Loan Officers, Underwriters, and Mortgage Brokers – Who’s Who?

Buying a home in the Cape Coral or Fort Myers area soon?

The world of real estate has many different types of professionals.  If you are a buyer looking to purchase a piece of property with financing, an area that can get a little confusing involves the professionals within the mortgage lending landscape.

According the National Association of Realtors, over 80% of buyers require some level of financing to be able to buy a home.  Ironically, while ensuring you are qualified for a loan to buy a house is the recommended first step in the home buying process, many buyers start by contacting a real estate agent.  When the need for pre-qualification comes up, buyers will usually do one of two things:  Go to their bank or use the Realtor’s recommendation.

Either option can lead to exceptional results and an outstanding buying process, however, buyers often do not realize that there are different providers in the mortgage space and who they choose can impact the loans offered and how much they pay for their home in the long run.  To help you understand your options, we have outlined several key players you may come in contact with or hear about throughout the process.

Loan Officers

Per the Bureau of Labor Statistics, Loan Officers evaluate, authorize, or recommend approval of loan applications for people and businesses.  Most Loan Officers are employed by commercial banks, credit unions, and related financial institutions.  This means that while they may have access to different types of loans available through their lending institution, they can only fit you to a loan offered by their employer.

To qualify for loan, a Loan Officer may need you to have an existing account with their bank or lending intuition and to meet stringent requirements that match their employer’s tolerance of risk.  Since the 2008 mortgage crisis in the United States, some banks have exited the mortgage business while others have adopted conservative loan requirements.

When deciding on a Loan Officer, you need to research the reputation of their employer, after all they will likely service your mortgage long-term.  You also need make sure you can communicate and get along well with your Loan Officer.    If you don’t hit it off, try visiting another branch of the same lending institution, they will have access to the same loan programs.

Loan Officers will typically take your application and gather all necessary documentation related to your loan.  This package is then submitted to other departments such as processing and then underwriting where approval decisions are made.  Loan Officers are paid either hourly or a salary by their employer and may receive bonuses for number of loans applications or dollar amount of the loans.

Mortgage Brokers

Think of a Mortgage Broker as an independent consultant.  They may work with a mortgage brokerage company or their own a mortgage brokerage.  They are not lenders and in the majority of cases they will not service your mortgage loan.  Instead, they have relationships with a diverse collection of lenders and will find a loan to meet your needs.  The source of funding may include banks, wholesale mortgage lenders, equity funds, and even private lenders.

Mortgage Brokers will assess your loan needs then “shop the market” for the best loan available.  There are strict regulations in place to help ensure that your broker provides the best loan for your needs rather than a loan that pays them the most.

Depending on the size of the team, a mortgage broker may have in-house loan processors or may outsource this function.  Ultimately, a mortgage broker who wants to be successful will ensure clients have the best loan experience possible, regardless of how their back-office functions are arranged.

A well-established mortgage broker has great relationships with their lenders and the underwriting teams and has a high rate of closing loans in a reasonable amount of time.  They are paid by the lender typically as a flat fee or percentage of the mortgage amount.  Newer industry regulations prevent mortgage brokers from being paid or bonused based on the interest rate of a loan.

Mortgage Underwriters

A Mortgage Underwriter may work for a bank, lending company, or private fund.  They are the decision makers who review all the documentation submitted for a loan and decide if all requirements have been met and if the loan applicant is qualified for the loan.

They represent the lender and are responsible for analyzing the loan package and determining if the lender will take on the risk associated with approving a loan.  They examine criteria such as the applicant’s credit rating and history, the applicant’s perceived capacity for repaying the loan, and the value of home being purchased in terms of loan collateral.

When a loan is delayed or “falls through” many people think this is done by their Loan Officer or Mortgage Broker.  Certainly, failure to properly match applicants with loan requirements or to submit critical documentation can impact the viability of a loan.  However, the ultimate decision on approving or declining a loan falls with the Mortgage Underwriter.  While most properly submitted loans are approved, sometime changes in underwriting requirements can “kill” a loan and stop a real estate transaction.

Mortgage Underwriters are employed by banks and lending institutions and go through extensive training to evaluate loan applications.  While they must be mindful of risk, Mortgage Underwriters do not aim to decline loans.  On the contrary, their paycheck and job security depend on approving as many healthy loans as possible.

Know Who Guards the Money!

When it comes time to buy a home or refinance your current home, be mindful of the service providers available to you.  In some instances, the Loan Officer at your bank may have the best rates and terms for you.  In other situations, your best bet may be to consult with a Mortgage Broker with access to dozens (maybe hundreds) of lenders who may offer better rates and terms.

