Monthly Archives: September 2018

What to Expect on Closing Day

Source: Chris Knox, Sr. Loan Advisor – Fairway Mortgage Co.

When you purchase a home, the most exciting part of the process is the day you finally are handed the keys. But, before this happens, you will need to sign some important papers to close the deal. Closing day is going to be a busy one with your mind on moving into your new home, but it is important to know what will happen at the closing table so that you are prepared.

Generally, the closing will happen at the office of the settlement agent (potentially an attorney, depending on which state you close in), or the closing could take place at one of the real estate agent’s offices or my office. Your real estate agent, the seller’s agent, the title agent and a notary may be there. I will also make my best effort to be there in case you have any last-minute questions.

Be sure to bring your ID (if there is a co-signer, please make sure they have their ID as well). We will have already discussed whether you are wiring the money or bringing a certified check for costs such as down payment, taxes, insurance or other closing costs. Don’t worry; I will make sure you are well-prepared.

You can then read, ask questions about and sign the loan documents that Fairway has prepared for you. Included in this paperwork is going to be your Closing Disclosure (which we will have reviewed together before closing), the promissory note (which says you will repay Fairway for the loan amount that you are borrowing) and the deed of trust (also known as the lien on the property). If you have questions about these, please do not hesitate to ask me.

My goal is to fully prepare you for what will happen at the closing table. We will talk often before then, and I will answer questions you may have and do my best to make this a stress-free process for you.

Chris Knox
Sr. Loan Advisor
NMLS# 129636
WA# MLO-129636
Phone: (253) 905-4810

105 8th Ave. SE, Suite 102
Olympia, WA 98501
http://loansbychrisknox.com/

Paperwork Needed For Your Loan

Source: Chris Knox, Sr. Loan Advisor at Fairway Mortgage Co.

When applying for a home loan, you will need more than just an application. With today’s mortgage regulations, the paperwork listed below is required to verify all the information you provided on the loan application about you, your income, assets, credit and other real estate you may own. Delivering these documents all together, up front makes the process easier for you and helps ensure a hassle-free, on-time closing.

Depending on the type of loan you are doing and its approval requirements, we may need some or all the following paperwork for each borrower on the loan:

Income Documents

  • Most recent pay stubs covering the last 30 days of earnings with YTD totals
  • If you own 25% or more of any company or have rental property, Personal Federal Income Tax Returns for the past two years
  • All W-2s, K-1s or 1099s for the past two years
  • If self-employed and/or you own 25% or more of any company, all pages of business federal tax returns for the past two years
  • YTD Profit and Loss Statement and Balance Sheet for each company you own
  • Awards Letter from Social Security Administration for all social security
  • Income
  • Letter regarding pension/retirement income amount to be received for the year 

Asset Documents

  • All pages of checking and savings account statements for the past two months
  • For any large, unidentified deposits, a letter of explanation for the deposit and a copy of the item(s) that were deposited (we will let you know the threshold on this)
  • If the money transferred from another account, all pages of the statements for that account as well
  • All pages of the most recent statement for any other assets, such as bonds, stocks, cash value life insurance or money saved in retirement programs that will be used for cash to close or reserve funds
  • If using retirement account funds for the loan, the generic “terms of withdrawal” for the account along with the loan or withdrawal documentation
  • Copy of current mortgage statement(s) for all real estate you already own: current home, rental properties or vacation home. If these mortgages are not escrowed for taxes and insurance, provide the most recent annual tax bill and insurance declaration page with premium as well. Also, if the property has HOA dues, a copy of the most recent HOA dues bill.
  • If any part of the down payment or closing costs are coming from a gift from an eligible source, a Gift Letter along with proof of receipt of gift funds

Personal

  • Driver’s license(s) or passport
  • All pages of separation agreement, divorce decree or court order, if applicable
  • Name and phone number of your current landlord, if applicable
  • Most recent student loan statement(s) listing the minimum monthly payment amount. If you are currently in deferment (no payments due), proof of the payment amount(s) once they come out of deferment.
  • All pages of bankruptcy, foreclosure, short sale or deed in lieu of paperwork 

Home Purchase

  • Sales Contract for the purchase of a new home
  • Homeowners insurance agent’s name and contact info
  • Homeowners’ association information with contact information if property is a condo or part of a homeowners’ association
  • Purchase Contract for current home being sold

Home Refinance

  • Copy of first mortgage statement on current home
  • If you have a second mortgage or equity line, copy of statement, note/equity line agreement
  • Copy of title insurance policy from previous closing or HUD-1 Settlement Statement
  • Copy of your homeowners insurance declarations page

Please note that additional documentation may be required upon further review of your file. I will explain the steps of the loan process and review with you what documents are needed and if we require anything else. My job is to guide you through the lending experience for the best possible result!

