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Tuesday, July 28, 2015

Disputed Credit Lines And The Impact On Asheville NC Mortgages

Everyone has a right to dispute incorrect items on their credit report. However, home buyers should be conscious of the impact that it may have on getting home financing. This article includes important information on disputed credit lines and the impact on Asheville NC mortgages.

Getting Ready for a Home Purchase

If you are intending to buy a home in the future, be proactive about reviewing your credit score several months in advance. This gives you the time to find and address errors well before you apply for a loan. Ideally, you would want any disputes addressed before starting the home purchase process. If you do have any pending items, notify your mortgage consultant early in the process. Do not assume that it was seen on your report at the pre-approval stage.

What Are Disputed Credit Lines

If you discover a mistake on your credit report, you have the ability to correct it by sending information to the credit bureaus. A note is made in your credit report and the accounts are called disputed credit lines. Credit bureaus can choose to disregard the particular items when calculating your score, so they may not lower your score while in process. Ordinarily, the notation is cleared when the issue is settled and, if applicable, the needed corrections are made. This process may take many months. Although you may not experience a negative impact on your score, the details of the dispute can cause other issues.

Disputed Credit Lines And The Impact On Asheville NC Mortgages

Many mortgage companies implement electronic underwriting systems. Your credit score and other elements of your credit report are analyzed by the program. Disputed credit lines may lead a loan application to be rejected or diverted to manual underwriting. Gather all paperwork and supporting material on disputed credit lines. If it was a debt that you settled but was not correctly reflected in the credit reports, have statements showing the amount owed and confirmation of payments made. Also write a letter clearly explaining the situation. All of this may improve your chances of getting your mortgage approved. Keep in mind that some lenders may not approve a loan if there is an active dispute, regardless of the scenario. This is implemented in an attempt to minimize fraud but, unfortunately, will sometimes hurt consumers with reasonable claims. To be safe, it is best to fully address credit disputes before applying for a loan. It is important to speak with a mortgage consultant for personalized guidance on your financing needs. To be referred to a local professional, Rowena Patton at Patton Property Group at 828-226-0217 or rowena@pattonpropertygroup.com.

Tuesday, July 14, 2015

Introduction To The Qualified Mortgage Rule For Asheville NC Mortgages

The qualified mortgage rule was released by the Consumer Financial Protection Bureau in January 2013 as part of the Dodd-Frank Reform Act. It officially takes effect January 2014 and specifies the way lenders must analyze and verify information for consumers. An introduction to the qualified mortgage rule for Asheville NC mortgages can be found below.

Introduction To The Qualified Mortgage Rule For Asheville NC Mortgages

The qualified mortgage rule requires mortgage companies to verify financial facts from borrowers and to determine their capacity to afford monthly payments. First and foremost, the earnings and assets must be sufficient to repay the loan. Secondly, the ability to repay must be analyzed over the life of the mortgage and not just for an introductory length of time. This is an especially critical factor for mortgages with variable interest rates.

Specifics of the Qualified Mortgage Rule

The qualified mortgage rule includes instructions for identifying the ability to repay, debt-to-income ratio meximums, and a limitation on points and fees. Mortgage companies will be required to apply a minimum of eight specific underwriting factors to analyze the ability to repay a mortgage. They are:
  • Assets and Salary
  • Employment Status
  • Credit Reports
  • Monthly Mortgage Payments
  • Recurring Payments for Second Mortgages
  • Additional Property Ownership Expenses (Real Estate Taxes, Association Fees, etc.)
  • Other Debts
  • Debt-to-Income Ratios
The highest debt-to-income ratio allowed will be 43 percent. This is actually higher than the existing 41 percent maximum ratio. Lastly, points and other fees must not exceed three percent of the loan amount. All of these rules take effect January 2014 as part of the qualified mortgage rule.

Programs Eliminated in 2014

Due to the components of the new qualified mortgage rule, certain mortgage programs will not be allowed. Examples are mortgages requiring no documentation, interest-only payments, balloon loans, negative amortization, and those with terms longer than 30 years. Although these types of mortgages account for a small portion of all mortgages, it will impact specific types of borrowers such as those wanting jumbo products.

