How do I pay PMI?
When you’re required to have Private Mortgage Insurance on your loan, the lender will require the property taxes and home owner’s insurance to be collected monthly as part of the total mortgage payment. The loan servicer will make the bi-annual property tax and annual home owner’s insurance payments on the borrower’s behalf when due.
In order to start this process, you will have to set up an Escrow/Impound Account (both terms for the same exact thing in California) with the new lender/servicer so that you can pay monthly property taxes and home owner’s insurance as part of the total monthly mortgage payments.
How do real estate agents get paid?
Real estate agents are paid by commission on a percentage basis for their work for real estate brokers or real estate agencies. Agents share their commission between the buyer’s agent, the listing agent, and the agencies those agents work for.
According to Investopedia, a typical commission split might look like this for the sale of a $200,000 property with a 6% commission:
- Listing agent: 1.5% ($3,000)
- Buyer’s agent: 1.5% ($3,000)
- Listing agent’s broker: 1.5% ($3,000)
- Buyer’s agent’s broker: 1.5% ($3,000)
How are independent brokers different from banks?
Independent mortgage brokers like me are motivated in a different way. We build a relationship with you. I help you get into the position you need to be to buy the property you want. I have a vested interest in your success, and I hold your hand along the way. I shepherd the process through from start to finish, with care.
How long is a pre-approval letter good for?
A pre-approval is typically good for 90 to 120 days, depending on the lender. That is the window in which your credit report is still considered current. After that, your credit may need to be pulled again.
I have hands-on relationship with my clients. I stay in communication with you, and I will check in with you throughout the period of time that you are looking for a property. If you tell me your data hasn’t changed, and you can provide updated documentation supporting reported income and assets, I will keep issuing a pre-approval letter until you get into contract. We may need to re-run your credit after the 90 days has expired, but not always.
What are Prepaid Items?
Prepaid Items are costs that are associated with the maintenance of the borrower’s loan and normal property maintenance, regular recurring costs that are paid monthly or annually. These costs include normal interest due on the loan, property taxes that are paid twice a year or monthly, and insurance.
What is a Buying Agent?
Buying agents are real estate agents who represent buyers during the purchase of a property. Their duties include:
- helping buyers find properties that meet their wish list
- finding properties in the buyer’s price range
- arranging home appraisals and inspections
- negotiating purchase terms
- helping buyers submit and file the purchase documents
What are closing costs?
Closing costs are required fees that are paid at the closing of a real estate transaction. The point in time called the “closing” is when the title to the property is conveyed to the buyer. Closing costs are paid by either the buyer or the seller.
What is a loan officer?
A loan officer is another name for a mortgage loan originator (MLO). Loan officers may work for banks, credit unions, or mortgage companies. A loan officer at a bank or credit union can offer only the programs and rates that institution makes available. A loan officer who works with many lenders can compare programs and rates across those lenders for you.
What is a Mortgage Consultant?
Mortgage consultants are finance professionals who help people buy homes and investment properties with financing that fits their circumstances. The consultant’s relationship with buyers includes:
- helping buyers understand the rules and guidelines of mortgage lending
- presenting buyers with realistic buying options
- advising them on making a choice that fits their needs and financial resources
Knowledge: In general, the mortgage consultant needs in-depth knowledge about the mortgage industry, enabling them to:
- provide accurate current mortgage rate and product information to buyers
- communicate effectively with lenders
- help clients get approved by knowing each lender’s guidelines
- manage loan documents, the loan process, and closing
Skills: A good mortgage consultant will excel and make their clients happy if they have skills in all of these areas:
- Communication — the ability to listen to clients, understand their needs, and explain mortgage details clearly
- Social — empathy and respect for clients during stressful transactions
- Math — the ability to compile complicated data and interpret it to compare loan offerings
- Detail — accurately tracking calculations and statuses for many clients concurrently
- Decision-making — using reason and experience to help clients choose an option they will be happy with
- Desire for mutual success — using their experience and skills to help a client close on a loan
What is a mortgage loan originator?
