NOLA Lending
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It’s one of the most stressful things mortgage originators, realtors and buyers ever face – last minute emergencies with closings.  Without careful and considerate management, it is easy for a client to find themselves in a strung-out paperwork battle and a fight against time.  But fortunately, the mortgage lending process doesn’t have to be this way for you.

Let’s take a look at the different steps in the lending process and how you can avoid being left with little to no time left on the clock!

The Lending Process explained

In theory, the lending process shouldn’t be a difficult process to tackle; it essentially breaks down into six basic steps:

1. Application
2. Pre-approval
3. Contract
4. Conditional Approval
5. Final Approval
6. Closing

Theoretically, once the mortgage application  is complete, it can be pre-approved with validating documentation and a contract can be drawn up so that the client can progress. This should take a reasonable length of time and come with as few complications as possible.

However, not every lender makes life as simple as NOLA Lending!  But even NOLA Lending sometimes gets stuck with last minute issues during verification (usually things the buyer didn’t disclose) or if someone such as a 3rd party drops the ball.

Common problems in the lending process

Unfortunately, some lending agents from other companies often choose to incorporate drawbacks into the lending process. NOLA Lending always advocates against these tactics and aims to secure your loan as quickly and accurately as possible.

Other lenders can delay your closing by a few extra weeks for any number of reasons such as:

• Lack of experience
• Poor management
• Incompetence
• Lack of communication

How a 30 day contract can be misused

Let’s take a look at how you could lose time and money by negotiating with an irresponsible lender.

First, understand that if you write a 30 day contract to close but you have the lender wait 10 business days for inspection and responses the close date is already in jeopardy.  A lender cannot get officially started without ordering an appraisal, so if you put that on hold for inspections the lender may not have enough time to close.

Below are steps to understanding a 30 day contract, title, and submitting the file for approval from a lender’s prospective:

1. Receive ALL client docs including the contract.  Delaying sending the lender a document can “pause” the whole process.
2. Order title
3. Order appraisal
4. Order insurance
5. Request additional documentation from clients and/or agents
6. Lender waits…
7. Documents are returned (hopefully quickly)
8. The loan is presented to the underwriter
9. Lender waits…
10. Underwriter issues conditional approval
11. Lender works approval and requests all required items from 3^rd parties
1. Updated income or assets should be obtained
2. Missing signatures on real estate forms should be completed including amendments, etc.
3. Explanation letters may be required
4. Updates or corrections to appraisal or title, or any other issues should be addressed
12. Lender waits… until everything is received from ALL! We cannot submit for final approval without these final docs!
13. Once ALL documents are received from ALL parties, submit for final approval and Clear to Close.
14. Receive final approval and Clear to Close
15. Send closing package
16. Close!

After a successful closing!

This may seem like a simple process, but let’s take a look at what is really going on here.

• The contract is written – so far so good
• The clock starts 30 days counting down – Those 30 calendar days are really only about 22 business days
• Lender waits on inspections (only if Agent or Client requests the lender to do so).  This may mean up to 10 – 12 days of additional delays
• Now there are only 18-20 days left and counting down quickly
• All paperwork must ordered from different parties which can take time while we wait on what we asked for
• The time in between dwindles down to about 5 business days or less of close very quickly

As you can see, not everything is quite as simple as it seems. Unfortunately, these delays are all too common.

How a 30 day contract can be further delayed

Other legitimate examples of how the lending process can be delayed can include:

• Insurance company waits until the last minute to submit insurance as it is needed long before the close date (express a sense of urgency with your insurance agent)
• Clients employer takes a while to provide information (same as above)
• Client takes a while to produce docs (work urgently and diligently to provide info & docs)
• Agents may take a while to produce required certificates or inspections

So if a poor lender wastes valuable time and everything doesn’t come back to the lender within 48 hours from the closing, and it takes 24-48 hours (generally) for an underwriter to review submissions; last minute issues can appear quickly, and worst of all, appear to be all the lenders fault although it really is not.

Study documents at the closing!

How to get the most from the lending experience

NOLA Lending wants you to know there are many responsible lenders out there and we hope you chose one of us to work with, and that there are simple ways you can help combat unnecessary delays in the lending process.