Purpose of the Qualified Mortgage Rule

The housing and financial crisis was blamed on specific financial practices such as issuing home loans with risky features or borrowers receiving loans that were obviously not within their ability to repay. The new qualified mortgage rule attempts to target harmful loan features. It also seeks to control fees charged by lenders. This is all meant not only to protect consumers but also to minimize the potential for another crisis. The above introduction to the qualified mortgage rule for Asheville NC mortgages is provided only as a summary. To view additional details on the qualified mortgage rule, visit the Consumer Financial Protection Bureau website

Thursday, July 9, 2015

Asheville NC Home Repairs Worth The Investment

Asheville NC homeowners should figure out the potential change in the value of their home compared to the expense of individual changes before performing any repairs. Some repairs are more profitable than others. The following is guidance on Asheville NC home repairs worth the investment.

Asheville NC Home Repairs Worth The Investment

Most homeowners think that they will regain every dollar spent on a repair, or even more, when it comes time to sell. This is a natural expectation, but it is not realistic. Different home repairs add different values, and that amount may differ depending on location. To give you an overview on home repairs worth the investment, below are a few nationwide figures.

Average Increase in Value for Mid-Range Improvements

The figures below are from the Remodeling Magazine Cost Versus Value Publication.
Renovation Expense Increased Value Cost Recouped
Replacing a Roof$21,204$12,25757.8 %
Deck Addition$10,350$7,25970.1 %
Bathroom Remodel$16,552$10,29362.2 %
Minor Kitchen Remodel$19,588$14,12072.1 %
Entry Door Upgrade$3,536$1,99056.3 %

Evaluating Home Repairs Worth The Investment

Another factor affecting the value of repairs is whether it is a mid-range or up-scale improvement. Kitchen upgrades, for example, can be completed using different quality materials leading to a different return on investment. So, not only should you consider the type of repair but also the amount of money to spend. For a full list of property updates and up to dateAsheville NC home repairs worth the investment, visit http://www.costvsvalue.com.

Wednesday, July 1, 2015

Building Vs. Purchasing Luxury Properties In Asheville NC


For luxury properties, you have the choice to build a new property or purchase an existing one. There are advantages and disadvantages to each. The following is some information on building vs. purchasing luxury properties in Asheville NC.

Purchasing a Pre-built Luxury Property

Buying an existing property is a simpler undertaking than constructing one. There are fewer decisions to make when the property is already built and hardware and appliances are already in place. Time frames and costs are also more definite. However, pre-built real estate may be more generic, particularly if they are situated in neighborhoods of similarly-styled homes. They may also lack some amenities on your wish list and therefore need construction work after you complete the purchase. It would be wise to discuss alternatives and expenses with a construction company prior to finalizing a purchase.

Building a Custom Luxury Property

Constructing a unique luxury home is exciting, but it does come with a few challenges. Custom properties can be constructed to your specific design. This allows you to attain all features that you desire and to create a truly special home. However, constructing a property is not simple. First and foremost, it may be hard to find and purchase a good lot. When found, it might not be situated in the community setting that you were hoping for. The building process also takes a lot of thought and time to complete and with many decisions to make throughout the process. The ending cost may change based on a variety of factors such as upgrades, change orders and unanticipated delays. Lastly, finding a good builder is extremely important.

Building Vs. Purchasing Luxury Properties In Asheville NC

A local real estate agent and a custom home builder can help you compare the options of building vs. purchasing luxury properties in Asheville NC. Differences mostly include planning, time frames, expenses, and possible amenities. Naturally, some of these factors may be more critical to you than others.

Friday, June 26, 2015

Asheville NC Mortgage Insurance Overview

Mortgage insurance (MI) is a policy required by mortgage providers to protect them from losses if a property buyer defaults on their mortgage. When the mortgage company goes to relinquish a house, they are unlikely to obtain the full remaining balance on the mortgage. MI applies to first mortgages where the home buyers are financing more than 80% of the sale price of the property. There is ordinarily an up-front MI fee due at closing and monthly fees based on a percentage of the initial loan balance. Asheville NC mortgage insurance overview and advice on getting rid of MI are provided below.

Amount of MI

MI rates depend on the type of loan. Home buyers should ask a mortgage professional to obtain sample rates and evaluate the impact that it will have on recurring mortgage payments. Rates can also change at certain times, so be sure to get accurate figures when you are assessing the affordability of a home purchase. Once you close on a loan, the MI rate for that specific mortgage will remain the same for the life of that mortgage. With certain loans, such as FHA, you may be able to obtain a refund of a portion of the up-front MI charged at closing if you refinance within a certain period of time.

