Mortgages for Real Estate and Many Videos & Counties

Type of Mortgages

I know now. I do not like mortgages. I like real estate brokerages.

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Online school means you get all your information from the computer, not from a person.

Adjustable rate mortgage: ARM: type of mortgage in which the interest rate paid on the outstanding balance varies according to a specific benchmark. The interest rate is normally fixed for a period of time, then resets, often every month. Length of stay? Interest rate may go down? Affordable reset rate? Interest changes over time. Interest changes on market conditions. Fixed period arm is hybrid arm. Usually 30 year loan. Higher monthly payment if interest rate rises. Is this a starter home? Do you believe interest rates might go down?

Amortized mortgage: a loan with a scheduled payments of principal and interest. https://www.youtube.com/watch?v=Mgq6rVJ2exg Amortization: relationship between interest and principal. Over time pay less in interest. More toward interest in beginning. Home for only 3-5 years, most money going into interest. You pay more principal toward the ends.

Discount points: https://www.youtube.com/watch?annotation_id=annotation_996930&feature=iv&src_vid=Mgq6rVJ2exg&v=4JAz8Pvkqrs

APR: https://www.youtube.com/watch?annotation_id=annotation_680210&feature=iv&src_vid=4JAz8Pvkqrs&v=Y2iYzJ6Jl0k

Escrow account: https://www.youtube.com/watch?annotation_id=annotation_183129&feature=iv&src_vid=Mgq6rVJ2exg&v=l7DrAl_DkFA

Short sale: https://www.youtube.com/watch?v=kzAOIltuj-w

Condo vs. co-op: https://www.youtube.com/watch?v=xCj6rkpUdp8

Buying vs. renting: https://www.youtube.com/watch?annotation_id=annotation_739108&feature=iv&src_vid=xCj6rkpUdp8&v=PNQr0QXN8G0 No job security or short period of time: rent. Buy: sustain the payments, secure financially, maintain and hold onto home. Build equity. Purchase something and start somewhere. You are the owner. You are not paying the owner.

Debt to income ratio: debt divided by income: https://www.youtube.com/watch?v=WBxAH4369sk

Good Faith Estimate: breaks down closing costs, lender fees, appraisal fees, mortgage interest rate, title and escrow fees, processing and underwriting fees, term, and point charged to you. https://www.youtube.com/watch?v=RdnN9RTvDbk. Lender provides good faith estimate provided by lender (mortgage banker). Have good faith estimate upfront and at closing to make sure there are no hidden fees.

Title insurance: https://www.youtube.com/watch?annotation_id=annotation_926082&feature=iv&src_vid=RdnN9RTvDbk&v=NmbYrLSlfY8. Insurance policy you pay for at closing table -- ensures you are the only owner and that seller had every right to sell you the property. All real estate taxes are paid until the day of closing. Title insurance is regulated in every state. Determined by overall purchase price of house. Security blanket on payment. No one can knock on your door and say they own your house.

Unexpected at closing: it's not over until you have the keys in your hand: https://www.youtube.com/watch?v=SSnXo5zecvM

Make an offer on the house: https://www.youtube.com/watch?v=n8Ve3HxpN3k. What's going on in the market? Does the price make sense? Price too high or priced right? Write an offer to the listing agent: verification of funds via bank statement, verification of a credit report, a written pre-approval letter, ask or help write a letter about themselves. Buying agent. Don't go in so low that the seller will not communicate. Make offer beneficial to seller. MARKET CONDITIONS ARE BIG FACTOR, DO RESEARCH WITH REAL ESTATE AGENT, STARTING TOO LOW MAY TURN OFF SELLER. 

How to negotiate: most important jobs. Buyers want to start low and negotiate up. Real estate agent knows the market and best competes with other offers. Willing to walk away. Every seller attached to property. Sellers unclear because emotional attachment. Be patient with sellers. A real estate agent knows the market. Be patient and respect the seller. 

Final walk through: https://www.youtube.com/watch?annotation_id=annotation_891977&feature=iv&src_vid=NsHWaPAotks&v=a6tFopPW_Nc: Everything you are supposed to get are there and appliances and AC work. Try light switches. Doorbell. Turn on water, heat it. Whatever you close on is what you get. Know exactly what you are buying. 

Deciding your down payment amount: https://www.youtube.com/watch?v=ov9DOeZV1Hs Fee lender charges (lender origination fees), title insurance title fees, recording fees, homeowner insurance. Don't put your emergency fund in your down payment. Speak to mortgage banker to learn options, consider other fees and costs, it's not your only expense. 

What can you can afford for your lifestyle: current and future income and future expenses: https://www.youtube.com/watch?v=AtdormU98SM  kids, car, childcare expense, mortgage payment, things going to go wrong with the house, plumbing, budget home with lifestyle

Principal pays off loan. Interest pays mortgage company. Amortization relationship between principal and interest. Interest goes down over time. Principal, interest, tax, and insurance. PITI. Total housing payment. Escrow pays T and I. Ask your real estate agent for help. 

Different types of mortgages: fixed interest rate (set years and fixed interest and principal), adjustable rate (fixed and then interest changes). FHA gov. sponsored, lower down payment, higher debt to income ratio or low cash in bank to utilize, VA loan current or retired military, no down payment. Verify participation in military. Jumbo loan: larger loan slices, higher interest rates and strict credit guidelines. over $417,000. 

A mortgage banker helps you get a home loan so you can buy a house. Find out how much house you can buy. Go see a mortgage banker. What are your goals? What is best for you? Offer suggestions. Not any two people are exactly the same. Quarterbacking the loan process for you. How much can you afford? Your partner in choosing a loan. 

Home inspection: https://www.youtube.com/watch?annotation_id=annotation_220065&feature=iv&src_vid=xptBrwVdgiA&v=UKf7CAOoejg Make sure the house meets what they think: safe and no hidden costs. After verbal agreement prior to or directly after contract. Facet of house fixed, safe, working from foundation to roof. Roof replacement, electrical systems, appliances. What is deficient? What needs to be replaced? Termites? Carpenter ants? Beetles? Expect the unexpected. Racoon in the attic. You can fix issues or seller can fix for you. 

