Annoyed by Telemarketers Calls After You Apply for a Michigan Mortgage Refinance?
Published May 5, 2010 | 
Here is a link to opt out of pre-screened offers of credit and stop those annoying calls that you receive after you apply for your Michigan mortgage refinance loan. It will also stop other unsolicited offers of credit and help protect your identity by limiting who can see you personal credit information.
Link to Opt Out – https://www.optoutprescreen.com
If you want more information about these unsolicited offers of credit here is a page on the FTC website that has more info.
More Info from FTC site – http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre17.shtm
If you are looking for a Michigan Mortgage Refinance and want a FREE, No Obligation, Real Time Quote, based on your qualifications, click the button below:
Michigan Refinancing – Stages of the Loan Process
Published March 30, 2010 | Michigan Refinancing – Introduction of the Stages of Approval
Today I’m going to talk about the seven basic stages of any Michigan refinancing loan. I’ll briefly go over what’s typically involved at each stage or milestone. It’s important to note that each Michigan mortgage company, and the various lenders or investors they may work with may follow their own specific loan process. In addition to the specific requirements of various lenders and/or investors, there also regulations both on the federal and state levels but also must be followed. Regular should the requirements set forth by the government often times require specific timelines, and therefore it is important to make sure you consult with your professional mortgage advisor to ensure you understand the current approval process, and how it relates to your specific transaction.
The purpose of this article is to provide a basic understanding of the Michigan refinancing approval process. I will be covering each stage of the process in more detail in future posts, so please be sure to check back often, bookmark the site, or even subscribe to get e-mail notifications.
Michigan Refinancing – Stage 1 Application
So you decided it makes sense for your financial situation, to move forward with a Michigan refinancing loan. The first thing you’ll need to do is submit a formal application to the Michigan mortgage company you have selected to handle your loan. There is a standardized Fannie Mae document, called the uniform residential loan application. This loan application is often referred to by mortgage professionals as the 1003 (pronounced “ten oh three”).
Once you complete the information on the loan application, you will need to sign and date it and turn it into your Michigan mortgage professional. All of the information that you document on your loan application, needs to be verified with supporting documentation and/or information. For example if you state that you make $5000 per month, you will need to turn in your pay stubs from your employer, as well as your to be two statements to verify your actual income. The loan application is really nothing more than a summary of all of your information used for the credit approval, as well as some disclosures, and without supporting documentation the lender who underwrites your loan has no way to tell if what you stated on application is true.
As you may have guessed the second step of the application stage, when applying for a Michigan refinancing loan, is submitting your supporting documentation. Again the supporting documents are to verify the information that was placed on application. Sometimes the supporting documentation is not quite clear or needs explanation, in which case the lender’s underwriter will typically ask for more details, more documentation, and/or a detailed letter of explanation. For example if there was a large gap in employment, a time where you were out of work or laid off, the underwriter the underwriter will typically ask for clarification as to why your income was lower for a specific period of time.
In addition to your loan application and supporting documents, there are a number of various disclosures that also must be reviewed, signed and returned to your Michigan mortgage advisor, to prepare your Michigan refinancing loan for the next stage. These include documents such as; the good faith estimate, truth in lending disclosure, privacy policy, fair lending notice disclosure, equal housing disclosure, various appraisal disclosures as required by lender, fair credit act disclosures, required state disclosures, and various other disclosures that may be required depending on the type of Michigan refinancing mortgage you are applying for.
Finally, the fourth step, which sometimes occurs in sooner in the process, is to obtain a credit report for your Michigan refinancing loan file. With the combination of the credit report as well as the supporting documents in the loan application is submitted, your Michigan mortgage advisor can now prequalify or pre-approve your loan file, and determine if your loan is eligible to move to the next stage.
