The Lawhead Team would like to share the latest One Cool Thing about borrowers views on making the mortgage process a little bit easier:

Home buyers want the mortgage process to be less onerous and faster, but they also want more personal interaction as they navigate a transaction.

Borrowers views on how to make the mortgage process easier:

• 27% reduction in paperwork
• 20% easier to shop and compare terms from lenders
• 16% less back and forth during the process

Mortgage shoppers want the person-to-person interaction:

• 65% prefer a person to explain mortgage terms and options
• 58% want assistance reviewing final loan documents
• 58% prefer a person to help them review final documents
• 56% want help singing loan documents

Source: Fannie Mae National Housing Survey

Planning to apply for a mortgage? Borrowers have been impressed with the smooth process The Lawhead Team provided for them!

The Lawhead Team would like to share the latest One Cool Thing to let you know how your credit scores are being used.

Who’s Checking Your Credit?

Consumers underestimate the impact of credit scores – and a significant number don’t even know that credit scores are used by non-creditors.

Only half of consumers know when lenders are required to inform borrowers of their use of credit scores:

1. After a mortgage application
2. When not receiving the best terms on a loan
3. Whenever a consumer is denied a loan

Not all consumers know which companies look at credit scores:

• 53% know that electric utilities may use credit scores
• 66% know that credit scores may be used by home insurers
• 68% are aware that cell phone companies look at credit scores
• 70% know that landlords check credit scores

Source: Consumer Federation of America

The Lawhead Team would like to share the latest “One Cool Thing” from the California Association of Realtors about the reported mortgage challenges first-time home buyers have with understanding the process and options available to them.

Of First Time Buyers:

• 41% said their representative completely explained the types of loans, terms, special programs, fees, and options to reduce their down payment during the mortgage process.
• 43% do not completely understand the mortgage process
• 44% reported the closing agent didn’t completely explain all of the closing documents.
• 54% do not fully understand the different loan options available to them.

Source: J.D. Power U.S. Primary Mortgage Originations Satisfaction

Halloween is one of the most anticipated events of the year for children. However, for those children with food allergies, trick or treating can be frustrating and even dangerous. In an effort to make Halloween more enjoyable and safer Food Alergy & Education (FARE) is encouraging communities to start a new tradition called Teal Pumpkin Project.

“This campaign encourages people to raise awareness of food allergies by providing non-food treats for trick-or-treaters and painting a pumpkin teal – the color of food allergy awareness – to place in front of their house along with a free printable sign from FARE to indicate they have non-food treats available.” (FARE)

I am absolutely thrilled to learn about such a great campaign for children with allergies and can really relate in my neighborhood. When I moved into my new home last October I was so excited to meet all of our neighbors. While introducing ourselves to the neighbors to the right, I noticed their daughter was wearing an allergy bracelet. I was informed that Danielle has severe allergies to latex and dairy. Being so close to Halloween I knew I wanted to make trick or treating special for Danielle so I found out her favorite non-dairy candies and had them all ready for her on Halloween night. I started thinking about how difficult it must be for children with food allergies to go trick or treating and was thrilled this year to learn about The Teal Pumpkin Project that is sweeping the country.

Do you plan on participating in the Teal Pumpkin Project this year?

Planning to buy a home in the near future? Check out these ten steps from TransUnion to prepare your credit and finances to apply for a mortgage:

