Kevin Tinsley
Mortgage Advisor

All Tech Mortgage Inc.
7403 Lakewood Dr W
STE 2
Lakewood, WA 98499
(253) 472-1500
(800) 339-7059
FHA & VA Approved

Thanks for all your hard work Kevin!! You were a pleasure to work with and made the transaction go smoothly for us...we will be sending referrals your way.  Thanks again, Courtney

Hi Kevin, We just wanted to thank you for a very speedy and smooth refinance.  We would highly recommend you to anyone.  Thanks again, Beth & Ladd Wolfe

Kevin, Thank you so much for all your help.  We love our new house and thanks to you it all went smoothly.  We will highly recommend you to everyone.  Thanks Again.  Kurt & Betty Miller

Kevin, Joel & I would like to say thank you with all of your help with our refinance.  We appreciated your honesty and willingness to answer all of our questions.  You were very patient and made the process smooth and painless.  Sincerely,  Kristin & Joel

Kevin, I wanted to thank for the referral this past month.  Aaron was a pleasure to work with.  The transaction went very smooth and I wanted to thank you for a flawless closing.  I look forward to working with you soon.  Best Regards, Brian Thayer - John L Scott - University Place, WA

Kevin, Just wanted to thank you for all your efforts & patience in helping us buy our new home.  It's nice to know  we'll have someone we can count on in the clutch who really knows their business.  Your results in such a short period of time were nothing short of spectacular!  Keep in touch and all the best with you & your family.  Sincerely,  Chris & Deanna
1. What documents do I need to apply for a mortgage loan? Answer
2. How do I know how much house I can afford? Answer
3. How do I know which type of FHA mortgage is best for me? Answer
4. What does my mortgage payment include? Answer
5. How much cash will I need to purchase a home using an FHA loan? Answer
6. Why Use an FHA Mortgage? Answer
7. How does a no cost refinance work? Answer
8. What are points and who should pay them? Answer
9. Why use a FHA Approved mortgage broker? Answer
10. How much is a down payment on a FHA Loan? Answer

Q : What documents do I need to apply for a mortgage loan?
A : Are you looking to Apply for a Home Loan in Tacoma, WA  and wondering what documents you need? If so keep reading, I have outlined a brief summary of the documents required.

Being prepared ahead of time by gathering the required documentation will help your Tacoma, WA  Mortgage approval process move a little smoother.

Below are the items needed in regards to your income and asset documentation:

Income:

- 2 Months Paystubs
- W-2’s from 2009 & 2008
- Tax Returns for 2009 & 2008 * if self employeed, have rental properties, or receive commission income
- Copies of your driver's license & social security card

Assets:

- 2 Months Most Recent Bank Statements - all pages
- Quarterly 401k Statement
- 2 Months Mutual Fund/Investment Accounts

Other items that may be needed:

- 12 Month lease agreement, or 12 canceled checks made to a private party landlord
- Bankruptcy papers and explanation for any derogatory payments after the BK
- Divorce Decree
- Letters of explanation for gaps in employment
- Letters of explanation for any judgments, tax liens, or repossessions
- Final Settlement Statement on recent sale of previous property
- Mortgage payment coupons on other real estate owned, including proof of annual tax and insurance costs
- Current lease agreements on any other real estate owned
- Job transfer letters
- College Degree if work history has not been established
 
Q : How do I know how much house I can afford?
A : Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
 
Q : How do I know which type of FHA mortgage is best for me?
A : FHA offers several different types of FHA mortgages from 30 year fixed rate to 3 year Adjustable rate mortgages.  After a brief interview, we can determine which options best suits your financial needs. 

Here's a list of several questions that will help us determine which product best for you:

1. How long do you plan to stay in the home?  Are you subject to job relocations or expect your family size to increase in the next few years?

2. Is your new house payment a shock to your currrent monthly budget?  If so a 2/1 buydown may be an option if your income is expected to increase in the next few years.

3. If you are considering refinancing how soon would you like to pay off the loan?  15 or 30 years?
 
Q : What does my mortgage payment include?
A : For most homeowners, the monthly mortgage payments include three separate parts:
  • Principal: Repayment on the amount borrowed
  • Interest: Payment to the lender for the amount borrowed
  • Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
  • Mortgage Insurance if applicable - required on all FHA loans
    •  
    Q : How much cash will I need to purchase a home using an FHA loan?
    A : The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
  • Earnest Money: The deposit that is supplied when you make an offer on the house - usually $1,000-$4,000
  • Down Payment: A percentage of the cost of the home that is due at settlement - 3.50%
  • Closing Costs: Costs associated with processing paperwork to purchase or refinance a house - approx. 3%

    •  
     
    Q : Why Use an FHA Mortgage?
    A : Since 1934, FHA has served as an economic backstop working hand-in-hand with lenders to provide consumers with access to safe and affordable loans, even during times of tremendous market volatility as with the current subprime situation. 

