March 9th, 2012
• I am interested in refinaning or buying a new home. I have an old tax lien on my credit report, and it looks like one of the agencies is still reporting it as having a balance, what do I do? When the tax lien was released, you should have received the confirmation from the IRS. You may call the repository and find out how best provide them with the information for correction. Once the correction is made, you will receive a confirmation. You may not see an extreme improvement in credit score immediately, but I would also ask the credit bureau whether the lien is reversed out as of the day of the release, or is it cleared as of the date received. This will make a difference in how your score rebounds.
• I am purchasing a new home. My lease ends in July, I would like to close in May, can I ask the seller to pay for my rent? Your agent can advise you as to the best direction to take when making an offer on a new home. From a mortgage perspective, you may ask for rent to be paid on your behalf. But in order to not reduce the purchase price, there must be an invoice provided by the rental company and paid directly to the rental company at closing. The buyer may not be provided funds and pay the rental himself/herself.
• I am interested in purchasing a home. My agent has advised me that the property may not appraise. I have decided to make an offer on the house. The sellers seem to also feel the property will not appraise and are understanding and agreeable to this. So where do we go from here? All contract offers are made in good faith. Your purchase price for mortgage purposes is the lesser of appraised value or contract price. In the current economy, we are finding some issues, but this has leveled out over the past 8-12 months. Once you have a ratified contract, I am able to provide all disclosures. We should then plan to collect documentation and order the appraisal. The appraisal is key in the process, so it can take precendence over documentation and application unless a government loan, where a case number must be assigned to order. Once the appraisal is received, we can then discuss any issues of valuation. If the appraisal comes in lower than expected, you may re-negotiate the purchase price, or you may decide to proceed with the sale as is. If you proceed with the sale as is - the difference between the appraisal and purchase price will need to be paid at closing - your new loan amount is based upon the lesser of contract price or appraised value.
- Jennifer Keenan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding 757-366-8690