First time home buyer tips: https://www.youtube.com/watch?v=zFkXnuU2qew Positives and negatives of home. Be patient throughout the process and don't feel pressure. What is the real reason you are buying this home. Give yourself time and be patient. 

Finding the right real estate agent: https://www.youtube.com/watch?annotation_id=annotation_906849&feature=iv&src_vid=zFkXnuU2qew&v=wYWtczym9Jg: matches your personality and someone you trust: knows the market: full time: how many transactions a year? current market conditions: how many houses have you sold? are you familiar with the area? what kind of commitment are you getting? how quickly will you get back information? it's a friendship. flexible. works around your schedule. agree on how you will communicate. spending a lot of time with real estate agent. real estate agent sees everything about you. what does it take to get through the real estate process? types of inspections? ask specific questions about real estate agent experience.

Home owner's association: pays for neighborhood (landscaping, lighting, watering, lighting around holidays) https://www.youtube.com/watch?v=ZMRgnrI7kl8 Restrictions: fencing, parking on the street, parking boat in driveway. People elected to board maintain hoa and enforce their rules. Fees go to the development. Usually yearly fees. What hoa covers and what hoa's won't allow you to do? Builder manages or home owner's manage? 

What to look for at an open house? https://www.youtube.com/watch?annotation_id=annotation_968672&feature=iv&src_vid=ZMRgnrI7kl8&v=KirXg3rY4hc Look at a bunch of different houses? Why are they selling? Are there issues? School districts? Roof age? Windows age? AC and appliance age? Look beyond cosmetics. What's your price range? Looking to downsize? Where relocating? More questions better for you. Big expenses down the road? Look at greater construction beyond cosmetics. You can make a house your own. 

Mortgage underwriter: assess risk for client and bank. After application with banker and processor, underwriter assesses credit history, income history, all banking accounts. Everyone has different employment background. Different tax returns. Helps make sure you can afford the mortgage you are applying for and don't have late payments. All mortgages meet government guidelines: Fannie Mae, Freddie Mac, Ginnie Mae. Don't over-strain your family or your bills. Make sure you don't foreclose. Make sure there is an acceptable amount of risk.

Homeowner's insurance: fire, lightning, wind storm, hail, vehicle, pipe breaking, vandalism, liability, dog bites somebody, theft, malicious mischief. Not covered unless endorsed: flood, earthquake, vermin, insects, wear and tear, mechanical breakdown. Speak to your agent. Jewelry and fine arts overlooked. https://www.youtube.com/watch?v=5HawdJ2P1Zk Do your insurance research. Just because you have insurance doesn't mean you are properly insured. 

PMI: private mortgage insurance: do not put 20% down, you have to pay mortgage insurance, that covers lender in case borrower defaults. Insurance that investor like Fannie Mae or Freddie Mac places on loan in case borrower defaults. Higher loan to value loan: more mortgage on the property -- lower down payment. Built into mortgage payment. On top of your PITI. You pay until loan to value is at 80% or less.

Pre-qualification versus pre-approval: https://www.youtube.com/watch?v=8UZAA_ISFF8 Pre-approval is verified pre-qualification. Pre-approved: seller knows bank has reviewed your credit and documents and shows seller that person is making serious offer. Pre-approval is bank approval for a mortgage. 

Interest rate is what is used to calculate your mortgage payment. APR is big picture of overall cost to obtain loan: interest + costs associated with obtaining loan. Costs: loan origination fee, appraisal fee, tax service fee, credit report fee, processing fee, home inspection fee, and more. APR is overall cost of the financing. 

Loan processor is the glue for process: work with underwriters, mortgage bankers, title company, the closers, work with the whole group. Once application submitted review for all items there. Full and complete application to underwriter. Makes an initial lending decision. 

Create a binder for buyers.

