Two Reminders:
Sellers can sign documents at almost anytime after escrow opens for conventional and jumbo transactions (as long as escrow has all necessary terms and time to prepare documents). Sellers do not need to wait for the buyer’s loan documents to get to title before they can sign.
With an FHA transaction, however, sellers do need to wait for title to receive loan documents before signing; FHA loan documents require seller signatures.
Lenders require buyers to get an impound account (property taxes paid with mortgage) whenever the “loan-to-value” (LTV) ratio is 90% or higher. Buyers, however, do not need an impound account when the LTV is 89.9% or less. Note: This is for conventional only; FHA requires impounds at all times.
We sometimes have buyers put down 5% to 8% (to save on cash), but they would be better off putting down 10.1%. While this requires a larger down payment, it in turn allows borrowers to get a lower rate and lower PMI**, and it allows them to avoid impounds, partially offsetting the extra cash required for the larger down payment.
**Loans with LTV’s below 90% have lower interest and PMI rates.
Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646
