Tip Tuesday Takeover ✨ with Special Guest- Cassandra Farnese, Senior Loan Officer

Hi there! We are so excited to have done our first LIVE Tip Tuesday! It was a success! We can't wait to do more in the near future. 🎉

In this week's Tip Tuesday Takeover ✨, we discuss Forbearances, Foreclosures, Market Strength, Loan Qualification, and more! See below times for specific topics for a quick reference 👇

Special Guest Introduction 1:51

Topics Outline 4:14

Forbearance- What are the options to get out? 5:47

Foreclosures vs. Housing Shortage 8:40

Refinancing Out of Forbearance + Effects on Credit Scores 11:41

Adjustable Rate Mortgage (ARM) Loans 13:36

Preapproval Process 14:40

Prequalification vs. Preapproval 15:35

Appraisal Waivers to Better Your Offer 16:31

Questions/Topics-

Forbearance…What is happening? Is there a way out if you cannot afford to pay it back? What are the options? Servicers of mortgage loans are offering many options to consumers who are still in forbearance.  The good news is consumers in some kind of forbearance plan have dropped month over month, with most recently a reduction of approx. 260,000 from June to early July.  The CFPB (Consumer Finance Protection Bureau) issued temporary safeguards just this June, which include servicers exploring loan modifications and selling their home.  The servicers are prepared and are helping homeowners steadily successfully exit their forbearance plans.

Repayment plan? Yes.  Options range from servicer to servicer and can include moving the missed payment amounts to the end of the mortgage term, splitting up the missed payments to repay over a fixed period of time, and loan modifications to reset / restructure the mortgage.

Refinance possible if you have equity to pay it off? To refinance, the loan must be reporting as current and no longer in forbearance by the creditor, so the agreement when exiting the forbearance plan would already need to be accepted and in place and the borrower making payments again, simply evidenced on the credit report and payoff statement (no delinquencies).

Are credit scores being affected? No.  The CARES act provided protections against creditors reporting negatively during an accepted forbearance agreement.  Once out of the agreement, then the creditor will report the account normally.

Is selling an option? Yes.  With the high equity position most have in their homes today, consumers can elect to simply sell to settle the mortgage debt, take advantage of their equity and start over with a new home.  This should be considered before walking away and giving your home back to the bank.

Are ARMs back in the game? Not really.  I have had literally zero requests for ARM loans.  They can benefit some borrowers who expect to have short term mortgages (selling in a few years or have an exit strategy ) but the rate is not that different from a traditional fixed rate mortgage and I find most will qualify easier for a fixed rate vs an ARM.  ARM loans we are required to qualify at start rate + 2% typically, so for a purchase, this could decrease a consumers purchase power.

How difficult to get pre-qualified to buy? It is EASY!  And it is FREE!  But there is a difference between Pre-qualification and Pre-Approval.  A pre-qualification is based on verbal unverified information where a lender states “yes, this client likely qualifies for the terms listed, pending verification of everything”.  I do not like to do pre-qualifications as, in my opinion, they are meaningless.  I issue full pre-approvals so all parties know – this client is qualified and will have no issue purchasing or closing their transaction.  Today, there is no need for historic documents from clients and days of digging for items for a lender.  We do most everything automated, including the application process, verifying employment and income, as well as assets.  If we are unable to get the automated verifications, then documents may be needed from the consumer.  I typically can have the initial pre-approval completed within 24-48 hours!

If you'd like more information on these subjects, feel free to contact us.

GUEST SPEAKER:

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Hi, we're Chantel Henson and Betty Stringer and we'd love to assist you. We are a mother-daughter team, committed to assisting you with your Real Estate needs! Providing you with Local Real Estate updates and advice for Monterey, Santa Cruz, Santa Clara, & San Benito County's real estate market for over 24 years.

We will provide you the FACTS! For an honest answer, call us. Our goal is, not to make a sale, but to create a Customer for Life!

Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having real estate professionals by your side. We'd be honored to put our real estate experience to work for you.

Chantel Henson & Betty Stringer
Broker/Owner & Broker Associate
Realtors®
831-809-4100 & 831-801-0730
DRE # 01271580​ & 02042438

[email protected]

VANCO Real Estate Executives

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***Disclaimer- A Realtor has a fiduciary duty to Buyers and Sellers individually. Our goal is to have a strong knowledge base of contracts. However, we are not Real Estate attorneys. Please contact a Real Estate attorney for more information about how to protect yourself from liability and Real Estate contracts affect you and your situation directly. Market fluctuations are common and unpredictable. All information is solely for education purposes only.***