Debbie Baum | What Corcoran’s Clients Must Know About Financing This Month
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What Corcoran’s Clients Must Know About Financing This Month

What Corcoran’s Clients Must Know About Financing This Month

Posted by Debbie Baum in Mortgage Broker

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What Corcoran’s Clients Must Know About Financing This Month

Rates

1. Slightly higher than last month–$1MM 30 year fixed co-op loan has moved up to 4.25% with zero points. (APR 4.301%)

2. The Fed has been buying bonds which serves as a primary catalyst for keeping mortgage rates low. They are now in the process of gradually winding down the bond-buying process by buying $10 billion less each month.

3. If economic growth continues as it has been, 6 months after this winding down process ends, the Fed has indicated plans to start raising rates. This could happen as soon as the fall of 2015, according to the Fed’s comments on Wednesday, March 19th.

HOT TOPIC FINANCING QUESTIONS

Q. My client’s down payment is being gifted to him from a long-time family friend. His lender seems to think the gift is really a loan and doesn’t seem to want to commit. Can this be resolved? A. Gifts play a huge role in helping buyers handle the large down payments in the tri-state area, but they have to be from a relative (by blood, marriage, adoption, etc.), fiancé, fiancée, or domestic partner. Documentation requirements are extensive. For example, domestic partners need to show that they have lived with the borrower for the past 12 months, will continue to do so in the new residence, and can show a history of shared expenses. Friends are not approved donors because lenders typically believe that a “gift” from a friend is really a second loan that will require an additional monthly payment.

Q. My client has zero credit card debt listed on his co-op application, however, the copy of his loan application that was submitted in the board package reflects an outstanding monthly debt. How can I get the mortgage application to match the co-op application? A. Unfortunately, you can’t. Many people pay their credit cards in full each month but it can take anywhere from 60 to 90 days for the credit reporting companies to reflect that fact. When your client applied for a loan, his credit was run real time at the touch of a button and the outstanding balances auto populated onto the loan document. Due to the reporting lag, these numbers are typically out of date but they can’t be manually modified because most lenders want to analyze the borrower’s spending patterns. The historical pattern of spending is not going to change just because your client bought an apartment. In fact, it is likely that the added debt of a new residence will increase the client’s monthly indebtedness.

CLOSE MORE DEALS WITH THE LATEST FINANCING TOOL

We are rolling out a great new product—a thirty year loan where the interest rate is locked-in for the first 15 years, adjusts once, and stays fixed at that new rate for the remaining 15 years. It’s called a 15/15. Unlike a 30 year fixed where rates have moved into the 4’s, the 15/15 product has a rate in the 3’s and appeals to many buyers who are looking to lock in for longer than the 10 years that a 10/1 ARM provides but fewer than 30 years. BTW, next month we will be rolling out a very competitively priced Foreign National mortgage product…… so stay tuned.

FEBRUARY’S MOST CHALLENGING CLOSING

Common sense underwriting was at its best with this loan.

1. Purchase price was $8.5 MM, loan amount was $5MM, the borrowers were gifted the 40% needed for down payment and closing costs.

2. While the borrowers had adequate funds, those funds were held in trust for the wife’s benefit and they did not want to liquidate them.

3. Additionally, the buyers had a 30 day late on a mortgage just 7 months prior to application.

Luxury was able to overlook the mortgage late and the fact that the borrowers did not want to put their own funds into the deal. Further, Luxury was willing to use the wife’s assets held in trust towards post-closing requirements. This deal was a triple exception but is typical of the creative thinking that Luxury has become known for. The icing on the cake was that we closed the loan in just 29 days and provided our unique 5/5 product!

www.luxurymortgage.com/maasbach
bruce
Bruce Maasbach
Branch Manager, MLO

Direct Phone: (212) 324-3000
Email: bmaasbach@luxurymortgage.com

Licensed In: CT, FL, NJ, NY
NMLS ID: 48072

24 Mar 2014 no comments

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