Sunday, November 3, 2013

Today's Home Financing Options

FINANCING CONFUSIONYes the world of mortgage financing has changed. Some for the better, a lot for the worse. Lenders have tightened their guidelines to a point that even with ½  down payment, some lender won't touch someone with a credit score under 580. We had 7 lenders turn it down. Fortunately FHA can do the loan and it is approved. But, this illustrates the difficulty that we are all experiencing in today's lending environment and the lenders, it seems, are still trying to find their way in the dark. We constantly get call from Realtors about what programs are available and how to make an offer work with the financing. First of all, virtually all of the traditional and a lot of non traditional loans are still available. The biggest difference is the underwriting guidelines that are substantially different. Credit scores rule. The lower the score, the more difficult it will be to obtain favorable rates and terms, if financing is granted at all. It is a waste of time, in today's mortgage market, to look for homes if you have not been pre-approved. Not pre-qualified but pre-approved. The buyer needs to meet with the mortgage professional and bring in all relevant documents and letters of explanation, then obtain a lender pre-approval, letter in hand. Then start their search. Once, not so long ago, it was pretty simple to just to get some information then send buyers out to find their home. Not so today. While the loans still exist the lenders are making sure that every "i" is dotted and "t" is crossed. Today's mortgage professional needs to make certain that everything is in order to properly submit a file so that it will make it to close and fund on time. They also need to have all the current loan programs, including FHA and VA as well as conforming and non-conforming loans. If not then you need to make sure you have alternate lenders available to handle those files. FHA is not the program of old. FHA has undergone substantial updates to their programs and well as their appraisals. In a lot of cases it is just as easy, if not easier, to get a loan bought FHA than conforming Fannie Mae or Freddie Mac, and the rates in most cases are a little better.So, just like a carpenter, you need all the tools to get the job done. And your lender needs to help provide those tools. If you're having trouble with traditional loans have your lender submit FHA and that should help get you deal to the closing table.

Adverse Credit Home Loans: An Incredible Way of Home Finance in Presence of Bad Credit

Adverse credit home loans are loans that one can get despite having a bad credit rating. If you place your property as collateral, in order to secure the loan and cover the risk of your lender, many lenders will be more than willing to offer you adverse credit home loans. Adverse credit home loans are string of opportunities for those who have bad credit record and would like to pay off their existing debt and head towards the road of good credit status.If you have plenty of impeding debts, you can consolidate them with a comparatively reduced monthly rate of interest. Thus by lowering your monthly outgoing, you can repair your bad credit outfit. If you keep up repayments for a year or so, you can see a remarkable change in your credit score. Adverse credit home loans [] are generally secured home loans. That is the simplest way of getting better deal from your lender.Adverse credit home loans have many benefits like: Low monthly interest rate thus reduced monthly outgoings
Repayment duration ranges from five to thirty years
It is most popular form of conventional loan , thus easily accessible
Loan process is simple, your loan application can get approved very soon
If you have planned for huge investment for your home, adverse credit home loans are ideal because you can draw large amount
You can have flexibility of choosing interest ratesYou should be careful about paying off the installments regularly, because there are chances of property possession by the lender.

Murabha and Ijara - Home Finance for Muslims Which is Allowed by Islamic Law

You learn in your economics course that the banks borrow cheaply from the depositor and lend at a higher rate to the borrower and the difference between the two allows them to run a profitable business. It is a way to make more money from money and sometimes it is not even on paper and is often not even connected to a physical asset. The demand-supply gap will be the larger, the greater the efficiency and credibility of the bank, which in turn will make the business even more profitable. Islamic banking runs on a very different principle.The first difference which exists between ordinary banking and Islamic banking is that the object associated with the contract must actually exist, be specific and free from all ambiguities and it also must be permitted by the Sharia'h. This implies that the bank cannot lend money to anyone but may make an investment. All features of a Muslim's life is embraced by the religion of Islam and this includes the way its business dealings and finance are carried out. This means, in effect, that mortgage products are not acceptable for Muslims. In Muslim countries, Islamic banks and religious scholars has thought of a number of ways by which to offer finance and banking which can be permitted by Islamic law. Ijara and Murabha are considered by religious scholars and Islamic banks to be the most suitable methods of finance for the purchase of property in the United Kingdom.Ijara - In the Ijara method of finance, the financier purchases the property and sells it to the customer for the same amount of money, with the payment spread over a period of time agreed between them. The customer also has to pay rent to the financier over the repayment term. The installment of the purchase is somewhat like the capital payments under a conventional loan, while the interest in the conventional loan is like the rent in the Ijara.Murabha - In the Murabha method of finance, the financier purchases the property and immediately sells it to the customer at a higher price. The higher price is settled based on the number of years allowed by the financer to the customer to pay the purchase price. The extra sum can be compared to the interest which is charged on a conventional loan at a certain rate over the whole payment term.An ethical dilemma is faced by about two million Muslims in the UK when they want a loan or a mortgage as conventional loans and mortgages all need the payment of interest and 'riba' (interest in Islamic law) is not allowed by the Koran.Under Ijara, the bank will buy the asset you want and you will be allowed to use the asset for an agreed period in return for a monthly payment which covers the bank's capital. It is a kind of leasing.In Musharaka (meaning partnership), the bank buys the asset and becomes the legal owner. You pay monthly installments, covering part of the rent and part of the cost of the asset, so that after a pre-determined period, you own the asset itself.

Are Non Conforming Mortgage Loans Prime or Subprime Home Financing?

In today's credit driven society, the dream of homeownership has become a reality for many consumers throughout the 50 states. For the most part, homeownership has been positive for individuals and families experiencing the sense of pride from owning a home and making a mortgage payment monthly.However, for some applicants becoming a homeowner has only been made possible by obtaining financing using an alternative form of financing otherwise known as subprime loans. An non-conforming loan program is definitely a good choice for some homeowners and can be wrong for others. Negative Amortization loans, jumbo home mortgages with interest only payments would both be considered examples of non conforming loans. They don't follow the Freddie Mac or Fannie Mae guidelines that lenders consider when offering conventional loans.These new loan options have in some cases led to borrowers taking on loan amounts that are too large for them based on their income. While these consumers qualify for the loan on paper, it can extend their monthly financial situation to the point where they are spending close to 50% of their monthly income on housing, instead of the suggested standard of 30%. For some consumers, these non-traditional loan programs are a viable option. Some borrowers would rather go with a standard 30-year fixed rate or a hybrid ARM with a longer fixed period would be the best option for them.The Federal Reserve and Fannie Mae, both recommend that consumers meet with an experienced mortgage professional to determine which loan program meets the needs for their specific circumstances.