Advice on Getting Rid Of MI

Recurring MI payments will normally be removed when the mortgage is paid down to 80% of the beginning home value. Most lenders allow removal of MI a little earlier if initiated by the homeowner when that percentage mark is attained. Refer to your loan paperwork for the percentages that apply to your loan. In an increasing real estate market, homeowners can also request a new appraisal (from a third-party approved by the bank) to document that the value of the home has increased and that you may have therefore reached the 80% mark sooner.

Asheville NC Mortgage Insurance Overview and Help

Most home buyers are unable to provide a 20% down payment and therefore cannot avoid MI. By understanding how MI works and how to get rid of it, home buyers can realize significant savings. We hope that you found this Asheville NC mortgage insurance overview useful and will be able to use the advice on getting rid of MI. For additional information on this and other related topics, contact Rowena Patton at Patton Property Group by calling 828-226-0217 or emailing rowena@pattonpropertygroup.com.

Monday, June 22, 2015

Tips For Remodeling Green In Asheville NC

Think about an eco-friendly approach to your renovation project. Green remodeling essentially means that you use specific materials and processes that are beneficial to the environment or for your health. Below are a few tips for remodeling green in Asheville NC.

Material Awareness

Opt for locally produced products. This reduces the fuel consumption for transportation. Local materials will be better adapted to the specific weather conditions. Also select recycled materials to lower the amount of trash in land fills. Evaluate materials such as bamboo as they are tough and easily grown. Also consider what products include and use those with minimal dangerous compounds. This may help improve air quality in your home. Environmentally friendly alternatives can be easily adapted to your rehab project.

Efficiency of Appliances

Efficient products may not only improve the environment but also reduce utility costs. Windows and doors can be found in energy saving alternatives and when carefully installed will stop air leaks. Appliances such as washing machines are known to save significant water usage. For all appliances, opt for Energy Star rated options that use less electricity. Evaluate other products that may have energy efficient variations such as low-flush toilets. Each one will make a little impact on preserving natural resources and saving you money.

Minimizing Waste

During your remodel, consider giving away items rather than trashing them. Many old materials may be reusable. Reduce waste by not running water when brushing your teeth and recycling rain water for other purposes.

Tips For Remodeling Green In Asheville NC

Going green can make your property more comfortable, save on natural resources, and save money. For a little bit of work, it provides a worthwhile return. Natural resources are rapidly diminishing and we all should help. This article on tips for remodeling green in Asheville NC was provided by Rowena Patton at Patton Property Group.

Wednesday, June 17, 2015

Removing PMI From FHA Loans Issued Prior To June 3, 2013

Most home buyers who have FHA loans were attracted to the ability to pay less money down. Given that PMI is normally charged on mortgages with less than a 20% down payment, most of these buyers have PMI payments each month. The procedure for having that fee removed depends on when the loan was issued by FHA. Below is an overview of removing PMI from FHA loans issued prior to June 3, 2013.

Removing PMI Gradually

With every monthly payment made, you pay down a fragment of your principal. In the early few years, the portion going towards interest is greater than the that for the principal, but this continuously shifts. PMI is finally removed when the principal is reduced to 78% of the initial value. You can also submit extra contributions towards principal to reach this point faster.
With many loans, you may demand that PMI be removed when the balance reaches below 80%. It certainly makes sense to monitor this and save additional money. Read your mortgage documents to verify that this is indeed an option.

Increase in Market Values

When home prices improve, you may be able to remove PMI sooner. Lenders refer to the loan-to-value percentage, which is based on the purchase value or the updated appraised value of the property. If house prices increase in a short time, your current loan balance might be less than 80%, which could remove your PMI. To remove PMI using this procedure, you must contact your Lender to order an appraisal. You are responsible for the fee, but it is worthwhile if your PMI is no longer charged as a result. Additionally, you must hold your mortgage for 5 or more years in order to have PMI removed.

More on Removing PMI From FHA Loans

Mortgage terms always change over time. This information is purely a summary of normal FHA mortgage conditions. It is important to review your specific paperwork regarding removing PMI from FHA loans. You can also reach out to your loan professional for more assistance.

