ALL HOMEBUYERS:

1. Copies of W-2’s for the last two years;
2. Copies of paycheck stubs for the last 30 days (most current);
3. Copies of checking and saving account statements for last three months (all pages);
4. Copies of quarterly or semi-annual statements for checking, savings, IRA’s, CD’s, money market fund, stock, 401k, profit sharing, etc.;
5. Copy of sales contract when ratified;
6. Employment history for the last two years (address any gaps of employment);
7. Residency history over the last two years, with name, phone number, address and account number of Land or Mortgage Company. Rental property copies of leases plus mortgage information.
8. Canceled earnest money check when it clears or corresponding bank statement, if applicable;
9. Commissioned or bonused income — if 25% or more of base, must have tax returns;
10. Check for the expense of appraisal & credit report;
11. Refinance Copy of Note, Deed of Trust, Settlement Statement, Survey, and Insurance information;
12. Any assets used for down payment, closing cost, and cash reserves must be documented by a paper trail;
13. If paid off mortgage in the last 2 years, need copies of HUD1;
14. Copy of drivers license for applicant and co-applicant.
15. Copies of your most recent 2 years tax returns
16. Copy of social security card for each applicant and co-applicant

SELF-EMPLOYED HOMEBUYERS:

1. Copies of most recent 2 years tax returns (with all schedules including k-I’s if applicable);
2. Copy of current profit & loss statement and balance sheet;
3. Copy of corporate/partnership tax returns for most recent 2 year period if owning 25% or more of company — copies of W-2’s and/or 1099 forms.

DOCUMENTS WHICH MAY BE REQUIRED:

1. Relocation Agreement if move is financed by employer, i.e. buyout agreement plus documentation outlining company paid closing costs benefits;
2. Previous bankruptcy, need copies of petition for bankruptcy and discharge, including supporting schedules;
3. Divorce Decree if applicable;
4. Documentation supporting moneys received from social security/retirement trust income, i.e. copies of direct deposit bank statements, awards letter, evidence income will continue.
5. Mortgage payment statement on properties owned
6. Homeowner’s Insurance Agent contact information
7. **Non-Purchasing spouse’s personal information (name, social security number and income)

DOCUMENTS NEEDED FOR FHA/VA LOANS:

1. FHA: Copy of social security card and drivers license for each applicant and co-applicants;
2. VA: Original Certificate of Eligibility and copy of DD214 Discharge Paper;
3. VA: Name and address of nearest living relative

Academy Mortgage: Ten Day Close Guarantee in

Arizona and CaliforniA

Close fast in Arizona and California with our 10 Day Guarantee

Ask About Academy Mortgage’s Ten Day Close Guarantee!

Tired of waiting on the bank to approve your loan so you can move into your house?

Customer service is becoming a thing of the past and more and more banks and brokers are taking as long as 45 days to complete your loan transaction but not at Academy Mortgage.

Not at Academy Mortgage

Our Ten Day Guarantee: It is simple, if we do not close your loan in ten *business days, we will credit you – our client – $100 for every day after 10 business days where we do not issue your loan documents at the title company’s office.

Our goal is to make your home buying experience as pleasant as possible for your family and our experienced team of staff and mortgage professionals, not only have the tools to make it happen but we also keep your expectations in mind at all times.

• One Stop Shop – This means our processing, underwriting, doc drawing and closing is all under one roof.  We don’t waste valuable time sending your file from office to office, city to city or state to state.
• Team Work:  It does take several important professionals to get your home loan approved.  We ensure that all parties involved in your transaction work as fast as possible and are constantly in contact.
• Experience: An untouchable pool of knowledge. Our company consists of many of Arizona’s top loan officers and staff.  Our management and support team have many years of experience so we can confront potential obstacles proactively.  This makes a tremendous difference when you need someone in your corner.
• We are an FHA Full Eagle Lender with Direct Endorsement Approval.
• We work to meet your schedule and we are always available.  I don’t shut phone off at 5 p.m.  Your satisfaction is my business.

To learn more about our 10 Day Close call us at 480.650.8602 or email Ted Canto

HomePath Loans in Arizona

With the number of REO properties increasing, HomePath financing is becoming more common compared to a year ago.  HomePath financing.  HomePath financing is available for Fannie Mae REO’s (Real Estate Owned/ Bank Owned properties) by searching if the property is located on HomePath.com property search tool. 