Home Financing, Refinancing and Equity Loans

When it comes to financing or re-financing a home, families with stay-at-home moms may have difficulty based on the fact that one spouse has little or no visible income.This leads some financiers to try and swing loans or re-finances that are easier to approve initially, but may be detrimental to the homebuyer in the long run.An adjustable rate mortgage, or ARM, is commonly offered when interest rates are low, and the finance company is betting on the fact that the housing market will turn around and cause rates to go up so they can make more money of the interest. This basically means that if you are holding an ARM and your payments are $565 per month, if the interest rates rise your mortgage could jump to $787 per month or even $1010 a month.If you are being pressured to sign loan papers for an adjustable rate mortgage, consider carefully what the long term consequences may be. The rates might be low right now, but there is no telling what the future may bring - and no guarantee that your net income will keep pace with interest rates.A fixed rate mortgage is usually better in the long run. If you can secure one when the rates are reasonably low, then you will be protected if they rise later and your payment will not increase. This is especially good for stay-at-home moms or seniors who are living on a very strict budget.Another tactic that is commonly offered is a second mortgage in the form of a home equity loan. These are not a good idea, should be looked into only as a last resort, and should never cause your total debt to be more than 80% the value of your home.A home equity loan is designed to provide you with a lump sum of cash to use to pay for home remodeling, bills or other debts in return for a second lien on your home. If your home is worth $100,000, your first mortgage might have a balance of $67,000, with payments of $400 a month. If you add a second 10 year mortgage in the amount of $17,000 (bringing your total debt to 80% the worth of your home) you could have an additional monthly payment of $200 per month.You have to decide if it is worth it to add extra to your house payment each month, and be aware that if you default on the second mortgage they can and will take your home, even if the original mortgage is paid.This can be a very real danger if the working spouse loses his job for some reason, and the family cannot meet all their obligations. Think long and hard before taking out a home equity loan, be sure your reasons for doing so are sound, and that you have a solid plan for repaying it as soon as possible.

The Nuts and Bolts of Securing New Home Financing

The prospect of securing that dream home can be an uphill task for those who go about it with a touchy-feely approach. You can be lumped with an unsavory life time commitment or make it work for you, providing you get to know the nuts and bolts of securing a great mortgage. Some provide a whistle-stop tour for the first-time home buyer so that you don't feel short-changed on the whole experience.Start at the beginningA good place to start is to know what criteria lending houses look at while reviewing your application for new home plan financing. Most lenders usually look at how much collateral you can provide as security against the loan, your capacity to repay, credit history and the amount of personal equity or down payment you can make to secure the loan.Financing basicsThere are different kinds of financing options available in the market today to help individuals finance the construction or purchase of homes.Construction loansHome construction requires a constant stream of money to keep the construction process going smoothly. Construction loans help do this by allowing you to get money in tranches at various stages of completion of construction.The good thing is that you only need to pay the interest component on the money disbursed until construction is complete. Once complete, you will be required to start repaying the interest and the principal component. Usually, construction loans are short term. Options to convert these into construction-to-permanent mortgage exist, where once construction is complete these loans convert to permanent, long term mortgage loans.You will need to have an approved builder and a mortgage loan approved to qualify for a construction loan in most cases.Interest-Only MortgagesThis is a misleading name, it is really not a mortgage it is a type of loan; what you are really getting is an interest-only payment. Eventually you will have to pay the loan principal also. A fair amount of mortgages offer this option, along with others as a means of paying back your loan.This is not a good fit for everyone. Here are some reasons it might be right for you: if your income is infrequent as with commissions or bonuses, or if you expect to earn a lot more in a few years than you do right now. Also, some people will take the principal amount they would normally give to the bank and invest it in something else that would give them a better return. There are a lot of misconceptions about this type of loan so it is important for you to do your research to be sure that an interest-only loan is suitable for your needs.Balloon mortgagesBalloon mortgages are loans that have a specific repayment period of 5-7 years at a fixed rate. Once this period is over, the borrower is expected to repay the entire loan amount. In balloon mortgages, once the specific period is over, there is a spike in the payments in case the entire loan amount is not repaid. Therefore the term 'balloon' is used to describe such mortgages. People who anticipate an increase in their income and hope to close the loan through increased earnings or refinance within the specified time frame go in for balloon mortgages. Refinancing might make you run the risk of paying a higher rate of interest prevailing at that time.Low-doc mortgagesLow-doc mortgages are those that require very little or no documentation and are mainly of three types.
No income / No asset verification (NINA) is the mortgage for you if you are not drawing a steady pay check. NINA mortgages are for those who are credit worthy and never fail to pay their bills on time
No-ratio loans are for the wealthy, who have complex financial arrangements and investments
Stated-income mortgages are available for those who work, but do not have a regular pay check and make a living from commissions or tips
The first two types of mortgages allow individuals to keep information about their incomes private. All these require very little documentation, but require a credit report and a home appraisal. The rate of interest for low-doc mortgages is higher and may range ¼ to 1% more than other types of mortgages. It also depends on the size of down payment (normally larger than what conventional mortgages expect), credit score and the property appraised.No-ratio mortgagesThese mortgages exist for credit-worthy individuals to expedite their loans. Such mortgages are called no-ratio because the lender is unable to calculate the debt-to-income ratio as the borrower does not declare it. However, the borrower should declare assets such as bank savings, investments, stake in business, real estate, etc.Knowing the costs on mortgagesRegardless of the type of mortgage you go for, it is important for you to know the costs involved - this is important as it might take a bit of digging to get the full picture. Typical costs include lender or appraisal fees, origination and discount points, credit report costs, third party fees such as attorney's fees, title insurance, amount of prepaid interest, if any, amounts for setting up an escrow and hazard insurance.

5 Ways To Buy Real Estate with No Money Down - 100% Home Financing

1. Lease-OptionRent a property from the seller with the option to buy. This buying technique is ideal for home buyers with bad credit and no money down. With a lease-option agreement, the seller establishes a monthly payment for the property, and the renter agrees to purchase the property within a reasonable period. Since a percentage of the monthly rent payments are credited toward the purchase price, the renter/buyer receives down payment assistance from the seller.2. Mortgage AssumptionBuyers may offer to assume responsibility of a property and use the seller's current financing. Mortgage assumptions assist home buyers with adequate means to meet the expense. In exchange for making mortgage payments, the buyer receives the property title. Before assuming a loan, research the original loan agreement and look for a "due-on-sale clause." This provision prohibits a mortgage assumption.3. No Money Down LoansZero down home loans or 100% financing is a simple way to buy real estate with no money down. To qualify, borrowers must have acceptable credit and verifiable income. Several zero down mortgage loans are available, especially to first time home buyers. These include select FHA and VA loans. Home buyers with no money down loans typically pay a higher rate and PMI (private mortgage insurance).4. Seller FinancingIf you canít afford the 20% down payment, ask the seller to increase the asking price, and seller finance a portion of the property. For example, increase the original sale price of $120,000 to $144, 000. The mortgage lender will agree to finance the lesser balance because itís 80% of the asking price. Next, the home seller carries a note for the balance of $24,000. After the closing, the seller may continue to hold the note, or sell the note.5. Borrow a Down PaymentFunds for a down payment can be borrowed from family, friends, or private investor. Discuss installment payments at fixed intervals, or repay money upon sale of the property. Other options include borrowing money from a life insurance policy or 401K.

