New­mort­gage tools show­ing up

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For many year­swe have needed meth­ods of sim­pli­fy­ing and speed­ing the mort­gage process for bor­row­ers. The un­qual­i­fied buy­ers that caused many de­faults in 2008 are long gone. Typ­i­cal bor­row­ers to­day are hon­est and qual­i­fied. It is about time their loan pro­cesses are sim­pli­fied and we are be­gin­ning to see that.

My first ex­am­ple be­gins at the out­set of the mort­gage process. Bor­row­ers may now click on a link and an­swer ques­tions (not fill out a loan ap­pli­ca­tion). Af­ter an­swer­ing the ques­tions, the se­cure link will au­to­mat­i­cally fill out the loan ap­pli­ca­tion. It is all se­cure and much eas­ier then com­plet­ing a loan ap­pli­ca­tion and then try­ing to send it se­cured to the loan of­fi­cer. This is par­tic­u­larly great for the bor­rower who is in a dif­fer­ent city than the­mort­gage com­pany.

The time re­quested to com­plete the ap­praisal has be­come longer and longer. Loan of­fi­cers can no longer con­tact an ap­praiser and or­der the re­quired ap­praisal and ex­pect it to soon be com­pleted. Re­cently we have seen a mul­ti­tude of what is called an “ap­praisal waiver.” This means that the value of the prop­erty, the home, is ac­cepted and the buyer or bor­rower need not pay for an ap­praisal. The cost sav­ings is ex­cel­lent but what re­ally helps is speed­ing the process of clos­ing the loan. The fact that no­body is wait­ing a week or two for the ap­praiser to com­plete the anal­y­sis is fan­tas­tic.

Other sim­pli­fi­ca­tions are headed our way. As we get far­ther from the 2008 real-es­tate melt­down, we are see­ing changes in un­der­writ­ing that will im­prove op­tions for self-em­ployed bor­row­ers. As an ex­am­ple, Fan­nie Mae and Fred­die Mac will now only re­quire one fed­eral tax re­turn to qual­ify a bor­rower who has been self-em­ployed for at least five years.

An­other big change ap­plies to jumbo loans. It’s a new loan prod­uct that per­mits a bor­rower for a pri­mary res­i­dence to bor­row 85 per­cent with no mort­gage in­sur­ance.

Rules and re­quire­ments are slowly re­lax­ing for bor­row­ers. We ex­pect this to con­tinue in 2019 and be­yond. Be alert and talk to a knowl­edge­able loan of­fi­cer who keeps cur­rent on mort­gage changes. We pre­dict th­ese sim­pli­fi­ca­tions to con­tinue with new ad­van­tages avail­able for the bor­rower.

Jim Gay was a real-es­tate bro­ker for 20 years and has been a fi­nan­cial con­sul­tant to For­tune 500 com­pa­nies. He is cur­rently pres­i­dent of The Mort­gage Place, Inc. (986-9080) and can be reached at [email protected] jim­gay­home­m­o­rt­gage.com.

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