Explaining the Loan Process - Mortgage Underwriting

Please note: Slight discrepancies in this process may occur as lenders may designate responsibilities differently among loan processors and underwriters.

Your mortgage application will pass from the hands of the loan processor to the desk of the underwriter. In the mortgage underwriting process, an underwriter will make sure your financial profile matches your lender's guidelines and loan criteria. Then, your underwriter will make the final decision – to approve or deny your loan request.

The Job of an Underwriter – Assessing Risk

An underwriter's main task is to asses a borrower's risk. Have you ever declared bankruptcy or gone into foreclosure? Or, do you always pay your bills on time or have a fantastic credit score? These questions will reveal how you manage debt. They will also predict your ability to make the proposed mortgage payments.

The 3 C's of Underwriting: Capacity, Credit, and Collateral

To more easily assess a borrower's risk, mortgage underwriters follow a set of guidelines – the 3 C's of underwriting.

Underwriters typically begin by looking at:

1) Capacity – Do you have the resources and means to pay off your debts?

The first question a mortgage underwriter asks is: can the borrower repay the mortgage? Underwriters determine the answer by analyzing and reviewing the borrower's employment, income, debt, and asset statements.

In particular, underwriters will take a close look at your debt-to-income ratio. They want to see that you have enough money to fulfill your current obligations as well as your new mortgage. Underwriters will also verify the state of your savings, checking, 401(k), and IRA accounts. They want make sure that if you lose your job or become ill, you will still be able to pay your mortgage.

2) Credit – Do you have a solid re-payment and credit history?

As we previously mentioned in Part 3, your credit is perhaps one of the most important factors in the loan approval process. Your credit report will reflect how you have handled and managed repaying past bills (car loans, student loans, and home equity lines of credit). It will also predict your ability to make the proposed mortgage payments on time and in full.

3) Collateral – What is the value and type of property being financed?

An underwriter wants to make sure a loan amount does not exceed a property's value. Otherwise, a lender may not be able to recover a loan's unpaid balance, in the case of a default. This is why an underwriter orders a home appraisal. This report will assess a home's current worth and safeguard a lender from lending too much money.

In addition, underwriters will also review the type of property you wish to purchase. Why is this? Well, not all homes have carried the same risks for lenders in the past. For example, many lenders consider an investment property a more risky investment than an owner-occupied home. Lenders assume that in a difficult financial situation, borrowers would more quickly walk away from an investment property than from their primary residence.

A Positive Thought

 Some home loans can be very easy to underwrite; many of us, however, have more complicated financial lives that make underwriting more challenging. Don't stress if your financial picture doesn't seem perfect to you. Your mortgage loan officer, processor, and underwriter are working as a team to find a home loan program for which you qualify. For example, a strong income, a large down payment, and significant savings could offset some of your possible credit issues. Similarly, good credit and a sizable income could overcome a lower down payment.

Interview with: Kamei Caver on Credit

• What do you do exactly and how can it help me?

I am an independent agent with Financial Education Services. Using your personal right under the Fair Credit Reporting Act to your advantage we help you dispute the mistaken negative ratings that may be preventing you from obtaining new credit when you need it most. FES is one of the most experienced credit education companies in business, we've helped clients restore their credit with credit files that included everything you can imagine, including inaccurate, obsolete or erroneous:

Late payments Charge offs Foreclosures Judgments

Repossessions Identity theft Closed accounts Bankruptcies

Negative settlements Liens Collections

• How long does it take for my credit score to improve?

Although everyone’s case is different, most of our clients see an improvement within the first 45 days

• What is a credit score?

A credit score is a number that reflects your risk level, as an individual, to a lender. The higher the number, the lower the risk will be to the lender. As you apply for increased credit or attempt to make a purchase, the lender will check your ability to pay back that loan. The more negative marks you have on your credit report, the less likely you will be granted the loan or purchase you requested.

• What does F.I.C.O means and how does it affect my credit?

A FICO score is a credit score developed by FICO (Fair Isaac Corporation), a company that specializes in what’s known as “predictive analytics,” which means they take information and analyze it to predict what’s likely to happen. The FICO score range is 300 – 850, with the higher number representing less risk to the lender or insurer. Consumers with high FICO scores (usually around 760 or higher, though every lender is different) are likely to get the best rates when they borrow, as well as the best discounts on insurance. There is a popular FICO score chart that describes the main factors that go into these scores:

    Payment History (35%)

•     Debt/Amounts Owed (30%)
•     Age of credit history (15%)
•     New credit/inquiries (10%)
•     Mix of accounts/types of credit (10%)

All of these factors are considered in other credit score models, so it’s safe to say that if you have a strong FICO score you likely have a good score with other models as well.

• Can I get a credit card with bad credit?

With bad credit, your options for credit cards are somewhat limited. Most companies won't provide a credit line without a deposit and virtually all credit cards are going to charge monthly fees. And even if you are approved, you will end up paying significantly higher interest rates. However, if used responsibly, these cards may be the best way to start establishing or rebuilding your credit.