Looking at Home Loans - A Brief Guide to Home Finance by Way of a Broking Service

If you don't currently own a property, then ideally you should begin the process by saving your down payment. One wants to be able to show a savings history to any loan provider your application gets listed in. Saving somewhere between 5% - 10% of the ideal investment sum is recommended to begin with. I realize, it is definitely difficult for young families starting out, and you are often thinking, this is a lot easier said than actually doing it, but there are actually options available to help you out. For example; the Australian government introduced the 1st home buyer's grant,that can help out young families, which have not previously actually owned a house. They might be entitled to the home owners grant, which can help contribute towards the money you seriously need to purchase your first home. You'll notice conditions linked to this, so should you deal with your agent, one must find out if you may be a candidate.At this time, approach your loan mortgage broker and he will gather all applicable material required from you, to establish how he can assist you. He will then check out that information, and execute a loans assessment from the lenders who he believes should be able to allow you to receive the best deal. This is done right away, and instantly, and without submitting your information to any lenders in the beginning. After the appropriate lender has been selected and he explains the details together with you, your app shall be submitted to the lender.Your broker can give you a pretty good indication of the most you possibly can acquire, based upon your earnings. So now you can start to look around for the new property you are wishing to purchase, whilst he, or she, secures ones own financial loan. Once you have your home pre-loan approval, and you have decided on your property, there are some conditional aspects that are usually on the mortgage. Your home finance broker will guide you through these nevertheless, so there's no need to get anxious that you might overlook some important detail.Some factors which are mandatory that need be taken into consideration are building and pest reports. You need to look at the structural integrity of this home before you buy, to be certain that there are no non-visual dilemmas you'll run into after you make your decision. It may be an extremely distressing shock without a doubt if you buy the house, after which you will be required to restore a portion of the construction because of mites (white ants) or borers.A valuation will need to be done for the property, which will be organised by your loan company. The House Insurance coverage needs to be set up and secure preceding to settlement, with a copy of your policy being shown to your loan mortgage broker that will put with the settlement help and advice to exhibit the lending company that you'll have security for your home.For the remaining processes of your respective loan, it is suggested you now use a solicitor to help you with means of buying the home from the owner. In your own interests, you have to make sure that all papers are done correctly, whilst your solicitor has gone over the fine print along with you, this means you understand all the details involved. It will cover you in respect to title registrations along with other documents which you will be needed to sign through the buying procedure. Your lawyer with your home loans broker will interact with you, to help get the deal settled.

Buying a Home with Bad Credit - Bad Credit Home Financing

If you have credit problems, it is still possible to acquire a mortgage. Many people assume that it is not possible to purchase a home with a low credit score. Whereas most banks and other financial institutions have precise lending criteria's, there are lenders that offer home loans to individuals with credit issues.To obtain home financing with bad credit, you must be willing to search for the best financing deal. In addition, there are measures you can take to improve your odds of getting a mortgage. If you have good credit, you will have little trouble obtaining a loan. Bad credit applicants may receive several rejections. To avoid this pitfall of homeownership, do everything in your power to improve your credit, and submit applications to lenders that offer bad credit loans. Tips to Improving your Credit ScoreBefore approving a home mortgage, lenders will carefully review your credit report. They base creditworthiness on your credit score and the information included in your credit report. If you are hoping to obtain a loan, get a copy of your credit report. Check the report for errors. Report any inaccuracies to the credit bureau and creditor. It takes time to resolve credit errors - be patient.Furthermore, if you have outstanding credit card balances, attempt to payoff the balance. Maintain a current standing with current creditors. Missing payments or continually making late payments will drastically decrease your creditor score, which makes it twice as hard to obtain a mortgage.Another tip for improving your credit score is reducing your total debt. Keeping credit cards at the maximum limit will make creditors doubt your ability to manage an additional monthly payment.Searching For Bad Credit LendersMortgage applicants with bad credit may benefit by applying for a loan through a mortgage broker. Because mortgage brokers can gain access to different loan programs, individuals with bad credit have the opportunity to obtain a mortgage. Most bad credit loans are provided by sub prime lenders. The interest rates for these loans are a little higher for bad credit applicants. However, once your credit score improves, you may refinance the loan for a better rate.