Chris Knox
Sr. Loan Advisor
NMLS# 129636
WA# MLO-129636
Phone: (253) 905-4810

105 8th Ave. SE, Suite 102
Olympia, WA 98501
http://loansbychrisknox.com/

Improving Supply Helps Slow Escalating Home Prices in Western Washington

SOURCE: NWMLS

KIRKLAND, Washington (September 7, 2018) – House-hunters in Western Washington can choose from
the largest supply of homes in three years, and they are facing fewer bidding wars, according to officials
from Northwest Multiple Listing Service.

New statistics from the MLS show prices appear to be moderating (up about 6.7 percent overall), but
brokers say they are not bracing for a bubble, or even anticipating a quick shift to a buyers’ market.

“There have been incremental increases in listing inventory the past few months,” noted Gary O’Leyar, the
designated broker/owner at Berkshire Hathaway HomeServices Signature Properties, but, he added, “By no
means have inventory levels reached a point that is deemed to be a balanced market.”

Area-wide, the number of active listings of single family homes and condos (combined) rose 16.2 percent,
but 16 counties reported year-over-year drops in inventory; of those, nine had double-digit decreases from
twelve months ago. At month end there were 18,580 active listings, the highest level since September 2015
when buyers could choose from 19,724 listings. Compared to July, inventory was up nearly 11 percent.

The latest numbers from Northwest MLS show wide-ranging changes in the volume of active listings when
comparing the 23 counties in the report. In Clark County, inventory doubled from a year ago to lead the list
based on percentage gains. King County was runner-up with a 74.3 percent increase, rising from 3,329
active listings a year ago to 5,803 at the end of August.

System-wide there is about two months of supply, but less than that in the four-county Puget Sound region
– well below the “balanced market” range of four-to-six months.

Supply was replenished in part by the addition of 11,994 new listings during the month, up slightly from the
year-ago total of 11,781.

A slower pace of sales also contributed to the boost in supply. Brokers reported 10,109 mutually accepted
offers last month, a drop of 14.8 percent from a year ago when they tallied 11,867 pending sales.

“The Puget Sound residential housing market remains positive, though the market has transitioned from a
frenzied state to one of strong sales activity,” remarked J. Lennox Scott, chairman and CEO of John L. Scott
Real Estate. “We are seeing stability in the affordable and mid-price ranges in all market areas,” he said,
citing “one of the best job growth markets in the nation” and favorable interest rates as contributing factors.

George Moorhead, designated broker at Bentley Properties, commented on buyers “still sitting on the
sidelines despite clear indicators.” He believes, “This is the best time in three years to be aggressive in the
marketplace” given rising inventory, a significant increase in the number of cancelled and expired listings,
and more incentives being offered by builders. “We are now seeing price reductions in new home
communities as builders try to move inventory of completed homes,” he noted.

Everything You Need To Know About Down Payments!

Source: Chris Knox, Fairway Independant Mortgage Corp.

For homebuyers purchasing their first house, the biggest obstacle to overcome is often the down payment. Making sure you fully understand the down payment and closing costs will help you throughout the home mortgage loan process. Many options for first-time homebuyers allow for little or no down payment on your home, and I am here to help answer any questions.

Depending on the loan program, the down payment may not have to come from your savings. A family member can sometimes make a “gift” to you to cover the down payment, or you could choose to pull money from your retirement plan. A mortgage planner can help you understand ways to take money from a retirement plan to buy your first house, without paying any tax penalties. If you choose a down payment of more than 5% but less than 20%, you will have to pay private mortgage insurance. Known as PMI, private mortgage insurance protects the lender in the event the loan goes into default.

In addition to the down payment on your mortgage, closing costs and pre-paid expenses are also involved with a home purchase. You usually must pay lender costs, an appraiser and legal fees associated with transferring the title on the house from the seller to you, the buyer. In addition, you will pay homeowners insurance for one year in advance, and the lender will establish an escrow account, which will take a portion of your monthly payment and save it to pay your future property tax bills and homeowners insurance bills. Most first-time homebuyer loans will require you to have an escrow account to pay for the future tax and insurance bills.

Some first-time homebuyer programs allow negotiation with the seller of the home to have them pay a portion of the closing costs. Doing so can help reduce how much money is needed to purchase your first house. Be sure to talk with your real estate agent before making an offer to negotiate that into the deal. It is always a great idea to talk with a lender first, so you can understand exactly what the closing costs will be and how much you will need the seller to pay.

