Home Appraisal Basics During a Mortgage Application

home appraisal mortgage application

Within the mortgage and homebuying world, one vital piece of the process to understand is the appraisal. Designed to produce a fair and unbiased value for a home about to be purchased, appraisals are based on several factors and play a big role in some of the major financial details of any home sale.

At Altius Mortgage and our partners at Mortgage Ogden, we’re happy to walk you through the ins and outs of the appraisal process whether you’re a first-time homebuyer or an experienced real estate flipper. Let’s go over the simple details you need to know about an appraisal, including what it’s used for and the areas of a home that will be included in it.

Appraisal Basics and Uses

Appraisals refer to an event where a third party is hired to assess all the important factors that play a role in the value of a home. These third parties are known as appraisers, and they have received specific training in evaluating home values across many different property types.

In the majority of cases, the seller of the home in question is the one who arranges for an appraiser. This objective review of a home’s value is very valuable for sellers to present as they price their home. In other situations, though, appraisals can be requested by potential buyers or even by a lender themselves – this is often done so the lender can get their own in-house estimate for the value of a home they’re about to lend money to a buyer for.

Areas Appraisers Inspect

  • Property details and location: Appraisers will assess all the property basics for your home, including the size of the lot and the structure itself. Lot size is important because it often means flexibility even if the structure doesn’t fill the entire lot. In addition, appraisers will consider the popularity of a given area, including how recent comparable homes nearby have done on the market.
  • Home exterior: Appraisers will also look into several exterior areas, those connected with what real estate pros would call “curb appeal.” Areas here include walls and roofing quality, garages and driveways, siding and much more.
  • Home interior: The appraiser will run through a wide list of various interior features, from plumbing and HVAC areas to a variety of appliances that might be needed in the home. They’ll check tub and bathroom areas for any potential future issues, and cover the entire interior of the home from top to bottom.
  • Other improvements: Appraisers also want to see any evidence that the home has been improved from its original state. This may include a swimming pool, new floors, a security system, or a variety of other upgrades. These can change home value significantly.

For more on what happens during an appraisal, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.

Basics and Benefits of Mortgage Automation

basics benefits mortgage automation

For many decades, mortgages and their related services required huge amounts of paperwork and manual data entry. This began to change with the advent of computers, and has continued to evolve as the internet and other resources have become more and more common.

At Altius Mortgage and our partners at Mortgage Ogden, automation is a big part of our services. From our online application our pre-qualification calculator and much more in between, technology is a huge part of what we do. Let’s look at some of the recent steps that have been taken by many lenders in this area, plus how automation benefits both you as a buyer and the lender you’re potentially borrowing from.

Automation Steps

There are several areas where lenders have begun to develop advanced automation practices:

  • Application: The online application is one of the simplest examples of automation in the industry. Clients can securely apply for any mortgage, including uploading documents required.
  • Account linking: This allows lenders to validate assets and collect important financial data directly from the sources of this data, such as credit bureaus.
  • Underwriting: Many lenders have algorithms that allow them to underwrite potential borrowers in real time. This lets them offer feedback and advice to the borrower before they even submit their application.

Lender Benefits

The primary benefit of automation to lenders is speed. Automation turns many functions that used to be manual into computerized areas that take a fraction of the time to complete. This leads to the ability to close on mortgages much faster in some cases.

Automation has also been huge for transparency – by helping create standard practices across every loan situation, technology has helped assure that all potential borrowers are treated fairly.

Homebuyer Benefits

There are several areas of automation that benefit actual buyers themselves. Here are a few:

  • Certainty: As we noted above, automation is big for transparency. Homebuyers who have received approval through automated systems can be certain they will receive their financing, with no risk of human error.
  • Reasoning: In many manual cases, an underwriter or another party will ask for additional documentation – but won’t give a reason for needing it. Automation allows for the flagging and explanation of specific application issues to the borrower, which makes the process simpler and faster.
  • Savings: The speed we noted above is very important for both buyer and lender savings. The ability to close faster often allows you to capitalize on a great interest rate that might have gone away before you had the chance in the past, for instance. Faster closing can lead to better pricing and lower fees.

For more on how automation in the mortgage world benefits you, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.

Mortgage Application: Step By Step

Mortgage Application

At Altius Mortgage and our partners at Mortgage Ogden, we’ll help walk you through every step of what can be a complex mortgage process. Home loans are some of the largest expenses you’ll undertake in your life, and you need to be confident about every step you take in this direction.

For those who have never done it before, let’s lay out exactly what these specific steps will entail. Here are the general stages of the mortgage application process, from start to finish.