How to Qualify For Home Financing, and Low Mortgage Rates

If this is your first time buying a home, it can be an anxiety-inducing, confusing journey. But knowledge is power, and with this article, it is my goal that you will become familiar with the elementary rules of home financing. Armed with this new education, and knowing what to do and not to do, will make this journey less rocky for you.First Things First - Your Personal Finances:Are you ready to buy? This question will invoke excitement in you, for sure, but there is time for excitement later. Qualifying for, and then getting approved for a mortgage loan is serious business, especially in light of this chaotic economy we are in. Being prepared for this, will inevitably allow you to qualify for more loan programs, with competitive and lower mortgage rates.You must first answer these questions before you embark on securing a mortgage loan or house hunting.1) Do I have a solid work history for the past 2-3 years? If the answer is no, don't despair. Your spouse/partner may be able to help the qualifying, or if the work separation was seasonal, this may not be a factor.
2) Is your Tax Return in order for the past 2-3 years? - If not, see an accountant first and get these filed/corrected.
3) How is my credit? If you have bad credit or no credit, you may qualify for a loan, but the interest rates will be higher. If you are not sure how your credit is, obtain a recent copy of your credit report from each of the 3 credit bureaus: Experian, Equifax, TransUnion. NOTE: Americans are always entitled to a free copy every 12 months, and if you are unemployed, if you collect public assistance, or have recently been denied credit.
4) What are my current debts? If you have large credit card balances, have several open accounts, unpaid student loans, car loans, etc., you could be denied a mortgage because you have what's called "too much open credit".
5) What is my banking history like? If you have negative balances, accounts closed by the bank, or several overdrafts, you'll want to clean this up and pay any balance owed before going for a mortgage. Bring payment receipts with you to prove payment.
6) How much can I put down? Although in many cases this is not required, and low mortgage rates can still be found via programs such as FHA and VA mortgages, putting up to 20% of your own money down as a down payment, can save you from paying PMI - Private Mortgage Insurance, which is a fee that can be both added to the initial loan amount, and added as an extra monthly expense.
7) What other Income Do I possess? If you receive income from dividends, alimony, child support, a settlement, disability, etc., this can help your application if your employment income is low, infrequent, or credit is compromised.By answering these questions honestly and thoroughly before you begin your search, you will be well prepared to work with a realtor and a lender, and the process will flow more quickly and smoothly because you've done this homework. Another bonus is that you'll have all this documentation organized and won't have to gather it piecemeal, thereby delaying the process and wasting time.Ready? Time to Do the Math:Just because you have met all the above criteria, there is no guarantee that you can afford that new home. Now, it is literally crunch time.A mortgage lender will begin processing your application by calculating your Debt-To-Income Ratio. This is the difference between what you owe in debt such as credit cards, student loans, car loans, bank loans, rent, and your total income.Calculate Your Debt-to-Income Ratio:o First, list your total monthly income. Include salary, commissions, disability, public assistance payments, alimony, child support, settlement payments, dividends and pensions.
o Next, list all your current open debt. NOTE: When listing debt, do not include regular household expenses such as child care, food, and clothing, unless these purchases are made with a credit card.
o Divide your Total Monthly Debt by your Total Monthly income. Many mortgage lenders today prefer to see a Debt-To Income Ratio of 0.36 (known as a score of 36) or lower. The higher the score, the higher your interest rate will be, and therefore the higher your mortgage payment or your down payment. Typically lenders will allow you to surpass this Debt to Income ratio; however we need to also make room for property taxes, homeowners insurance, and possibly Private Mortgage Insurance, and/or condo association fees.
o To find out where you should be with your proposed mortgage loan included, also multiply your Total Income times this general.36 multiplier (to compute your maximum allowed monthly debt based on a 36% Debt-to-Income ratio).
o Lastly, subtract your current total debt from the.36 amount, to find the difference. This is where you should strive to stay under, for your mortgage payment! This will also tell you if you need improvement in this area. Depending on where you want to be, perhaps you should work on paying off some other debt first, increase your down payment, adjust your ideal price ranges for a new home, and/or the total mortgage loan amounts.Fine Tuning Your Numbers:Now that you have a rough estimate of what your max monthly debt and mortgage payments should be, you can also fine tune your numbers, once you know other loan parameters. NOTE: Some of these extra parameters may not be known, until a home is found. Some other factors to consider are the terms of the loan, the mortgage interest rate, property taxes, homeowners insurance, condo/homeowners association fees, and depending on the amount of your down payment, Private Mortgage Insurance may also be tacked on to your monthly payments!

Bad Credit Home Financing - Finding the Lowest Rates on a Bad Credit Mortgage

Finding the lowest rates on a bad credit mortgage will save you
thousands of dollars. Even with poor credit, you can find near market rates by
picking the right home financing terms and lender. A quick online
search will yield dozens of mortgage quotes for your inspection. In no time
you can find a home loan that fits your budget needs.Set Yourself Up For Low RatesSub prime lenders have developed a surplus of financing packages to
meet the needs of practically every lender. Within this plethora you will
find terms specifically design for lower rates.Adjustable rate mortgages offer the lowest rates, at least in the
beginning. You can also select caps with this type of mortgage to protect
yourself from future jumps in rates and payments.Shorter terms and large down payments will also help you secure lower
rates. Usually a 15 year loan rate will be .4% to .2% lower than a 30
year loan. That is a difference of thousands of dollars. Down payments
also discount your interest rate, especially is your payment is 20% or
more.In addition to these factors, you can also purchase a lower rate by
paying points at closing. In order to save money with this option, you
need to keep your mortgage for at least seven years in most cases.Interest Rates Lower With The Right LenderPicking the right lender is just as important as picking the right home
loan terms. To protect yourself from fraud and dodgy lenders, it is
especially important to research several lenders when dealing with bad
credit financing.Start your home financing search with recommended lenders. Request
quotes for the same type of loan from several different lenders. This will
help you sort through all the lenders without hurting your credit
through needless credit checks.When comparing loan offers, the APR will show who has the lowest
costing loan. However, be aware that some lending companies will charge
higher closing fees for lower rates. This can mean a real savings if you
keep the original mortgage for several years. But if you move or
refinance, you will be out that money without seeing a real savings.

Simple Home Financing Advice For The Borrower

There is a lot of home financing advice available today and with banks being more cautious about lending, it can be very beneficial to heed much of it. A borrower can avoid some of the headaches with getting a mortgage by heeding some of these tips.Preapproval for a loan can shorten the lending process. Many mortgage lenders will review all of the home shopper's financial information even before he has decided to make a bid on a house. The lender can even help the potential buyer determine what his price range should be. Before you start shopping for your new home, talk with potential lenders in order to determine the options that you have available, and then start the pre-approval process so that things move quickly once you find the home that you want to buy.Nearly all mortgage lenders will examine a person's debt-to-income ratio prior to lending a potential borrower any money. To know how much an individual will qualify for, he needs to understand his debt-to-income ratio. A person's monthly mortgage payment, including principal, interest and taxes, should not exceed 28 percent of his monthly income. His overall debt payments, including student loans, credit cards and medical bills, should not exceed 36 percent of his total monthly income.Even though it can be exciting to shop for furniture and appliances, these major purchases will show up as increased debt on the potential buyer's credit report. A lender may run a last minute credit report prior to the closing date. It is important to avoid any purchases that could change the debt-to-income ratio or cause worry. Once the home purchase has gone through and the financing is taken care of, then you can start shopping for the furniture and appliances that you need for your new home. Also, keep in mind that you don't have to buy everything right away, you can slowly furnish your home as the money is available.Prior to the closing date, it is also recommended that the potential buyer not make any sudden changes in career. Fluctuations in income can worry the bank and the seller, so that the buyer could lose the house. He should wait to change jobs until after all of the paperwork is signed. Even then, it is a good idea to make sure that he can still afford the home if he decides to make a switch.Shop around for the best rate. The buyer's primary bank may not be the one that is best suited for his mortgage, so looking around for other options may provide alternatives that offer cheaper financing. A lower interest rate means a lower monthly payment or being able to afford a higher loan. The individual should go to several different banks and get quotes.Understanding debt-to-income ratio, getting pre-approval for a loan, shopping around for the best rate and not making drastic moves that will alter your credit score is home financing advice to those seeking to obtain a mortgage. Each of these will help greatly with the process. It could also help put an individual in the home of his dreams.