Here are some quick tips NOLA Lending advocates to help you save valuable time and money:

• Research the company you are going to work with
• Talk to an loan agent and see if you agree with their attitude and competency
• Make sure you uphold your part of the contract and submit paperwork immediately
• Feel comfortable being able to discuss the progress with your lender
• Feel comfortable being able to discuss any discrepancies
• Use “Full Disclosure” with your lender

NOLA Lending wishes you the very best in your lending process and hope that you have a fulfilling and profitable experience. If you have any questions regarding something you have seen here, or about lending in general, please feel free to contact one of our friendly agents at NOLA Lending in Covington who will be more than happy to answers any and all questions, with no obligation.

So what are you waiting for? Find out how NOLA Lending in Covington can help you today!

A second mortgage is a second loan taken on a home where a current mortgage is in place behind your first mortgage. This type of loan is commonly called a home equity loan.

To get one, you need to have equity in your home, which means you need to have a home where the value of the property is higher than the amount of money you owe on the home through your current mortgage. If you have this, you may be able to qualify for a second loan.

How do you get a 2^nd mortgage?

Here is a quick explanation of how a second mortgage works. If you own a home that is appraised at $200,000, for example, and you currently have a mortgage on the home where you still owe $140,000, you have up to $60,000 worth of equity in your home. You may potentially be able to borrow from that $60,000 through a second mortgage.

Here are some facts about these loans:

• This is a second secured mortgage. If you default on this second loan, you could lose your home because of doing so.
• You can use the money from a secured loan for anything you need to, including consolidating debt, doing home improvement or even taking a dream vacation. However, keep in mind that you are putting your home under more debt to do so.
• The interest rate on a second mortgage is generally lower than on unsecured loans, such as credit cards and personal loans. The repayment terms are often affordable. It is because of these factors that many people turn to second mortgages instead of getting a credit card out to make that expensive purchase.
• You will need to qualify as you would any other loan. You will need to have a high credit score and have the income available to repay your loan. If you are not employed or have a low credit score, you may not qualify for the loan.
• Most lenders will not give you a loan that would put you at 100 percent of your home’s value. Some lenders require 20 percent of the home’s value to remain in place.

For many people, a second mortgage is an ideal way for you to invest. However, there are limitations and risks. Before borrowing, be sure you are getting the best loan available, with the lowest interest rates. You may also want to consider your ability to repay the loan in a timely fashion as a default on a 2^nd mortgage can lead to foreclosure even if you stay current on your first mortgage!

Find out if you qualify for a 2^nd mortgage by completing our Quick Online Application today!

A mortgage loan is probably the largest loan you will ever take on, and certainly the most complex. Getting a loan these days is not easy, but with a bit of planning and preparation, you stand a better chance of getting the loan you want.

Our tips for getting the mortgage you want:

• Before you request a rate quote , do your homework. Do some looking around to see what interest rates are and begin to think about the type of loan you need. It is a good idea to use a mortgage calculator to help you to get an initial idea of how much you can afford in a monthly payment. However, read our prior blog post for a few words of caution regarding mortgage calculators.
  
• Ensure your credit report looks good and is accurate. Avoid making significant purchases at this point and pay down the debt you have. You want the best credit score possible before you apply.
• Contact a national or local financial institution, mortgage lender or credit union and request a quote. A quote should not require any cost to you, but it will tell you what the lender can offer to you. You want to compare loans from several companies.
• Determine the down payment requirements. Most lenders require 20 or more percent from homebuyers unless you obtain mortgage insurance (MI) which can drastically impact the terms of your loan.
  
• Negotiate to get the lowest interest rate possible and the terms you want. You may get the lower to cover some of the closing costs, too. The key here is to ask for the best offer possible.
• Provide all documentation to back up the details you provide on your mortgage application. You want to ensure you have the most up to date information because the lender will require verification.

Don’t try to “do it yourself”

Getting a mortgage loan is definitely not a DIY process these days. With the changes to the lending market in recent years, it’s never been more important to talk to a qualified, professional loan officer to help you make an informed decision about this important investment.