Whomever you choose, be certain to submit all necessary documentation carefully so that the Mortgage Underwriter can clearly see that you meet all requirements and easily approve your home loan.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Title Insurance Explained Visually.

5 Room Makeover Ideas

If you own a home in the Fort Myers or Cape Coral area and have been on the hunt to spruce up a room or two in your house then you have landed at the right spot.  Consider these 5 room makeover ideas during your planning!

  1. Everything Has A Place: A Walk In Closet

If you have become a recent empty-nester or looking to do something with the guest room, converting an old bedroom into a walk-in closet is something to think about!  Just imagine having a whole wall…just for shoes.

If the room is large enough, you can even have a center island installed to hold ties, accessories, and jewelry.  Full length mirrors can be added to wall areas or section doors.  Shirts can be separate from slacks and sweaters can have their own kingdom.  If you need to sit while you tie your shoes, no worries – just use your footwear bench. The possibilities are endless and overall, converting a bedroom into a closet is relatively inexpensive and can typically be done without structural changes or permits.

  1. A Space for Your Passion: The Hobby Room

Perhaps it’s time for your passions to have their own space.  Bedrooms can be transformed into spaces that house materials and work areas for a variety of fun hobbies and pass times.  Are you a crafting maven?  Into model building? How about sewing?  Or perhaps a music room with a collection of guitars?  With the right lighting and ventilation, that old bedroom could even become a new studio for painting or sculpting (or both!).

Transforming a former bedroom into a hobby heaven can be as simple as removing furniture and adding a work bench.  If you want something more dramatic or high-end you can add cabinetry, storage areas, power strips, custom lighting, and even soundproofing.

  1. Be Your Best You: Your Personal Fitness Center

Perhaps you’ve had a gym membership that should qualify as a donation when you figure you have been to the gym 3 times in the past 5 years.  Perhaps those dollars are better spent converting an old bedroom into a fitness area designed just for you.

Fitness means a lot of different things to different people.  Maybe you are best motivated by the cardio trio of Treadmill, Elliptical, and Stationary Bike.   Or, sculpting muscle with free weights might be more up your alley. Quality fitness equipment can be purchase brand new or you can save quite a bit by shopping online or at second-hand stores for used equipment.

If investing in a ton of heavy equipment isn’t in your retirement plan, imagine a serene yoga room achieved with some soothing paint colors and a plush carpet.  Add a small self-contained water fountain and a quality speaker for playing music and presto, you have a peaceful meditation room that can serve as an escape from your everyday routine.

  1. Watch Your Flicks In Style: The Movie Room

Bring on the sun blocking curtains and leather recliners!  With the abundance of streaming services brining dazzling HD movies into your home, your home can beat out any fancy movie theater.   A simple and indulgent movie room can be created with a large screen TV and comfy couch.

For those who want more of a movie theater experience, there is a vast collection of theater style seating for the home.  Some seats even include cup holders or built in speakers!  Your viewing experience can range from an oversized flat screen TV, to a curved 4K screen that brings you in close.  Movie buffs may take it even further with a projector and screen that makes you feel like you should be holding a huge tub of popcorn.  Sure, these higher-end options can add up to a sizeable budget, but at least the popcorn will be much cheaper at home!

  1. Indulge Yourself: Master Bath with Home Spa

Speaking of higher-end budgets, how about luxuriating in a brand new master bath with spa features? If your empty nest goals involve more relaxation rather than entertainment, this might be just the make-over you need.

While building a bathroom requires a greater investment of time and money, the results can be so worth it.  Imagine never having to share a sink again.  You’ll have plenty of counter space, plus storage for your skincare and spa products.   How about a beautiful Jacuzzi tub – for two!  Or a rainforest shower with side jets. Other perks you can add include heated floors, a towel warmer, and….how about a personal sauna?

It’s a wonderful fantasy that can be your reality!  Visit spas in your area to get ideas, check out boards on Pinterest, and/or consult with a designer who specializes in crafting home spas.  In just a few weeks you could be fully submerged in a deep, warm bubble bath in your own home enjoying some much needed relaxation.

Make the House Yours with a Makeover

Former bedrooms can sit unused for years adding to the quiet and creating a space of nostalgia.  At some point, it becomes time to let go and reclaim the space in your home.  Add excitement, color, purpose, or even relaxation by transforming that room into a space that brings you joy.  Whether it’s painting, working out, watching movies, or hanging out in your sauna – a room makeover can be exciting and add a whole lot of fun to your life!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Does The Ability To Repay Mean?