Michigan Refinancing – Stage 2 Processing
Okay so your Michigan refinancing loan is successfully preapproved and pass the application stage. Now it’s time to start working on your final loan approval. Some Michigan mortgage companies have separate processing departments or personnel. Others use contract mortgage processing companies. While some allow or require their loan originators to handle the processing of your Michigan refinancing loan. Regardless of who handles the tasks of processing, the basic steps are typically similar.
Processing a Michigan refinancing mortgage typically involves ordering all of the services required from each of the third party vendors. These services may include; appraisal reports, title reports and insurance requests, flood certifications, pest inspections, surveys, and very as other requests made to third-party vendors.
In addition to ordering the requests, the processor typically is also responsible to follow up to ensure that the reports are completed, as well as return a timely manner. Any corrections updates revisions needed, are also typically the responsibility of the mortgage loan processor.
Michigan Refinancing – Stage 3 Submittal
Your Michigan refinancing mortgage processor is usually the person who is responsible to make sure that all of your documentation from the application stage, as well as the documentation from third-party vendors, is complete and ready to be submitted to the lender’s underwriter. Any corrections updates, etc. required are usually initiated by the mortgage processor.
Once the processor has determined that the file meets all the requirements as to be submitted to the underwriter for approval, and all documentation looks to be accurate and complete, the mortgage processor will submit the entire file to the underwriter for approval.
Once your Michigan refinancing loan package has been received by underwriting department, it will typically be reviewed for completeness by a pre-screener. If there are any deficiencies, your Michigan refinancing loan package will typically be rejected and sent back to the processor who will need to make the necessary corrections and/or additions to resubmit your loan file.
Michigan Refinancing – Stage 4 Approval
Upon receiving a complete loan file, including all required third-party reports, supporting documentation, disclosures, application, etc. and underwriter is finally assigned to review your Michigan refinancing loan for approval. The underwriter is the person who is typically responsible, and in some cases held accountable, for your loan approval. He or she is the person who is going to review your entire loan file and all supporting documents, to make sure that all of the current approval guidelines are met to approve your loan.
Your Michigan refinancing loan may require additional documents as requested by the underwriter, as mentioned previously, to clarify any questions or further support any statements on your loan application. When an underwriter asks for additional documentation or disclosures, it is usually requested through what’s called a “conditional approval”. In other words, the underwriter has issued an approval, as long as the additional documentation can be provided, and is deemed acceptable by the underwriter.
Once a conditional approval has been issued, the next step is to clear the conditions. This is typically a team effort by all parties involved in the condition required. For example if the underwriter makes a request for a more recent paystub from the borrower, typically the processor will notify the loan originator who will in turn contact the borrower to request the data payoff to be sent to him. Once the loan originator has the updated pay stub he will typically forward it to the processor, who is gathering any additional conditions required. Often times the underwriter may condition for a document that the processor needs to request from the title company.
The clearing conditions process can take several days, depending on the complexity of your Michigan refinancing approval and the number and type of conditions required. Once the processor has all of the conditions ready for the underwriter, he will typically submit them to the underwriter all at once.
When the underwriter receives the conditions that they have requested from the mortgage processor, the file gets reviewed again. If there are still remaining conditions or questions or documents needed to be cleared, the underwriter will issue an updated conditional approval addressing these. The cycle continues until all of the conditions have been cleared.
When all conditions have been met cleared and satisfied, and the loan passes a final review from the underwriter, a “Clear to Close” approval is issued.
Michigan Refinancing – Stage 5 Document Signing
Once your Michigan refinancing loan meets the clear close status, it’s time to schedule the closing, or document signing. In the state of Michigan, all mortgages are required to be closed and funded by properly licensed and approved title company. The title company is the entity that the mortgage lender will send the money to when your Michigan refinancing loan is funded. The responsibility of creating the final settlement statement as required by the Housing and Urban Development (HUD) as well as the accountability of dispersing all funds for your Michigan refinancing loan, falls upon the title company.
So once your Michigan refinancing loan is ready to schedule the closing, the mortgage processor or your loan originator, will coordinate a closing date time and location with the title company and you.