A mortgage loan originator, or MLO, is an individual who takes a residential mortgage loan application and offers or negotiates loan terms for compensation. MLOs are also called loan officers. An MLO works with the borrower from the initial consultation and application through approval and closing, and must be licensed and registered through the NMLS. You can look up any originator, including Vic (NMLS #244388), at nmlsconsumeraccess.org.
What is a Listing Agent?
Listing agents are real estate agents who represent sellers during the sale of a property. Listings agents’ duties include:
- helping owners determine the appropriate listing price
- advising the owner about updates that will increase the appeal of the property to buyers
- arranging for home staging
- hosting open house events
- marketing the home on the Multiple Listing Service (MLS), on websites, social media, and other channels
- negotiating on the seller’s behalf on the sales price
- helping sellers submit and file the sale documents
What is a Real Estate Agent?
Real estate agents are licensed to help people buy, sell, and rent real estate. Agents put buyers and sellers together by guiding and organizing transactions between them. Each state has its own requirements for licensing. Typic responsibilities are:
- Following the local market
- Finding and showing properties to potential buyers
- Negotiating as liaison between buyer and seller
Real estate agents are paid a commission from the sale of properties.
What is a Realtor?
A Realtor is a licensed real estate salesperson who belongs to the National Association of Realtors. Realtors are held to a higher ethical standard than licensed agents and must adhere to a Code of Ethics requiring them to make their clients’ best interests their top priority.
What is a Real Estate Broker?
A real estate broker is a licensed real estate agent who has additional education earning a broker license. There are three types of real estate brokers:
- Associate brokers, who have broker licenses but choose to work under another broker
- Managing brokers, who manage broker offices along with training and mentoring new agents
- Principal or designated brokers, who supervise real estate agent transactions to make sure they comply with state and national laws
Real estate brokers get paid either through commissions from their own deals or through a share of the commissions earned by real estate agents who work under them.
What is insurance in closing costs for?
Insurance is one of the Recurring Closing Costs or Prepaid Items paid in your closing costs. This insurance includes Home Owner’s Insurance/Fire Insurance/Hazard Insurance (three terms for the same exact thing) and in some cases, Private Mortgage Insurance (PMI).
What is PMI (Private Mortgage Insurance)?
PMI is a Recurring Closing Cost or Prepaid Item. When the loan amount is greater than 80% of the property price/value the lender requires you to have insurance on the loan. This protects the lender in case something happens and the mortgage goes unpaid. The lender will then be able to recoup their losses.
What’s included in closing costs?
There are two different categories of closing costs. Recurring Closing Costs, also called Prepaid Items, and Non-Recurring Closing Costs, NRCCs.
Why not use online loan approval apps?
Online loan approval tools can be a starting point, but they may not compare programs across multiple lenders or account for the details of your circumstances. A mortgage consultant can review your documents, discuss realistic options, and help you understand the steps needed for pre-approval.
A pre-approval is not a commitment to lend. Final approval depends on a satisfactory appraisal, title, verification of all information, and final underwriting review.
Will applying for pre-approval lower my credit score?
Many people worry about how having your credit run affects their score. The good news is that we can start your pre-approval with a soft credit check, which has no impact on your score. We can run the automated underwriting system (AUS) for your pre-approval with a soft pull. When it’s time to submit your loan for formal underwriting approval, we will need to do a hard credit check.
Hard checks occur when you apply for a mortgage or auto loan. Credit card applications, student loans, personal loans, and apartment rental applications also trigger hard checks. In general, a hard credit check can lower your score slightly. Because of this, I work to limit the number of times your credit is pulled.
However, your credit can be checked multiple times for a single purpose (i.e., applying multiple times for a car loan) within a 30+ day window, and that only counts as one incidence.
Note: A “soft check” is when you check your own credit, when we run a preliminary pre-approval for you, or when a potential employer accesses your credit profile as part of a background check.