As qualified FHA, VA and USDA mortgage lenders, the licensed mortgage professionals at Fairway can help you determine the best loan program to use for your first home. I will help you decide which loan program is best for you, the right amount for your down payment and how much the seller should pay for your closing costs, and I will give you other considerations to make sure you get the best financing for your first home purchase. You can trust me to make your home loan as stress-free as possible. Call me today to set up an appointment.

Chris Knox
Sr. Loan Advisor
NMLS# 129636
WA# MLO-129636
Phone: (253) 905-4810

105 8th Ave. SE, Suite 102
Olympia, WA 98501
http://loansbychrisknox.com/

Single Woman’s Guide to a Mortgage-Worthy Credit Profile

Source:  / CreditCards.com

Research shows women often face challenges getting approved for home loans, and financial gender inequality may be to blame.

According to a study conducted by the Woodstock Institute, women are more likely than men to be denied mortgage loans. Typical reasons for mortgage denial include a high debt-to-limit ratio or a poor overall credit history.

The gender pay gap is a big reason why many women struggle for total financial independence. While the large-scale fight for gender equality is long and collaborative, there is something you can do to play a part: maintain a high credit score.

A strong credit score is important for financial equality

Your credit score is a tool lenders use to determine your trustworthiness when borrowing money and answer questions about your financial habits.  Will you max out your credit line? Will you pay your bills on time? Will you pay off your debt in full? Are you a high-risk or low-risk borrower?

Anytime you try to borrow money – whether on a credit card, small business loan, car loan or mortgage – your credit report and overall score will be reviewed to determine if you’re approved or denied and what your interest rate and credit limit will be.

A high credit score can also protect you (and your kids, if you have any) in case of divorce, a spouse’s death, or events that cause your spouse’s credit score to drop.

Gender roles in society have an effect on women and credit

Women sometimes have thin credit files due to traditional gender roles. An example is a household in which the husband is the family’s financial manager and applies for all credit cards and loans in his own name. In this case, his wife will not have an opportunity to build credit unless she obtains other credit lines in her name. If the husband dies or the couple divorces, the woman may find it difficult to strike out on her own.

A relatively low income – perhaps due to gender bias in a workplace – can also hamper a woman’s ability to build credit.

One of the most important factors lenders use to calculate your credit score is credit utilization. Credit utilization indicates how much of your total available credit you’re using. For example, if you have a card with a $2,000 limit and your balance is $1,000, you have a credit utilization ratio of 50 percent. The lower your utilization, the better your credit score will be.

Credit limits are often based in part on how much you are able to pay each month. So, since women typically make less than men (thanks, gender pay gap), that can result in a low credit limit, and a better chance of credit score damage from high utilization.

Establishing your own credit

If you have a thin credit file, there are a few ways to build it up:

  • Become an authorized user. If you don’t have any credit history to work with, you can start by becoming an additional cardholder or authorized user on a friend, family member or spouse’s card.
  • Apply for a secured or prepaid card. These cards are great starter cards for those who are worried about credit card debt, and they generally require no credit history to get approved. Just make sure the card you choose reports to one of the major credit reporting agencies.
  • Apply for a rewards credit cardIf you qualify, cards with no annual fee and a low APR can help you build credit with small purchases that you pay off each month. Plus, rewards cards help you earn points and miles that you can use towards travel or your monthly statement.

Preparing your credit before buying a home

Establishing credit isn’t enough to get a solid mortgage approval; your score must be strong, and your credit habits need to be healthy.

Here are a few ways you can make sure your credit profile is in great shape before you apply for a mortgage:

1.  Check your credit reports

A high credit score and a clean credit report can help you lock in a low interest rate. You can visit AnnualCreditReport.com to pull a copy of your report and look over it. You’re entitled to a free copy once a year from the three major credit bureaus – Experian, Equifax and TransUnion.

Review your reports for errors, no matter how small. Correcting these can help bump your score and ensure you have an accurate profile. All three bureaus handle report disputes online, which helps simplify the process.

2. Stay away from larger purchases and unnecessary credit lines

As you get closer to when you plan on applying for a home loan, avoid making large purchases and opening additional lines of credit. Experts advise limiting the number of hard inquiries into your account and keeping your credit profile “quiet” leading up to the homebuying process.

3. Reduce your utilization

Paying off debt (without draining your savings) can help boost your credit score, helping you land a better interest rate on your home loan.

Keeping your utilization low across your accounts is always a good credit habit to get into, whether you’re planning on buying a home or just want to stay financially healthy.