1. Start with your credit report. The first thing lenders will probably do when you apply for a mortgage loan is to check your credit; you should, too. There’s no better time for regular credit monitoring than when you’re trying to prove your creditworthiness to a lender so you can get the best possible rates. You want to make sure that your credit report is as accurate as possible, your scores are where you want them to be, and no one else is getting access to your credit, possibly harming your scores.
2. Then, get things in order. Once you’ve been keeping regular tabs on your credit report, you’ll be able to see how you’re doing. Dispute any inaccuracies with the 3 credit bureaus and get everything cleared up. If your debt-to-credit ratio is too high, monitoring your score over time will show you how your score might change. If you see accounts that you didn’t open or addresses that aren’t yours, take immediate steps to investigate what could be identity fraud.
3. Do your homework. Yes, the word “homework” makes us shudder too, but this time the reward is much bigger than memorizing geometry theorems or the periodic table. You’re finding a home but you’re also making a financial commitment you’ll have to live with for years: get the best deal you can. Research loans, rates and brokers exhaustively before you sign or commit to anything. Doing the hard work now will pay off down the road with a better rate and terms.
4. Be realistic about what you can afford. Home ownership may be the American dream, but keep one foot on the ground, too. If you’re looking for a rate that will require you to come up with a 20% down payment and you only have about 5%, figure your calculations based on the rate you’ll be able to get.
5. Understand how lenders operate. Your credit score, on which lenders base much of their decision about your loan amounts and rates, is a reflection of their confidence in your ability to repay them. In a nutshell, the higher your credit score is, the easier it will be to get the amount and rate you want.
6. Decide how you’ll finance it. Once you research the types of financing available, determine which is best for your financial situation when buying a home: 15-year mortgage or 30, adjustable or fixed. If you are looking for security and a guarantee that payments won’t increase, a fixed rate mortgage might be the way to go. If you believe mortgage rates could still fluctuate and you want more flexibility, consider an adjustable rate mortgage.
7. The larger your down payment, the wider your options. See number 4, it’s important to be realistic. So within a realistic framework of what you can afford, the more you put down, the better your terms. The days of zero down payments, especially on a mortgage, seem to be winding down. Putting more money down up front will help ensure you pay less each month.
8. Check on pre-payment penalties. Something else to keep in mind when finding your perfect mortgage is whether or not you’ll be penalized for paying the mortgage off early. Some homeowners double up on payments to reach the end of their term sooner—regularly or when they experience a cash windfall. Check and make sure you won’t be dinged for actually getting to your goal sooner!
9. Take a targeted, rather than shotgun approach to mortgage applications. Remember that whenever you apply for a loan, including a mortgage, the “hard inquiry” the lenders make shows up on your credit report and temporarily lowers your score. Applying for several mortgages in a two week period only counts as one inquiry, but if you drag it out and canvas as many lenders over a longer period, you’ll end up doing damage to your score, which could result in a lower rate than you were hoping for.
10.  “Not now” doesn’t mean “never”. Home ownership is just not a realistic option for everyone right now, despite what may look like once-in-lifetime mortgage rates. If you fall into this category, don’t despair. Your financial circumstances could change, the economy is still very much in flux, and remember that the current mortgage crisis involved a lot of home buyers getting in over their heads. When it comes to a major purchase like a home, timing is critical.

Read entire article from TransUnion – Ten Tips When Preparing For A Mortgage.

Selling or buying a home? The Lawhead Team would like to share some frequently asked questions Coldwell Banker answered that buyers and sellers had at closing.

These frequently asked questions are from Coldwell Banker’s Mortgage FAQ’s on Closing. Do you have questions about closing that weren’t answered below? Comment on our blog!

Where do I go to close the loan? In most cases, you will go to a local Title Company or attorney’s office for the closing. If you let us select the closing agent for you, we will work with our network and try to find an agent within 15 minutes of the property. The closing agent will have all your mortgage documents needed for closing. You may need to bring money, picture identification, etc. Your closing agent will let you know what you need to bring.

Can I bring a personal check to the closing? You will need a cashier’s check or certified check for closing. Since this is such a large transaction, a cashier’s check provides verification that the funds are actually available.

What is title insurance and why is it required? Title insurance protects the lender or you against losses from disputes over the title of a property. It ensures against the possibility that there may be an unknown lien or any discrepancies in ownership. You may want to consider purchasing a separate buyer’s policy to protect your interests.

How much title insurance do I need? The amount of title insurance needed is based on the value of your home and the amount of your mortgage. Lenders are covered for the full value of the mortgage. This policy is required and will vary from state to state. There is a one-time fee for the policy that you pay at closing. In addition, you can obtain a separate owner’s insurance policy to cover the full value of your home. However, this additional policy is not required.

