Deanna Valeo
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Seasoned Funds What are they and why do you need them? July 5, 2010

"Experience is a hard teacher because she gives the test first, the lesson afterward." ~ Vernon Law

As mortgage lenders we often see buyers trying to use money that "magically" appears in their account or client's that have businesses and may have cash they want to use for the down-payment on their new home.  All lenders require that down-payment and reserve funds be seasoned.  So what does this mean? (no it is not mesquite flavored :)

Seasoned funds are funds that have been in a client's account for 90-days or more.  Fannie, Freddie and all government loans require that the last two months banks statements and financial statements be supplied to demonstrate the necessary funds for closing on a loan and also to provide proof of liquid reserves to close.  Reserves; Fannie and Freddie loans require 2 months of principle, interest, taxes, insurance and HOA dues worth of funds to be in reserve (left over after closing on your loan) for an owner occupied purchase of a property.

When reviewing bank statements an underwriter will require that any large deposits shown on the statements be explained and the funds must have an audit trail (canceled checks or a reasonable explanation) as to where the funds came from - no they cannot magically appear.  This is extremely important on Fannie and Freddie loans as borrowers must have a minimum of 5% of their own funds into the purchase of a property.  The only exception to the rule is when over 20% of the down-payment is gifted.

Seasoning is a very important part of buying a home when funds may come from different sources.  Knowledge is power and may just make the difference for getting you a loan with the lowest monthly payment.

As always Deanna and I are here to answer any lending questions you may have. All our best to you for a great week!

All our best for the upcoming week.

@ The Valeo-Croy Team, we are here for you.

The Valeo-Croy Team -  (704) 366-7711

Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421

Accessible | Program Expertise | On-Time Closings                              
 
The Valeo-Croy Team and Cunningham and Company Mortgage Bankers are Equal Housing Lenders.
This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for Cunningham and Company to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date: 7/5/2010


What a Change in Circumstances Can Mean for Your Closing July 12, 2010

"Creativity means believing you have greatness." -  Dr. Wayne Dyer

 
 
Deanna and I are off to take our third exam for our SC license; which brings us to next weeks topic of the different between being licensed and registered.  Do you want to work with a non-licensed professional after all the changes we have seen? 
 
Quick reminder/update:
Please remember if an appraisal does not come in for value and anything about the loan has to be changed - amt. lowered, PMI added or loan program changed.  This is a change in circumstances and a delay to closing.  If the program changes then there is a 7-day delay from the date the borrower signs new disclosures.  A change in loan amount is a 3-day delay from date of customer signature.

All our best for the upcoming week.
 
@ The Valeo-Croy Team, we are here for you.
 
 
The Valeo-Croy Team -  (704) 366-7711
Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421

Accessible | Program Expertise | On-Time Closings                             
 
The Valeo-Croy Team and Cunningham and Company Mortgage Bankers are Equal Housing Lenders.


Refinance your loan by Aug 26, 2010 for better cash flow July 20, 2010

It is getting close the deadline to do a refinance without having to pay the entire property tax bill at closing. In Mecklenburg County property taxes are due on September 1, 1010, however; they are not late until January 6, 2011 (almost all escrowed taxes are paid in late November and into December). If a mortgage is refinanced after September 1st you must bring all 12 months of taxes to the closing table at the time of the new mortgage funding. This can lead to a larger loan amount or more dollars needed to close your loan. 

Bottom-line, it is better for cash flow to close on your refinance in Mecklenburg county and all other jurisdictions that have due dates for property taxes of September 1st by August 26, 2010.

It’s a perfect time to finally pull the trigger.

All our best for the upcoming week.
@ The Valeo-Croy Team, we are here for you.

The Valeo-Croy Team - (704) 366-7711

Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421
Accessible | Program Expertise | On-Time Closings

The Valeo-Croy Team and Cunningham and Company Mortgage Bankers are Equal Housing Lenders.

This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for Cunningham and Company to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply. Date: 7/20/2010
 


To pay an origination fee or not? July 26, 2010

 "People think I’m disciplined. It is not discipline. It is devotion. There is a great difference." Luciano Pavarotti

To pay an origination fee or not? Actually we get many calls referencing closing costs and origination fees. In Charlotte it is traditional to pay an origination fee and in many cases the lowest rates are quoted with 1% origination fee and 1% in discount points. This can create confusion over the rate for the day versus the costs to close.

Let’s do an example: Assuming a $300,000 loan an origination fee of 1% is $3000 and a discount point of 1% is $3000 for a total of $6000. The rate for this scenario the other day was 4%. The principle and interest payment for this loan is $1432.25 per month. The closing costs not including pre-paid interest and escrows are $6000 + $2446 (this includes attorney, appraisal, title work and bank fees) for a total of $8446. On the same day (at the same time) you could also get a $300,000 loan at 4.5% with 0% origination and 0% discount fee with a payment of $1520.06; the total closing costs would be $2446. Which of these is the right solution?

When trying to decide which way to go on the structure of your loan we need to have an idea on how long we are going to be in the house. I would use the information from above to do the following analysis. The difference between Principle and Interest payments for both options is $87.81 ($1520.06-1432.25) per month. The difference in closing cost is $6000. The number of months to breakeven on the difference in closing cost can be calculated by taking the difference in closing costs divided by the difference in payment. So for our example it is $6000/$87.81 = 68 months or 5 years and 8 months. If you are going to be in the house for longer than this period of time the lower rate may be the best choice. If you are not sure how long you are going to be in your house maybe the zero cost loan is the better choice.

Your lender should be able to talk these and other options over with you and help you find the right loan structure, the lowest rate may not be the right choice for you.


All our best.

@ The Valeo-Croy Team, we are here for you.

The Valeo-Croy Team - (704) 366-7711

Todd Croy - NMLO license #91428
Deanna Valeo - NMLO license #91421

Accessible | Program Expertise | On-Time Closings

The Valeo-Croy Team and Cunningham and Company Mortgage Bankers are Equal Housing Lenders.
This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for Cunningham and Company to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply. Date: 7/26/2010