Filling Out Application

The first step is filling out the application itself, and our mortgage brokers can be of service here. You can supply information by phone or in person while our representatives help you out, and the entire process will likely take under an hour. Most mortgage applications will have about five pages of questions regarding finances, debts, assets, employment, the loan and the property itself.

Reviewing Loan Estimates

If you’ve applied to more than one lender, you can review your options using the Loan Estimate forms. Don’t focus too much on rate, and ask your lender to explain anything you don’t understand here. Compare the total cost in five years, the principal you’ll have paid in five years, the APR (annual percentage rate) and the percent of the money paid in interest you’ll be undertaking over the life of the mortgage.

Choosing and Committing

Once you’ve compared lenders, you can assess all the factors and make your choice. From here, you contact your lender and say you’re ready to move forward.

Loan Processing

The loan processing area is one that will take a couple weeks, and involves confirming all the financial information you provided on your application.

Underwriting

Similarly, an underwriter is hired to assess the risk of lending money to you based on the property you’re interested in. They’ll check on various financial elements from an objective standpoint, and will also check on the home itself and ensure that it’s properly valued before you purchase it.

Closing

Finally, it’s time for your loan to close. This doesn’t require any action on your part – it’s up to the lender to send a Closing Disclosure, and all you have to do is compare this to your Loan Estimate to make sure none of the important numbers have changed. If they have, you can discuss them with your lender and ensure there wasn’t just a simple error.

For more on the steps to filling out a mortgage application, or to find out about any of our other mortgage services, speak to the pros at Altius Mortgage today.

Is Now the Right Time for a Mortgage?

right time

As top mortgage brokers in Utah, we at Altius Mortgage and our partners at Mortgage Ogden are here to do more than just give you some money and usher you out the door. Rather, we provide a comprehensive experience that walks you through every step of getting a mortgage loan.

This means that beyond our actual loan services, we’re also here to provide expertise on important areas of the mortgage world. One of the biggest and simplest areas here: Is the time right for you to buy a house? Let’s look at several factors that might influence your answer here.

Long Term Goals

What are the goals you’ve set long-term, both for yourself and your family (if you have one)? Are you looking to have your housing situation also function as an investment, and are you able to do so? Do you want more control and customization over the place you live in? If so, getting a mortgage could be right for you. On the flip side, if you move around a ton and don’t have some of the time and funds it takes to properly own a home, you might consider waiting.

Needs and Desires

Going a little deeper, you need to look at the actual practical needs and desires you have for a home. Those with outdoor pets will need decent yard space, for instance, while those with young children might need more room for once those kids grow up. Once you’ve determined the things you truly need, consider the desires you have in other areas as well.

Financial Preparedness

Also vital during the early stages of deciding whether or not to get a mortgage? Assessing whether you’re financially ready. You don’t need 20 percent down no matter what to own a home, but it’s great to have at least some chunk of money to put down up front. You can use basic mortgage calculators, like ours at Altus Mortgage, to assess your financial situation and how it fits with a given mortgage.

Market Conditions

A related area here is the mortgage market, particularly current mortgage rates. Rates fluctuate up and down at various times during the year, and if they’re in a favorable place at a given time, that might be the right period in which to pounce. On the other side of that coin, unfavorable conditions might dictate you should wait a little and then revisit.

Season Considerations

Down similar lines, there may be certain seasons where things are busier or lighter. Spring and summer are generally considered the busier time for home buying and selling, with fall and winter generally seeing lighter loads. But that doesn’t mean you can’t get a house at any time of the year – more inventory means more competition and also more homes, where the slower season may have fewer homes available but will also come with fewer buyers on the market.

For more on deciding whether a mortgage is right for you, or to learn about any of our other mortgage services, speak to the pros at Altius Mortgage today.

Down Payment Average Basics

down payment

There are several important parts of a given mortgage situation, and for many people, the down payment is chief among these. As the largest chunk of cash you’ll be asked to put down at once during the mortgage process, many buyers naturally worry about having the proper down payment amount.

At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help. Our loan center contains numerous options for buyers, from experienced real estate flippers to first-timers. If you’re worried about the down payment, let’s look at some basics and averages that might set your mind at ease.

Down Payment Basics

To understand a down payment, you have to consider what’s actually happening in a mortgage loan situation: Your lender is giving you money, taking a small risk that you’ll repay it properly over the agreed upon period – with the benefit of interest to make up for this small risk. But in many cases, that’s not quite enough of a carrot; this is where the down payment comes in.

The down payment is not considered part of financing. Rather, it gets you immediate equity in the home you’re buying – you immediately “own” that percentage of the home. This kind of investment helps protect lenders and sellers alike.

Down Payment Averages

Many buyers, particularly first-time buyers, have hear a few myths when it comes to down payments. The biggest one? That you absolutely can’t get a mortgage without 20 percent of the purchase price placed down in cash.