How much homeowner’s insurance does a lender require? Your homeowner’s insurance policy must cover the cost to rebuild the home. The insured amount may be higher or lower than the actual purchase price as long as it meets the program requirements. The insurance company you choose can give you an actual quote based on specific information about the property.

Entire article about closing questions answered can be read here.

Whether you go with a conventional loan, FHA loan or a VA loan, there are different features that many loans offer.

The following are some of those features:

Fixed Rate – A mortgage with a fixed rate means your interest and mortgage payments remain the same, or “fixed”, through the entire loan. Typically the loans are for 15 to 30 years. A 15 year loan will obviously have higher monthly payments but you will end up saving more than half of the interest costs than a 30 year fixed loan and pay it off in half the time.

Adjustable Rate – This type of mortgage is also known as an ARM. The interest rate on an ARM fluctuates during the entire life of the loan. Your interest rate will be modified based on a predetermined economic index established at the beginning of the loan. Most of the time a max is set on the interest rate to avoid enormous increases. An ARM is usually safe only if your budget can afford to handle fluctuating payments.

Payment Option Adjustable Rate – This type of loan accommodates a households fluctuating cash flow which include minimum payment options, interest only payment options and others. You will want to thoroughly understand these types of loans because you need to make sure you are prepared for a sudden increase in payment.

Balloon Rate – A balloon mortgage has a fixed rate but for a shorter term than 15 or 30 years. At the end of the balloon rate (the fixed rate), the borrower must pay the remaining lump sum or refinance. If the buyer is purchasing unimproved property that they plan to build on in less than ten years, a balloon mortgage may be a good option.

Talk to a lending professional to find out what the best type of loan for you is. We highly recommend knowing exactly what you are getting into when you apply for a home loan.

Buying a home takes preparation and it is important to make sure you are ready to make the commitment to buy a home.

The Lawhead Team would like to share some helpful ways to know if you are ready to buy a home:

• You’ve created a budget – When you own your own home, money management is a must. There will be unforeseen expenses and emergencies you will have to fork up money for. If you haven’t started a budget yet, start it now and make sure to use it!
• Save up for a down payment – For a conventional loan, you will need to save up 20% of the cost of the home. If you plan to buy a $400,000 home, you will need to have $80,000 saved up. If you haven’t started saving yet, start now!
• You can show a solid proof of steady income – It is important to make sure you will be able to not only afford the monthly mortgage payment, but also the extra little expenses that come with home ownership.
• You’ve created an emergency savings fund – This is on top of your down payment savings you’ve built up. Say a serious illness happens or an unexpected layoff. You will still be able to survive for a few months while you are unable to work because of your emergency fund.
• Your credit report looks good – Good credit history will help you get a lower interest rate on your mortgage while lowering your monthly payment. Check out your credit report to make sure there aren’t any incorrect marks before you go to buy your home.
• You can stay in the home for at least three to five years – That is usually how long you’ll have to keep the home in order to recoup any buying and selling costs. If you aren’t sure how long you can stay in the home you may want to wait to buy  a home and rent for a bit until you know where you’ll be for three to five years.

The Lawhead Team would like to share the North San Diego County Association of REALTORS® latest key points in the housing market for North County San Diego.

If you are looking to buy or sell your home in North County San Diego, call The Lawhead Team, because two Lawheads are better than one^TM!