• What steps should I take to rebuild my credit?

Well you would want to start by paying down your debt and paying your bills on time. However, at FES we have programs specifically designed for that such as Debt Zero and Positive Credit Builder. These are educational systems that are designed to guide you on how to more efficiently pay down you debt, as well as educate and provide you with resources to help you take the necessary  steps to enhance your credit score and manage your financial life. That information can be found on my website at www.clearmycredit.org

• What is a good credit score?

A good credit score is generally considered to be 720 or higher

• How long does something stay on your credit report before it goes away?

Negative credit accounts, or trade lines, can remain on your credit report for up to 7 years, and bankruptcies and other public records for up to 10 years. Inquiries on your credit report may remain for 2 years. These are the maximum times that are permitted by federal law for reporting agencies to show negative items; however, these times are not mandatory. At any time, a creditor or credit bureau may remove a derogatory remark from your credit report if the consumer requests an investigation into remarks that they feel are incorrect.

• Will checking my credit report hurt my credit score?

Contrary to popular belief, checking your own credit score doesn’t hurt your credit.

• How many points does an inquiry take off your credit report?

In general, credit inquiries have a small impact on one's FICO Scores. For most people, one additional credit inquiry will take less than five points off their FICO Scores.

• I’m deep in debt and have a terrible credit score. What should I do?
  

Visit my website at www.clearmycredit.org or call (856)389-4303 and we can discuss what steps you need to take to improve credit and change your financial situation.

10 Tips to Consider Before Buying Your First Investment Property

Taking the initial plunge into investing can be a nerve-racking move. What should you buy? Who can you trust? And most harrowing of all: What if you end up losing money?

1. Are You Ready to Invest?

2. Do You Have a Plan?

3. What Kind of Property Should You Start With?

4. What is the Neighborhood Like?

5. What are the Local Vacancy Rates?

6. Do You Know All Your Investment Expenses?

7. How Will You Finance Your Property?

8. Should You Self-Manage or Hire a Professional Manager?

9. Can You Be Your Own Bookkeeper?

10. Do You Have an Exit Strategy?

Always keep in mind that your investment property is used for one thing; making you money.

Your property is not only an investment unit, its’ part of your business. Always conduct your business wisely and with strong business ethics. You will make all the necessary repairs for your tenant to live safely and comfortably in the home. You want your property to be appealing to renters, but you don’t have to go overboard. While it’s important to add your personal touch, you must also make smart financial decisions in order for your business to survive.

Personal Branding for Real Estate Professionals

 

 

About Agent Basics, Inbound Marketing real-estate-branding

 

Why would you buy a house from yourself?

If you can’t answer that question, it’s time to work on your real estate personal brand. People choose who they do business with based on a number of different factors, including presentation, demeanor, experience and passion. Your brand combines your beliefs with your business practices and this is what people gravitate to when seeking out a real estate professional.

 

Authenticity real-estate-branding

Anything other than the real you won’t do. Discover exactly what makes you fascinating. Build your brand on your true strengths. As a real estate professional, your goal should always be to attract clients who identify with you and your abilities. The same skills you have at building friendships can be utilized to build trust with clients. People make decisions every day in the industry based on gut instinct, and insincerity just won’t work.

 

Focus real-estate-branding

Blurry brands languish. Define your brand with a focused niche to connect with the minds of those you aim to influence.  If you’re having trouble clarifying your message, bring it back to the basics. Why do you love real estate? People? Your town? Great architecture? Try to remember the first reason you got into this field. Or think about the first sale you made. Use those emotions to drive your messaging.

 

Slogan

Your brand should be the promise you make. Work at developing a unique selling proposition and express it in a concise, memorable slogan.

 

Real estate is an evolutionary, exciting, personable market; why did you choose to become a part of it? These are all integral questions you should be able to answer honestly and easily. Condense these ideas down and sum them up with one sentence — this is your slogan.

 

 

 

 

Voice/Video real-estate-branding

 People remember how you made them feel. What you say is important, but how you say it is even more important. Develop a unique and genuine voice.  Are you a quirky individual that comes across as stiff in your writing? Do you sound genuine in person and forced online? Are you an older professional trying to make connections with younger clientele? Try to use language that is true to how you speak, and make sure that it sends the right message to your clients.

 

Understand Triggers real-estate-branding

 Weak brands focus solely on intellectual arguments. Strong brands tap into emotions. The subject you need to master is psychology. Become a student of it. People buy houses on based on feelings and what it will do for their personal lives, not just property stats. Dig deep and try to comprehend emotionally what the people you are selling to be looking for. Adjust your strategy accordingly.

 

Photo real-estate-branding

Your face must appear all across the social sphere. Don’t scrimp here. Hire a pro to do a photo shoot and pick the portrait that says, “I’m your friend.”

