Lender Checklist: What You Need for a Mortgage

·     W-2 forms — or business tax return forms if you're self-employed — for the last two or three years for every person signing the loan.

·         Copies of at least one pay stub for each person signing the loan.
·         Account numbers of all your credit cards and the amounts for any outstanding balances.
·         Copies of two to four months of bank or credit union statements for both checking and savings accounts.
·         Lender, loan number, and amount owed on other installment loans, such as student loans and car loans. 
·         Addresses where you’ve lived for the last five to seven years, with names of landlords if 
·         Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account. 
·         Copies of your most recent 401(k) or other retirement account statement.
·         Documentation to verify additional income, such as child support or a pension. 
·         Copies of personal tax forms for the last two to three years.

Common First-Time Home Buyer Mistakes

1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house. 
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller. 
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years


Energy Efficiency Tips

You don’t need to be a professional to learn where your home is losing energy. A careful walk-through can help you find the energy-zapping areas in your home and help you prioritize where you need to make efficiency upgrades.

Locate and seal air leaks. You could save 5%-30% on your energy bills by reducing drafts. Look for gaps along baseboards and where walls join ceilings. Check the exterior for leaks that can occur where two different building materials meet. Once you pinpoint the problem areas, seal them by caulking all holes and cracks around faucets, pipes, electrical outlets and wiring. Seal leaks in the mortar, siding, doors, windows and foundations as well.

Check the insulation. If your home has less than the recommended minimum amount of insulation, you could be losing large amounts of energy through your walls and ceilings.
·      Check to see if the attic hatch is as insulated as the attic.
·      Make sure pipes, ducts and chimneys are sealed with permanent sealers.
·      Your water heater, hot water pipes and furnace ducts should all be insulated.
·      Check for insulation on exterior walls.
·      Turn off the circuit breaker and unscrew any fuses. Once you’re sure the outlets aren’t conducting electricity, remove the cover plate from one outlet and burrow into the wall with a thin stick or tool. A plastic crochet hook works well. If you feel any resistance, you have insulation.

Inspect heating and cooling equipment. Ideally, you should have this equipment professionally checked and serviced once a year.

Appliances and electronics. To reduce the amount of energy your appliances and electronics use, think about
Unplugging an item when it’s not in use
Using an item less often. 
Changing the settings on the item.
Buying a new product that’s more energy efficient. 

5 mortgage market insights

The vast majority of homebuyers in the U.S. are also borrowers. Poorly regulated and predatory mortgage lending fueled the real estate bubble. As many pundits have noted since the real estate market collapse, regaining traction has been stalled by lender overcorrection. Thus, the moniker for our recent economic situation: the “credit crunch”.

After nearly six years of severely stunted mortgage lending, lenders are loosening their purse strings once again, according to a recent Wall Street Journal report. Check out these five must-knows about the future of our mortgage markets.

1. Low down payment loans are coming back. True, the 3.5% Federal Housing Administration (FHA)-insured loan never totally went away. But 2008 saw the FHA’s market share balloon to an unsustainable size as FHA-insured loans were the only option for buyers with little savings, post-bust. The share of all non-FHA-backed loans with a down-payment of 10% or less reached a 5-year high last year, according to Black Knight Financial Services.

2. No-money-down mortgages still exist. The VA still offers no-down-payment loans. Veterans can also get special loan privileges through the Navy Federal Credit Union. The USDA insures some no-down-payment loans in certain rural areas. The fact is, however, we ought to be thankful such loans are no longer available to wider public. Having some skin in the game vastly decreases the chances of default and thus protects against another foreclosure tsunami.

3. The return of low-down-payment loans does not necessarily mean another bubble. True, low- and no-down mortgages were the accelerant of the real estate wildfire in the early 2000s. However, it’s important to remember that it wasn’t the lack of down payment alone that led to the mortgage market’s flammability.

The preponderance of loans that went belly up were no- and low-doc loans. New qualified mortgage (QM) and ability-to-repay (ATR) rules ought to prevent another subprime crisis of the same or similar character to the last one.

Adjustable rate mortgages (ARMs) remain a threat to the real estate market’s stability, however. Very little has been done to specifically regulate these products even though the combination of low teaser rates on ARMs and poor financial literacy was a huge impetus for the mortgage crisis. QM/ATR does address ARMs. They are to be underwritten at the maximum allowable interest rate after five years from the date of the first payment. So the ARMs threat has been eased but not neutralized. 

4. Credit standards are easing, but remain tight.Fewer than 0.2% of mortgage borrowers had a credit score less than 620 last year. This is compared to 2001 when more than 13% of borrowers fell below this threshold. The tighter credit score standards means the millions of Californians still recovering from foreclosure and short sale will have a harder time qualifying for mortgage funds. However, the new ATR rules do not include any specific credit score minimums. Thus, lenders may have an opportunity to focus more on an applicant’s ability to repay based on their current financial situation rather than their tainted credit history.

5. Mortgages move the real estate market. There would have been around 200,000 more mortgages made in 2012 if credit standards had returned to pre-bubble levels, according to the Urban Institute.
Economists at Goldman Sachs estimate new home sales will rise to 800,000 homes in 2017, compared with about 430,000 in 2013. This increase ought to occur based on improving economic fundamentals such as job growth and household formation.