Consider Utilizing a Seller's Credit

Let's face it. One of the main questions you probably have in your head is how much money am I going to need to purchase this house? That's a really good question.  A couple of things you'll need to get to the finish line of purchasing a home is your down payment, your closing costs, your insurance, and your escrow funding.  

Depending on what time of the year you purchase your home, the property taxes that the seller owes you from living there last year may help you reduce the amount of money you need to bring to the table. However, if you're buying your home close to the time your county's tax bill is due, this may not be the case. If you're not going to benefit from a tax proration, the next thing you should do is ask your realtor to ask for a seller's credit.  

A seller's credit is the seller agreeing to pay for a portion (or all) of your closing costs, insurance, and escrow funding.  On a FHA application this amount can be 6% of the sales contract and on a conventional this number can be 3% of the sales contract.  So to keep math easy, let's say the house you want to put an offer for on is $100,000.  That means on a FHA application, the seller could give you up to $6,000 towards your closing costs, insurance, and escrow funding.  Or if in this example, they had to have $100,000. Maybe ask them to accept an offer of an amount higher than $100,000. + a seller's credit. You could structure the offer at $106,000 with a seller's credit of $6,000.  They're still going to get their $100,000 ($106,000 - $6,000 = $100,000), but you will have essentially financed your closing costs, insurance, and escrow funding into your mortgage.  

The only word of caution in this strategy is that the house will need to appraise for the amount of the loan. So if you do add a seller's credit in over the original asking price, it just needs to appraise for that amount. The majority of the time this does not create an issue, but it is something to know ahead of time. 

If you have any questions about this strategy, please give us a call at the office at (815) 324-9760.   

We're a Mortgage Brokerage: Here's What that Means

If you've been looking at our page for very long, you probably know that we're different than banks and credit unions. We outright say that and are proud of it.  You may not know what a mortgage brokerage is though and why the structure of our business works to your advantage.  

A mortgage brokerage very simply put is your personal shopper for mortgages.  We are connected to wholesale lenders all across the country that have every single mortgage program available.  Let's just look at a few:

  1. FHA
  2. USDA
  3. Conventional
  4. VA
  5. Bank Statements for Business Owners and Independent Contractors 
  6. ITIN
  7. Alt-A
  8. Non Owner Occupied Investment Properties
  9. Second Homes

If the program exists, we have it.  So if you like having options, you're researching the right business.

What's more is that these lenders do not have extra rules like your bank or credit union may have. Your bank may want a high credit score. Your bank may want to have other loans with you. Your bank may want to see a checking account or savings account. None of these things are things that our lenders care about. They simply want to see if you can afford the house and meet the qualifications of the program. If you can, great. If you can't, we'll help you find a better program to meet your needs. 

If you like lower interest rates, you've also come to the right place. Because these wholesale lenders do not have all of the overhead that your bank and credit union does, they can actually charge you lower interest rates.  Whether your credit has taken a couple of beatings or you have kept your credit score perfect, it's in your financial interest to use us because we are a mortgage brokerage.  

We have programs, we have low interest rates, and lastly we are really good at what we do. Just last week, we closed a FHA loan in 11 business days.  That was the application, the appraisal, and everything in between that takes to process the loan. The attorney, realtor, and borrower were all blown away. We'd love to do the same for you. 

In short, why use a mortgage brokerage and why use us? Because we have the programs, low interest rates, and exceptional customer service that will turn your dream of getting a home to call your own, a reality.  

Collections and FHA Applications

One thing that is coming up in many of our applications is collections. Let's face it. We've all been there. We have an unexpected medical situation that insurance does not fully cover. Since most of us do not have thousands of dollars that we just can't wait to spend on medical expenses, these expenses often go into collections.  

With FHA applications, the magic number is $2,000. You need to get your collections at or below this number.  If it's now above that number, here's what I would suggest:

  1. Gather up a list of all your collections statements.
  2. Call each place and negotiate a lower amount that they'll accept to mark your account as settled. Collecting some money on your account is better than not collecting any.  
  3. Go to your bank or local credit union and present them with your findings. Ask them for a signature loan to cover what you need to pay off. They'll likely want to pay the collectors directly and take your payment out of a direct deposit. Be prepared to let them do so.  