4. Improve your areas of credit weakness

Do you have a habit of forgetting to make payments on time? Set reminders on your phone or enroll in auto pay. Are you behind on any payments? Talk to your lender or card issuer about getting back on track. Did you find multiple errors on your credit reports? Make every effort to get those corrected.

Take the time you need to get your finances as healthy as possible before applying for that loan application. An extra six months to get your credit score up could mean the difference between being approved with a great interest rate and barely scraping by with a rate that will cost you an exorbitant amount of money down the line.

Protecting your credit

Your credit isn’t only important in the lead-up to buying a home. Credit scores are commonly used as an indicator for your overall financial health. Establishing strong credit habits and protecting your score can help you remain financially independent throughout your entire life.

Monitor your credit score for fluctuations and suspicious activity. Most card issuers have mobile apps, and many have built-in credit monitoring benefits for all cardholders. A lot of card issuers and banks allow you to set up purchase notifications, which can also help you stay on top of spending while watching out for fraudulent charges.

Another way you can protect your credit is by protecting your personal information. Never give out private information like usernames, passwords or account numbers over the phone or through email.

Finally, avoid using your credit cards more than is necessary. Pay them in full each month to avoid incurring interest charges and keep your credit score in good shape.  And maintain a savings account for emergencies and large purchases.

The bottom line

Building and maintaining a strong credit profile is important – both for future loan applications and overall financial gender equality. Make sure you’re putting your best foot forward for your future by establishing healthy credit habits, whether you’re a newly single divorcee looking to gain financial independence or a college graduate ready to make your mark on the world.

David Lafferty
CreditCards.com
9430 Research Blvd. | Building 4, Suite 400 | Austin, TX 78759

Become An Excellent Homebuyer in 10 Easy Steps

Source: Chris Knox – Fairway Mortgage

Buying a home can be the start of the best decision you have ever made. However, between finding the right place, securing the loan and moving in, you are likely going to experience some stress. Purchasing a home is a large commitment, and the emotions of making such a personal investment require a great team behind you, which is why Fairway Independent Mortgage Corporation is here to help.

Here are 10 tips that will help make you a successful homebuyer:

  1. Have the Right Partners – You will work with your mortgage planner and real estate agent a great deal throughout the process, so working well together is crucial. Take the time to select a great team in the beginning, and your first home purchase will be a pleasing and memorable experience.
  2. Income + Lifestyle = Mortgage Payment – Be open, honest and up front with your real estate agent and mortgage planner when discussing your income level and living expenses. Take in to account future considerations such as children and plans you may have for repairs and upgrades for the house. Your dream home is certainly worth a sacrifice, but don’t mortgage your entire future.
  3. Utilize Your Team – Don’t be afraid to ask questions. Your mortgage planner and real estate agent are there to support you and work together for your benefit.
  4. View Several Homes – See multiple properties. With your agent’s help, you should be able to view enough properties to have a good overall perspective of the home market.
  5. Imagine the Property Vacant – Your furnishings and decorations will be the ones filling this residence, so don’t be swayed by beautiful furniture that leaves with the owner.
  6. Be Thorough – Explore all costs and expenses before you commit. These include utilities, taxes, insurance, maintenance and homeowners association dues.
  7. Inspect, Inspect, Inspect! – Ensure that the inspection report was completed by a professional and examine it carefully. For condo purchases, review the bylaws and association fees.
  8. If It is Not in Writing, It Does Not Exist – All promises and discussions should be in writing. Don’t make any assumptions or believe any verbal assurances. Have your real estate agent keep an ongoing log in writing of all discussions and acquire the seller’s written approval on all agreements.
  9. Complete a Final Walkthrough – Visit the property after all furnishings have been moved out, to be sure that there are no surprises. Be certain that the property was left exactly as you agreed upon in the contract. Ensure that all utilities are turned on during your walkthrough, so you can inspect everything in working order.
  10. Plan for Flexibility – Closing dates are not written in stone. Allow for contingencies and have a backup plan. If you or the sellers need a little more time to conclude the final arrangements, do not let delays upset or frustrate you.

Many steps are involved when purchasing a home. While there may be some bumps in the road, I am always here to help in any way I can. Call me today to schedule an appointment to review your financial plans. I look forward to the opportunity to help you make the best home loan decision and show you the path toward homeownership.

Chris Knox
Sr. Loan Advisor
NMLS# 129636
WA# MLO-129636
Phone: (253) 905-4810105 8th Ave. SE, Suite 102
Olympia, WA 98501
http://loansbychrisknox.com/