Once the closing has been scheduled, your mortgage processor requests the loan documents from the lender to be sent to the title company. When the title company receives the loan documents, they will review and prepare your Michigan refinancing closing package. This includes the HUD settlement statement, as mentioned previously, which summarizes all of the transaction details.
After the HUD settlement statement has been approved by the lender who’s funding your Michigan refinancing loan, and your loan originator, it’s ready for your review and closing.
You will finally sign your Michigan refinancing loan documents on the date that was previously scheduled, is commonly referred to as “The Closing”
Michigan Refinancing – Stage 6 Completion
Once you have signed all the closing documents, the title company has several steps to complete before the lender will fund your Michigan refinancing loan. The title company has to review and notarize all of your closing documents. If there are any deficiencies, they need to get them resolved as quickly as possible. Once the title company has reviewed all the closing documents in Kenya and to be acceptable and complete, they will submit the documents to the lender and request funding.
In addition, the title company will also submit some documents to your local county for recording. At any point in the process if there any clerical errors or issues the title company may contact you to get them resolved.
Michigan Refinancing – Stage 7 Funding
Once the lender receives the request for funds, and any required documents, from the title company, your Michigan refinancing loan file will likely be reviewed again. If all prior to closing and prior to funding conditions have been met, and there don’t appear to be any other issues with your loan, then the lender will authorize the title company to disperse funds on your loan.
At this point your Michigan refinancing loan is now funded, and the title company has the money to disperse to the appropriate parties. Usually they will overnight a payoff to any mortgage lenders that were required to be paid off on the same day of disbursement of the funds.
Michigan Refinancing – Post Closing Notes
it’s important to note that your Michigan refinancing loan will typically go into a post closing audit and review process after your loan funds have been dispersed. If there are any document efficiencies errors Cargill errors or items that were overlooked throughout the process, this is the time and stage where those items are corrected. If the title company, your mortgage lender, or the funding lender contacts you to get any items resolved, it’s important to respond as quickly as possible to ensure that there are no problems down the road.
A Final Word
Hopefully this article leaves you with a better understanding of the overall Michigan refinancing loan approval process. As mentioned in the beginning, this is not, by any means, a complete step-by-step all-inclusive list of everything that happens throughout your Michigan refinancing loan process.
Again I highly recommend that you consult with your Michigan mortgage advisor to learn more about the specific steps that will be required for your Michigan refinancing loan.
Please feel free to leave questions and/or comments in the section below. If you’d like to begin your Michigan refinancing loan, you may begin by clicking on the GET A QUOTE button or tab on this page.
21 Factors to a Michigan Refinance or Purchase Mortgage
Published March 24, 2010 | Only One is Your Credit Score!
Most people realize that their credit score is an important factor in qualifying for a Michigan mortgage, but there are several additional criteria that must be met, in order to successfully get your loan closed and funded. Michigan refinancing approvals and purchase loan approvals, depend on much more than just a good credit score. The purpose of this article is to help potential borrowers become more aware of the most common underwriting criteria that lenders review during the mortgage approval process. These are also the same factors used to determine the appropriate rate and terms of any loan offered.
This list may not be all inclusive, or apply to your specific situation. I recommend you consult with a professional mortgage advisor to review your specific scenario. The following factors are generally reviewed by the underwriter assigned to your loan, or in some cases by your loan processor or loan originator. Generally the underwriting guidelines have specific tolerances assigned to each factor, however in some cases exceptions may be made, when there are strong compensating factors to support an exception.
The specific criteria that each lender/loan program requires vary and are changed from time to time depending on market conditions. At the time this article was written, the mortgage industry was in a contraction, and underwriting guidelines have been getting increasingly more stringent. So please consult with your mortgage professional to find out more details, as they relate to your scenario.
Mortgage underwriting criteria which must be met to qualify for a Michigan refinance or purchase mortgage typically fit into one of two categories; Credit factors and Non-Credit factors.