More to watch later: https://www.youtube.com/user/mynewhomefromchase/videos 

Adjustable rate mortgage: ARM: characterized by fluctuating interest rate over the term of the loan. Originates at the original interest rate. Interest rate increases or decreases based on objective economic indicator called an index. As the interest rate on the index changes at preset changes the interest rate on the ARM loan changes. An ARM lender can link loan interest rates with index interest rates such as the US treasury securities index. The index moves up and down with the nation's fluctuating economy. A lender cannot create an index. A borrower can verify and see the index. Although the interest rate changes in an ARM the margin % never changes. Monthly payment amount change in an arm because of the index fluctuations. To get an ARM full interest rate you have to take the index interest rate and add it to the margin interest rate. In ARM the interest rate for a borrower is the national interest rate plus the lender's margin. The interest rate on ARM adjusts periodically based on the loan interest rate documents. An ARM interest rate can adjust annually, or every 5, 7, to 10 years. There are rate caps on ARM interest rate loans though. A periodic rate cap limits the amount the interest can go up at one interest rate change level. So the interest rate can be capped to only go up less than 2% of the before interest rate. An ARM can cap the total amount the interest rate can go up over the life a loan too. An ARM loan can have a lifetime cap of 6%. Meaning the ceiling for the interest rate is 6%. A payment cap limits the amount the monthly payments can increase during a year. A teaser rate can be offered by a lender to allow a lower than market interest rate for the first year and then spike your annual interest rate increase for the next to compensate the low interest rate from the first year. "Rate caps limit how much the interest rate may change."
Amortized mortgage: level payment plan. Amortize means to distinguish or deaden. You gradually and systematically kill an amortized mortgage loan over time. An amortized mortgage is characterized by payment of debt in regular installment periods. Amortized mortgage included paying monthly interest and monthly principal. Interest and principal are flopped in an amortized mortgage. You start off paying more interest than principal and then end up paying more more principal than interest, and your monthly payments stay the same. Just a greater portion of your payment goes to interest in the beginning and then a greater portion of your payment goes to principal in the end. Amortized is good for long term loan. An amortized mortgage is fixed amortized mortgage and a level paying plan for residential purchase. On a 30-year fixes rate level paying plan mortgage the first five years are usually paying for interest. Then the last years are usually paying principal. Interest and principal usually balance out around the 17th or 18th year, then around the 29th and 30th year the payment is almost all principal, even though the monthly and yearly payments are the same for all 30 years. Your balance goes down as you pay yearly and monthly. How to amortize a mortgage. 1) Principal balance x annual interest = first month's interest. 2) Monthly mortgage payment - first month's interest = payment on principal 3) Beginning principal balance - principal payment = new principal balance.You can have a negative amortization if your monthly mortgage payments are not enough to cover your increased interest rate. A teaser can be offered to you. An ARM can say the max interest that can be changed... but not charged. A rate cap limits the amount the interest can change. Charging is based on the national index.
Amount financed: TILA, regulation Z, expressed as the total amount of credit provided by the lender
Annual percentage rate: the finance charge must be stated as an APR. The APR includes the interest rate and other loan costs and represents the true annual cost of credit. The APR is expressed as an effective yearly interest rate. The disclosure of the APR is central to the uniform credit cost disclosure. It is common to see an ad that states "mortgage interest rates at 6%" followed by a parenthetical statement such as (annual percentage rate 6.25%) or (APR 6.25%). APR is a function of the amount financed, the finance charge, and the payment schedule. The APR is rounded to the nearest 1/8th. 
Bait and switch: TILA makes bait and switch advertising a federal offense. If a subdivision advertises a down payment of a home as $1,000 that developer must accept $1,000 as a complete down payment, or be in violation of the law. TILA is worried about borrowers being given truthful but inaccurate information in advertising. While TILA does not require creditors to advertise credit terms, it does require them to include their triggering terms in a separate disclosure.
Balloon payment: big payment at the end of a partially amortized loan where the borrower is allowed to pay less than the mortgage payment throughout the mortgage life and then at the end pays the accrued interest and unpaid principal mother load called the balloon payment. On a Florida partially amortized mortgage the balloon payment has to show on the mortgage face and the mortgage has to say it's a partially amortized loan.
Biweekly mortgage: custom mortgage: amortized the same way as amortized loans with monthly payments but the borrower pays every two weeks instead of every month for 12 months. Amount paid is equal to half the monthly payment. The 52 weeks in a year is divided by 2 making bi-weekly amortized loans paid 26 weeks of the year. Borrower makes the equivalent of an extra month's payment each year (26 half sized payments = 13 months). The buyer saves on interest paying bi-weekly and pays off the loan faster.
Blanket mortgage: custom mortgage: covers many parcels (land development loan by land developer secures construction loan and more). The developer uses proceeds from the sale of individual parcels to pay off the blanket mortgage. A partial release clause commonly used in blanket mortgages provides for the release of individual parcels for the amount acceptable to the partial release clause in a blanket mortgage. The partial release clause stipulates the conditions under which the mortgagee will grant release of lots, free and clear of the mortgage. 
Certificate of eligibility: CE: states the amount of entitlement for the veteran borrower. The VA loan uses a scale that establishes the veteran's entitlement amount based on the loan amount. A veteran who has used entitlement in the past is eligible to use a portion of the entitlement now.  
Buyer qualification has to do with what the buyer wants and can afford.
Conforming loan:
Consumer Financial Protection Bureau: supervises banks and credit unions and also enforces federal consumer financial laws, including TILA. TILA is the Truth in Lending Act. Administers RESPA to protect the public consumers.
Conventional loan: a loan that is not verified by the FHA or VA. Lender assumes the full risk of default. A conventional loan is from a private lender. A conventional loan is not from the government. A lender and borrower decide the interest rate based on market conditions in a conventional loan. A fixed rate conventional loan contains a due on sale clause. A fixed rate conventional loan is not assumable. A borrower is allowed to pay off the loan entirely due to the prepayment clause. A borrower can pay the principal before the due date. Conventional loans have a lower LTV ratio than nonconventional loans (VA and FHA). You have to provide more equity in a conventional loan. Usually 20% is required to the lender as a down payment in a conventional loan. If you need more than 80% of the payment in the loan then the lender will require you purchase mortgage loan insurance called PMI private mortgage insurance. Because a conventional mortgage is a private mortgage. PMI covers the rest of the 80% that you don't have. Although a borrower can be approved for a conventional loan with less than 20% of loan down payment. You can still get a conventional loan if you are asking for 90-95% of the amount of the purchase price but you have to purchase PMI on above the 80%. A conventional lender will calculate your gross monthly income. A conventional loan lender will want to know your current monthly debt, and maybe future debt you plan to partake in. Debt comes from your gross income. What are you spending your money on? A conventional mortgage lender wants to know. So the total obligations ratio is the borrower's total monthly debt / gross monthly income. You can only get a conventional loan if your TOR is under 36%. TOR is monthly obligations/monthly income. 0.25 is 25%. 0.35 is 35%. "A conventional loan is one that is not insured or guaranteed by a government agency. Conventional loans usually have a lower loan-to-value (LTV) ratio than either FHA or VA loans." Conventional loans usually feature 30 year or 15 year terms.