The more REOs hit the market, the more questions we are being asked about the program.  I hope that this will provide you with some clarity or information that you can use to take advantage of this great program.  However, there are distinctions between the two types: HomePath Mortgage and a HomePath Renovation Mortgage.  The difference being, the HomePath Renovation Mortgage will allow minor fixes to the property. 

Here is a quick example of the HomePath Mortgage:

• Minimum 3% down for primary residence. (5% seems to be the prevalent outcome).
• 10% down investment property
• Borrower can own up to 10 financed properties (but need 25% down if they own more than 4)
  • Check with your local lender to determine if they have overlaying guidelines.  
• NO APPRAISAL NEEDED
• NO MORTGAGE INSURANCE
• High balance (jumbo) and interest only products available
• Seller contributions
  • up to 6-9% on primary residence (the larger the down payment, the larger the allowable contribution)
  • maximum of 2% on investment property
• The HomePath Loan tends to be higher in rate and at times, higher in cost when compated to a standard 30 year fixed conforming loan. 
  • If you want an equivalent rate to the going 30 year fixed, the loan will price with an additional (approx) 1% to 3.50% discount points.  However, these costs are often covered by the seller and there is no mortgage insurance.  In lieu of the discount points, one can just opt for the higher rate in lieu of the discount points.
• Same basic underwriting requirements of a conforming loan, but without the property issues (appliances missing, small wall patchwork, etc..) does not present problems with the financing.

The HomePath Renovation Mortgage  is currently only offered by 3 lenders nationwide.  This will allow for light renovations to the property that can be included into the loan.  Information about this specific product is scarce.  In general, renovation and construction type of products work like this:

• An appraisal is required ”subject to” the completion of the repairs.  The value is typically determined contingent upon completion of the repairs/ or market value, whichever is lower.   The down payment is determined on this appraised value (Note: most of the renovation costs are financed into the loan).
• The loan closes and the repairs are completed by a licensed contractor within a specified amount of time
•  There is more involved with these types of loans, such as: bids, inspections, draw schedules, etc. 
• The interest rate is typically higher than your general conforming 30 year fixed and often will incur additional costs/ discounts.

The two programs are excellent.  If you have any questions as to the 2 programs, please feel free to contact me via phone (480.344.3671) or email.

For a long time, longer than I care to remember, FICO Scores aka credit scores have been an super secret formula where only the credit reporting bureaus (Experian, Transunion, Equifax) knew how they worked.  This, of course, is because they are the ones who created the system.  For too long, we all wondered how to improve our credit scores while mortgage professionals tripped over themselves trying to provide a homebuyer a logical answer.    However, it still remains a complex formula based on factors that we likely will never know how they actually work. 

Getting and maintaining good credit isn’t rocket science, we just need to pay our bills on time, keep our balances low and sparingly take on new debt.

Bankruptcy

FICO’s information demonstrates that a bankruptcy tends to do the most damage to a person’s scores.  I can damage scores up to 240 points.

Credit Card/ Revolving Debt

Those with good or excellent credit – aka Prime Borrowers – put their scores at risk with a simple mistake. For example, someone with an average score of 680 who might make a payment 30 days late can experience a 60 to 80 point drop in their score.  However, someone with an excellent score of 780 – that same late payment can plummet their score by 90 to 100 points.

It Can Cost You Money

Just how badly a drop in your FICO score can hurt you financially is explained from studies made from the home mortgage, auto loan, and the credit card industries.  Studies were made based on hypothetical scenarios of a consumer who applies for a $200,000, 30 year mortgage and a $20,00 auto loan. The industry stressed that the FICO score isn’t the only factor in determining who gets credit and at what cost and rate (such as debt to income ratio, relationship with the lender, etc.), they were able to provide an idea of what a borrower who had the following credit scores could expect:

For a Consumer with a FICO Score of 780:

• Following a 30 day late, the consumer’s car loan rate would jump nearly 3 percent costing the borrower approximately $26 more each month.
• After a debt settlement, the consumer would pay as much as $109 more each month on a home mortgage.

For a Consumer with a FICO Score of 780:

• Following a 30 day late payment, the consumer would pay $41 more each month for a car.
• After a 30 day late payment, the consumer would pay as much as $95 more each month on a home mortgage.
• Following a debt settlement, the consumer would not qualify for a credit card

Of course, knowing the impact on a FICO score and actually avoiding these mistakes are two separate things. Amid rising unemployment and other daily financial struggles, paying bills and staying on-track financially becomes a much bigger challenge for many borrowers.