This is a very common question, especially with first time home buyers. A parent may wish to cosign on a mortgage loan if he or she wishes to provide help to their child to qualify to purchase a home. Many adult children may not have good credit or adequate experience with credit to obtain a mortgage on their own. By cosigning, a parent can help the child to get the loan he or she wants or needs. However, there are good and bad things about this process that you should know about.

How it works

When a parent cosigns on a mortgage for a child, the child and the parent partially own the home together. While the child may live in the home as a primary residence and be the primary person responsible for repayment of the loan, the lender can come after the parent as a way to get payment if the child stops making payments towards the loan. This can negatively affect both the child and the parent’s credit score.

The parent will need to go through the application process with the borrower and will sign legal documents with the lender at the time of the loan closing. As a result, the parent’s credit score and employment information is taken into consideration during the application process. In addition, the child’s information is also used.

Words of caution

It is possible that a parent cosigning on the loan can actually help the child to get the loan, but he or she still needs to be able to make monthly loan payments. It is often necessary then for borrowers to consider whether they can afford to make payments and if the loan is the right one for their long-term needs. If a parent does not want to make payments for the child, he or she needs to ensure that the child has the ability to make payments on his own.

Lenders may have special limitations or restrictions for borrowers who wish to apply in this manner. It is a good idea to ensure that you provide all information to the lender at the time of your application to ensure that the lender considers the borrower’s ability to have a cosigner on the account. When this happens, it could help the individual to qualify for a lower interest rate, better terms or just to get the loan when he or she may not have otherwise been able to do so. For the right situation, cosigning can be an ideal way to get the loan you want.

Halloween is a time for creativity and there are many ways to pull off a fun party if you turn on the creative juices. The goal of your party should be to make things fun for everyone, which often means that you need to be different from everyone else. The good news is that it can be just as fun to plan a party like this as it is to attend it.

Tips for Success

Look at the following tips and Halloween party ideas. They are just places for you to get started. Use them as a starting point for your own ideas and creations.

1. Start with the decor. You will need to consider decorations that scream Halloween – sometimes literally. It is a good idea to create as many decorations as possible to keep costs down. Focus on things that are scary, but only as scary as it remains fun for your youngest visitors. Spider webs, witches, window clings and fun lights make parties like this fun.
2. Be creative with food, too. Choose foods with a range of Halloween themes, like punch with floating, candy eyeballs. You can create cupcakes with fun Halloween themes, too. Be as creative or as simple as you want to.
3. Dress the party always. Each person in the family may wish to be a member of a group, for example. Dressing up is one of the best parts of the event. Plan to dress up with as much detail as possible to impress your guests.
4. Get the music right. You can find a collection of Halloween songs available at this time of the year to play. You may also want to use spooky sounds of creaking doors and howling dogs to play in the background if you are creating a particularly scary Halloween event.
5. Get a lot of people involved. Make it something you do together in a block party, for example. You can also get numerous people to compete for the best party theme.

The fun of Halloween is being creative in your own way. Determine what you want your party to include and then make it better by making it spookier or more interesting. Shocking people is a good way to go, but only to the level that is acceptable for those who plan to attend. The more creative you can be, the more you can achieve with your Halloween party. 

Working moms have the hardest job in the world – taking care of a family while still working full time or part time. Being a mother means taking on the responsibility of raising a family and no job outside the home is more important or more difficult to do.

However, many moms have to work, and when they do they double up on responsibilities. So, how do they do it? If you are a new working mother or just want to know what the secret is, realize that the process takes time to learn and perfect. 

Tips for working moms

Look at some of the things working mothers do to accomplish all they do. It is never an easy task but for many moms, it is definitely worthwhile to do.

• Efficiency. Most working moms have a lot to do in a given day and get it done because they have a schedule that works. On the other hand, when things go wrong, they find a way to prioritize to make the important things get done anyway. In short, there is rarely anyone to step in and do what moms do.
• Setting Priorities. Many moms have to juggle things that need to be done by the level of importance. Things that can get done today do get done today while those things that can wait, wait. Juggling between the many responsibilities a mother has in any given day means taking the time to learn what their priorities need to be.
• Selflessness. Most of the time, mothers do not have a lot of time for themselves. Those that work outside of the home, or manage businesses at home, have little time for their own needs and desires. Reading that book, playing on the computer or just having down time never really seems to happen.

