Preferred Financial Services, Inc.

02/03/2021

Need a Jumbo Loan?
Minimum median score 700. Up to 2 Million.

01/13/2021

Attention Realtor Friends!
What's better than a pre-approval letter?
A full credit underwrite on TBD properties!
Few lenders do this.
Call me for details. 864-378-9647

01/08/2021

Moving to SC? We are here for you.

If you think Wilmington is a great place to live you’re not alone, according to a recent study, Wilmington was the number one city in 2020 for inbound moves in the United States.

07/20/2020

https://www.linkedin.com/posts/fannie-mae-corporation_19722_information-and-resources-that-can-help-you-activity-6658065275990134785-08tl

Information and resources that can help you navigate this challenging time are available at https://spr.ly/60491202L...

07/08/2020

https://www.linkedin.com/feed/update/urn:li:activity:6686625707596091392/

Realtor friends, I'm available to attend your open house event(s) to offer on the spot pre-approvals. Act fast, July is filling up. Send me a request...

06/23/2020

Refinancing when you have a Home Equity Line

Rates are at all time lows, and many people are refinancing. In the cases where they have both a first mortgage and a Home Equity Line, questions come up about how to best structure their refinance. Here, I answer commonly asked questions:

The rate on my equity line is low right now, but it can go up. Can I pay it off in my refinance? On conventional loans if you are paying off anything other than a first mortgage, the refinance is considered a “cash out” transaction. These are limited to 80% of your appraised value. So if your two loans don’t total more than 80% of your value, you can pay off both loans.

Are there any exceptions to that? Yes, FHA will not consider your refinance a “cash out” loan if your second mortgage has been in place for at least 12 months, and you have not drawn more than $2000 on it in the last 12 months. They will allow you to go to 97.5% and pay off both loans. However, FHA has a PMI premium above 80%, and this may add too much to your payment to make financial sense. Another exception is VA loans, which allow you to go to 90% if you are an eligible veteran. Conventional lenders will not consider it cash out if the Equity Line was originally used to purchase the home, and will refinance to 95% under that condition.

I want to keep my equity line and just refinance my first mortgage. Can I do that? Yes you can. Current guidelines allow you to leave your equity line in place, as long as the combined balance on your new loan and your equity line, does not exceed 95% of your home’s value.

Do I have to have permission from my equity line lender to refinance my first mortgage? If you are paying them off, you do not need their permission to refinance. If you are going to keep your equity line when you refinance, your equity line lender will have to sign a Subordination Agreement, in order for you to refinance and leave it in place.

How do I get them to do that? Your mortgage broker will handle that for you, along with your closing attorney, when you apply for your refinance loan. The Subordination Agreement is a legal document that your attorney will draw up. Your mortgage broker will provide your equity line lender with all the information they need to sign the Subordination Agreement.

I welcome questions and comments.

06/09/2020

Reverse Mortgages – The Right Choice for You?

Reverse mortgages have been around for a number of years now. We at Preferred Financial Services have processed a number of these through the years but find that a great deal of confusion exists about this product. Here, I answer common questions that arise from those looking into reverse mortgage financing.

How old do I have to be to take out a reverse mortgage? At least 63 years old.

How much equity do I have to have in my house to be eligible? Usually about 50% equity, but you need less equity the older you are.

Can I use a reverse mortgage to purchase a house? Yes, you can. In the case of a purchase, you would put in enough down payment to make up the difference between the Reverse Mortgage and the purchase price.

Is it true that I will never have to make a mortgage payment for the rest of my life? That is true. Whether you take your proceeds as a lump sum or choose to take it out as a monthly withdrawal to supplement your income, you will not have a mortgage payment.

How can they do that? Reverse mortgages are based on two factors: the amount of equity in your house, and your expected life span. Look at it this way: if you had $100,000 equity in your house and your life span was 10 years, who wouldn’t give you $10,000 per year for the next 10 years, and get paid back with interest when the house sells?

But does that mean the bank owns my house when I take out a reverse mortgage? Not at all. The title to the house is not changed one bit.

Could I sell my house after taking out a reverse mortgage, or am I stuck there for the rest of my life? You can sell the house at any time you want to. You would simply owe the reverse mortgage lender the amount you had taken out of the house in payments, plus the accumulated interest on that amount.

Well what if I live to be 110 years old and owe $300,000 on my $100,000 house since I lived so long. Are my children going to have to pay the difference? No, they will not. One of the beauties of the Reverse Mortgage is that your estate can never be charged with any deficit that arises from the sale of your house after your death. Period. The lender must accept any fair market offer on the house when it is sold after your death, regardless of the deficit.

What’s the catch in that? How can they do that? There is no catch. Part of the fees charged on a Reverse Mortgage pay for a “life insurance” policy. That “insurance” protects them if you outlive your actuarial life.

So why should I NOT take out a Reverse Mortgage? If your intention is to leave your children your house or leave them proceeds from the house after your death, you would not want to take out a reverse mortgage. Apart from that, there is no compelling reason not to do it if you qualify.

D. A. Borders / Preferred Financial Services / 864.378.9647 / NMLS # 1957394

05/27/2020

A Timely Warning About Mortgage FORBEARANCE

Mortgage Forbearance is a term that you have likely heard, but it is highly misunderstood. It is not forgiveness of debt and it does not tack on payments to the end of your term. It simply means that during a 90-day term (or longer) you will not be foreclosed on if you cannot make your payments. At the end of that term, all monies are due in full. If the missed payments cannot be made, then you may (or may not) qualify for a loan modification or a restructuring of debt. The truth is we do not know how Freddie or Fannie will view forbearance in the future, but we are already seeing the notification of a property in forbearance on credit reports. Before you initiate a forbearance request with your loan servicer, you should call me for a more complete discussion of the adverse consequences this can cause.

Below are some healthy alternatives that you might consider:

• A rate term refinance to lower your rate, payment and extend your term.
• A debt consolidation loan to lower your payments.
• A HELOC, which is a 2nd mortgage line of credit that allows you to freely access funds if you need them.

Call or email me to explore your options.

D. A. Borders
Preferred Financial Services
311 Pettigru St
Greenville, SC 29601
864.378.9647
[email protected]
NMLS # 1957394

03/25/2020

In these unprecedented times, it is hard to not give way to anxiety, with looming thoughts of possible bailouts and even debt moratorium. I thought that I might throw some ideas out there.

These might be viable options and a proactive plan for some of us who have been financially set back by the current events.

1) Straight out refinancing to lower payments
2) Cash out refinancing to provide cash in the bank you may not currently have
3) Refinance to consolidate debt
4) Extend mortgage terms from 15 to 30 years

Just some thoughts today as we watch and wait to see what the Covid-19 virus will do to our economy. My thoughts and prayers are with us as individuals and as a country. No doubt, we are strong, there will be lessons learned and that we will begin to see a cure to this awful pandemic. Stay safe my friends and inbox me if you need advice from this post.