Credit scores: used by lenders to measure potential risks of making a loan. A higher credit score means the borrower is more likely to be approved than a applicant with a lower credit score. Credit scores reflect a consumer's payment history, amount owed, and how much available credit is being used, also length of credit history, and whether the applicant has recently opened a new credit account.
CRV: certificate of reasonable value: VA loan cannot exceed CRV. CRV from a VA approved appraiser. 
Demand deposit:
Discount rate: Fed uses to control the supply of money, the interest rate charged member banks for borrowing money from the Fed
Disintermediation: 
Equal Credit Opportunity Act: ECOA: is enforced by the Federal Trade Commission. Ecoa is a federal law that requires financial institutions and firms engaged in extending credit to make credit available with fairness and without discrimination. ECOA levels the playing field of race, color, religion, creed, national origin, sex, marital status, age, how many people you slept with, how many people you haven't slept with, where you live, which city you were born in. ECOA makes sure none of that matters. ECOA can ask about handicap and family.
Entitlement: the VA established loan guarantee limits or the maximum entitlement. The 2014 max. entitlement guarantee is $104,250. A veteran's entitlement is the max amount the VA will pay the lender if the borrower (soldier) defaults. Soldier: a person who serves in an army. The unused portion of entitlement money is available to the veteran up to the maximum guarantee. When the VA loan is paid off, the veteran maximum entitlement is reinstated.
Explain and request technique: find out amount buyer can realistically spend on property (housing). Ask general questions like how much do you plan to may a month and how much is your down payment? A buyer's responses will bring to the surface any misconceptions about the value of real estate and how much the buyer can afford.  
FACT ACT: fair and accurate credit transaction act:  makes it possible for consumers to monitor their credit reports at no cost. The government allows consumers to to monitor their credit reports at no cost every 12 months from each of the three credit bureaus. Consumers can request all three credit reports at once.
Fannie Mae:
FHA insured mortgage: the National Housing Act of 1934 created the Federal Housing Administration. A major focus of the FHA is to stimulate home ownership. The FHA is a government agency within the department of housing and urban development. The FHA functions as an insurance company, insuring mortgage loans made by approved lenders. The FHA insures various types of mortgaged properties. Common FHA loan programs include a mortgage program for condominium units and an adjustable rate loan program. An FHA loan does not have a due on sale clause. The FHA requires complete qualification of the buyer assuming the loan. Assume: begin to have power and responsibility. All assumed and FHA loans are for owner-occupied use only. FHA does not deal with investor loans. The lender must release the original mortgagor from the mortgage if the new assuming mortgagor is deemed qualified, is found creditworthy, and executes an agreement to assume and pay the mortgage debt. An FHA loan cannot charge a prepayment penalty. An FHA loan can be paid off early without penalty. An interest rate on an FHA mortgage cannot be determined by HUD or FHA. The interest rate on an FHA loan is determined by the Treasury Securities index. The interest rate in an FHA loan is negotiable by the lender and borrower. An FHA approved appraiser must appraise the home. HUD has qualities that the home must possess in order to qualify for FHA loan. HUD has property standards. The FHA does not warrant the condition of the property. Warrant: official guarantee. The FHA encourages buyers to have a home inspection conducted.  FHA can ask about age, marital status, and public assistance income.
FICO: most widely used credit scores. Credit scores are based on information found in a consumer's credit report. Scores range from 300 to 850. Scores above 700 are good financial health. FICO score below 600 indicates high financial risk for lender. Score under 600 could result in denial of loan. Lenders buy FICO scores from 3 national crediting reporting agencies.  FICO credit score http://www.myfico.com/CreditEducation/CreditScores.aspx.
Finance charge: TILA, regulation Z, the finance charge is the total amount the loan will cost over it's life. Charges that must be disclosed include the interest charges, discount points, or buydown fees, loan finder's fees, servicing fees, and required life insurance. Not included in the finance charge are title insurance, legal fees, appraisal fees, survey fees, notary fees, credit report, and deed preparation. 
Freddie Mac:
Ginnie Mae:
Good Faith Estimate GFE:
HER: housing expense ratio: FHA loan: a factor that's look at by the bank to see if you qualify for a loan -- monthly expenses / gross monthly income. Monthly expenses PITI and MIP. So, her is calculated with the total monthly housing number and the total monthly income number: PITI and MIP/Income = HER (housing expense ratio). 
Home equity loan: a homeowner uses a home equity loan to finance a consumer purchase, to consolidate existing credit card debt, and pay for college tuition, medical expenses, or home improvements. Because the interest on most home equity loans is tax deductible, they are more popular than other types of consumer credit. A home equity loan is secured by the borrower's place of residence. Second to original mortgage. The dollar amount of a home equity loan is based on the amount of equity. The borrower may take a lump sum amount or access a line of credit. The interest rate is usually adjustable and based on the lender's prime rate.  The loan to value of both mortgages combined is limited to 80% of the property's value.
HUD: housing and urban development. has FHA loans inside it. 
HUD's settlement cost booklet: HUD's settlement cost booklet is a required disclosure given at the time of filing for a loan. Hud's settlement cost booklet contains consumer information regarding closing services, required for purchase transactions only, describes the home buying process, and explains that good faith estimate and and the settlement statement. The GFE is the closing settlement costs, listing the charges the buyer is likely to pay at closing. The standardized GFE facilitates shopping among settlement service providers. If the lender allows the borrower to shop for third party settlement services, then the lender must provide the borrower an acceptable list of service providers. A servicing disclosure statement discloses to the borrower whether the lender intends to service the loan or transfer it to another lender or servicing company. If the borrower did not receive the disclosures at the time of loan application then the lender must mail them within 3 business days. Huds settlement cost booklet: http://www.hud.gov/offices/hsg/ramh/res/settlementaug17english.pdf. Blank GFE form http://www.hud.gov/offices/hsg/ramh/res/gfeform.pdf.
Index:
Intermediation:
Land development loan: custom loan: developers commonly purchase land for development by securing seller financing. The developer requests the seller agrees to a subordination clause. This allows developer to secure a construction loan from a traditional lending institution. Blanket mortgages cover a number of parcels, usually building lots.
Level-payment plan: is an amortized mortgage where equal regular payments are made monthly throughout the life of the loan and the loan starts with more share of payment toward the interest and then ends with more payment share toward the principal. A level payment plan is a fixed amortized mortgage. To determine the amount the payment toward the mortgage goes toward the principal and the interest you need to know the amount of the principal, the amount of the interest, and the amount of the payment. 
Loan underwriting has to do with property and buyer qualifications.
Margin: in an ARM loan, there is an amount of money added to the index rate of interest. The margin is the percentage added to the rate of interest. A margin is how a lender makes money. A margin is a spread. A margin represents a lenders cost of doing business plus profit. A margin percentage remains constant over the life of the loan.
Minimum cash investment: an FHA-insured loan small down payment as low as 3.5% of the price
Monetary Policy: refers to the actions undertaken by the Feds to influence the availability and cost of money and promote national economic goals. The Federal Reserve is charged with setting the monetary policy.
Mortgage broker:
Mortgage insurance premium: MIP: FHA loan: borrower charged a MIP in addition to a UFMIP, annual MIP is paid monthly and equally over 12 months, the MIP is paid as part of the monthly payment on the mortgage, and is also factored into the mortgage payment/loan amount. When calculating the borrower;s qualifying ratios, the MIP must be included in the proposed monthly expenses. The monthly MIP is paid for the life of the FHA loan when the borrower received maximum financing. UFMIP and MIP go into an FHA fund for repaying lenders if a borrower defaults.