The question is not how do working moms do it, but rather, how could they not? Most mothers adore their children and want to spend a great deal of time with them. That feeling of having arms wrapped around your neck and a big “thanks, Mom” from your child makes all the hard work that goes into every single day easier to manage and makes it definitely worthwhile.

Most moms do what they need to because they have a sense of responsibility and a passion for being everything their family needs them to be. That is powerful.

Deciding when is the best time to pull the trigger on a home loan refinance, as a rule of thumb, is not always clear. Refinancing seems like a new opportunity to get a better interest rate or perhaps even to take funds out of equity to use for your own benefit. The problem is, though, that refinancing can be costly in some situations. It is a good idea to know when to refinance and when it can cause you to end up spending more on your mortgage, rather than less.

What are good rules of thumb to refinancing? According to some experts, the following tips can help you to save money on refinancing. To learn when to refinance, consider the following:

How much is the new interest rate going to be? Most experts warn not to refinance unless the new rate will be at least one to two percent lower than what you are paying right now. Anything less than that and you may not end up saving as much (considering you have to pay closing costs on the new loan).  You must be able to compare the actual payment amounts if you want to accurately estimate if it’s a good idea to refinance. I do not fully agree with this as each situation is case by case. Sometimes 2% is not enough and sometimes .5% is a good refinances. It all depends.

Take your current loan product into consideration.  The type of current loan you have might make a huge difference.  For instance, if you have an ARM that’s at 5% currently, and can refinance into a fixed rate at 4%, this doesn’t make the 2% rule of thumb.  However the long term security of a fixed rate may be awfully attractive.  Things like mortgage insurance, loan terms and pre-payment penalties should all factor into the decision. Other exceptions apply.

Are you planning to remain in the home at least five years? If not, then refinancing may not help you to save any money. To save money on a refinance, you must stay in your house longer than the break-even period – the period over which the interest savings just cover the refinance costs. But again, call me because sometimes we have options where we can absorb costs because your break even must be within 6 months or 12 months or immediate, whatever the case may be.

 How much equity do you have in your home? If you plan to withdraw that equity, or some of it, to consolidate debt or to do home improvement projects, plan to have at least 20 percent in place. Some lenders will not allow you to borrow up to 100 percent of your home’s value, either. Some programs allow 85% while some max out at 75%.

 Do you have good credit? You may not qualify for a lower interest rate loan or save money overall if you do not have good credit. The better your credit is, the less you will pay to get a loan. If you have bad credit, it is likely that refinancing will be more difficult and will cost you.

 Know your goal. Do you want a lower monthly payment? If so, you may pay more in the long term. Do you want to pay off your loan sooner? Try reducing the term and getting a lower interest rate, too. Ensure that you can accomplish your goal.

Don’t be afraid to ask for qualified advice

The fact is if you cannot save money, then it probably doesn’t make sense to refinance. Otherwise, it may cost you more in the long term and not make any sense for you to pay the closing costs on a new loan.

The rules of thumb are great for weighing the pros and cons – but remember, they are just guidelines.  You should never make a decision as important as whether or not to mortgage your home based on general ideas, and that’s why we recommend taking the time to sit down with your favorite loan officer and get the facts. And in this situation, it’s important to be cautious with advice from friends and family members as it’s just that – free advice. 

It is important for anyone who is considering obtaining a home mortgage to learn how to calculate monthly mortgage payments or the amount of money you pay each month to buy your home. A variety of factors play a role in what this cost will be, including your interest rate, the length of the loan, your creditworthiness and the current lender’s requirements. 

More complicated than you might think

The problem with learning how to calculate monthly mortgage payments is that the process is pretty complex mathematically. In short, your loan is not the principle borrowed amount divided by the number of monthly payments. However interest plays a significant role in this process.

The real issue is that the interest on a mortgage loan is compounding, which means that it applies to the current balance of the loan. Also important is the fact that most of your monthly payment starts out with being interest payment while over time, the percentage you pay each month increases until you are paying nearly all principle.