This couldn’t be further from the truth. There are programs out there with extremely low down payment requirements, and even some with no such requirement at all. Per the National Association of realtors, median down payments for first-time buyers over the last several years has only been about 6 percent. Averages in most locations tend to range between 5 and 10 percent.

Calculating Down Payments

Calculating what amount you might need for a down payment is extremely simple with a basic calculator or even some napkin math. You simply take the purchase price of the home, then multiply it by whatever percentage you’re looking at putting down to see what the amount you’ll need would be. You can also reverse this and figure out what kind of percentage your budget allows you to put down on homes within a given price range.

For more on down payments, or to learn about any of our other mortgage services, speak to the staff at Altius Mortgage today.

Basics on Down Payment Wire Fraud

fraud

You come to a mortgage group like Altius Mortgage and our partners at Mortgage Ogden because you want a reputable, experienced company to walk you through what can be a complex process. You want the security of knowing you’re dealing with a process that’s above-board from the start.

Unfortunately, some unscrupulous characters do exist in our industry, and our mortgage brokers are here to protect you from these. One common scam that’s run in the mortgage loan world: Down payment wire fraud. Here’s how this happens, and how you can protect yourself from it ever happening to you.

How Down Payment Fraud Happens

The timing of down payment scams is important to the scammers – they strike when you’re actually in the process of buying a real home, to make things feel as real as possible. They’ll generally send you an email that looks like it’s from your actual real estate agent (with an address that’s often just changed by a few characters), telling you instructions for your down payment have changed and providing you with a new account number to transfer money to.

There are a few possible red flags that can alert you something is off here. For one, they’ll ask for the incorrect amount, or a partial amount. For another, they may ask for different timing than usual – nearly all normal down payments are made the day before closing.

Rising Rates

This kind of fraud is on the rise, so be careful. It exploded by almost 500 percent in the year 2016, and became the highest individual form of fraud out there in terms of total dollar losses – hundreds of millions were lost during the calendar year.

Stopping Fraud

The simplest way to prevent this process from ever getting off the ground is to simply call your real estate agent the moment you notice any red flags. Ask them if they sent you the curious email, and proceed accordingly. If you do get duped and fall for the scam, call your bank immediately, then contact the FBI and Federal Trade Commission.

Spotting Fraud

Anytime you see an email with money-wiring instructions and account numbers, this should immediately raise some concerns. Virtually no reputable financial institution does things this way. Anytime you do transfer money for a down payment, ask your bank to confirm the account number and name on the receiving end. To be safe, contact your real estate agent or title company after sending the transfer to ensure that the money was sent and received properly.

For more on avoiding down payment scams, or to find out about what our mortgage brokers can do for you, contact Altius Mortgage today.

Notable Mortgage Trends to Know

girl talking on phone

Within the mortgage world, it’s vital to stay on top of various market indicators that can dictate a huge part of the financial picture for your next home loan. At Altius Mortgage and our partners at Mortgage Ogden, our brokers stay on top of these kinds of trends at all times to give you the most informed perspective possible.

The housing picture is expected to improve in the remainder of 2018, and has already done so –though parts of the market will remain challenging as they’ve always been. Let’s look at a few important trends to keep an eye on.

Home Price Deceleration

In a particular piece of good news for first time homebuyers, appreciation on home prices is expected to slow down after a few insane years in this area. Home prices rose a ridiculous 6.3 percent in 2016, per the FHFA, and are on track to exceed 6 percent in 2017 as well. For 2018, though, it’s expected that the increase will be closer to just 4 percent.

One big factor here is home construction, which experts expect to rise sharply in 2018. Single-family housing is expected to rise about 8 percent in 2018.

Home Sales Could Rise

Despite trends in recent years where homes were harder and harder to find, 2018 could have some rays of light. A growth in inventory is finally expected around the fall of 2018, and resales of existing homes are expected to rise modestly. Cities in the south will show the most growth here, with up to 6 percent home sales growth in many southern markets with strong regional economies.

Rising Mortgage Rates Possible

Current mortgage rates are expected to rise in 2018, potentially up to about 4.7 percent compared to 4.07 percent in 2017. However, note that interest rates are typically resistant to precise prediction – most people expected similar rises in 2017, and these actually never came. The rates did indeed rise at the start of the year, but then they actually dropped from spring until the end of the year. So take this forecast with a grain of salt.

More Equity, Lines of Credit

As home values rise, homeowners gain more equity. Banks expect many homeowners to borrow against that equity in 2018, with about 1.6 million homeowners forecasted to receive new home equity lines of credit for the year – a 16 percent increase over 2017. By the year 2022, TransUnion predicts that 10 million homeowners will get lines of credit, double the number from the previous five years.

