When you apply for a mortgage you have to provide a lot of documentation, like bank statements, tax returns, and pay stubs. But sometimes, lenders also require a letter of explanation to better understand your financial situation. This letter can be essential in securing loan approval and should be treated as a requirement. It helps fill gaps in your financial picture and provides a deeper understanding of your ability to repay the mortgage.
A letter of explanation is typically requested when specific information in your application raises a red flag for the lender. For example, it may be needed to explain a job change, past credit issues, new credit card applications, large bank transactions, or unsteady income sources. Proactively submitting a letter of explanation can be beneficial if you are aware of potential issues in your application.
Of course in the event you need to provide a letter, we can help with it so you’re not in it alone 🙂

If you are going to be getting a loan funded Fannie Mae or Freddie Mac there are new few changes coming on May 1.
Upfront loan fees will be changed due to alterations in Loan Level Price Adjustments (LLPAs), which are fees that differ for each borrower based on factors such as credit scores, down payments, property types, and more. These adjustments are connected to credit scores and the size of down payments.
In certain instances, individuals with higher credit scores might end up paying more, while those with lower credit scores could pay less.
What do the fee modifications entail?
The entire fee matrix, based on credit score and down payment, has been revised. Although having an excellent credit score still results in lower fees compared to a poor credit score, the penalties for lower scores will be less severe after May 1st.
For instance, with a credit score of 659 and borrowing 75% of the property’s value, you’ll face a fee equivalent to 1.5% of the loan balance. Prior to these changes, the fee would have been 2.75%. On a hypothetical $300,000 loan, this equates to a $3,750 reduction in closing costs.
Conversely, if your credit score is 740 or above, you would have been charged a 0.25% fee on a loan for 75% of your home value before May 1st. After this date, you might pay up to 0.375%.
If want to see how this affects your borrowing costs fill our our online qualifier or schedule a meeting on our website.

If you are ready to purchase a house – you are probably going to be excite and maybe a little nervous.
Here are 5 important things to do on a walkthrough to help lower any anxiety or future surprises. 1. Look For Wet Spots Check the ceilings for wet spots (rings or circles) and discoloration around windows. They can cause issues down the road and be hard to fix! 2. Check The Wiring Turn on the switches, dimmers, check the doorbell, garage door, basically check it all. If things are not working right, there could be an overall wiring issue. 3. Inspect the Bathroom Again look for water damage around toilets, showers and tubs. Also make sure everything is working properly, flush the toilets, check the showers and faucets to make sure the hot water works. 4. Test the hardware Basically check everything from fans to the washer and dryer. Make sure it all works. 5. Run the heat and AC You want to make sure the heat and AC are working properly – turn them on and let it run a few minutes. Finally make a checklist for all the items to be included in the sale and have the owner sign-off or initial it so there’s no confusion or disagreements at closing.
If you want to review with us – just go to our website and schedule a call with our easy online calendar tool.

We saw more activity in the market as rates dropped in a volatile business environment. Applications were up 7% and Freddie Mac reported the average rate on the average 30-year fixed mortgage was 6.60% this fell to 6.60% this week down from last weeks rate of 6.73%.

In statement by Freddie Mac’s Chief Economist Sam Khater, he said “turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short-term.”
And he continued, “our research concludes that homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among multiple lenders.”
Check with us about your options as the market is in a period of volatility. You can use our quick analysis our website and we will auto-schedule a review of your options.

With increased borrowing costs, many buyers are seeing their options limited, and you might be considering buying a fixer-upper. We’ve all seen the home make-over shows with amazing before and afters, but is it right for you?
Here are a few things to consider:
1. Know Your Limits
How much of the work can you do. How much time do you have to put into renovations. Are you prepared to live in a work zone for a while
2. Work Out Costs In Advance
Have a contractor walk through the inspection with you and get a written estimate for work he would do. If you are doing the work yourself price the costs of supplies, either way add 15% to the costs because surprises are likely.
3. Check Permitting Costs and Procedures
Check with local officials to see if the work requires a permit and the permit costs.
4. Be Extra Careful with Structural Issues
If the house requires structural repairs then double check the work and pricing. Hire a structural engineer to do an inspection and if structural work needs to be done make sure your bid discounts this work
5. Include Inspection Contingencies
Make sure you hire professional inspectors and check for hidden issues like mold, piping issues, pest damage etc., if things come up ask for discounts. And if too many red flags come up or the seller won’t properly discount the costs for repair then stand firm and walk away and keep looking!
With the real estate market in flux check with us to get pre-qualified and know your options – just fill out our quick consultation on our home page to get started!