• The median price for all North County home sales – attached and detached – increased to $478,500 in December 2013 compared to $475,000 in November 2013.
• Detached homes in North County increased 0.19 percent to $540,000 in December 2013 compared to $539,000 in November 2013. Year-over median price for SFD homes in North San Diego County increased 10.32 percent, compared to $489,500 in December 2012, continuing a 17-month trend of year-over median price increases.
• Detached home prices OUTSIDE North County decreased 2.86 percent to $441,250 in December 2013 compared to $429,000 reported in November 2013. Year-over non-North County median price jumped 15.21 percent compared to $383,000 in December 2012, continuing a 21-month trend of year-over median price increases.
• Attached home prices in North County decreased 3.14 percent to $339,000 in December 2013 compared to $350,000 in November 2013. Year-over SFA North San Diego County median price jumped 21.07 percent, compared to $280,000 in December 2012, the 24th straight month of year over price increases.
• Non-North County attached home prices increased 0.53 percent to $282,000 in December 2013 compared to $280,500 in November 2013. Year-over non-North County SFA median price increased 15.57 percent, compared to 244,000 in December 2012.
• The number of North San Diego SFD listings (active and contingent) decreased 13.42 percent in December 2013 compared to November 2013, and decreased 3.42 percent year-over compared to December 2012 – the 28th straight month of year-over declines in listings.
• The number of sold North San Diego County SFD units decreased 3.16 percent in December 2013 compared to November 2013. Year-over sold SFD units declined 15.97 percent compared to December 2012.
• Median days-on-market for single-family detached homes sold in North County increased to 33 days in December 2013 compared to 32 days in November 2013.
• The HomeDex affordability percentage for all homes in North San Diego County – attached and detached – remained at 33 percent in December 2013.

The latest in the mortgage world for 2014.

Realtors® website shared some interesting changes that will be happening to mortgage in this New Year of 2014.

Take a moment to check out what Realtor® had to say about those looking to apply for a mortgage in 2014:

Qualified Mortgage Rules – Whether you’re thinking of buying a home or mulling over refinancing your mortgage, Jan. 10, 2014, could be an important date for you to remember. The Consumer Financial Protection Bureau is in the process of implementing regulations to meet goals set forth by the Dodd-Frank Act in Congress, which was meant to correct the errors that led to the housing crisis. The CFPB’s “Qualified Mortgage,” or QM, rules go into effect in January. Essentially, these rules require lenders to prove borrowers’ ability to repay a loan by meeting several guidelines, including a maximum debt-to-income ratio of 43 percent. While many lenders already limit borrowers to a similar maximum debt-to-income ratio, the new rules won’t allow for any compensating circumstances such as significant cash reserves or a large down payment to be considered in order to offset a higher debt ratio.

The 3 Percent Rule – The new QM requirements also limit fees for originating a loan to no more than 3 percent of the loan amount. If you’re financing a more costly home, such as a $400,000 home or more, the lender can easily keep fees under 3 percent, which in this case would be $12,000. However, if you’re refinancing a smaller loan balance or purchasing a less expensive home — for example, for $80,000 — the lender might find it more difficult to keep all fees under $2,400. Mortgage lenders are less likely to offer loans for smaller amounts since they won’t always recoup their costs and make enough profit to pay their staff. If you need a small loan, you may want to push to get it closed before Jan. 10, 2014.

Self-Employed Borrowers – One particular group of borrowers will most likely be impacted by the QM rules: self-employed borrowers. These borrowers already are heavily scrutinized and find it more difficult to obtain a mortgage because they must prove their income based on tax returns and profit-and-loss statements, rather than standard paystubs and W2 forms. The “ability-to-repay” feature of QM rules requires all borrowers to prove they have the cash flow to make payments on their mortgage. Self-employed borrowers often have fluctuating income and rely on cash reserves to pay bills in-between payments, but the emphasis on cash flow can make it harder for lenders to approve a loan even for someone with significant funds in the bank.

Potential Lower Loan Limits – The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced in October that plans to reduce the maximum loan limits for conventional conforming loans will be delayed until later in 2014. Typically, loan limits are adjusted on Jan. 1 of each year, but the agency decided to wait to see the impact of the introduction of QM rules before making changes. Currently, the limits are $417,000 in most housing markets and rise to $625,500 in high cost areas. If you need a mortgage near these limits, it would be wise to close your loan earlier in 2014 rather than later in case limits are lowered.

 Read entire article on the mortgage world in 2014 at the Realtor® website.