Mortgage & Financing

Will provide you valuable insights into what is involved in financing a real estate purchase, changes in underwriting criteria, and various options and trends associated with financing a home.

Found 43 blog entries about Mortgage & Financing.



If you have been self-employed for a minimum of 2 years, and you maximize your tax deductions to minimize your tax liability but have excellent cash flow, it is now possible to document your income by adding up the deposits on your 24 most recent bank statements. The total deposits will replace the income reporting on your tax returns for qualifying.   Taking this different perspective can make the difference to get you to qualify for your home loan.

Below are the features of our Bank Statement Loan Program:

  •   Can use Business or Personal Bank Statements

  •   All owners of bank accounts used must be on loan

  •   100% of deposits can be used


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Construction Loans ~ Which are best?

There are two types of construction loans used by homeowners;
1. One-time-close loans
2. Two-time-close loans

With all construction loans, money is disbursed by the lender based on a pre-established construction draw schedule. The goal is to only pay for what has been completed, minus retainage, typically 10% of the cost of the project, which is held back until everything is completed properly and the owner has issued a certificate of occupancy (CO).

One-Time-Close Construction Loans...

This loan has one approval process, and one closing, simplifying the process and reducing the closing costs. Typically, the borrower can choose from the portfolio of mortgages offered by the lender such as 30-year-fixed, or

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What is the difference between Fannie Mae and Freddie Mac when you need to use monthly income from assets?

Fannie Mae:

• 1-2 Unit primary residence or second home only. For purchase or rate/term refinance transactions
• Maximum Loan to Value is 80%
• Assets must be employee-related
• When assets have assessed a penalty, the penalty must be included in the calculation and deducted from the asset amount
• Calculating the net amount to use for monthly income form the asset, Minus 30%, if the assets are in the form of stocks, bonds, and mutual funds
• Your calculation is applicable to the term of the loan in months such as 360,180, etc.
• The asset must be liquid and available to the borrower and must be one of the

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Many agents do not take into consideration the art and science of valuing a home.  Most agents merely punch CMA, which gives them the averages, the highs, and lows.  There are many issues that cause the home to appraise.  We will discuss some of the issues of valuing a home.

This home was listed for $350,000.  And we offered $360,000, which exceed the listing price.  And we won the offer.  My analysis resulted in the price range of $360,000 you $364,000.  The appraisal came in at $362,500.


We also look at appreciation.  We go back to the original date it was sold and apply the appreciation rate.  Based on the condition of the house the appreciation will vary. 

Age of the Home   

One of the rules for appraising property is

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HomeOne mortgage is a new conventional 3% down payment option for qualified first-time home buyers. HomeOne mortgage serves borrowers without geographic or income restrictions.  The HomeOne mortgage will provide home buyers the flexibility they need to help buyers achieve the milestone of home ownership and overcome the common down payment resource hurdle.

Below are the highlights of the HomeOne Loan Program: 

  • Financing with just 3% down

  • Lower Mortgage Insurance requirements than standard rates

  • No Income Limits

  • Homeownership education course required for at least one borrower

  • Must be an owner-occupied property

  • Includes 1-unit single-family residences, condos and townhouses

  • Must be a

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HARP REFINANCE REPLACEMENT!  High Loan-to-Value Refinance Option

The High Loan-to-Value (LTV) Refinance loan option provides refinance opportunities to borrowers with existing Fannie Mae mortgages who are making their mortgage payments on time, but whose LTV ratio for a new mortgage exceeds the maximum allowed for standard limited cash-out refinance options.

The High LTV refi option replaces the Home Affordable Refinance Program (HARP), which ended Dec. 31, 2018.

Borrowers must benefit from the refinance in at least one of the following ways:

  1. Reduced monthly principal and interest payment

  2. Lower mortgage rate

  3. Shorter amortization term

  4. More stable mortgage product, such as moving from an adjustable-rate

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Agent’s Fall into Two Groups

Many agents that get into the real estate business have little or no experience.  Their lack of experience will allow you to overprice a home.  I recently had a call from a friend who had a house in the Decatur area.  The home was listed for $469,000; my analysis suggested that it should be listed for $372,000.  It was listed for $100,000 over what it should have been. The process included routinely decreasing the price.

When you meet an agent that has years in the business, the agent will not allow for a home to be overpriced.  This will ensure that the agent is an advocate for you.

Overpriced Homes will Lead to Fewer Showings

When a home is listed, the buyers have options for searching for homes in

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The Worst Appraisal In 34 Years

There are things that the appraiser needs to do to have a good appraisal.  These all require more attention to the appraisal so that the appraisal is one that meets the appraisal standards.  There are numerous things that the appraiser needs to consider when appraising a property.  This is the worst appraisal that we have ever received.  I will define some of the items that the appraiser defaulted on.

Problem #1

This ranch was built with brick in 1971 with 2071 square feet.  The appraiser used 2 stories and neglected the ranches that were also built with brick.  A requirement of appraising a home is that they have to be similar in structure.  To be similar they have to have 10% greater or less in square

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Fidelity offers borrowers an affordable option that could help you qualify for a home loan. Whether you want to purchase or refinance, we are able to help lower your initial monthly mortgage payment with a temporary mortgage rate buydown.

The principle behind the 2/1 buydown loan using the standard 15 and 30-year terms, is to decrease your mortgage payment ratio, and overall debt ratio. This loan option is beneficial for those who might not otherwise have the necessary ratios for qualifying. 

The temporary buydown option allows you to prepay some of the interest on a 30-year fixed-rate mortgage in exchange for a discounted interest rate for the first one-to-three years of your mortgage. The rate will gradually increase to the agreed-upon

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  • What is Asset Dissipation? (A/KA Asset Depletion)

    Using assets for qualifying income to demonstrate an ability to make mortgage payments. Asset depletion mortgages, also known as asset dissipation mortgages, enable borrowers to use liquid assets to qualify for a mortgage.  Asset depletion mortgages are good for borrowers with relatively minimal income or no verifiable employment but significant assets such as funds in a bank, investment or retirement account.  Examples of potentially applicable borrowers include the self-employed, retired (or almost retired) and wealthy.

    Fidelity Bank Mortgage uses a formula to calculate the income that could be generated by depleting a borrower’s liquid assets over a fixed period of time and use that

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