5 Tips If A Storm Damages Your Home

We can all agree 2017 has been a year of intense storms and natural disasters across our country.  For us living in Florida we are no stranger to storms.  Although we hope you never have to deal with damages resulting from a storm we thought it would be helpful to share some tips in case you ever find yourself in this situation.

Below are 5 tips to keep in mind in the event your home is ever damaged by a storm:

1) Document the Damage

The more comprehensive your documentation the better. Video has become a favored medium for recording damage, however, insurance companies and government agencies aren’t always able to receive or process video files.  In addition to video, make sure you have still photos and plenty of notes to clarify what the photos represent. If available, before and after photos can be helpful in demonstrating the extent of the damage.

This can be a traumatic and overwhelming task, so try not to do this alone.  Take a relative or friend that you can trust to be emotionally supportive and also helpful in identifying and documenting damage.  Avoid lingering in unsafe conditions.  However, if the area is safe, then take your time and document carefully.  If you are taking video, slowly narrate what you are seeing and explain the damage you see, for example:  “White door with broken window laying in about 4 inches of water in the backyard is the backdoor to the house.  It is now about 25 feet away from the house, all hinges are broken, and the doorway is completely exposed”

Inside the home, check for evidence of flooding and roof leaks. Be methodical, yet avoid any areas that seem unsafe.  Never enter a flooded basement or climb unto a potentially unstable roof.  If you are not certain if your roof has been damaged, speak to your insurance company about an assessment by an approved roofing company.

2) Secure the Area

Again, safety is key here.  Even small pieces of debris can feature sharp edges, so be abundantly careful if you must clear an area.  For large jobs including removing trees or sizable debris such as cars, boats, parts of homes, etc. contact your insurance company to get access to their preferred provider list.  Beware of post-storm opportunist who canvas neighborhoods asking for exorbitant prices for debris removal.

Your insurance company will likely have approved resources listed for water remediation as well as companies that will cover damaged roofs and broken windows to prevent further water damage.  These resource are often available on the website so you don’t have to spend time holding to get information. Providers vetted by your insurance company will often not ask for money upfront, instead, they will help you file a claim to cover the costs of damages.

It can be confusing to know what is covered by the insurance company and what falls under your responsibility.  Your best option is to gather information directly from your insurance company and your local municipality.  Often, local sanitation departments will help with debris removal, but it can take time for them to get to your home.

3) File a Claim

After a storm, be prepared for possible long hold times when calling your insurance companies.  Use a landline or make sure your mobile phone is sufficiently charged.  Especially if you need to contact multiple insurance companies such as your home insurance company, auto insurer, flood insurer, and/or wind insurer.

When calling insurance companies, it is typically better to stay on hold rather than hanging up and calling back.  Have your policy information handy (if possible), be prepared to calmly describe the damage sustained to your home, and have photo and video files ready to transmit once you have instructions from your insurance providers.

It’s a good idea to have pen and paper ready to take notes.  Also, if you are leaving the area or do not have access to mail service, provide your insurance companies with a forwarding address where they can mail important documents.  The same applies if you have a new or temporary phone number.

4) Tap Into Government Resources

Stay abreast of communications emerging from local, state, and federal agencies.  They will have critical information on resources available to help with damage control and debris removal.  Depending on the nature of the storm and the total impact to your community, your region may be declared a disaster area in which case different types of financial assistance and services may be available to you.  There are many misconceptions about payouts from FEMA and other agencies, so please make sure you conduct careful research and speak to qualified personnel.  Try not to rely on rumors or unofficial social media posts.

5) Watch for Deadlines

Insurance claims and applications for financial assistance all come with important deadlines.  In the aftermath of the storms, days can be lost while you struggle to clean up and get life back to normal.  Set reminders for yourself and make sure you have access to phone and internet service when needed to submit applications or substantiating documentation.   Put your claim or case number on all correspondence and keep careful documentation of all submissions, conversations, and contacts.

Helpful Links

Always start with local and state websites for information relevant to your immediate community.  If weather is still a factor, tune into www.weather.com or any reliable weather channel in your area.  If there is a risk of inclement weather during clean up, it is important to have a working cell phone or battery operated radio with you and audible at all times.  Knowing about tornados or flash floods even minutes in advance can be life-saving.

If your community is declared a disaster area, visit www.FEMA.org to learn about resources and aid available to your area.  Agencies such as www.redcross.org and https://www.disasterassistance.gov may also be helpful in accessing needed resources and support.

