Newmortgage tools showing up
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.