Walter Gorman

Senior Loan Officer NMLS#: 138370

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Phone: 973-200-3405
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There are many self-employed individuals that earn a good living. But without a regular paycheck, these workers might have a harder time proving their income than those who receive a traditional W-2. While this makes it more difficult to obtain a mortgage, it is possible to purchase a home if you’re self-employed. As the U.S. has seen mortgage rates falling back to recent lows, many people are looking into refinancing or purchasing a home during the COVID-19 crisis. However, both of these loans have become difficult to obtain due to recent impacts on unemployment rates and the economy.  Recent Changes in Guidelines for Self-Employed Borrowers For self-employed applicants, lenders have traditionally looked to verify a self-employed borrowers’ business, income, and assets within 120 days. And while a typical crisis would see an extension of that timeframe to 180 days, vendors now only have just 10 days to verify income and assets during the COVID-19 pandemic. Because of the recent changes, obtaining a mortgage can be even more challenging for self-employed workers as lenders consider the overall stability and viability of both your business and your income. Lenders will often consider the overall demand for your business, its location, financial strength, and whether or not it’s capable of continuing to provide you with enough of a stable income to support a mortgage.  In response to COVID-19, many lenders have been making adjustments to their credit criteria with the goal of better accounting for the increased likelihood of forbearance and defaults. According to a survey conducted by the Mortgage Bankers Association in ...

Why It Is Imperative to Pay HOA fees!

Apr 2
9:46
PM
Category | Blog
Condo living provides many benefits and there are plenty of buyers are looking to enjoy or invest in an amenity filled community lifestyle.  During these tumultuous times here are some things to keep in mind regarding condominium communities and mortgage financing. MOST IMPORTANT: Protecting Homeowner Investment & Community Worth It behooves all residents to stay up to date with HOA fees to keep their community in good standing in order to secure the maximum value of their investment.  Home Owner Associations and owners equally want to safeguard their real estate assets by preserving the equity of each unit and the entire development. Keeping Communities Safe & Well Maintained When working with sellers, buyers or investors, it’s a good idea to remind them that keeping current with HOA fee payments is essential. When finances are precarious it is tempting to skip a fee, but if many neighbors have the same inclination, the entire neighborhood can suffer as maintenance may be interrupted or scaled back, creating potential safety concerns or aesthetically unpleasing upkeep.  Homeowners and realtors alike strive to present listings in the most appealing light to obtain the properties’ optimum worth . The Mortgage Effect Having a significant number of owners in HOA fee arrears within a community adversely affects everyone. For instance, “approved” developments (per Fannie, Freddie & FHA guidelines*) may lose their status if 15% or more residents fall behind on fees. Why is this important? By losing a positive evaluation, a substantial pool of potential buyers is eliminated. ...

The lack of inventory continues to drive the growth in entry-level home pricing. The high demand for homes in this tier of the market makes it a great time to consider using your equity to move up to a bigger, more premium home.  The Effect on Equity  Rising home prices have seen a focus on whether they’re accelerating too quickly and how sustainable their growth in prices really is. One of the most overlooked benefits of rising prices, however, is the impact they have on a homeowner’s equity position. Home equity is known as the difference between a home’s fair market value and the outstanding balance of all liens on the property. While homeowners pay down their mortgages over time, the amount of equity they have in their homes increases with its overall value. Today, the number of homeowners that currently have significant equity in their homes is growing. According to the Census Bureau , 38% of all homes in the U.S. are currently mortgage-free. ATTOM Data Solutions reported in a recent home equity study that of the 54.5 million homes with a mortgage, 26.7% of them have at least 50% equity, a number which has been increasing over the past eight years.  Inventory Terms for Entry-Level Home Owners Spurred by low mortgage rates, the uptick in demand has left available inventory in the U.S. depleted. As a whole, the volume of new listings has decreased by 5.3% over the year for entry-level homes. Homes priced under $200,000 have dropped by 15.2% and mid-tier inventory, priced between $200,000 and $750,000, have dropped by 4.3% as well.  The National Home Association of Homebuilders recently reported that ...

Approximately 110 million Americans will see their credit score change in the upcoming month due to FICO launching a new scoring model this summer called the FICO Score 10. The new model will focus more on consumer’s account balances and potential missed payments over the past two years. An estimated 40 million consumers will see their scores drop by an average of 20 points as a result of the new scoring model. How it Works FICO’s new scoring model is designed to weigh delinquencies, especially those that have occured in the past two years, more heavily than past models. The new model will be putting those with late payments on their history as well as those that have a history of high utilization ratios (the amount of credit you use vs. what you have available) at a disadvantage. It will also flag consumers that apply for personal loans, which are generally considered riskier than other financial options.  How it Affects Your Mortgage  According to Fair Isaac Corp., the company behind FICO scores, the new model should reduce defaults significantly, particularly for lenders who issue mortgages. Fair Isaac reports that, “the reduction in defaults is even higher for newly originated mortgage loans, at 17% compared to the FICO score used in that industry.” If and when lenders do begin to use the FICO 10 model to evaluate mortgage applicants, potential homebuyers will need to take extra steps to prevent late payments, which could negatively impact their score, leading to higher interest rates and less favorable loan terms. However, a higher score can mean a lower rate, which can save you thousands over the life of ...

If you’ve lived through the recent real estate and economic recessions, the very title of this article may cause some pain. In the not-so-distant past, this country was swept with an economic crisis that many of our generation had never seen. It felt like the market would never recover.  Fast forward a few years and now, once again, long term wealth is being built through real estate and the opportunity is available to the average American.  The Appreciation Factor Appreciation, or the rising of home prices over time, is how the majority of wealth is built in real estate. While prices can fluctuate, real estate values have consistently increased over time and there’s no reason to think that’s going to change.  According to the National Association of Realtors (NAR) , the average price appreciation of a single family home ranged from 29% (seven year tenure) to 39% (ten year tenure), with average gains of $38,000 to $49,500 respectively.  One thing to consider when it comes to real estate appreciation affecting your ROI is the fact that appreciation combined with leverage offers huge returns. For example, if you buy a property for $300,000 and it appreciates to $330,000, your property had made you a 10% return. However, you likely didn’t pay cash for the property and instead used the bank's money. When considering that you may have put 10% down ($30,000), you have actually doubled your investment, which is a 100% return. The Longer You Own a Home, The More Equity You Gain Net worth, in the form of equity, is one of the first measures of the financial benefits of homeownership can build over ...

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