How To Get Home Finance For Your Dream Home

Getting and buying the house of your dreams can be a
liberating step in your life. It indicates
that you are moving forward in life and expanding your
horizons. This is why so many people invest in
a dream home. However, even if the dream is there,
it does not necessarily mean that your finances can
accommodate it.Sometimes you have to settle for the home that is within
your budget. Not many people can afford to pay the
required amount upfront for their dream home, which is
is why so many people have no option but to apply for a
home loan. This is not a bad thing, as it is a stepping-
stone that brings your dream home closer within your reach.A home loan gives you the option of making your dreams a
reality, as it might take you longer to save for a home
and it is still no guarantee that you will be eligible.
With increased prices, it is no wonder that getting home
finance through home loans is an option worthy of
consideration by first time home buyers.It might not be the best, but at least you can get the
space that you have so long been waiting for but could
not afford.Home loans are usually used to supplement your personal
finances if you have any. Although it does not
necessarily mean that you have to have money saved in
order to qualify for a home loan as a source for
financial aid.You can apply for a home loan at your local bank or even
at a real estate agent. Most people will opt for the
Internet as a place to apply for their home loans, as
they find they can get a quicker response.It is important to keep in mind that home loans include
interest. Subsequently, the best loan to get is a short
one if you can afford it. You may want to take a 10-year
loan if you can find and afford it. Not only will
you save in the long run, but it will give you the
security of actually owning your home.

Home Equity Loans Are Great Tools for 100% Home Financing

Are you considering buying a new home, but do not have the funds for the required down payment? Or maybe you save the money for the down-payment, but are not sure if you want to use it for another type of purchase? If either situation fits you, then 100% home equity loans, also called a zero down home financing, might be the solution for you.The first step to understanding 100% financing is to be aware of something called Private Mortgage Insurance (PMI). According to All-Options, "PMI insures the lender against loss if the borrower defaults on the mortgage loan. PMI is usually required when the borrower's down payment or equity is less than 20% of the loan value." Although not every mortgage lender insists on mortgage insurance, those who adhere to the Fannie Mae and Freddie Mac loan approval guidelines will require it.PMI is added into the cost of your mortgage, so your monthly payments are higher than if you had put 20% down on the loan. Therefore, many people who are looking for a no money down home loan and want to avoid PMI, turn to something called an 80-20 loan. An 80-20 home loan takes the cost of the home and divides it into two mortgages. The first mortgage is for 80% of the home's value. Depending on the specific needs and wants of the borrower, the first mortgage can be a fixed rate, adjustable rate, or interest only loan. The second mortgage is for 20% of the cost of the home. This second mortgage, also called a "piggyback loan," is usually a fixed mortgage or a home equity line of credit. With the two mortgages, you are financing 100% of the cost of your home AND avoiding the additional monthly cost of PMI.Zero down home loans can be a great option for those who don't have the ability, or the desire, to put down a large down payment. With an 80-20 mortgage, you are able to avoid PMI and the required 5% down payment that many conventional mortgage products require. Before you begin shopping for an 80-20 loan, it is important to know and understand your credit score, as many lenders require a strong credit history for this particular mortgage option.

Home Financing Tips - Tactics to Approach Reasonable Property

Buying of a good home or investing in property is considered as the best financial asset for you and your family. For availing Australian home financing options, the borrowers must check out the following tips. These tips help them to avoid costly mistakes while buying property.Proper researchThe borrowers need to do some detailed research to know more about the market value of the property. This process is well-known as comparative market analysis and it is very effective when borrowers are trying to negotiate the best possible price.Be a good thinkerHonestly, the selling agents are not there to help you in getting a good deal. They work for the seller but not the buyer. Selling agents tell you what they want you to know about the property. They are persuasive especially when agents are using negotiation and influencing tactics. To know more details of the property, the borrowers or property seekers must ask the right questions and do detailed research.Searching with finance approvalAnother common mistake that Australians make during acquiring of home financing is that they search without finance approval. Therefore, people must make sure that they should know how much they want to borrow before starting with search.Avoid overstretching your financesUsually, people across Australia have financially committed beyond their means that have made their situation worst. Therefore, it is recommended that borrowers or property seekers must make sure that their repayments are no more than 25% of total household net income. It is requested that borrowers must not borrow more than 80% of the property's value.Property sight must be seenBuying of property sight without seeing it can make the situation disastrous. You must do a site inspection yourself or have an exclusive agent acting for you, who knows exactly what your needs are.At last, these home financing tips can be helpful in locating the best property deals. There are many modes of financing home such as online, leading institutions, lenders, banks and so on. Accessing of home loans through internet is considered as the best and cheapest method.

Saturday, November 2, 2013

UK Home Finance - A Good Way To Locate The Absolute Best Contract

When you have to secure an optimum UK home finance, make sure to do some research on your own. This is because the Internet can really be enormously advantageous in terms of very educational data once you're going to need a first class UK home finance.You need to research all of the available mortgage product before making a decision because once your mortgage has been chosen you need to understand that it will stay with you for a long time.Once you need to finance the buying of your own home with a mortgage, what the interest-rate might be is always something that people tend to focus on and allowing for the fact the rates are important, it is also important to remember that they don't tell the full story. Once all the things like the full length of your mortgage are taken into account, understanding the terms and conditions fully and making sure that they are also are favorable to you is extremely important.Because of the financial information that you will read via the Internet extremely easy to arrive at the idea that virtually all the financial service providers are offering almost identical financial services and products. But thinking this, would be a mistake because this is certainly not the way things are and it's more accurate to say that all of the financial service providers work with products that consist of some very dissimilar terms and conditionsThe finance industries have become more obsessed with pushing the concept that there is no scope for negotiation in the deals they have on offer. This is absolutely not accurate and a large number of potential customers would actually be able to make some real savings if they were to take advantage of the room for negotiating that's there in these deals. Lots of people find the advertising that goes with financial products to be more than a little confusing and given the style of the technical speak that is generally presented in this type of material, I can certainly recognize how this is often the case but it's very important to take advantage of that room for negotiating to save quite a bit of money.The marketplace for the provision of personal finance has grown more complex in recent years and a significant percentage of prospective customers find a sizable chunk of the information to be quite difficult to decipher and given the nature of language that is used in this type of material, I thoroughly comprehend why this can be likely.For many citizens getting an attractive UK home finance can be the root of a huge worry but the reality is organizing the very best UK home finance is not as large a problem as it can seem upon initial viewing. To conclude, you will hope to conserve money with your UK home finance. There are large numbers here and as a by-product even a microscopic deviation in a percentage point can grant you major savings.