HUD has ruled on waiving the 90 day seasoning financing contingency for buyers. What does this mean?

Effective February 1st 2010, FHA/ HUD will not require that a seller of a property be on title for 90 days or more in order to sell the property to a borrower acquiring FHA financing. This is an incredible opportunity for the majority of buyers & sellers in today’s market.

Investment Properties, Flips, Foreclosures, Short Sales

This news is an important decision handed down by HUD as it propsed to dramatically assist the real estate market recovery.

FHA’s 90 Day Anti Flip Rule

Prior to HUD’s decision, HUD required that a seller had to hold onto the title of the property for a period of 90 days after settlement date. This has always affected an investor’s decision in accepting an offer made on the investment property by a FHA Approved Buyer. This will all change on February 1st for a temporary period of 1 year.

Below is an excerpt from the HUD website:

“In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”

This great news obviously comes with some restrictions. However, they are minimal but important when looking at the new rule. REMEMBER, THIS IS FOR ONE (1) YEAR ONLY!! I anticpate that if it has the expected results, the rule may be extended for a longer period.

The New FHA 90 Day Flip Rules

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

•All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
•In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
•The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

You can learn more by visiting HUD’s site CLICK HERE

It can be time-consuming to dispute mistakes on your credit reports and eliminate inaccuracies, but it’s worth doing. Start by calling us and obtaining a copy of your credit report.
Although most national lending institutions report consumer credit information to all three credit bureaus, smaller banks and other credit grantors may report only to one or even none. Therefore, your credit report may vary from one credit bureau to another. If you’ve occasionally applied for credit from smaller creditors, check your report from all three credit reporting agencies-TransUnion, Experian and Equifax.

Look very carefully. Circle anything that seems wrong, but keep in mind that balances may be off by a few payments because recent payments may not have been recorded at the time you ordered the report. Make copies for your files and for anyone who may need proof of the errors.

Credit Report Disputes

,p>Credit report disputes must be made in writing and sent through regular postal mail. Use the sample credit dispute letter in the downloadable Credit Guide as an example. In your letter, give a detailed explanation to the best of your ability as to why the information in your report is wrong and should be changed. You must also include documentation that supports your assertion that you have an inaccurate credit report. For instance, if your report says that a credit card is active, but you know it’s closed, you must show proof that it’s been closed, which you may have to obtain in writing from the credit card company. This will all take some time, but it will be worth the effort when your credit score eventually goes up, and the interest rates you qualify for in the future go down.

Be sure to send letters to all three credit bureaus whenever you clear up an error and also to the original creditor, such as the credit card company in the example above. Keep copies of everything for yourself. By Federal law, a credit reporting agency must help you resolve inaccuracies on your credit report within 30 days. Just as many bureaus (such as Experian) allow you to dispute your credit report online.

Download a copy of the Credit Guide for a sample credit dispute letter and start fixing credit report inaccuracies.

Credit Bureaus

Overview

Developing a solid credit history takes time. Nothing can create a dramatic overnight jump in your credit score but there are tools that can help you ensure you’ll help your score climb.

Read up on sure-fire steps to improving your credit score and reaping the benefits of a higher score – like lower interest rates and payments! Then check out FHA home loan programs that cater to a range of credit scores, and click here for our personalized tips to give your score a boost. Credit Tips.

There are no quick fixes for improving your credit score. But you can raise your score over time by demonstrating that you consistently manage your finances responsibly. In the meantime, any of the following ten tips can help you to improve your credit score:

1. Pay your bills on time. This is the best way to improve your score, and it’s never too late to start. Even if you’ve had serious delinquencies in the past, those will count less over time if you keep paying your bills on time.
2. Keep credit card balances low. High outstanding debt can pull down your score. Don’t go maxing out your credit cards all the time.
3. Check your credit report for accuracy. It’s possible that there may be inaccurate information on your credit report that can be easily cleared up (see How To Fix Credit Report Inaccuracies). If this proves to be the case, then you should contact one of the three credit reporting agencies — TransUnion, Experian or Equifax.
4. Pay off debt rather than moving it around. Consolidating your credit card debt onto one card or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your score is by simply paying down the amount you owe.
5. Keep your credit cards – but manage them responsibly. In general, having credit cards and installment loans that you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has managed credit cards responsibly.
6. Don’t open multiple accounts too quickly, especially if you have a short credit history. Opening too many accounts in too short of a time period can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts, something that your FICO score also considers.
7. Don’t open new credit card accounts you don’t need. This approach could backfire and actually lower your score.
8. Don’t close an account to remove it from your record. It’s a myth that closing an account removes it from your credit report. This is untrue — even closed accounts remain on your report, possibly for an indefinite period of time and may still be factored into the score. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.
9. Shop for a loan within a short, focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur. If you shop for a number of loans over too long a time period, it can count against you.
10. Contact your creditors or see a legitimate credit counselor if you’re having financial difficulties. This won’t improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.

Steps to Improve Your Overall Credit

If you have a history of poor credit or think that you might, it’s important that you find out and take the steps to improve it. It will take time, but with discipline, you may expect to see improvement in as little as six months. You see, creditors are interested in a track record. You’ll have to prove that you consistently pay your creditors on time and that you can effectively pay down your debt. Here’s the simple plan to improve your credit:

Know what’s on your credit report and resolve any discrepancies.
Even if you believe you have a good credit score, it is still wise to check with credit reporting agencies to make sure they contain a similar view of your credit history. It’s also wise to make sure there are no errors on your report, such as name misspellings or incorrect addresses.

Plan to pay your bills on time and follow through.
You can start this today, even before you take a look at your credit report. Contact your creditors to review your payment options and catch up with any late payments. Focus on ways to reduce your spending.

Stop using credit cards now.
Paying down your credit card balances will not only improve your credit rating over time, but you’ll be in a better position to negotiate a lower interest rate for your cards.

Don’t live beyond your means.
Make paying your bills and buying only essential items your main priority. Carefully weigh the importance of all new purchases against the greater importance of reestablishing your good credit.

Getting a handle on your spending, paying bills on time, and paying down credit cards takes a long-term commitment and strong self-control. It won’t always be easy, but the effort will pay off (in dollars and cents) once you see your credit improve.

Home Loan Options

FHA loans don’t have the same income and credit requirements as conventional loans. If you’ve been told your income or credit is too low for a conventional mortgage, take a look at the FHA Program. You can refinance up to 97.75% of your home value; some of that can be cash back. Even if you’re in a 30-year fixed now, you can still refinance to an FHA loan. Use that cash to pay off debt that doesn’t offer a tax incentive.* Your down payment can be as low as 3% of the price of the home. Even better, the entire down payment can be a gift from a relative.

For more information on FHA Loans, talk to your Home Loan Expert. They can help you qualify so you can reach your financial goals quicker. Just call (888) 724-7402 today for the info you need.

Overview:

Learn the basics of credits scores and what they mean to your financial situation. Find out which part of your credit report can affect your interest rate. Then, read up on home loans that fare well in even low credit climates, like FHA and USDA Programs..

Your credit score is also known as your FICO score. FICO stands for Fair Isaac Corporation – the company that developed the mathematical formula to determine credit scores. It’s a number that reflects your financial responsibility and helps lenders decide if you’re a good credit risk or not. Your score is based on – but not part of – your credit report. It’s generated at the time of request, then included with the report when requested by lenders.

What Determines My Credit Score?

The five main factors that determine your Credit Score are:

Payment History (approximately 35% of your score)
The factor that has the biggest impact on your score is whether you’ve paid past credit accounts on time. However, an overall good credit picture can outweigh a few late payments which will continue to have less impact over time unless the late payment is a mortgage payment.

Amounts Owed (approximately 30%)
Having credit accounts and owing money doesn’t mean you’re a high-risk borrower. But owing a lot of money on numerous accounts can suggest that you are financially overextended and may be more likely to make some payments late or not at all. Part of the science of scoring is determining how much debt is too much for a given credit profile.

Length of Credit History (approximately 15%)
In general, a longer credit history will increase your FICO score because it shows that you can responsibly manage your available credit over time. However, even people who have not been using credit very long may get high scores, depending on how the rest of their credit report looks.

New Credit (approximately 10%)
People today tend to have more credit and to shop for credit more frequently. But opening several credit accounts in a short period of time can represent greater risk – especially for people with short credit histories. Requests for new credit can also represent greater risk. However, FICO scores are able to distinguish between a search for many new credit accounts and rate shopping. FICO scores generally do not equate your rate search with higher credit risk.