Once your collections are cleaned up, you'll be in a better position to purchase a house. What's more, your credit score will start to improve.  

If you need a referral to a lender, call our office and we'll put you in touch with the right people. 

You Deserve a Better Mortgage

You deserve a better mortgage. For years you've only had two options: go to the bank or go the credit union. The banks and credit unions of our community are necessary. We need a place to keep our money, right? What you don't need though is to pay for all of their overhead costs. By getting a mortgage at a bank or a credit union, you are paying a higher interest rate to cover their higher overhead costs. 

Savvy borrowers know that the way to get the best deal on a mortgage is to use a mortgage company. As we're closing out 2017 and entering into 2018, it's time to arm yourself with a better mortgage. Refinance or get pre-approved today.  You deserve a better mortgage.

Dear Clients: We're Thankful for You

Dear Clients,

From the bottom of our hearts, thank you.  This first year in business has been an exciting one. You have supported our business in ways that we did not expect. From the very first day of opening to going into our second year of business now, you have kept our schedules filled with appointments.

Each of your stories has been unique and they have all touched us. From keeping a family home that's been in the family for generations; to starting a new life together as newlyweds and purchasing your first home; to expanding your family and needing more space; to simply needing less space now that your little ones have grown and left the nest... all of your stories have been meaningful to us.  

What is touching us more and more each day is that you have been sending your friends and family. Our referral business is growing and growing and that's thanks to you.  These are people that you care about and love in a deep way and to trust us with helping them like we helped you, well, we don't take that lightly.

So as we reflect upon this Thanksgiving, we just wanted to let you know that at Two Rivers Mortgage Company, we are thankful for you.

With Grateful Hearts,

Two Rivers Mortgage Company Team

Kids Back To School: Time to Refinance

 

Now that the kids are back in school, maybe now is the time to look into that refinance you've been thinking about all summer long.

Maybe you'd like to consolidate your debt into one monthly mortgage payment. Maybe you'd like to get some cash out for some home improvements. Maybe your monthly payment is too high. Or maybe your interest rate well, let's face it, sucks.

Pick up the phone and talk to us or if it's after hours, just apply on our website. Keep in mind, we're a mortgage brokerage. Not the bank. Banks have one set of options for you. We have every option that's available out there. You come here, you basically get a chance to shop every single mortgage program out there and then we help you find the right one.

(815) 324-9760

You Might Want to Refinance If...

Let's face it, there are many reasons you might want to consider refinancing your conventional, FHA, VA, or USDA mortgage. Instead of writing out a big long article for you, let me just give you a list of reasons you might consider refinancing your mortgage.

  1. Removal or Lower Mortgage Insurance 
  2. Lower Interest Rate
  3. Lower Term (Flex Terms are Available) 
  4. Extend Term
  5. Lower Monthly Payment
  6. Cash Out for Home Improvements
  7. Cash Out for Debt Consolidation
  8. Cash Out for College Education
  9. Cash Out for Traveling the World
  10. Cash Out for Buying a New Car
  11. Cash Out for Investing in a New Business
  12. Cash Out for Medical Expenses
  13. Cash Out for Unexpected Expenses
  14. Cash Out for Investment Property
  15. Cash Out for Because You Can

You can probably come up with even more reasons. Basically, if you have a mortgage you can refinance it and it doesn't have to be with your original lender.  

If you own your house free and clear, you can also do a first mortgage refinance.  

If any other questions pop up in your mind, give us a call at the office at (815) 324-9760 and we'd be happy to talk different scenarios.  

 

The Death of a FHA Mortgage Application: Unverified Deposits

I think it's time we told you one thing that is making our ability to get you a FHA mortgage a bit on the difficult side. It's not something that's impossible to overcome, but it will make both your life and our lives a lot tougher when it comes to processing your FHA mortgage application.  

Unverified Deposits on a FHA application. 

You're probably thinking, okay what the heck do you mean by unverified deposits? Unverified deposits are deposits that you can't explain where the source came from.  