For more on mortgage trends to watch for this year, or to learn about any of our mortgage services, speak to the pros at Altius Mortgage today.

Details on Changing Credit Reporting

credit card score

 

As a top mortgage company in Utah, we at Altius Mortgage and our partners at Mortgage Ogden are always abreast of big changes in or around the industry that might impact your ability to secure a mortgage loan. One such important change that’s taken place recently? An update to the way the three major credit bureaus (Experian, Equifax and TransUnion) track certain parts of credit reporting.

For those speaking with a mortgage lender like ours about getting a great home loan, credit score is a huge factor. It often determines whether you can qualify for certain mortgage types, and is a big determinant of the kinds of mortgage rates you can get as well. Let’s look at this new change, and whether it will affect your score.

Why and When?

After a Consumer Finance Protective Bureau study that revealed its necessity, the three major credit bureaus have enacted the following change: Tax liens on consumer credit reports will no longer be included, and will be removed from previous scoring.

The study from the CFPB revealed that many incorrect reporting complaints received over the last few years were in this area. This change was enacted on April 16, 2018 – some of the changes were actually made last summer, but this was the date by which all reports were properly adjusted. Data will be held to a generally higher standard, with refreshing taking place every 90 days.

Will Your Score Be Affected?

As we noted above, these changes have been taking place since the summer of 2017 – it’s possible you already saw an increase to your score since then if you have any tax liens in your credit history. If not, you should have seen it by mid-April. LexisNexis Risk Solutions estimates that only about 11 percent of all customers will see a change in their score based on these changes, but those who do see changes will see increases of up to 30 points.

For more on new changes to credit score and how they affect you, or to learn about any of our mortgage solutions, speak to the pros at Altius Mortgage today.

 

Discover Mortgage Products That Can Help You

Mortgages are valuable loan opportunities that can help you get into the home you have always wanted. In fact, virtually everyone who owns a home achieves this goal with the help of a mortgage. This means that the process of applying for a mortgage is just as important as the process of buying a home; just as much care and deliberation should be taken when making both decisions. Altius Mortgage has helped clients discover the mortgage solutions that fit their goals and financial lifestyles perfectly. Here are a few things to keep in mind when determining which mortgage services are right for you.

What Distinguishes the Right Mortgage?

The general guideline for determining how much home you can afford is to take your annual income and multiply it by two or three. This gives you a basic idea of the price range you can reasonably afford. However, do not begin selecting mortgages just based on this amount. There are other things that can affect your borrowing power, such as:

  • Current debts and savings
  • Your personal employment history
  • Your credit history

Making a down payment is a very good idea and it can make fulfilling the terms of your mortgage considerably simpler. While down payments are not necessarily a required part of getting a mortgage, this is a sound way to begin life as a home owner.

Based on these and other criteria, some mortgage services may be more or less well-suited to your particular needs. That will help you eliminate some options from consideration.

Help for Prospective Home Owners

Upon learning what criteria borrowers must meet to qualify for good mortgages, some prospective home buyers might think that home ownership is entirely out of reach. There are actually several programs that can help people achieve this dream. You may be more qualified than you realize. The best way to learn if these programs could help you is to talk with an associate at Altius Mortgage.

A More Affordable Way to Borrow

Prospective home buyers are usually aware that mortgage loans are one of the best ways to achieve their dream of property ownership. These valuable lending services have the potential to address many of the financial concerns affecting people shopping in the current housing market. As advantageous as a mortgage clearly is, some homeowners are concerned about the various fees and costs associated with this loan. Typically, escrow fees and other costs have to be addressed. Some mortgages allow borrowers to apply the fee total to amount borrowed and pay it off that way. Altius Mortgage offers no-fee mortgage loans to simplify borrowing even further. This is a great way to refinance without spending a lot of extra money while doing so.

You Can Refinance Without Paying More

Not everyone has the money to pay for all the fees associated with getting approved for a conventional mortgage loan. This leads some people to assume that they have no lending opportunities available to them at all. In reality, there is actually a diversity of mortgage program services currently offered and some of them involve minimal fees or none at all.

Is This the Right Option for Me?

There are a few indications that a no-fee mortgage might be right for you. These include:

  • If you will not be staying in your current home for more than another five years or so
  • If you wish to refinance a current home or purchase a new one
  • If there are no other mortgage solutions that suit your needs

Speaking with an experienced mortgage lender can help you clarify whether or not a no-fee mortgage is good for you. They can explain what distinguishes these loans and tell you more about what circumstances can be best addressed. There may be other lending opportunities that are better-suited to your particular financial circumstances and housing needs. Call Altius Mortgage today to speak with a representative.