Mortgage lender:
Mortgage loan originator (MLO):
National Housing Act: NHA: most popular mortgage program in the FHA, Section 203.b. Section 203.b loans require a small down payment for the purchase or construction of a one-family to four-family residences.
Negative amortization: in ARM, a mortgage payment is not large enough to cover the interest expense. In a negative amortization the unpaid balance of the principal loan increases. A payment cap can limit the amount of the monthly payment year to year, and limit the amount of increase. So if you have a very high interest rate from the index but a capped monthly payment then that unpaid interest difference is added to the loan. You are fixed to the interest cap and index on an ARM loan. 
Nonconventional loan: backed by the VA or FHA, insured. Nonconventional are not conventional. They are guaranteed by the FHA and VA. Require a smaller down payment than conventional. Lender accepts smaller down payment amount because borrower is backed by VA and FHA insurance. A less than 20% loan is usually required in a nonconventional loan.
Office of thrift supervision OTS: the Financial Institutions Reform, Recovery, and Enforcement Act fo 1989 FIRREA created the Office of Thrift Supervision OTS to charter and regulate member federal savings associations. FIRREA also created the Federal Housing Finance Board FHFB to supervise mortgage lending for 12 FHLBs.
Open market operations: a way the Fed controls the flow of money, implementing monetary policy, involve the purchase and sale of US treasury and federal agency securities. The purchase or sale results in an increase or decrease of money in circulation.
Package mortgage: custom mortgage: includes both real and personal property as security for a debt. A buyer may choose a package mortgage when buying a completely setup restaurant that has appliances in it, and cooking equipments and can use all the inclusive in the property as collateral for the debt.
Partial release clause:
Partially amortized mortgage: custom mortgage: buyer makes regular payments smaller than what is required to completely pay off loan by its termination date. The payments do not fully amortize the loan. A single large final payment, including interest and unpaid principal, becomes due on the loan maturation date called the balloon payment. 
Primary market:
Principal: unpaid balance of a debt.
Purchase money mortgage PMM: custom mortgage: given as part of the buyer's consideration for the purchase of real property. A PMM is delivered when the deed is delivered as a simultaneous part of a transaction. A PMM is a mortgage taken back by a seller from a buyer in lieu of purchase money. A PMM is used to fill a gap between the buyer's down payment and the new first assumed mortgage. Title passes to the buyer and and the seller retains a vendor's lien right as security for a debt.
Real estate settlement procedures act: RESPA: a consumer protection law. RESPA makes the lender tell the borrower how much will be charged at closing and the type of charges at closing. RESPA applies to federally regulated residential loans. RESPA covers loans secured with a mortgage on one-family to four family residential properties. RESPA covers loans: purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. 
Receivership clause:
Reserve requirements: a way the Fed controls money implementation is the nation's monetary system: influence the supply of money by changing the reserve requirements, it's the amount of money a institution must hold in reserves against deposit liabilities. Institutions must hold funds in the form of vault cash or deposits with the Federal Reserve Banks.
Reverse mortgage: custom: a reverse mortgage is a HUD mortgage: HUD's reverse mortgages are for Americans age 62 and older who have almost paid off their whole mortgage. The US Federal Government insures a HECM home equity insurance mortgage. A HECM is only approved through an FHA lender. A homeowner can borrow against the equity in their home. A reverse mortgage borrower can receive payments in a lump sum, on a monthly basis, or on an occasional basis as a line of credit. The size of a reverse mortgage is based on borrower's age, interest rate, and home's value. A HUD reverse mortgage loan is not like a home equity loan. A HUD reverse does not require immediate payment as long as the borrower lives in the home. The interest and principal are recovered when the home is sold. The remaining value goes to the homeowners and homeowner survivors. If the sale proceeds are less than the reverse mortgage amount, then HUD will pay the lender the shortfall. The FHA is part of HUD. The FHA collects an insurance premium from the borrower to provide this coverage. The AARP offers comprehensive information about reverse mortgages.
Right of rescission: the borrower's right to cancel the loan for financial reasons up to three days after the contract signed. The right of rescission applies to most consumer loans but not apply to loans to purchase or construct a house. If the refinance is with a new lender the borrow can rescind the loan. If the refinance is with the original lender, the borrower can only rescind the money added to the original loan can be rescinded. The right of rescission applies to home equity lines of credit, second mortgages, refinance.  
Secure and fair enforcement of mortgage licensing act: SAFE: intended to improve the accountability and tracking of residential mortgage loan originators MLOs, enhance consumer protection, reduce fraud, and provide consumers with easily accessible information regarding an MLOs professional background. The SAFE act sets a minimum standard for licensing and registering mortgage loan operators.
Secondary mortgage market:
Servicing disclosure statement:
Total payments: TILA, Regulation Z required disclosures, the total amount the borrower will have paid after making all required payments.
TOR: total obligations ratio: used to qualify an applicant for an FHA loan, the TOR cannot exceed 43%. Total obligations include PITI, MIP, and recurring expenses and housing expenses/gross monthly income is your TOR. So HER only accounts for housing expenses and income. The calculation is division. 
Triggering terms: TILA disclosures, lenders advertising certain credit terms, amount or percentage of any down payment, the number of payments, the period (term) of repayment, the amount of any payment, the amount of any finance charge. An advertisement with triggering terms must also include: the amount or percentage of the down payment, the terms of repayment, and the annual percentage rate/and if the apr may be increased in the future. That fact must also be disclosed.
Truth in Lending Act TILA: title 1 of the consumer protections act. Most of the rules imposed my TILA are contained in Federal Regulation Z, therefore the Truth in Lending Act and Regulation Z are used interchangeably. TILA law became effective in 1969 and was most recently amended in 2009.
VA: veterans affairs, servicemen readjustment act (GI BILL OF RIGHTS) was passed for returning Veterans from WWII to aid in home purchasing. The servicemen readjustment act (GI BILL OF RIGHTS) gave the VA the authority to partially guarantee mortgage loans provided by private lenders. The partial guarantee covers the top portion of the loan. The VA issues rules and regulations that set the qualifications, limitations, and conditions under which a loan may be guaranteed. TILA is intended to inform borrower's of the true cost of obtaining a loan. TILA law ensures that credit terms are disclosed in a meaningful and uniform way so that consumers can compare credit terms more readily and knowledgeably. Before TILA's enactment, consumers were faced with various credit terms and rates. It was difficult to compare loans because they were all presented in the same format. Under TILA, all creditors must use the same credit terminology and and expression of rates. In addition to providing a consistent system for disclosures, TILA includes substantive protections. TILA gives consumers the right to cancel certain credit transactions, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. 
VA guaranteed mortgage: government guaranteed, no down payment, no mortgage insurance or funding fee, no established loan limit, assumable, no prepayment clause penalty.
Up front mortgage insurance premium: UFMIP: FHA loan: a one time mortgage insurance premium that can be added into your mortgage and is paid at time of closing. UFMIP is based on term and type of mortgage. The up front mortgage insurance premium is a one time insurance premium paid at the time of closing.
VA loan: no prepayment penalty clause. A veteran can pay off the mortgage ahead of schedule without penalty. Veteran video: http://www.benefits.va.gov/homeloans/# 