CREDIT FACTORS REVIEWED FOR MICHIGAN MORTGAGE APPROVAL INCLUDE:
1. Credit Scores
Most people realize that their credit scores play an important role in getting a mortgage approved, however when asked which of their 3 credit scores is used, many people have no idea. Most mortgage lenders review all 3 major credit bureaus (Experian, Equifax, and Trans Union) and use the middle of all three for mortgage approval and risk determination. Meaning the score that is not the highest, not the lowest, but land in between the other 2.
General Rule: The higher the credit scores the better.
General Requirement: Minimum credit scores per loan program must be met along with additional approval factors per loan underwriting guidelines.
Michigan Refinancing Tip: Try to pay all bills on time, and don not exceed 50% of your available credit line on credit cards and lines of credit.
2. Credit History
Without a sufficient credit history, or track record, it is very difficult for a lender to asses the risk of your future performance. Sometimes you can have a very strong credit score, but not much time or depth of credit and payment history.
General Rule: The longer length of time reported to the credit bureaus, the better.
General Requirement: Minimum length of time required with certain type of credit lines/loans usually required.
Michigan Refinancing Tip: Avoid closing out accounts when possible, so you can keep a deeper history of active credit.
3. Delinquent Accounts
General Rule: The lower number of delinquent accounts, or late payments, the better.
General Requirement: Maximum allowable delinquent accounts in a specific time period.
Michigan Refinancing Tip: Sometimes, you can negotiate with creditors to remove the accounts, upon payment, and potentially bring up your credit scores.
4. Mortgage/Rental Account History
General Rule: The lower number of late payments and the better, and the more successfully closed accounts the better.
General Requirements: Maximum allowable late mortgage/rental payments required to be met within specific time period. Maximum allowed mortgage accounts open at one time.
5. Revolving Credit Utilization
General Rule: Balances equal to 50% of the available credit line is optimal.
General Requirement: None of the account balances exceed the limits, and must not exceed the maximum number of late payments in a specific time period.
Michigan Refinancing Tip: 50% rule and try to leave these open, rather than closing the accounts.
6. Public Records – Judgments, Liens
General Rule: The older the better, as well as non housing related (apartment/landlord) are better than housing related.
General Requirement: Letter explaining the details as well as any legal paperwork, often required to be reviewed.
7. Foreclosures
General Rule: Never having a foreclosure is best, but the older it is the better.
General Requirement: If the lender/loan program allows a foreclosure at all, borrower will likely have to meet the minimum time required after foreclosure and provide a detailed letter explaining why the foreclosure occurred.
8. Collections Inquiries
General Rule: Zero is best, but the lower number of collection accounts and the lower the dollar amount of the collections, the better. Older collections are less relevant than newer ones.
General Requirement: Maximum allowable number of collection accounts and cumulative dollar amount not exceeded.
9. Bankruptcy
General Rule: No bankruptcy is best, but Chapter 13 bankruptcy is usually less stringent than a Chapter 7.
General Requirement: Minimum time required out of bankruptcy, can vary by type, also minimum time rebuilding credit (see 2. credit history above). In addition, many lenders will require a detailed letter explaining why the bankruptcy occurred.
NON CREDIT FACTORS REVIEWED FOR MICHIGAN MORTGAGE APPROVAL INCLUDE:
10. Down Payment – Equity or LTV (Loan to Value)
General Rule: The larger down payment (purchase), or larger the remaining equity after closing (refinance) the better.
General Requirement: Minimum down payments required, or maximum loan amount to appraised value required by loan underwriting guidelines.
11. Liquid Reserves after Closing
General Rule: The more liquid assets or money saved and easily accessed the better.
General Requirement: Minimum number of monthly payments remaining after closing must be met, per loan underwriting guidelines.