100% Home Financing - Home Financing with Little or No Down Payment

These days there are some creative methods for avoiding the need to place a large down payment in order to purchase a home. This is fortunate considering that for many families homeownership would be out of reach were it not for these methods. In the past placing a down payment on a home was commonplace. Recently, as housing prices have risen drastically over the past couple of decades it has become harder and harder to save enough money to put forward a meaningful down payment. Luckily, there are now ways to go about getting 100% home financing. What will work best for you depends on your means and goals.You may hear advertisements for 100% home mortgage loans. What this usually ends up being is an offer for an 80/20 home mortgage, also known as a "piggyback mortgage". An 80/20 mortgage is actually two mortgages that you get at the same time to finance 100% of the cost of a property. Typically, both loans are handles by the same lender and closing on both happens at the same time.In an 80/20 mortgage, the 20% part refers to a second mortgage that acts as a down payment on the primary mortgage. This second mortgage can be an equity line of credit or a traditional second mortgage.Because both mortgage's in an 80/20 situation are secured by your home, you need to be sure that you can afford the payments on both mortgage loans. Where you do end up saving money with an 80/20 loan is that you can avoid paying PMI in these situations. PMI stands for "Private Mortgage Insurance" and it can amount to a hefty monthly payment that can be avoided by placing a large enough down payment, as happens in an 80/20 loan.It is important to know that even in a 100% financing situation, you will still need to have enough money on hand to cover your closing costs. Most lenders do not allow you to roll the costs involved in closing in to your home mortgage, even in a piggyback loan situation. Because you are closing on two mortgages at the same time, your closing costs for an 80/20 mortgage are generally higher than in a traditional mortgage.Even though a piggyback mortgage will cost you more, it is still an attractive option for families that have adequate income but little savings. By taking advantage of this method of financing 100% of the cost of your home, you can experience the benefits of homeownership and work towards building equity in a home.

The Intricacies of Home Finance Loans

All of us are well aware of the term, home finance loans. For the very few who really do not know the meaning of this term, then here it is- it is the loan which is taken or availed of to provide funds for the purchase of a home. A home finance can be availed of by a single applicant or jointly by 2 or even a group of individuals.The basics are all clear now, and it sure looks very clear and straight forward to us. But it is only when we really are in need of a home loan, and we practically approach the authorities for a home finance loan, that we begin to realize how terribly stressful and tough it is to go through the entire loan application process and to finally get the finance cleared too. Due to the down play of the mortgage segment in the precedent numerous years, the procedure of the home loan underwriting has undeniably undergone a sea of transformation.In the past the necessity for the home finance loans, used to be Stated Income, which was not a factual expression of one's earnings. But now the prerequisite has altered from Stated Income to Full Documentation. But this long drawn documentation feature has indeed reduced the number of prospective home buyers. But after all no one can afford to exist without a dwelling of their own, and this is precisely the reason why the home finance loans continue to be applied for and disbursed too.There are a bunch of erstwhile factors too, which are caught up in the entire home finance loan procedure. A lot of home loan officers are now strained to carry out the part of a sly detective too. This is unquestionably a fine thing, for the reason that the total undercover procedure is aimed at lessening and elimination of any likely fraud. But that in addition means that you will be put through more exhaustive and minute examination, prior to realizing the dream of owning a house. Regardless of the state of affairs, you can certainly save your self a whole lot of trouble, if you can get the ensuing preparations finished, so that you are prepared to face the examination and dissection of the home finance laws and rules.

Affordable Mobile - Manufactured - Modular Home Financing And Insurance

If you are one of the over nineteen million mobile, manufactured or modular home owners in America that is located in a park or Community, or perhaps you have your home located on your own property, the following Loan and Refinance information will assist you in making sound
financial decisions regarding your home.As most of you are aware the majority of manufactured homes in the past have been financed as personal property. In many instances these loans have been financed with very small down payments and amortized for only ten or fifteen years. The majority of these loans were considered high risk that resulted in very high interest rates, which combined with a short amortization period, resulted in an unusually high loan payment.
Over eighty percent of the existing loans were financed through the lender that the retail salesman, that sold them their home, recommended. This often resulted in the retailer placing the loan where it was the most beneficial for him not the borrower. It was a common practice that the retailer would receive a fee for placing the loan with them also frequently the community rental and the insurance costs rose. Although these loans are the most common, fortunately, some changes in
the industry have attracted additional lenders and types of loans. Many manufactured homes may now be financed for twenty or thirty years. If you are purchasing a new home, do not feel obligated to accept the financing offered by the salesperson!!!Fortunately some of the old bias against manufactured housing is lessening with the rapid growth of sectional homes. Also, they are being built to more rigid construction standards, especially for wind resistance.Many home owners are frustrated and tired of paying ridiculously high interest rates or even worse not being able to get any finance company to finance or refinance their loan. Take heart, lower interest rates and lower payments on loans are now available online!There are now reputable companies that do mobile, manufactured and modular home financing. The companies that I have located have competitive interest rates. In most cases you can still qualify for a refinance or finance loan even if you have bad credit.Would you not agree that a lower payment would ease your financial burden? Perhaps you would like to take some cash out of your home equity for personal use?Insurance Rates have skyrocketed due to the unusual number of hurricanes and tornados in recent years. I have located a company that could save you a lot of money on your insurance premiums (especially if you combine your auto insurance with your home insurance).

Funeral Home Financing FAQ - Credit Score

Is my credit score very important when a bank is determining my loan?YES, your credit score is very important in today's tough credit market. Banks will use your credit score as a handy mechanism to assess how much risk is involved in providing a potential borrower a loan. The higher the score of the likely borrower the lesser is the risk opposed to that lender. A higher score will also determine your likelihood of obtaining the available rate and term. What we have seen is that most banks will decline a loan solely based off the credit history of that potential borrower.An average score that lenders will consider favorable is 680 or higher. Every bank is different, however some can work with a 630 FICO score where others require 680 or higher. From our research the average American range is from 651 to 720 in following during these turbulent credit times.Credit score will also flush way from time to time because your payment history determines your credit rating. If you do struggle to make your payments by the due dates then this will affect your credit standings and lower your score. For example: Someone with an average  score, 700 plus, can increase their score with as much as 20 to 25 points by paying their bills on the correct time in a given month.  Establishing or re-establishing a good repayment track record will help in strengthening your score.Another item that can lower your  score is having elevated debts and stretching your credit cards to their maximum limits. This may lower your credit score by as much as 70 to 80 points.Although it is better to have a credit card account than not at all, you must still make timely repayments to raise your credit score. Someone who does not possess a credit card for instance has a tendency to be a higher risk than somebody who responsibly manages their credit cards on a month to month basis.One thing to remember before applying for a large commercial loan is to pull your own credit report. By pulling your own credit report you can go through and check through the items we just covered in this short segment.Remember: In today's rough market, your credit score is King!