A lender may not charge an application fee until after the disclosures have been provided. The applicant may be charged a credit report fee. Lender's must deliver to the borrower a copy of the appraisal report three business days before closing the loan.

Your LTV Ratio is a comparison between the value of your loan and the value of your home. To determine your LTV, your lender will divide your loan amount by the lesser of the home's appraised value or purchase price (if applicable).

Differences between the FHA and VA: insured vs. guaranteed, 3.5% minimum down (cash) vs. $0 down (cash), mortgage insurance UPMIP/MIP vs. no mortgage insurance, loan limits by area vs. no established loan limit.
Similarities: government, assumable, no prepayment penalty.

In a partially amortized mortgage, the payments do not fully amortize the loan. Title passes to the buyer, and the seller retains a vendor's lien right as security for the debt.

TILA allows trigger words such as "owner will finance" and "favorable financing terms available."

 
Features of conventional mortgages: conventional: what is generally done or believed. Mortgages can be grouped as conventional loans and nonconventional loans. Nonconventional: not what is generally done or believed. Conventional is not guaranteed or insured by the government. Lenders are not protected or covered by the government in a conventional loan. A conventional loan can be a private loan. Conventional loans require a larger down payment. The government provides a safety net to the lender in a nonconventional loan, so the down payment can be lower. A conventional loan is from a private party. A conventional loan interest rate is based on the current market and is negotiated between the lender and the borrower. A fixed rate conventional loan is not assumable and contains a due on sale clause. A fixed rate conventional allows the borrower to pay off the loan before the payment date. The LTV is lower in a conventional loan than a nonconventional loan. A conventional loan require a larger down payment, equity, than a FHA or VA loan. A loan asking more than 80% of the total cost requires a PMI. PMI is private mortgage insurance. If you borrow $800,000 and down payment $100,000 for a purchase price of $900,000 then you only provided 12% of the loan as down payment. So the 8.8% that is over the 80% you get PMI on so the lender is covered for the excess of 80% of a $900,000 loan. $720,000 and you provided $100,000. So the private mortgage insurance is for $80,000. A mortgage lender uses income ratios to qualify potential borrowers. For a lender to sell a mortgage, the mortgage must meet the expense/income ratio requirements. TOR is total obligations ratio. Divide your monthly debt by your income. TOR is from monthly expenses found on credit report like credit card payments, auto payments, student loan payments, child support payments, and PITI payments. A TOR cannot exceed 36% or you are disqualified from a conventional loan. 

Distinguish between the common types of mortgages: recognize something as different. Common: occurring found or done often. 

The most popular loan product is a amortized mortgage. A constant level monthly payment in an amortized mortgage calls for regular equal payments over the life of the loan. Mortgages to purchase real property usually call for regular equal payments that include payments on the principal and the the interest. Amortized fixed rate level payment plan loan is usually 15 to 30 years. An interest rate for a mortgage is expressed as an annual interest rate. A $60,000 mortgage at a 10% interest rate means that the interest rate is 10% per year. To find the monthly interest rate find out what 10% of $60,000 is. $6,000. $6,000 is annually. $6,000 / 12 months is $500 a month for interest $500. When the principal amount changes the calculation has to be done over again. A principal balance must be treated as it were applied to all 12 months. Index is an objective economic indicator. As the index changes the interest rate on the loan changes. The nation's economy fluctuates. An ARM loan interest rate fluctuates with the nation's economy. The index from the US treasury security can show the national interest rate. A payment cap limits the amount a monthly payment can increase over a year. A lender can offer a borrower a teaser. A below market interest rate can be offered at first by the lender in an ARM. A low rate usually lasts for a year then sharply increases the year after to compensate for the low interest to get you signed up.

Features of a custom mortgage: made or done to order by a particular customer. You can't get a home equity loan unless you own a home. You can own a home through a mortgage. The lender owns your mortgage. You have to pay it off. A home equity is second (junior) to your first loan. Your original mortgage is your first loan. Then your second loan is your home equity loan. You can't have two loans out for over 80% of property worth. PMM is purchase money mortgage. The FHA is part of HUD. FHA lenders use gross monthly income to calculate two qualifying loan ratios for loan applicants. The housing expense ratio is calculated by taking monthly housing expenses for principal, interest, tax, and insurance and the MIP and dividing by the applicants gross monthly income.

An FHA loan is a type of nonconventional loan because it is insured by the FHA for up to a certain limit. The FHA insures mortgage loans in the case of buyer default. The cost of the mortgage insurance is passed onto the buyer. FHA loans are made by FHA approved lenders. The FHA is not the direct lender of a loan. The FHA is not a construction company, does not build houses, and does not lend money. An FHA approved lender can charge a discount point or FHA approved lender discount points on FHA-insured loans. Discount points may be paid by either the buyer or the seller. An FHA-insured loan down payment (nonconventional) loan is much less than a private conventional loan. A buyer can place as little as 3.5% of the purchase price down on a property for the purchase price or the appraisal, whichever number is less. Closing costs may not be used to meet the 3.5% minimum down payment. Closing costs are fees associated with the loan: appraisal fees, credit report checks...flat numbers (good faith estimate). A buyer must have a good credit history to qualify for maximum financing. The FHA sets limits on the amount that can be borrowed in an FHA loan. Limits vary based on costs of neighborhoods in different parts of the country. The ma FHA loan you can take out in Miami and West Palm is higher than a loan you can take out in Gainesville or Tally. The average cost of housing is greater in West Palm and Miami than college towns. Lender make FHA loans in $50 increments. An FHA loan borrower is charged a one-time mortgage fee at closing. The fee is called the up front mortgage insurance premium. UFMIP. The percentage of the UFMIP is based on the type (new or refinanced), and term (15 year - 30 year) of the mortgage. The UFMIP can be financed into the mortgage amount and is paid at closing. 