Making It Faster

So, how can you calculate the monthly mortgage payment you are likely to pay? A good place to start is with a mortgage calculator. Many of these can be found online and are free of charge. None of your personal information is gathered in this process, and all you will just need to enter the terms for a loan you are considering and it will do all of the mathematical work for you.

This method does allow for individuals to get information right away as it does give you an instant quote on basic amounts and rates. It will also allow you to:

• Compare how much of a difference a down payment makes on the loan.
• You can determine how paying over a long period, or a shorter period can affect the monthly payment
• You can compare the interest rates of various loans provided to you by lenders

Nothing beats personal advice

The good news is that an online mortgage calculator is easy to use and can provide you with an estimate about the loan you hope to get. However, be very cautious with the information you find online as it may not apply to your specific situation.

Things to watch out for with online mortgage calculators:

• These online calculators may or may not accurately apply things like taxes, home owners insurance and other fees such as condo dues
• You may not accurately judge the rate you qualify for
• Mortgage insurance may vary depending on the type of loan
• Rates fluctuate daily

Our best advice is to speak to one of our helpful team members and get an exact quote and payment estimate for the home you want.

Getting behind on payments can happen to anyone, but not getting help to get caught up can mean a significant risk of losing your home. And for those who become behind or facing the prospect of foreclosure, there may be government help for late mortgage payments. Keep in mind that the government is not going to simply give you money to get your loan caught up.

However, today’s government regulations do offer some protection for homeowners, and many lenders are at least making an effort work with borrowers to get their loans back on track.

First steps you can take

The government suggests individuals to take their first step by calling their mortgage lender and determining if the lender can help them directly. Oftentimes, lenders are willing to adjust interest rates or to help individuals to get caught up by making home loan modifications. For example, the lender may agree to tack on the missing payments at the end of the loan or may agree to allow you to repay the missing payments over a period of time.

Making Home Affordable

Another option that may work if the lender is not immediately willing to work with you is the Making Home Affordable Modification Program , called HAMP. This is a form of government help for late mortgage payments. You may qualify under certain circumstances, if you meet the right requirements, such as the following.

• You are living in the home you are behind on mortgage payments (it must be your primary residence).
• You owe less than $729,750 on your mortgage and began it prior to January 1, 2009.
• Your payment on the loan is more than 31 percent of your gross income at this point.
• You cannot afford to make your mortgage payment due to some type of financial hardship, such as a job loss or because of medical bills.

In these situations, the lender may agree to work with you under this government help for late mortgage payments. You will need to apply for this type of help through the federal government’s website for the program. You may or may not receive help. It is important to consider your long-term goals here. In some situations, if you do not have the financial means of being caught up, you may lose your home due to the inability to pay your loan.

When applying for a mortgage , your lender may ask you to sign and submit a Form 4506. It is a form we get directly from the IRS which some mortgage lenders may require you to complete as part of your loan application.

What is a 4506 used for?

Form 4506 T, as it is most often requested, is also called a Request for Transcript of Tax Return. This document allows for a copy of your tax return to be obtained from the IRS directly. A mortgage lender may request this to verify your income documentation that you have provided as part of your loan application.

There are a few things to know about it.

1. This form may be necessary if you are a self-employed borrower and the lender wishes to see official documentation of your most recent earnings from the IRS.
2. This form is also used to detect fraud in cases where there is an apparent discrepancy. If there is some reason the lender does not believe your reported income is accurate, they may take steps to verify it through this manner.
3. Many mortgage companies also use this tool randomly within their business. For example, during the course of the day the lender may request a certain number of these documents. This is often for a quality control measure and those who receive the request are selected randomly.

4506 as part of the loan process

The fact that your lender has asked for a signed 4506 doesn’t necessarily mean they suspect fraud or have identified an issue with your loan.  It may simply be part of their regular process.

During any loan application, it is necessary for mortgage lenders to verify the information you provide to them.  So as a rule, when filling out documents to obtain a loan, always provide the most accurate information. Ensure that all statements you make are accurate and verifiable to avoid any problems with this step or other verification steps the lender will take.