We certainly hope you never need to use this information and that you and your family are always safe and sound.  However, should there be an incident in your area, we hope that the information and resources provided give you peace of mind and helpful guidance during a difficult time.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Is An Escrow Account And Do I Need One?

What Should I Know Before Investing In Real Estate?

Are you thinking of investing in real estate in the Fort Myers or Cape Coral areas?

While you can’t control everything, it helps to know what you are getting yourself into and actively prepare yourself to execute a sound investment.  If you are new to real estate investing, here are ten nuggets of wisdom that can help you prepare for success.

10 Things to Know Before You Invest In Real Estate

  1. Understand Your Risk Tolerance – As the famous Greek adage says “First Know Thyself”. If the idea of losing money gives you a migraine, then you need to direct yourself to lower risk investments. Outline how much money, time, and effort you can realistically and willingly dedicate to investing, then respect your own thresholds.
  2. Pick Partners Carefully – The number one destroyer of marriages, family relationships, friendships, and partnerships is money. Make sure you have a clear agreement on acceptable risk and losses with people involved in your investment.  Choose people you can stand to work with even in stressful times and that you can trust implicitly in prosperous times.
  3. Assemble A Team – Even if you are venturing out as a solopreneur, you really cannot do it all on your own. Before you get started, build a solid team including a Lender, Contractor or Handy Man, Tax Professional, Attorney and a Realtor.  If possible, find a mentor who has experience in the type of investing you want to do.
  4. Write Out A Plan – Avoid making it up as you go along. Decide what type of investment you want, how the numbers work, and who will be on your team.  Map out the investment like a project and carefully track time and expenses.  Always be realistic about the amount of time and funds you can sink into an investment.  Finally, be sure to have an exit plan.
  5. Taxes Make A Difference – An investment can seem profitable until tax seasons comes around and you are paying thousands in capital gains and other tax obligations. Keep in touch with the tax professional on your team and make sure you know the tax outcome of every potential investment you consider.
  6. Always Run The Numbers – Buying a home to live in is usually an emotional purchase. Investing in real estate is a decision based on numbers.  Carefully examine expenses, investment capital, tax burden, and even the cost of failure associated with the property before fronting your money. If the numbers don’t work, walk away.
  7. Keep A Tight Schedule – Time really is money in most real estate investments. In many types of investing, such as flipping a home, the longer you hold a property, the higher your expenses.  Conversely, in some cases holding properties long-term allow is better.  In addition, there are deadlines for inspections, payments to lenders, etc. that need to be carefully managed.
  8. Find Your People – Many cities have a Real Estate Investors Association. This is a great place to meet mentors, take workshops, meet qualified service providers, and even build partnerships.  Use Google to find associations in your area or try finding a group on Meet-Up.  These groups are also a great way to get plugged into local trends.
  9. Be Aware That Markets Have Cycles – Tune in to the local real estate market where you intend to invest. Many people made lots of money investing between 2003 and 2005.  By 2007, there was no more easy money and many “late-to-game” investors lost their money, their good credit, and in some cases even their own homes. Pay attention to the market.
  10. Know When to Fold – Just as our own homes can become money pits, so can a real estate investment. When a loss is becoming overwhelming, sometimes the right answer is to walk away. The same applies when you are making a lot of money.  Avoid getting complacent, taking on too much risk, or failing to enjoy the wealth you are accumulating because you are working too hard.

Real Estate is considered one of the most reliable paths to building wealth.  If you decide to venture into this diverse and exciting world, be sure to follow these 10 guidelines.  Remember, make a plan, not a bet!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Is The Debt-To-Income Ratio (DTI)?

Should I Sell My Home?

Are you currently living in the Fort Myers or Cape Coral areas and wondering if you should sell your home right now?

It seems like a simple question, yet ask 10 people and you will likely get 10 different answers. Within real estate markets there always seems to be so much conflicting information. Plus, everyone thinks they are an expert! Even people who have never owned a home suddenly have profound real estate insights to share. With all the confusion, how do you decide if selling your home is the right move?

Let’s be clear on a fundamental truth, the decision to sell your home is a deeply personal decision. Naturally, factors such as market conditions, equity in the home, and your financial situation are factors to be carefully weighed. Ultimately, you need to do what feels right for you and your family even if the market stars are not aligning perfectly. There are always great reasons to sell your home and we are going to share three of them with you.

You Need More Space

This is one of the most common reasons for selling a home. Single individuals and young families often buy a “starter home”. These tend to be affordable, small homes that fit a first time home buyer budget. Over time, there is a need for more space. A single adult may have more furniture, want room for guests, adopt pets, or get engaged. Young families may need more room for kids that are older and need their own space, to accommodate more children, or to make space for a beloved elderly relative.

