This week we had Cindy Koebele from TitleSmart and Jennifer Dierkhising from Wells Fargo join us in the studio. The first topic we wanted to dive into was about the increasing amount of utilizing wiring funds vs certified (cashier’s) checks. Cindy Koebele discussed how customers used to bring in a cashier’s check and the title company would deposit it and then they would cut checks from the closing and overnight them to the lender. Now the lenders are requiring title companies to wire the funds to them to pay off the mortgage, and in the event of a bank-owned property, they have to wire the proceeds out and the sellers want them to wire the proceeds as well. The Title Company has to make sure they have those funds in their bank account in order to send the wire. This is mainly being done to eliminate fraud as technology evolves. Also, when a Title Company deposits money into their trust account, the money has to be in the account in order for them to spend it. If the company has to wire the money out right away, they need to make sure it came in by a wire otherwise they are not able to cover those funds without using other funds, which most likely are from another closing.
There is the question of how long it takes to wire money. Between the destination, through the federal reserve, and to the title company’s bank, it takes less than 30 minutes. A regular customer going into their bank, a lot of times, it has to go through a series of signature authorizations which could take several hours.
Additionally, due to the ability to deposit through your mobile device, companies have their customers make the cashier checks out directly to the Title Company because they don’t know if somebody swiped that check before it was given to them. When they give out the seller’s proceeds check, as soon as the seller walks out of the door, the rules change. The title company doesn’t know if the check could have been swiped. If the customer were to walk back into the office and they wanted to give the check back as they decided to accept a wire, the title company would not be able to do that without a holding period.
Jennifer Dierkhising expressed how jumbo loan rates are ridiculously low. If you are in the market right now and are thinking about buying a house with a loan amount over $417,000, you need to look at rates today. It’s been eye opening as these rates are typically higher than conforming rates, but they are lower in many cases. In order to prepare for jumbo loans, the loan officer wants to be able to give the buyer the documents they need to make their decision, which requires the buyer to have their taxes ready or anything else they have going on. The uniqueness of jumbo loans really is not as much the product as it is the clients.
Text Question: 60 year old, with a little debt under $3,000, bad credit, full-time job with no savings, can I even dare to think I can own a home?
Jennifer Dierkhising: Absolutely talk to a mortgage consultant. $3000 in debt is not a big deal as long as payments are being made on time. We can look at the credit history and credit score and explain whether they are able to qualify for a mortgage today or what they would be able to do over the next 30, 60, 90 days. My Home Road Map, a program offered through Wells Fargo, gives you 2 hours of credit counseling and helps you become prepared to buy a house. Chris Rooney stated that many Buyer’s are not aware of their credit and should have a loan officer run the report for them.
Text Question: Conflicting news about FHA purchases, some say harder to qualify, some say easier?
Jennifer Dierkhising: I don’t think it’s necessarily harder but we are asking more questions and requiring more documentation, so it’s really good to have a mortgage consultant. Wells Fargo has a lot of lists and guides to make sure people are ready for the process.
Ron from Eagan: I have a one-year arm, is it a good time to move to a 30 year fixed? What would you advise me to do with the one year arm.
Jennifer Dierkhising: It is a great time to convert to a fixed rate even if it is more expensive for the one-year arm because if you are going to be in the house for some time, the one-year arm will have increased rates over the years and in the end the fixed rate will be better.