Tuesday, June 9, 2015

Should Personal Property Be Added To P&S Contracts?

When making an offer on a property, it is normal to include appliances. Sometimes, buyers request additional personal property as well, such as mirrors or equipment. Before adding these to P&S contracts, it is essential to understand the impact that it might have on the mortgage approval process. This article covers the topic of should personal property be added to P&S contracts?.

Underwriting Impact

When adding personal property to P&S contracts, home buyers may be willing to offer a higher dollar amount for the home based on the value of the additional items. However, mortgage companies and appraisers do not attribute any value for them. This is justifiable because loans are issued according to the real estate. Should a buyer be unable to submit payments, the lender can take steps to foreclose on that property. They can not foreclose on items such as electronics, so those will not add value to a property from a mortgage company's perspective. If a home buyer increases the offer amount to reflect personal property, it is possible that the appraisal amount will not be as high as the purchase price. Also, underwriters may have an issue with certain things being listed in P&S contracts.

The Best Way to Address Personal Property

Personal property may be noted in various ways. Minor items may be written into P&S contracts as gifts from the owner. For more expensive things, or a large number of items, it may be advisable to detail it in a separate contract. The owner would basically be agreeing to convey the items for a particular price to the Buyer when the property closes. The price and other details would not be entered in the official P&S contracts and the real estate transaction would thus not be contingent upon the purchase of the items.

Should Personal Property Be Added To P&S Contracts?

Home buyers may certainly purchase certain personal property from an owner of a home, but how that is addressed will differ depending on the particular items. Consult with your real estate representative and loan representative beforehand to decide on the optimal solution. This will minimize delays in the appraisal process. This information on "Should personal property be added to P&S contracts?" was provided by Rowena Patton at Patton Property Group.

Wednesday, June 3, 2015

2015 New Mortgage Disclosure Documents

You normally get various disclosure forms when applying for a mortgage. It is easy to get overwhelmed. Many of these documents were mandated by different laws over the years. You will notice that some forms offer overlapping details, which can make the documentation even more complicating to look through. The 2015 new mortgage disclosure documents will simplify much of this.

The Loan Estimate Form

The new loan estimate document combines numbers from the Good Faith Estimate (GFE) and Truth-in-Lending (TIL) forms. This document will provide a better understanding of the features of a loan, fees involved, estimated loan payments, and any risks that come with it. This can be helpful for comparing multiple loan alternatives from the same mortgage company or from multiple companies. Once you apply for a mortgage, you should receive this new disclosure within 3 business days.

The Closing Disclosure

The closing disclosure form outlines the specific costs related to the mortgage. It will combine information previously included in the settlement form and Truth-in-Lending disclosure. To help simplify the different charges, fees will be lumped into a few categories such as service charges, taxes, and pre-paid expenses. This form is available later in the process; it must be provided no later than 3 business days before settlement.

2015 New Mortgage Disclosure Documents

These disclosures will be in use on August of 2015. If you start a mortgage application on or after that date, you will see them. This rule does not apply to reverse mortgages and equity loans. Regardless of which forms you get, you should always call your mortgage advisor if you have difficulty understanding the figures involved with your home loan. The information on the 2015 new mortgage disclosure documents in this article is intended only as an introduction and does not provide every detail of the planned changes.

Wednesday, May 13, 2015

An Overview Of Lender Paid Mortgage Insurance For Asheville NC Home Loans

Mortgage insurance is often mandatory when a owner borrows more than eighty percent of the value of a property. It protects mortgage companies against loss should a homeowner fail to pay. Although it insures the lender, it is usually paid by a buyer as a closing cost and additional recurring amount. In some cases, a mortgage company will cover the cost of the mortgage insurance. This blog includes an overview of lender paid mortgage insurance for Asheville NC home loans.

An Overview Of Lender Paid Mortgage Insurance

Some mortgage companies will offer lender paid mortgage insurance loan programs for a higher interest rate. When a homeowner pays mortgage insurance themselves, it remains in effect while the loan amount is higher than eighty percent of the purchase price or current appraised value. So eventually, the monthly payment reduces when mortgage insurance is no longer mandated. With lender paid mortgage insurance loans, this reduction in monthly payment will not take place since the higher interest rate remains in effect for the full length of the loan. The only way to change it is to refinance.