For every deposit that is greater than 1% of your sales contract (example: $100,000 purchase price = anything over $1,000 deposit) has to be verified. So that means if you had cash laying around the house, you could not use those funds IF it were over 1% of your contract. If in this example, you had $500 to deposit, that would not need to be verified. 

Basically, the ways the FHA rules are written, they want you to be able prove where every penny came from if it's a large deposit (1% of your sales contract).  Why do they do that? We didn't write the laws, but we assume they don't want you to go sell a bunch of drugs to save for your down payment. Kidding, not kidding.  

We love our customers and don't want you to feel frustrated. 

More pro tips to come. 

Taking the Proper Steps to Finding Your New Home

If you've been thinking about buying a house, I'm going to guess something prompted you. Maybe you were tired of the landlord not fixing that running toilet or they said no when you asked to change the color of your wall. You started to think, if this were my place, I would just do this or that.  

Over the next week, you start to notice houses for sale.  That little ranch on the corner of that street that's kind of close to some people you know from the outside looks like it just might work for you. You could see yourself living there. So in your excitement, you might look it up online or you might even call a Realtor to look at it. 

Before you do that, STOP.  

I only say this because I care about you. I don't want you to get your head and heart involved in a house until you can find out what you can afford. So though it's exciting to go look at houses right away and get a Realtor, come to us at Two Rivers Mortgage Company first.  

Here's what you need to do.  Set an appointment with us to discuss your financial situation and get pre-approved. If you can, gather up the last two years of your tax returns and W-2s, the last two months of your bank statements, the last month of your pay stubs and bring it all to the meeting.  

At the meeting, we'll discuss your entire financial picture so that we can optimize your pre-approval. We want you to be able to get the house that you want and we'll look for a way to make that happen.

After the meeting, we will give ourselves 24 hours to run all your numbers and give you a firm pre-approval.  This is based on the computerized underwriting system that Fannie Mae, Freddie Mac, FHA, and others use.  We'll let you know what programs you're qualified for and how much you're qualified for.  If you're not quite qualified yet, we'll give you a credit improvement plan so that you can become qualified soon.  

So the proper to finding your new home are:

  1. Find out how much you can afford by getting pre-approved with us.
  2. Connect with a Realtor that will help you look at houses.
  3. Find the house that you want to turn into a home.

After that, the process begins with financing and we go to work for you.  If you follow this simple advice though, you'll ensure that your home-buying process will be smooth and less stressful. Equip yourself with the information you need to find that house that you'll turn into your home.

We're looking forward to meeting you. 

When You're Looking for your Home, Keep This One Thing in Mind

Buying a house is both an exciting and somewhat intense process.  Here at Two Rivers Mortgage Company, it's always our goal to make it as easy as possible for you.  

A lot of our first-time home buyers are qualifying for FHA loans.  That's wonderful because that means you'll have a low down payment and a low interest rate. 

After you have found the house that you want to purchase, an appraisal will be ordered. An appraisal is simply an evaluation of the house to determine what the house is worth.  However, with FHA appraisals, there are a couple of things to consider. If the house you are looking at has any of the following, tell your Realtor that you want the seller to fix them. 

  1. Peeling Paint
  2. Exposed Wires
  3. Make Sure there are Hand Rails on Stairs
  4. GFI/GFCI Outlets Have to be Installed Near Water Sources
  5. No Obvious Signs of a Leaking Roof 
  6. No Standing Water in the Basement

If any of these are evident to the appraiser, it will cause your FHA mortgage application to be delayed. The appraiser will require the seller to correct these items.before they sign off on the appraisal. The appraiser will then have to have a second appointment to inspect the completion of these items and there will be an additional cost to the appraisal.  

It's just best if these things are addressed ahead of time.  It will make the process go smoother and will be less stressful for everyone involved. So just keep an eye out for those things and communicate with your Realtor along the way and they'll help you find the right house. 

 

How it Feels When You Apply For Your First Mortgage

Let's be honest, applying for your first mortgage can be a really scary thing. You go from renting or living with family to thinking about buying your first home and all of the sudden a lot of questions hit your brain all at once. 

Where do I start?

Who do I talk to first?

