that you can’t afford to break.Personal finance 101 may not be on your course schedule, but that doesnât mean you canât school yourself on how to manage money. Learn these 10 personal finance rules that you can’t afford to break.
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Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.93 percent, up from 3.87 percent.
The government just announced a settlement with 5 major banks that will mean some homeowners will now be eligible to receive reductions in principal, a refinance or compensation.
The post Government Foreclosure Settlement Means Homeowners Could Get Reduced Principal, A Refinance Or Compensation appeared first on Bible Money Matters and was written by Peter Anderson. Copyright Â© Bible Money Matters – please visit biblemoneymatters.com for more great content.
Another quarter in the books! Every three months, Iâll be taking a look at my personal finances, recent news from The Best Interest, and more dog pictures. Here are my previous quarterly updates: Q1 2021 Q2 2021 Q3 2021 Annual Review 2021 Why share this info? To brag?! No way! I want to be transparent. I practice what I preach… Read More »Net Worth, Projects, and Dogs â Update Q1 2022
Betterment offers the best combination of investment options, tax-loss harvesting and low fees of any robo-advisor – with no minimum investment requirement.
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