VA loans: veterans, unremarried spouse of veteran, and active military personnel. Specific eligibility requirements are based on period of active duty or period of continuous service. Real estate agents should rely on the VA lender to determine VA eligibility. A VA loan is made by a VA approved lender. The VA does not have the power to make VA loans in areas where VA loans are not applicable. A VA loan may be used to purchase, refinance, or build, one to four unit properties provided the resident resides in one of the units. Maximum loan term for a VA loan in 30 years. VA loan interest rates based on the market conditions and are negotiable. To begin a VA loan, a military person must apply for a certificate of eligibility. The VA does not set loan limits. The amount a veteran can borrow depends on the value of the real estate. Another limiting factor, other than the certificate of reasonable value, is the veteran's income and ability to make monthly mortgage payments. The VA uses a funding fee or a user's fee to help with foreclosed properties. VA loans are no down payments. The funding fee or user's fee in a VA loan is currently at 2.15% of the loan amount. Funding expenses can be added to the loan total and paid off over the life of the loan. If a veteran has a service connected disability the funding fee is waived. Wounded veterans pay no funding fee or users fee and do not contribute to the foreclosure safe net. There are no MIPs, mortgage insurance premiums in VA loans. FHA loans have MIPS and UPMIPS. A lender may charge a veteran a discount point. VA guaranteed loans are allowed to incur discount points. The veteran buyer or seller may pay the discount point(s). The VA uses TOR to qualify applicants. total monthly expenses / total monthly income. A veteran's total monthly obligations 41% of the total monthly income. A lender may charge a VA loan applicant closing costs: VA appraisal, credit report, loan origination fee (usually 1%), discount points, title search, title insurance, recording fees, state transfer fees, survey. Closing costs may not be included in a VA loan. Closing costs vary among lenders. The veteran borrower or seller may pay for all or share some of the closing costs. A VA loan is assumable and does not have a due on sale clause. There is no prepayment penalty in a VA loan or an FHA loan. A VA prior to March 1, 1988 is assumable without a credit check of the new mortgagor, but the buyer and seller are responsible for the default. A buyer can qualify and complete substitution documents in order to not be responsible for default. An assumable VA loan made after March 1, 1988 must be qualified. A buyer of a VA mortgage and property must pay the VA an assumption fee and the lender an assumption fee. The seller is then released from the liability of the VA loan and property. 

Procedures for qualifying a loan: there are various types of mortgages in local areas and it is critical to stay up to date with the changing mortgages as a real estate professional. Before attempting to qualify a buyer, a licensee should make sure the proper written brokerage disclosures have been made. A brokerage disclosure is important because agents are dealing with peoples appropriate loan amounts, financing plans, and income-expense ratios. So determine the candidates real property needs and financial abilities. 1) Determine the buyer's real property needs. 2) Determine the potential buyer's economic capability to satisfy those needs. Wishes are separate from needs. What a buyer needs and wants are two different thinks. What a buyer can and can't afford are two different things. A licensees job is to find housing features, neighborhoods, and prices compliant with goals and priorities. First determine needs, then determine wants. So find out what a buyer wants. Find out the size of the family, the maximum commute to work, any buyer hobbies, any specific space needed, ages of family members, proximity to school/university. It's important to know your buyer, than know their financial capability. If the licensee knows what's available in the market, then the home buyer can know what is available for financing. Sometimes gauging someone's economic capability is difficult. Sometimes it's not. Financial capability is sometimes sensitive and private, but it is the licensees business. You help your potential buyer qualify by knowing the current financing options. "Have you a rough idea on how much your down payment will be?" "Do you have any current debts: student loans, credit cards, etc." "Do you know your comfortable monthly mortgage payment?" Talking about loan options demonstrates professionalism, and introduces buyers to consideration of a down payment and monthly payments, and helps develop confidence in the licensee. Why should a licensee qualify a buyer? To save time, increase confidence in sales associates, fit buyer to property, and retain buyers. General information: name, address, age, education, facebook name, email address, home town,  Personal: income, expenses, marital status, number members in family, car payment? tuition, inheritance? A lender must qualify anyone who i purchasing a property with a mortgage. The loan underwriter uses the property appraisal, survey, and title search to make a decision on the property. The purchaser must be qualified to get the loan. 

Five major guidelines a lender uses to qualify or deny a loan applicant and asses risk analysis:
The quantity and quality of the borrower's income, other assets of value, past credit history, loan to value ratio, the borrower's credit score. DOES THE BORROWER HAVE THE ABILITY TO REPAY THE DEBT? WHAT IS THE PROPOSED MORTGAGORS NET WORTH? WHAT IS PROPOSED MORTGAGORS RATIO OF TOTAL LIABILITIES TO TOTAL ASSETS? IS THE BORROWER WILLING TO REPAY THE DEBT? HOW MUCH EQUITY IS THE BORROWER INVESTING? An applicant's credit score is an important aspect of loan decisions. Strength of credit score determines interest rate. The strength of credit score dictates the amount of total supporting documents needed for loan application. Loan underwriting is not buyer qualification. The loan underwriting process begins with the FNMA/FHLMC Uniform Residential Loan Application for all one-family to four-family homes. Prospective buyers must provide information about:
PRESENT EMPLOYMENT, FINANCIAL HISTORY, PRESENT OBLIGATIONS: TAX RETURNS, FINANCIAL STATEMENTS = LOAN APPROVAL OR LOAN REJECTION. Lender is interested in debt paying ability and risk amount. Quantity of income is amount earned. Just year amount is not sufficient for a 30 year loan. Duration of income is important. What is length of time in the present employment and the probable continuation of that employment? Lender's evaluate demands on a borrower's income: income taxes, installment credit amounts, proposed mortgage payments, property taxes. Other assets for securing a debt include personal property, savings account, stocks and bond if monthly income is interrupted. Credit history is a willingness to repay a debt: a credit history is obtainable from the credit card bureau, and the national network of credit bureaus permits a comparatively rapid check of buyers, even of new residents from other states. A credit score is a number that assists lenders when predicting whether or not a borrower make timely credit payments. You can download your credit report and print it or request or credit report by mail. 