A personal brand is heavily based on visuals. Find a picture that drips with confidence and friendliness. Post it all over your social and make it your visual signature. If you don’t have one, hire someone to make you look great.

 

Content real-estate-branding

 Valuable content has magnetic power. Create an interesting mix of content to earn the mindshare and trust your brand needs. After you decide who you are, share what you know. Your content is the key to conveying that message of your brand. Choose to share insightful knowledge. Use interesting content to challenge the status quo of a classic industry. Don’t forget to ask questions: Ask your audience for their ideas and input. Everyone who’s looking for new homes can benefit from an expert comment or two.

 

 

 

 

 

Questions

Ask questions. Ask people to tell you their stories. Ask for their ideas. And then listen closely. Everyone loves a good listener. Questions can be drawn from every corner of your life, whether that’s in person or online. Listening to people’s real estate needs or past experiences (good and bad) can help you grow your knowledge base of potential client dos and don’ts. Social is a great resource for potential new business strategies and content. Listening can be the difference between finding properties a client “likes” to sign papers.

 

Keywords real-estate-branding

 When surfers go a-Googling, which words will lead them to you? Build a short list of the most relevant keywords and use them often. Pick out some relevant keywords for your business area. Decide which words from your website and social pages have the most traction, and integrate them appropriately into your content, pages, and social media. The phrases you choose should accurately describe your business but also who you are as a professional.

 

Media real-estate-branding

 Media is more complex than ever, and more vital. Identify the outlets that are most valued in your field, and use their tools to elevate your brand. Social media and multimedia channels are the best way to get your messaging out there quickly and creatively. It’s free exposure, and if you’re message and ideals are constructed properly, it will enhance your brand. If you aren’t getting interviews or spotlights from major media, build from within. Hire a video production team or take some tips from video experts and make some impressive content to share. Video is also a great piece of content to share on social media.

 

Graphic Design

Everything you create should be presented with class and continuity. Develop a tasty logo, color palette, and design standards that reflect well on your brand. Design is a crucial piece of making your brand message sing. Remember to compose a striking logo that translates the qualities of your slogan. Consider getting a pro on this one: The more professional your designs look, the more weight your brand will have.

 

 

 

 

Network real-estate-branding

Make connections locally, regionally, and globally. Have a business card or something of even greater value to distribute. Follow up and follow through. Use social media to reach out and connect with new business partners and potential clients alike. But don’t focus on just business. Make sure that people know and trust you and your brand way before they’re thinking of real estate. And when they do? You will immediately pop up in their heads as a reference to a friend or family (or perhaps themselves).

 

Influencer’s real-estate-branding

 Influential professionals have prominent friends. Seek out leaders. Surround yourself with them. Find ways to be of value to them.  There is a world of real estate professionals out there who have years of skills and knowledge to impart. Seek out those who you can make you better — it’s the best way to become a leader.

 

Zeal real-estate-branding

 Zeal is a “strong feeling of interest and enthusiasm that makes one determined to do something.” Without it, there’s no point in building a personal brand. This is something that should come naturally if you’re passionate about your work and your brand. Channeling this energy will make the difference of new and exciting business opportunities.

There is no success without the struggle

Even in the dictionary success comes after struggle, grind, sacrifice, and hustle. Lets just put that out there make it clear whatever type of success you want for your life prepare to "struggle" for it.

Now I'm not talking about living out of your car, or only eating ramen noodles until your first big break although your path to your success may call for that. Everyone's path is also different and will face different trials and tribulations to get the life we desire. Don't confuse your path with my path I've went through a divorce and lost friends on my way to where I'm going. But, I'm willing to go through that struggle were as your path just may call for you to cut back on spending dramatically and put that money into your business and brand.

You are meant to go through grind. It's your way of proving to the universe, god, or whatever your personal beliefs are That you are more than capable and ready to have whatever success comes your way. Each level of success will require a stronger more determined version of you. It will require you to grind and out hustle your competitors sacrifice and struggle a little bit more. With all of these things and with a strategy you can see success in anything you set out to do

Let me share with you a story about how much going through the struggle is needed.
This caterpillar was coming out of his chrysalis on his way to becoming a beautiful butterfly. A women was walking by and seen this happening feeling sorry for the little butterfly she tore the open the chrysalis so the butterfly wouldn't struggle no more. But what she didn't realize that this process was needed in order for the butterfly to strengthen his wings. He didn't go through the process needed so his wings wasn't strong enough to support him . So he fell to the ground and didn't make it.

If you gave all the pain back they caused you, you would lose all the strength you gained.
Don't run from it or try to avoid it and still think success will come your way. Want that body you've always dreamed of walking alone won't get for you. You must eat right and lift weights that's your struggle. You want to be the top sales closer in your office you must out grind and hustle everyone else. Sacrifice what they won't and watch you soar past them. Embrace the grind, the struggle  it will become apart of your success story!!!