Types of Credit in Use (approximately 10%)
Your FICO score will reflect a combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. While a healthy mix will improve your score, it is not necessary to have one of each, and it is not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your score, but it will be more important if your credit report doesn’t have much other information on which to base a score.

You can read more about the factors that affect your credit score in the Guide to Managing Your Credit.

Interpreting Your Credit Score: What’s Good and What’s Bad?

A high – or “good” – credit score can be in the mid-700s and higher. If you are below this range, however, your credit score will list up to four reasons why your score is not currently higher, and whether your credit report might contain errors. Knowing this can help you figure out how to improve your score.

Here are nine common explanations for a lower credit score:

1. Serious delinquency: You have one or more accounts with late payments.
2. Serious delinquency and public record of collection filed: You have one or more accounts thathave gone to a collection agency.
3. Time since delinquency is too recent or unknown: You have one or more accounts that are recently past due.
4. Level of delinquency on accounts: Your accounts are 60 to 90 days or more past due.
5. Number of accounts with delinquency: You have numerous past due accounts.
6. Amount owed on accounts: Your amount of debt is too high.
7. Proportion of balances to credit limits on revolving accounts is too high: The balances on your credit cards are too high.
8. Length of time accounts have been established: The length of your credit history is not long enough to show responsible credit management.
9. Too many accounts with balances: The amount of accounts you have with balances creates concern over how much debt you’re carrying.

How Lenders Interpret Your Credit Score

At The Canto Team, we match you with the best possible mortgage to fit your needs based, in part, on your credit score. Our mortgage bankers take the time to evaluate your financial situation and offer expert advice. If you’re credit is less than perfect, FHA Loan programs allow lower credit and income requirements, but still offer the security of a fixed rate loan. Not to mention the added security of a program that was created by the Federal Housing Administration.

Overview

Your credit score is one of the most important factors in determining if and how you qualify for a mortgage. But if your credit isn’t perfect, you still have safe, secure loan options that don’t rely so heavily on your credit score, like FHA.

So who compiles your credit report? A credit bureau (also called a credit reporting agency) gathers, maintains, and sells information about your credit history. It collects information about your payment habits from banks, savings and loans, credit unions, finance companies, and retailers. That information is gathered into credit reports that are used by creditors and lenders.

What Information Is On My Credit Report?

Your credit report contains your credit history. It includes all of your loan and credit card accounts with specific account information, such as the date opened, credit limit or loan amount, balance, and monthly payment. It also includes late payments, bankruptcies, liens, and collection agency attempts to collect past due amounts.

What a Good Credit Score Means for Your Finances

It’s important to maintain a good credit history. A good credit history means a good credit score. A good credit score means you’re a “good risk” to lenders which makes you eligible for better mortgage rates. A poor credit history and/or score sends a message to lenders that you’re not a good risk which subjects you to higher rates. Higher rates mean higher payments. It’s also possible to be denied credit if the score is low enough.

It’s important to review your credit report. Financial experts advise to check your credit report once a year for inaccuracies. A 2004 Federal law now means that you can now receive a free copy of your credit report every year from each of the three major credit reporting agencies. You can also find a free copy of your credit report at www.transunion.com .   You can also call us and we can provide you a with a free credit analysis that will help you improve your score. Just answer a few questions about yourself and you’ll get a completely free report on how to improve your scores.

Less than Perfect Credit? You Still Have Options.

If your credit score isn’t as high as you’d like, be sure to check out your FHA Loan options. FHA Loans are popular, secure choices among homeowners of all credit types because they were created by the Federal Housing Administration. FHA loans require a small down payment and offer the most choices for refinancing, especially with cash out. FHA loans don’t have the same income and credit requirements as conventional loans. If you’ve been told your income or credit is too low for a conventional mortgage, take a look at FHA. You can still get the benefits of FHA’s low rates and secure monthly payments.

Bottom Line

The bottom line is that you should do everything possible to maintain a good credit history to keep your score high. The higher your credit score, the more loan options you’ll have when it’s time to get a mortgage. If your credit report contains a few blemishes, don’t worry. There are many valuable resources where you can learn what you can do to improve your credit score like the Guide to Managing Your Credit.

Credit Bureaus