Truth in lending act, equal credit opportunity act, real estate settlement procedures act. In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act created the Consumer Financial Protection Bureau, consolidating most consumer financial protection authority under a single bureau. TILA and regulation Z do not mandate how much interest banks may charge or whether they must grant loans to consumers. The law does not attempt to regulate interest rates. TILA applies to consumer loans only. A TILA loan does not apply to agricultural, commercial, or business credit, or credit extended to governmental agencies. Regulation Z usually applies when a loan is secured by a residence. A residential real estate loan purchase or construction of consumer dwelling are considered consumer loans under TILA. TILA applies to:
Loans to construct or purchase any consumer dwelling (prior to 2009 applied to principal residence only), Refinanced home loans, Home equity loans (including home equity lines of credit). Regulation Z requires 4 disclosures regarding the cost of credit:
Annual percentage rate, Finance charge, Amount financed, Total payments.

Transactions discluded from respa include:
loans to finance the purchase of 25 acres or more, loans for home improvement or to refinance or any other type of loan if its purpose is to not to purchase or transfer title, loans to finance the purchase of a vacant lot if none of the proceeds will be used to place a residential structure or mobile home on the lot, sale or transfer of a property involving only an assumption of an existing loan or sale subject to an existing loan, construction loans except those intended to convert into a permanent lot, a permanent loan to finance a construction of a one-family to four-family structure when the lot is owned by the borrower, loans to finance the purchase of property when the primary purpose is resale of the property.

When a borrower applies for a mortgage loan: disclosure:
HUD's settlement cost booklet, a good faith estimate, and a servicing disclosure statement. 

3 credit bureaus lenders order credit report from: Equifax, Experian, TransUnion. The centralized source to access and request your credit report is www.annualcreditreport.com.
www.annualcreditreport.com Is the only site that participates with the government program FACT ACT. Don't be fooled by free credit report gimmicks from other sites. Gimmick: publicity stunt, scheme, or ploy -- a trick or device used to attract attention, publicity, or business.

My job is to fit buyers to properties. 

Main areas of expense:
Transportation, Food, Personal Insurance and Pensions, Apparel and Services, Entertainment, Housing, Cash Contributions, Healthcare, House Furnishings, Other Expenditures/Miscellaneous, Vacation, Education.

Wasting money: 
Check |___| check if you do any of these:
http://www.usatoday.com/story/money/personalfinance/2014/03/24/20-ways-we-blow-our-money/6826633/
Alcohol, Gambling, Deal Sites, Tobacco, Unused Gift Cards, Warranties that Cost as Much as the Product, Unused Gym Memberships, Lottery Tickets, Premium Cable Packages, Speeding and Traffic Tickets, Daily Coffee Trips, Wasted Energy, Designer Clothing for Babies or Children, ATM Fees, Speedy Shipping, Bad Health Habits, Wasted Food, Unclaimed Property, Unclaimed Tax Refunds, Credit Card Interest, Clothing and Shoe Repairs, Jewelery, Watches, Sports Equipment, Photographic Equipment, Boats, Trailers, Movie Rentals, Club Memberships, Theme Park Admission, Vacation Homes, Pets, Toys, TV, Radio, and Sounds Equipment, Gifts, Eating Out, Candy, Soda

About home: http://homebuying.about.com/od/buyingahome/f/A-Complete-List-Of-Home-Amenities-And-Features-For-Home-Buyers.htm 

Home buying amenities: http://freshome.com/2011/03/25/10-amenities-to-look-for-when-buying-a-home/ 

FHA loan for Hillsborough and Pinellas: https://entp.hud.gov/idapp/html/hicost1.cfm
FHA loan for Orange: https://entp.hud.gov/idapp/html/hicost1.cfm
FHA loan for Miami-Dade West Palm: https://entp.hud.gov/idapp/html/hicost1.cfm
FHA loan for Broward West Palm: https://entp.hud.gov/idapp/html/hicost1.cfm

Hillsborough 474,030. Pinellas 415,876. Polk 227,485. Pasco 189,612. Sarasota 175,746. Manatee 135,729. X hernando. X citrus. X sumter. X hardee. X de soto. Lee 259,883. X Charlotte. Lake 121, 289. Orange 421,847. X osceola. X highlands. XX glades. X levy. 137,726 Marion. Seminole 164,706. Brevard 229,692. Alachua 100,516. X gilchrist. X dixie. 133,719 Collier. X Monroe. 867,362 Miami Dade. X hendry. X lafatyette. X taylor. x madison. x jefferson. x suwanee. 110,600 Leon. X waukulla. Volusia 208,700. Flagler X. Marion 137,800. X putnam. X st. johns. X clay. 342,800 duval. X nassua. X baker and columbia. X okechobee. X indian river. 108,523 St. lucie. X martin. 544,227 palm beach. 686,047 broward. Miami-dade 867,352. X franklin. X gulf. Bay X. X washington. X walton. X okaloosa. X santa rosa. Escambia 116,238. X Holmes and washington. X gadsden. X hamilton. X bradford. X union.

BIG PLAYERS:
301-900
Hillsborough, Pinellas, Orange, Miami Dade, Palm Beach, Broward

BENCH WARMERS:
0-300
Polk, Pasco, Sarasota, Manatee, Lee, Lake, Levy, Seminole, Brevard, Alachua, Dixie, leon, Volusia, Marion, Duval, St. Lucie, Escambia


TILA: APR disclosure, finance charges disclosure, triggering terms in advertising, 3-day right of rescission
RESPA: GFE disclosure, settlement cost booklet, servicing disclosure statement, affiliated business relationship disclosure, settlement statement, kickbacks or referral fees for closing