How much can I afford?

What is the total monthly payment going to be?

What will the down payment be?

How do I get a mortgage?

What if my credit score isn't where it needs to be?

How do I find a house?

How long does it take to get a house?

What documents will I need?

What does a pre-approval mean?

How do I find a realtor?

Who pays for the realtor?

Do I need an attorney?

Where do I get insurance for the house?

Trust me, I completely get it.  I hear those questions every single day and you have to know that those were the same questions that were swirling through my head when I bought my first home.  It can be really stressful if you don't have the right person to guide you through it.  

At Two Rivers Mortgage Company we are committed to being specialists in the area of first time home buyers.  

The process here is simply setup an initial meeting. You can book one on the website and select a time that works for you. Then you'll get an email reminder the day before and a text reminder the hour before your appointment. 

When you're here we'll ask you some questions to see where you're at right now. We'll find out if you're prepared to purchase a home or if we need to make you a plan to get you ready. We'll describe the process to you and ask you if you have any questions.  You may come up with a couple, but honestly, you'll probably come up with them more after you leave our office.

You'll think to yourself, "Ok, I know I asked that question, but what did they say about that again?" That's completely and 100% fine. Ask us questions twice. Ask us three times or four. We honestly don't mind. We are here for you and to make this process as comfortable as possible. If you like to see things on paper, we created a guide for you that will walk you through the whole process. If you'd rather text or email or call with a question, that's fine as well.  

This business is for you. We are here to make your first time home buying process as easy as possible. You know why we do that? Because we know if we treat you right the first time, you'll come back to us for your second and your third and your fourth home. We want this to be a long-term relationship and we want to treat you right from the start.  

If you're ready to talk, we are as well. Book an appointment on the website or give us a call at (815) 324-9760.  We're excited that you've come to the point that you're ready to purchase your first home and we're looking forward to speaking with you soon.  

 

 

 

 

Yes or Not Yet

In the last post, I mentioned to you that we are never going to put you in a position that you think you're pre-approved and then three weeks later you find out you're denied. We've had too many customers come to us upset that their bank or credit union pulled out the rug from underneath them.  Honestly, that's not how we think people should be treated. At Two Rivers Mortgage Company, we'll give you a Yes or a Not Yet.

You might be thinking to yourself, what does a Not Yet mean? 

A Not Yet primarily means your credit score is challenged and needs some work. Luckily for you, we LOVE working on credit scores. We have credit improvement services to help our customers quickly move from a Not Yet to a Yes. Here's how we do it:

Step One: We give you a credit improvement plan.  This will outline exactly what you need to do. The plan might ask you to make a $137 payment on your Kohl's card. It might ask you to open up a credit card because you don't have one. It might ask you to refinance your auto loan and pay off a collection with your equity. Each plan is unique to your situation and to the specific credit bureaus scoring model that we are trying to improve. We'll guide you and give you the exact steps you need to take and how many points it will increase your score by. 

Step Two: Execute the plan. As you check off items off the list, get a letter or a receipt from each item on your credit report you address. In the next step, we will need that evidence so that we can get you re-scored. 

Step Three: Order a Rapid Re-Score. This is the fun part. Give us evidence that you've completed the plan and order a Rapid Re-Score. This will force the credit bureaus to re-score you based on the new information we provide them.

If you follow the exact steps, it works exactly as planned.  Last week we had a customer address two lines on his credit report.  He gained 66 points. Three weeks ago, we had a customer address one line on his credit report. He gained 48 points. Both customers went from a Not Yet to a Yes in 3 business days.  

If you're wanting to purchase a home this year and you live in the State of Illinois, let's talk. We have all the tools and the expertise to get you qualified. We're ready to help you, develop a solid working relationship with you, and someday help your family and friends that you refer to us. 

Time

Let's face it. We lead busy lives.  Between working our jobs, making food, doing laundry, taking the kids around to their various activities, and staying connected to our loved ones, we don't have a lot of free time. 

When you add to your already busy schedule purchasing a home, it gets even more chaotic.  At Two Rivers Mortgage Company, we get that.