Home Financing With Bad Credit - Secure a Great Mortgage Loan Even With Poor Credit

Poor credit alone will not prevent you from getting approved for a new loan. Your credit score will simply impact the amount you can borrow and the specific interest rate. Be smart about how much home you can afford and then work with the right lender and even with a weak credit history, getting approved for a new loan should be very possible.There are a few things to keep in mind when preparing to apply for a new mortgage:
Take advantage of the Internet. Shopping online can help you save a lot of time and money. Quickly and easily find a reputable company to work with, review any of their available programs and then apply. In many circumstances, you could have an answer about your qualification for a new home mortgage in a matter of minutes. It sure beats having to drive around from one bank to another!
Apply with a company that will provide you with multiple competing offers from a few different lenders. There are certain companies that simply require one application and then they in turn will send the application to a few different companies on your behalf. All of those lenders will then review your application and contact you through e-mail with some initial terms and offers. This makes it very easy to review your choices and quickly compare to find the best offer.
Be sure to fill out your application as accurately as possible. Not being truthful or perhaps simply being too aggressive with estimates will end up costing you a lot of time in the end. All lenders will have to verify the information you put on your application so be accurate.
Know how much home you can afford before applying for a new mortgage. Put together a budget so you know for certain how much you can afford to pay each month on a mortgage payment. Run a few numbers to get a sense on an affordable range. The general rule for mortgage affordability is a monthly payment that equals two to three times your gross income.
Start looking for homes sooner than later. Once you know how much you can afford, do some research to determine if there is anything available that fits your budget. There is no sense getting approved for a mortgage loan if your budget is insufficient for the area where you would like to live. Save yourself some time and determine what is available.
Be persistent. Finding a new home and securing a new mortgage takes time. You may not find a home you like initially or you might run in to a few challenges getting approved for a mortgage loan. Stay positive and keep trying.

Home Financing Demand Up

New applications for US mortgages rose for the first time in five weeks. Demand for home refinance loans jumped to its highest level in 14 years as interest rates hit 20 year lows. The report serves as a rare bit of good news for a housing market which has struggled since federal tax credits for home buyers expired in April.The report showed an increase of 7.5 percent in its seasonally adjusted index, which accounts for both purchase and refinance applications. The four week moving average, which is intended to smooth out weekly volatility, was also up, by nearly 5 percent.Borrowing costs on a 30 year fixed rate mortgage, not including fees, averaged 4.6 percent, down slightly from the week before and the lowest in the history of the survey, which has been around since 1990. Interest rates were also well below their 2009 levels of 5.3 percent.The seasonally adjusted purchase index, used as an indicator of future sales numbers, increased just under 3.5 percent after hitting a 13 year low the previous week. Demand, meanwhile, is down a staggering 42 percent since the federal tax credits expired. Analysts say that the market is still trying to reach a bottom since the credits expired, and this should continue through the next several months before a slow upward trend begins. Experts predict a steady growth within the job market to provide much needed support to housing going forward.The seasonally adjusted index of refinance loans reached its highest level since 2009 after an 8.5 percent jump as borrowers look to cash in on historically low interest rates. They also reported the average rate for a 15 year mortgage reached a new record low of 4.04 percent, after the previous week's record of 4.11 percent. The average rate on a one year adjustable rate mortgage, or ARM, also fell, from 7.21 percent to 7.18 percent. Meanwhile, it was reported earlier in the week that US housing starts for June reached their lowest level in 8 months.

North Carolina Home Finance Secrets

Are you residing in North Carolina and searching for a home loan? Also known as a mortgage, a home loan is what homeowners need in order to get their dream residence in North Carolina.Mortgage rates are different from country to country, and from state to state. So what you pay for a North Carolina mortgage rate is not what you pay when you buy from another state.You have to find the best mortgage that is suitable to your needs. In order to do this, you have to tell your lender what it is that you exactly want. Lenders are constantly competing with one another and all of them will offer you low rates.Be it you buying your first home, looking for an equity loan or refinancing, the whole procedure is quite simple. Just get a lender you trust and knows what he's doing.Or do what the adage says, "If you want to do it well, do it yourself." You can simply browse through the various advertisements of North Carolina Mortgage rates by flipping through mortgage directories - which can all be found online. It is updated daily and you will find the mortgage rate that will satisfy your needs.Ask yourself, "How much mortgage can I afford?" This is the key question that will allow you to narrow down all home loans made available to you for that one which is the most suitable. If you do this online, you see that there are mortgage calculators that will assist you in calculating for the home loan that you can afford - in North Carolina.The nifty thing about the mortgage calculator is that it lets you see how much you will pay every month on the North Carolina home loan you opted for. Of course, it depends on the loan amount, the interest rate and the duration of the whole borrowing period.Homeowners prefer the landscapes, cultural offerings and beautiful weather in the Golden State. No wonder California homes are often desired, therefore, they are expensive. Unless you are as wealthy as a movie star (a majority living in Los Angeles), then you do need mortgage assistance.Here is where the brokers step in. California mortgages can be acquired from a wide selection of California-based lenders. Because of their number, it is hard to make a wise decision. A matter concerning money is quite serious. For this very reason, we suggest that you take your time before you agree to sign on board with any lender.This is also why many home owners look for assistance from California mortgage brokers. It is the job of brokers to assist their clients in getting the best deal that will suit their needs. The broker receives a commission which the client will pay or which is attached to the loan.But before you sign any contracts, you have to be fully aware of what you are getting into. Education is the key. There are so many mortgage information sources within your finger tips. From newspaper articles to web sites, mortgage books to workshops and consumer seminars, all these give the client information regarding home equity loans and mortgage rates.
Determine how much you'll pay for the type of mortgage you'll be committing to. Make sure that this suits your current budget. You should also consider the timeline. Paying this debt can last from 15 to 30 years.If it so happens that you realize you cannot afford the mortgage you'll choose, you can lose your home. Worse, you would taint your record and therefore, have a hard time applying for home loans again.So in order for you to avoid the hassle mentioned in the previous paragraph, you have to carefully examine your expenditures. If you think you can afford to purchase a home, then you must be sure what the mortgage rate you can afford is. Lenders are not difficult to talk to. Once you tell them during your loan application that this is your budget, then they will give you the type of home equity loan that is appropriate in your bank account.Also, shop around for a loan. At least you have personal knowledge of the kinds of mortgage loans out there. If you have special preferences on your mortgage application needs, not every lender can provide you with what you are looking for. Shop for a loan like you shop for a pair of shoes. Go for the one that fits you, that looks good and you can afford.