    Developing closer ties to the lender community will allow FHA to broaden its appeal. But there are specific business reasons for lenders to work closely with FHA. Because our products offer less risk for you -- as well as fast closings, competitive rates and foreclosure protections for your clients -- you can qualify more business and improve your bottom line. FHA's positives include:

    • No minimum credit score.
    • Non-traditional credit is acceptable.
    • Low 3.5% downpayment.
    • Non-occupant, co-borrower is permitted.
    • Expanded qualifying ratios.
    • No prepayment penalties.
    • Fully assumable.
    • Default assistance.
    • Lower premiums.
    • Non-credit qualifying, streamline refinances.
    • Availability: in all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards.
    • Versatility: may be used to purchase or refinance a new or existing one- to four-family home in urban and rural areas, including manufactured homes on permanent foundations.
    • Adaptability: typically offered at terms of 15 or 30 years.
    • Negotiability: interest rates are negotiated between the borrower and lender.
    • Works well with state and local agency products.

    FHA-insured loans are also compatible with industry requirements for:

    • Appraisal and repair;
    • Closing costs; and
    • Lender insurance.

    Lenders can take advantage of the Automated Underwriting Systems (AUS) via FHA's TOTAL Scorecard. Plus, there is similar documentation for comparable products between us and the industry, ensuring lender savings in dollars and time. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><?xml:namespace prefix = o /><?xml:namespace prefix = o /><?xml:namespace prefix = o />

     

    Innovative FHA solutions such as the streamline 203(k) "buy and repair" mortgage, 85% cash-out refinance, reverse mortgage (HECM) for seniors, and basic construction-permanent or manufactured homes insured financing options are available today to meet borrowers' needs for a better tomorrow.            

     

    Now more than ever we need a sustained, coordinated industry-wide effort to strengthen the housing market for future generations. We look forward to forging a closer partnership with you and the greater lender community to achieve our goals together. www.fhamortgagetacoma.com

     
     
    Q : How does a no cost refinance work?
    A : With interest rates at historic lows, many homeowners are considering refinancing. One question that seems to come up often is, should I pay closing costs or not? Here is a list of options to consider when looking at refinancing. Each option has it's benefits, so there's no one size fits all answer.

    Interest Rate Points/Origination Fee
    4.25% .875%
    4.50% -.875% *
    4.875% (-1.50%)*
    * indicates a payment to your lender or broker - known as a "premium"

    1. No Closing Cost Refinance - 4.875% with a 1.50% Premium Paid To Your Lender or Broker: Like the title says, it means you do not pay closing costs. The next question is who is paying them? Indirectly you are. By taking an interest rate higher than the market rate, the lender or broker can use the "Premium" in the interest rate to pay all your costs. For the purposes of this example, let's take a look at how this no cost refinance works.

    Your lender or broker will be paid 1.50% of $400,000 * 1.5% = $6,000. They will then use this money and pay all your closing costs of approximately $2,500. Leaving them $3,500 in gross revenue, before their office expenses and overhead.

    2. Low Closing Cost - 4.50% with a .875% Premium Paid To Your Lender or Broker: This is a combination of the No Closing Cost & Full Closing Cost Option. The lender or broker is paid their origination fees, and you are paying 3rd party costs, like title, escrow fee, credit reports, appraisal etc. In the above example your lender is being paid 400,000 * .875% = $3,500 gross revenue before their office expenses and overhead. You are responsible for the third party costs of $2,500.

    3. Full Closing Costs - 4.25% with a .875% Loan Fee: In this example, you will pay the origination fee plus the 3rd party closing costs. That means you pay $3,500 loan fee + $2,500 in 3rd party fees or $6,000 total closing costs.

    Now look at the monthly payments:

    $400,000 Loan Amount * payments exclude taxes and insurance

    4.25% = 1,967 Cost: $6,000
    4.50% = 2,026 Cost: $2,500
    4.875% = 2,116 Cost: $ 0.00

    Compare: 4.25% v 4.875%
    monthly savings: 2,116 - 1967 = 149 lower payment by selecting the 4.25% rate. Now look at the total costs divided by the savings: $6,000/149 = 40.26 months or 3.35 years to break even. That means after 3.35 years, the lower rate and paying the closing cost would have paid off.

    Compare 4.875% v 4.50%
    monthly savings: 2116 - 2026 = 90 lower payment by selecting the 4.50% rate. Now look at the total costs divided by the savings: $2,500/90 = 27.78 months or or 2.3 years to break even. That means after 2.3 years, the lower rate and paying the closing cost would have paid off.

    Compare 4.50% v 4.25%
    monthly savings: 2026 - 1967 = 59 lower payment by selecting the 4.25% rate. Now look at the total costs divided by the savings: $3,500/59 = 59.32 months or or 4.9 years to break even. That means after 4.90 years, the lower rate and paying the closing cost would have paid off.