“Moving Up” to a bigger house can be exciting. Imagine not having to share a bathroom with the kids or with guests? A bigger home can provide a lot more than more bedrooms and bathrooms. You may gain a garage, a bigger backyard, a finished basement, larger entertainment areas, and…a full sized kitchen with a pantry. Divine, right?

Beyond the changes in daily living, a more spacious home can offer a delightful change of lifestyle. Your new, larger home will likely accommodate guests more comfortably, especially for extended family visits. Instead of cramped dinner parties, you may host events that flow between spacious rooms and outdoor areas. Your new home may even become the family favorite for celebrating holidays!

If the thought of dozens of people walking around your house gives you anxiety, remember, you don’t have to host guests! Whether you invite people into your space or not, a bigger home gives you a lot more space to enjoy. If you are not into having guests, that spare bedroom can become an office or a beautifully appointed library. Your days can be filled with light, air, and silence – all in a spacious home that is all yours.

You Need Less Space

Oh, we can wax poetic about the joys of a dedicated laundry room, but we recognize that not everyone is looking for more space. The opposite may very well be true. You may find yourself at the stage in your life when the big house is more hassle than comfort.

“Downsizing” can be equally as exciting as “upsizing”. There are so many options ahead! Whether it’s a cottage on the beach, a high-rise condo in an urban area, or even a well-appointed apartment in a retirement center, shopping for a smaller home can be an adventure.

If you are truly adventurous, you may even decide to try a Tiny House. These small, portable homes are typically hand-built and can be “parked” on designated lots, backyards, tiny home communities, and more. Providing between 100 to 500 square feet of living space, these homes comes with a crash course in economy of space.

Yet tiny homeowners love it. They can build their house to their own specifications with many features of the home serving double duty. Everything has its spot and there is a designated spot for everything! It’s not for everyone, but those who have adopted the lifestyle often talk about the incredible feeling of freedom that comes with living in a tiny house.

Sea-side living, urban dwelling, senior communities, and tiny homes are all great options for enjoyable housing solutions once you sell your home. Many individuals who downsize report a feeling of “lightness” once they let go of all their “stuff”. Regardless of where you downsize to, take the time to evaluate what needs to go and what keepsakes need to adorn your new, streamlined world.

You Need a Change of Venue

Sometimes it’s not about more space or less space, it’s about different space. If you have spent all your life in quiet country living, maybe you are craving the faster heartbeat of city life. Or conversely, maybe urban life has worn you down and small town life is calling. You need a change and the one thing you can’t take with you is your home (well, unless you own a tiny house!).

Renting your home to tenants may be a reasonable solution, but often a permanent change of venue requires selling your home. The proceeds of the sale may support your move and fund a whole new life. In some circumstances, the financials are a not a factor and selling the home is more a symbolic “letting go” that allows you to fully embrace your new adventure.

Make sure you are prepared for the logistics involved in selling your home to move away. You will need to decide whether to stay in the home until it’s sold or to go ahead with the move and leave the home vacant to sell. Both are viable options that require planning and patience.

If you stay in the home, you will likely need to stage it for sale. Be prepared to have buyers viewing the home and to accommodate open house events. If you move, you need to ensure you can financially maintain two residences and that you have excellent communication with your real estate team. Either way, remember the sales process is only temporary and eventually you will be fully rooted in your new home.

Embrace the Sale

Regardless of your reasons for selling your home, relocating can be immensely exciting. Not only do you gain a new place to live, you will likely have a new job, meet new neighbors, and build new friendships. New places can bring wonderful new experiences and introduce you to exciting new cultural vibes – enjoy it!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Is A Mortgage?

Title Junction’s Top 5 Tips to Help You Close More Sales in Fort Myers

Are you a Realtor that services Fort Myers and the surrounding areas?

On a recent webinar we shared our top 5 tips to help you close more sales in and around Fort Myers.

If you missed it we got you covered, just click on the title to hear the replay: Title Junction’s Top 5 Tips to Help You Close More Sales in Fort Myers.

What you will learn:
* The Best Darn Facebook Post For Driving Qualified Leads. Period.
* Where You Can Easily Make Flyers & Graphics for Social Posts For Free
* How To Save Time by Automating Appointment Scheduling
* How Getting Instant Quotes Can Save A Deal
* And Much More…

We hope you enjoy it!

At Title Junction, we are committed to helping you succeed in Real Estate. Have questions? Give us a call at 239.415.6574.