Choosing Between Owner Paid and Lender Paid Mortgage Insurance

Although the interest rate on lender paid mortgage insurance home loans may be greater, it can still result in a lower monthly payment for certain buyers. Furthermore, mortgage insurance may not be tax deductible for buyers whose income is higher than certain IRS limits whereas mortgage interest is generally tax deductible. Therefore, opting for a higher interest rate and lender paid mortgage insurance can also result in greater tax advantages for some buyers.

Help with Asheville NC Home Loans

Lender paid mortgage insurance loans may be a good solution for some buyers. It is important to compare it to other types of loans and understand the short term and long-term differences. The above is an overview of lender paid mortgage insurance for Asheville NC home loans and is intended only as an introduction. For a list of reputable local loan officers, contact Rowena Patton at Patton Property Group via phone at 828-226-0217 or email rowena@pattonpropertygroup.com.

Wednesday, May 6, 2015

New Construction Tips For Asheville NC

Building a new house is an exciting process. There are many enhancements for you to weigh, which can be somewhat overwhelming. The new construction tips for Asheville NC below can help you through the process.

New Construction Tips For Asheville NC

1. Understand the Costs

Your budget will require you to weigh different upgrades. It is understandable to want everything that you have dreamt of, but it is also critical to remember that all things come with a cost. Prioritize your list into must-have and bonus items. Once you understand the expense of the must-have items, you should then start to pull from the optional features until you reach the maximum budget. Remember that there are always unplanned expenses as well, so the budget should include a buffer as a precaution.

2. Importance of Documentation

It is important to ensure that you and the builder understand each other. A lot goes on in the planning and building process. This lends itself to miscommunication. Always keep the lines of communication open with the builder and retain good documentation. If you discuss certain items verbally, put it in writing to verify that what you understand is correct.

3. Compromise

Delays and issues can appear with any home project. In certain cases, you both may need to compromise to fix an issue. Maintain a good relationship with the builder and make the effort to understand the cause and potential solutions. By taking a professional approach and working together on a solution, the construction of your custom property will progress more smoothly.

Improving the New Construction Experience

The process of new construction is not really a simple one, but it need not be an extremely stressful one either. Start with a practical understanding of what you can and can not have in your property based on your budget. Maintain accurate documentation and open communication with the builder prior to and during the building process. Lastly, work with your builder to fix problems. In the end, you want a home that you will love and the builder wants a quality home to add to his portfolio. Keeping the above suggestions in mind will help you both reach your goals and lead to a less stressful experience. The new construction tips for Asheville NC in this article are just a few of many different tips available. Follow this blog for future tips on new construction.

Tuesday, April 28, 2015

An Introduction To Condo Insurance In Asheville NC

If you own a condo, you may not realize that you need condo insurance. Condo complexes normally have a master insurance policy, but the scope is actually limited. It is essential that you understand what master insurance actually covers and the necessary protection of individual Asheville NC condo insurance policies. This article covers an introduction to condo insurance in Asheville NC.

What Is Master Insurance

Master insurance policies for condos typically protect the structure and shared features (i.e. hallways, stairways, and the roof). It may not insure unit-specific components such as heating and cooling, electronics, upgrades, etc. More importantly, it does not protect personal belongings such as furniture, televisions, and clothes. Policies differ, so be sure to obtain a copy of the master insurance policy for your condo development and understand what it does and does not include.

Why Buy an Individual Policy?

Other than not encompassing the structure of the building, MA personal condo insurance is actually similar to typical homeowners insurance. It normally protects you in instances of burglary, fire, specific weather damage, vandalism, debris, and accidents from vehicles or planes. It can also include personal liability protection for cases where people get injured in your home or if you damage other people's home. A low amount of value is normally included for personal belongings. Increased coverage may be purchased for jewelry, electronics, collectible items, and condo improvements (such as a high-end kitchens or expensive appliances).

Average Premiums and Where to Start

In many instances, Asheville NC condo insurance is actually lower cost than regular homeowners insurance. You should ask your insurance agent for advice on how much coverage you need. Your agent may ask about the size and upgrades of your condo plus the value of personal belongings. He/she may ask for a copy of your master insurance policy to confirm what is included. Completing this important step will establish that you have sufficient coverage based on your circumstances.