    A few other factors to consider is the loan to value ratio of the new loan to your home's value. If for example, adding closing costs to your loan puts you into a higher loan to value bracket, you may opt to go with the lower closing cost or no cost option. Or if you have to pay private mortgage insurance by adding in closings cost, you may opt to go with the low or no closing cost option.

    For additional refinancing question, feel free to contact me directly at (253) 472-1500. Ask for Kevin or visit us online at     www.mortgageratesgigharbor.com
     
    Q : What are points and who should pay them?
    A :

    Points are up-front fees paid by the borrower to obtain a better interest rate on a loan. One point equals one percent of the loan amount. And while a lower interest rate may result in a lower monthly payment, it is important to consider how long you intend to be in the loan and to compare current interest rates to historical market trends. This will help you to determine whether paying points is a worthwhile investment.

    Let's look at a sample scenario. If you take out a $300,000 mortgage and decide to pay one point in order to lower your interest rate, this would translate into an up-front cost of $3,000. To keep things simple, we'll assume that paying this one point will save you $50 a month. This means it will take you 60 months to recoup the cost of that point. If you decide to refinance or sell the home before the 60-month mark, your money is lost . not to mention the opportunity cost of not having this money invested elsewhere. In this scenario, you would only benefit financially from paying points if you were to remain in the home for no less than 60 months.

    It's also important to remember that interest rates run in cycles. When rates are at historical lows, it makes more sense to pay points if you plan to live in the home for an extended period of time. If it's unlikely that rates will go down in the near future, then there will be no need to refinance.

    When interest rates are high, however, there is a strong likelihood that they will come down again before too long. Therefore, this is not a good time to pay points. The chances of refinancing in the near future are extremely high, and you will likely not be in the loan long enough to recoup the up-front cost of the points.

    Tax deductibility is another thing to consider when choosing whether or not to pay points. For new purchases, interest from both points paid and your mortgage are tax deductible up front. For refinances, however, points are not deductible up front. Instead the deductions are spread out over the term of the loan (unless the entire loan is paid off early), making points more costly in comparison. Ultimately, there's a lot to consider when it comes to points and whether or not they are a worthwhile investment. An experienced mortgage professional will work with you to determine the best course of action based upon your specific situation. Request a comprehensive cost comparison to see whether paying points could be financially beneficial to you.

    If you or someone you know would like to learn more about points and whether they should be a part of your mortgage plan, give me a call. I would be happy to assist you!
     
    Q : Why use a FHA Approved mortgage broker?
    A :

    In the past 20 years, independent mortgage brokers have had a significant positive impact on the lending industry. Today the use of a professional mortgage broker is one of the key strategies used by sophisticated Borrowers.

    What is a FHA Approved Mortgage Broker? A mortgage broker is an independent real estate financing professional who specializes in the origination of residential mortgage loans. Mortgage brokers normally pass the actual funding and servicing of loans on to "Wholesale Lending Sources." A mortgage broker is also an independent contractor working with (on average) as many as 40 lenders at any one time. By combining professional expertise with direct access to hundreds of loan products, your broker provides the most efficient way to obtain financing tailored to your specific financial goals.

    What Do Mortgage Brokers do? In the volatile home-lending market, Mortgage Brokers can serve as "police," offering their clients security, safety, and peace of mind. One of the Broker's most important functions is escorting your loan application through the entire process, constantly patrolling the component transactions for possible breakdowns. A professional mortgage broker can wade through the mountains of rate data and program options, researching current market conditions to find the most accurate and up-to-date information about cost-effective loan options.

    Brokers handle the Details! There are literally thousands of variables that can affect the outcome of your mortgage transaction. That's why you need a mortgage broker to act as liaison between the title and escrow company, real estate agent, lender, appraiser, credit agency, the underwriters, the processors, attorneys, and any other services which may effect your transaction. A mortgage broker also:

    • Discusses and explains financing program options

    • Informs you, in writing, of lock-in options

    • Explains all documents of the loan application

    • Explains all associated costs of the loan application

    • Explains the disbursement of all loan applications

    • Explains the loan process, from application to closing

    • Provides you with a good faith estimate of cost and fees

    • Communicates with you throughout the loan process in a timely manner

    • Coordinates the final closing of your transaction

    Brokers and loan officers are your resource for questions or concerns after your transaction closes.

     
    Q : How much is a down payment on a FHA Loan?
    A : The down payment on a FHA loan is 3.50% of the sales price. 

    $150,000 (Sales Price) X 3.5% (Down Payment %) = $5,250 (Down Payment)

    In most cases the seller will pay your closing costs, so all you need is the down payment amount and you are ready to purchase.
     


    Kevin Tinsley All Tech Mortgage Inc.

    Ph: (253) 472-1500 Toll Free (800) 339-7059
    Fax: (866) 421-1788