Time and time again, we have customers coming in simply exhausted because the bank or credit union they were working with took three weeks to tell them that they could or could not do the mortgage. Three weeks is a lot of time when you're trying to purchase a house to not know if you need to explore other options. 

So here's how it works at our business. Keep in mind, we're a business not a bank. From the time we take your application, we give ourselves 24 hours to tell you yes or no.  

If we tell you yes, then we'll tell you exactly what documents you need to bring us.

If we tell you no, we're going to tell you exactly the steps to take to improve your credit score and get yourself into a position to purchase a home. We're not going to sugarcoat it for you, we're going to give you exacts and specifics and time-frames. So if we ever tell you no, it's really just a not yet. We'll help you get there. 

We want to give you the service we would want ourselves. A straightforward answer in 24 hours.  It's just the right thing to do. 

 

6 Things Not to Do When Applying for a Mortgage

Purchasing a home can a bit of a confusing process. Whether you are a first-time homebuyer, purchasing your third home, or simply looking to refinance your mortgage, steer clear of these 6 things and you'll be on the right path. As always, if you have any questions, feel free to email us, text us, or give us a phone call. We're here for you and want to make the process of purchasing your home as painless as possible.  

 

The Start of a New Business

When you start a new business and embark upon an entrepreneurial adventure you must have a reason that drives you to do so.  Something in the market must drive you to say, I don't think it should be like that, instead it should be like this.  The thought that you and your customers deserve a better product or a better experience or an easier time of conducting business is what ultimately pushes someone over the edge and tells them that they need to do something about this.  

I reached that point in my life.  My name is Aaron Cantrall and I am one of the owners here at Two Rivers Mortgage Company Inc.  Until recently, I spent most of my time as a loan officer at a local financial institution.  Day in and day out, I saw my customers stuck in mortgages with high rates and unfavorable terms.  You know what? It upset me.  I was tired of seeing hard working members of my community with monthly payments that were higher than they should have been and feeling unnecessarily stressed by their mortgage.  

I constantly brought these loans, that were not working, to my upper management and asked if we could refinance them and give them a better deal.  Their answer surprised me. Time and time again I was told that our financial institution did not want too many mortgages and that we were only truly interested in helping people with car loans because we could make more money off of those loans. I don't say this to make my former employer look bad because they are a business as well and need to make a profit to pay for their employees and overhead expenses. It simply left me feeling frustrated that I couldn't help my customers more.  

So, like any other entrepreneur before me, I decided to do something about it.  I put together a team and created Two Rivers Mortgage Company Inc. so that I can help the members of my community more fully.  I want to help first-time home buyers who don't understand the process of purchasing a home yet or what's involved in a mortgage. I want to help the couple that is busy working and raising a family that haven't had a chance to look into refinancing their home recently. I want to help that family that's ready to purchase their next house because they outgrew their last one. I want to help that person that is tired of renting, but knows their credit is not where it needs to be.  I want to help the real estate investor that's trying to purchase more houses to provide great places to live for our community. 

We're located in beautiful downtown Ottawa, IL right where the Fox River and the Illinois River meet. You know what though? I don't care where you are in the state of Illinois, I am ready to help you. Peru, I am ready to help you. LaSalle, I am ready to help you. Morris, I am ready to help you. Springfield, I am ready to help you. Carbondale, I am ready to help you.  Anywhere you're at in the state of Illinois, if you have a phone and internet access, we're good to go.  

As I embark upon this journey and put my heart and soul into helping my community with their dream of home ownership, I ask only that you communicate honestly with me. Tell me what you need. If you need later hours because you are working all day long, let me know and I will accommodate.  If you need a course on buying a house for the first-time because all of this mortgage lingo sounds like Greek to you, let me know and I'll put it together.  This business is for you. We're not a bank. We are a business that hunts down the best deal for you and walks you through the entire process from start to finish. In other words, we're on your team. We are your advocates and will make sure that your biggest expense in your budget (your mortgage) is as low as it can be. 

Are you ready? I am. Let's team up and build the business that our community has been missing.  

-Aaron 

Have some thoughts, suggestions, or want more information? Email me at aaron@tworiversmortgagecompany.com. I look forward to our conversation.