12. Loan Purpose
What you are using the loan for, is another factor that lenders review. Basically certain loan purposes are more risky for lenders to make, than others, so the criteria may be more stringent for these loans. An example of this is when refinancing, if you elect to take cash out, or get money back at closing, those loans are inherently more risky. Therefore, the lender’s underwriting guidelines are usually more restrictive for that loan purpose, when compared to someone only refinancing the balance.
General Rule: Purchase and No-cash out refinances are usually among the least risky to the lender.
13. Loan Term
General Rule: The short the term generally the better, however this typically affects other factors (see expense ratio)
14. Amortization Type
General Rule: Standard amortization is least risky, then interest only, then negative amortization.
General Requirement: More restrictive guidelines as the risk increases for the lender, as well as higher rates/costs in many cases.
15. Occupancy Type
General Rule: Owner occupied offer least risk to the lender, then secondary residence, then investment property.
General Requirement: More restrictive guidelines as the risk increases for the lender, as well as higher rates/costs in many cases.
16. Total Expense Ratio – Debt to Income Ratio (DTI)
This is the amount of monthly payments you have going out every month, divided by the amount of income you have coming in. This is usually calculated on a before tax income.
General Rule: Lower the better
General Requirement: Must not exceed maximum debt ratios as required by loan program.
17. Property Type
When it comes to residential mortgages, the standard single family home is the least risky to the lender. When you start looking at different property types, the underwriting guidelines may get more restrictive. For example condominiums have additional considerations the lender must take into account, such as what happens if the home owners association or builder goes bankrupt and no longer keeps up maintenance as agreed, and other factors.
General Rule: Single family homes carry the least risk, and lowest historical default ratios, and are therefore offered the best terms.
General Requirement: property type must meet the specific allowable property type guidelines for the loan program and or lender requirements.
18. Co-Borrowers
Adding a co-borrower can either add additional risk to the lender or in some cases reduce risk to the lender, depending on all of the factors for that particular borrower.
General Rule: Co-borrowers, who have additional income without exceeding the expense ratio requirements, can bring value to your mortgage application, assuming that they also meet or exceed all of the credit factors.
General Requirement: Lenders usually look at the combined expense ratio and assets, and the lower of the two middle credit scores, when reviewing a loan with a co-borrower.
19. Self Employment
General Rule: The longer time in business for self, with a solid history of income, the better.
General Requirement: Must meet the expense ratio requirements based on average income calculations, as well as have solid earning history of the business and meet the minimum time in business, per the underwriting guidelines.
20. Seasoning of funds for Down Payment (Purchase Loans)
General Rule: Save up your down payment prior to shopping for a home, or at least prior to making any offers to purchase.
General Requirement: The money used for down payment must be in an account for a specific minimum amount of time, before closing, as required by the loan program.
21. Time of Ownership Prior to Sale (Seller Seasoning – Purchase Loans)
There are special underwriting guidelines or restrictions for certain properties, such as homes where the last transfer of ownership was a short sale or foreclosure, which requires the home, is owned for a specific period of time, prior to approving a mortgage on it. This is a newer factor that has come about due to some of the fraudulent activity that has occurred in the real estate market.
General Rule: The longer the seller has owned the property the better.
General Requirement: The seller must be the owner of the property for a specific period of time, prior to selling.
FINAL THOUGHTS ABOUT MICHIGAN REFINANCE AND PURCHASE MORTGAGE APPROVAL CRITERIA
As you can see, getting approved for a Michigan mortgage takes much more than just a great credit score, there are 20 additional factors to consider. In the not so distant past, it was much easier to get an approval, since the criteria required was much more flexible. With the record numbers of foreclosures and mortgage delinquencies plaguing Michigan and the entire nation, no thanks to record setting unemployment rates and the like, mortgage lenders have been increasing their underwriting criteria.
Successfully navigating the Michigan mortgage market requires the assistance of a professional with years of experience, who can help you overcome any obstacles as they arise.
Having the minimum credit score to qualify for a particular mortgage loan program is only the beginning.
Please feel free to leave comments and questions below.
