"Ask Mac About Mortgages"

What is the single-most-important attribute, skill, or experience required to achieve success in any real estate occupation?   If you answered education, knowledge, experience, or wisdom, you should continue reading.  You can have wallpapered hallways with licenses, certificates, and awards, but this assuredly will not have your phone ringing with business opportunities.  The totality of these attributes will affect your quality of work and the ability to navigate through the maze of daily evolving information that is necessary to participate as a loan officer or real estate agent.   My resume shows accomplishments and awards in the real estate industry that distinguish me as having superior knowledge. My accolades can add legitimacy to why a client would want to use me, but it does nothing if I do not have a client network.   The single-most-important thing is your external network relationships. Your circle or sphere of influence is most importa...

A double edge sword cuts between the tax advantages provided by the IRS and the income required from a lender to qualify for a mortgage.  Qualifying for a mortgage is harder for self-employed borrowers compared to W-2 wage earners. Program guideline rules from Fannie, Freddie, and Penny are applied to determine a borrower's income for conventional or government loans.  There are tax advantages for self-employed individuals or business entities. Unfortunately, self-employed borrowers are at a disadvantage of qualifying for mortgages that offset the benefit of having business expenses or losses. Self-employed borrowers typically show losses on the available IRS tax schedules, and the bottom line is the adjusted income after the business losses. Most often, small businesses provide very little income, and this is the problem.  W-2 wage earners experience the opposite effect. The IRS appreciates the taxes you pay, and verifying income is easier for a mortgage. The gross incom...

  What is an ARM or adjustable-rate mortgage?  An adjustable-rate mortgage, or ARM, is the most misunderstood loan for most people, including those entering the mortgage profession. There are hybrid versions of the ARM that are no longer insurable today after the 2008 financial crisis. The hybrid ARM with interest-only option falls into the non-qualified mortgage product. I will only discuss the ARM loans that are currently available as an insurable qualified mortgage.  The benefit of an ARM for borrowers is the lower rates and payments early in the loan term. Lenders can use the lower ARM payment for loan qualification resulting in a higher loan amount.  Another benefit of an ARM is that more of your payment is applied to the loan principal compared to a fixed-rate mortgage. A fixed-rate mortgage amortized over 30-years has the majority of the interest in the front of the loan amortization schedule. An ARM recasts the loan with each payment, thereby applying more of...

HomePath™ is the program that the Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, uses to market and sell their real-estate-owned (REO) properties.  You have probably heard of Fannie Mae if you are in the market to refinance your home or purchase a home. Fannie Mae is a conventional loan type with a maximum loan amount of up to $548,250 for a single-family residence in the continental U.S.  Fannie Mae does not originate loans. Fannie Mae is a corporation that buys loans from banks and sells the mortgage packaged as mortgage-back security to investors. Fannie Mae guarantees the loans originated to their requirements and will cover the investor if the borrower defaults. When a Fannie Mae home loan is foreclosed, the property becomes known as an REO. The goal is to sell the property in a timely matter to maintain stability in the neighborhood. Fannie Mae's HomePath™ REO homes are listed for sale on HomePath.com, with photos, descriptions, and financing...