For many people buying a home is the American dream but saving for the down payment might not be. Here are some tips and strategies to make your down payment.
1. First-time home buyer programs. There are a number of first time home buyer programs such as FHA, VA and USDA loans that have lower down payment requirements than conventional loans.
2. Old fashioned monthly savings – this takes longer but make a monthly budget of your spending – see where you can cut back and see how much you can save monthly – then commit to saving towards your down payment each month.
3. Tax Return – with tax season here, if you are getting a refund, try setting it aside towards your down payment.
4. Get side gig – if you have enough time consider getting a side gig and save the money from that.
5. Ask – its fairly common for parents to help their kids with money towards down payments today (for those lucky enough to have this option), you can also consider asking friends and family for cash instead of gifts to help you put towards your house.
The market is changing and it also helps to see how much you’ll need to save and what you can qualify for – so please fill out our quick qualifier on our website to get a good idea of what you can qualify for.

With recent market volatility we have good news for some new home buyers. Starting in March, those who are receiving FHA financing and paying mortgage insurance will see the monthly fee reduced from 0.85% to 0.55%. This is expected to affect 850,000 borrowers this year and result in an average savings of $800 annually. The savings will vary based on the loan amount, for example a person with a $500,000 FHA loan would save $1,500 annually.
If you are in the market for a new home, fill out our quick home qualifier on our website and we can help determine what loan best fits your needs and let you know how much you can pre-qualify for.

We don’t have to tell you that interest rates have gone up in the past year, so refinancing now may seem unusual but if you have a lot of debt, like credit card debt, those rates have gone up even more.The average American has nearly $40,000 in debt not including home loans so today we ask if you consider a cash-out refinance to pay off other debts like credit card debt. Credit card interest rates are normally much higher than mortgage interest rates and if you are carrying high credit card debt while making minimum payments, there is an opportunity to save a lot in monthly credit card payments that are primarily going to pay high interest rates on the debt. First you will need enough equity in your home to get a cash-out refinance. With real estate values increasing in recent years, many people have seen their home value rise so they may qualify for cash-out. You’ll still need to maintain equity in the home at 80-90% to avoid paying mortgage insurance and you will have to get an appraisal and pay closing costs which will be subtracted from the cash out amount. Of course, contact us to see if a cashing out to pay off your debt makes sense for you. And remember you’re not actually eliminating the debt you’re just saving on high interest payments so be careful not to start spending again

We are often asked about jumbo loans and when they are used, so here’s an explainer (or refresher). For conventional mortgages there are two general types conforming and nonconforming. Conventional conforming loans for most areas are $726,200 or $1,089,300 for select areas with high housing prices for 2023 as set by Fannie Mae and Freddie Mac. A jumbo loan would be a nonconforming loan that exceeds those limits.

If you are looking to buy a home that is high priced and don’t have a huge down payment you will likely need a jumbo loan. A jumbo loan with its higher loan amount is often going to have higher qualifying requirements than a conventional loan – including higher down payments and credit scores as well as lower debt to income (DTI) ratio.

In terms of conventional versus jumbo – it may be jumbo out of necessity if you are looking at a high priced home as previously noted. Complete our quick analysis and we can help you see what programs you qualify for and what fits your needs!

Is it cheaper to build a new home or buy an existing house? According to census data the median cost of a newly built house was
$534,600 in November 2022 versus $454,900 for an existing home in October 2022.
Of course, there are pros and cons to both buying and building.
If you are building a new home some the biggest pros will be you have a custom-built home, that is brand new and move in ready. You may also have lower bills with newer efficient appliances and systems. Some of larger cons are time – this means more of your time; you’ll likely have to be more involved and review construction decisions and options which can be a challenge if you have your hands full with work and family. Building also takes longer with an average of over seven months for new construction. You can also experience cost over-runs and contractor / sub-contractor delays.

Buying an existing home as we noted tends to be cheaper and you’ll be able to move in much sooner. You may also be able to negotiate for a lower price if a home has been on the market for over 30 days. Additionally, if you are looking to live in a specific area you may have more options. Of course, if you buy an existing home you will have to compromise on layout and features versus building your own home. Depending on the age of home you may also have older appliances and systems.

Building or buying are also going to have different financing options. Schedule a consultation with us on our website and we can review the options to give you a better idea of your specific options.