A New Choice for Home Financing: Correspondent Lenders

When you begin your search for a new home loan, one of the first things to consider is where you'll get the money. Your basic choices will be mortgage brokers and banks.Your first instinct may be to go with your local bank, who you know from doing business with them for other things, such as your checking and saving accounts. But you've probably also heard that mortgage brokers can get you a better interest rate, since they deal with hundreds of lending sources. It can be confusing, but there's a third source of funding that combines the best of both--the correspondent lender.In order to understand the differences, let's look at how the lending process works in each case. Mortgage bankers are given rate sheets by their institutions, telling them what interest rates they can quote to their clients on any given day. There's only so much a bank can do, with regard to interest rates, because it needs to remain profitable in order to stay in business.Mortgage brokers have an advantage in that regard. They're not loaning their own money, and are free to "shop your loan around," looking for the best terms from various lending sources. They make their money by getting loans at discount prices and then marking them up, making money on the difference. Since they have many sources to choose from, they can often find loans at lower rates than most banks.The third alternative, correspondent lenders, combines the best features from both groups. Correspondent lenders are similar to mortgage bankers in that they make the lending decision and fund the loan with their own money or credit line. However, as soon as a loan has closed, it's sold to another lender at a previously negotiated price. It's the best of both worlds for you as a borrower. You'll be dealing with the banker who is funding your loan, yet that banker is able to shop your mortgage around, which can obtain you a lower interest rate.Correspondent lenders can sometimes be difficult to find, since they're generally smaller institutions, operating on a regional basis, and it can be hard to tell whether a lender is a broker or a banker, based solely on the company's name. One way to find out is by visiting the lender's website, if they have one. You'll normally find a button you can click that will bring up a page containing a detailed description of the company. If the lender doesn't have a website, you may find their phone number in the Yellow Pages.Although they may not always be easy to locate, with a little digging, you may find that a correspondent lender offers an attractive alternative to a banker or mortgage broker when it comes to shopping for your next home loan.Copyright © 2005 Jeanette J. Fisher All rights reserved.

New Home Financing - The Different Types of Financing

Before you buy a house you need to understand the different financing options that are available to you. Home loans differ mainly in the interest rate and the points charged. Loans can also vary depending on who offers the loans and how they are backed. The two most common types of home loans are conventional and government backed. You can get your loan from a banker or you can get a loan from a banker backed by Uncle Sam. Loans vary depending on how the payments are structured. The two most common structures are fixed rate mortgages and adjustable-rate mortgages. Here I will tell you about the different types of home loans you have available to you.Conventional LoansConventional loans are secured from a lender - usually a bank, mortgage broker, or savings and loan institution. Conventional loans usually require 3 to 20 percent for a down payment. You can put down less than 20 percent, but if you do, most lenders will require that you purchase private mortgage insurance (PMI). This insurance increases the costs to you because you have to pay to protect the lender in case you default on the loan.Government-Backed LoansThe two most common types of government loans are FHA (Federal Housing Authority) which are insured by the federal government, and VA (Veterans Administration), which are guaranteed.FHA loans are attractive because they are assumable(someone else can take over the payments). There are no penalties for prepaying an FHA loan.Fixed Rate Mortgage LoansOn a fixed rate mortgage, your monthly payment never varies. You pay the same amount for the first payment as you do for the last. If interest rates go up, it doesn't matter; your payment stays the same. Likewise if interest rates go down, your payments stay the same.Adjustable-Rate Mortgage LoansWhen you get an ARM loan, you usually pay a lower rate initially than on a fixed-rate mortgage. The interest rate on the ARM loan is tied to an index that reflects the current money market. If the interest rates go up on your renewal date, your payments go up. If the interest rates go down your payments go down.I hope that this article has given you some useful information that will help you in your search for a home loan.

Mortgage Meltdown Creates Home Financing Obstacles

Thanks to the surplus of inventory and historically low mortgage rates, the time has never been better to buy a new home. The reality is that most people do not have the spare bundles of cash lying around to buy their potential properties outright and need to rely on securing a home loan to finance their purchase of the American Dream.However, the landscape of the real estate market has substantially changed since the days of your parent's mortgage. Borrowers are now under greater financial scrutiny than ever as lenders now are interested in mitigating their chances of losing money because of a high-risk borrower.The change in attitude is a direct result of the mortgage meltdown kicked off by the subprime mortgage mess. Private lenders and federal agencies are tightening the standards associated with the loan approval process, leaving many potential homebuyers high and dry. Prior to the mortgage mess, it was not uncommon for five or six mortgage applications to make it through the approval process. According to The Legacy Group (Bellevue, Washington) loan officer Paul McFadden, "These days, the number of mortgage applications that get approved is probably three out of 10." Here is why:
Higher Credit Score Required: Lenders have used credit histories and scores to determine the potential "loan-worthiness" of applicants for decades. Now only potential borrowers with credit scores exceeding 700 can qualify for the best mortgage rates out there. Although there are still mortgage opportunities for those with scores underneath that value, but the interest rates charged will be significantly higher for this demographic.
Income and Assets Under the Microscope: Prior to the mortgage meltdown, paper proof of both income and assets were enough to secure a mortgage. Lenders are now taking the time to verify the information by making phone calls and triple checking all paperwork submitted.
Pregnancy: Being pregnant is not a legal path to discrimination, but the New York Times reported that maternity and paternity leave might be seen as a potential "loss of income." Technically, this type of interference should be categorized under "Income and Assets Under the Microscope."
Home Appraisals: Thanks to the crop of under water properties, mortgage lenders are ordering stricter reviews of submitted home appraisals. Homes that do not appraise for the full contract price are subject to disapproval.
Mortgage Industry Shake Up: Prior to the real estate bubble bursting, mortgage offers with enticing promotional rates were abundant and easy to secure. Right now, the industry is in flux as it attempts to clean up the mess and get business back on track. However, the guidelines are evolving everyday, creating a challenge for lenders regarding instructions on the mortgage approval process. Additionally Congress introduced new regulations to limit the power of predatory lenders, and the blanket laws are negatively impacting small business owners and independent contractors in the mortgage industry.
Tighter Condo Approval Rules: Although condo living can provide a fantastic quality of life, those interested in financing purchase of a unit should expect challenges in the mortgage approval process. Typically, condos are considered to be a riskier type of home purchases and are charged slightly higher mortgage interest rates than single-family home purchases. The reason why, condos have a community behind them and the finances of the community (as well as the buyer) are being analyzed more intensely by mortgage lenders.

The 'How-To' of Home Financing

Negotiate lower interestLength of Loan, Interest Rate, and PointsThe longer the term and the higher the down payment, the lower your monthly payments will be. On the other side, the higher the term the high rate of interest you pay.· Here the rate of interest is very important because when the rate of interest is high, your monthly payment will also high.· Points are an amount of prepaid interest paid by the borrower to the lender at closing. A point is equal to 1 percent of the loan amount.Adjustable or Fixed:Mortgage loans have interest rates that will stay fixed for the life of the loan, that may change or represent a combination of fixed and variable rates. Most people use a fixed-rate mortgage. The benefit of that is , you always know exactly how much your mortgage payment will be, and you can plan for it. But fixed-rate will not be the good ever for you.With an Adjustable Rate Mortgage (ARM), your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year.Freddie Mac, Fannie Mae, and Ginnie MaeFreddie Mac and Fannie Mae have the same charters, Congressional mandates, and regulatory structure. The two companies, however, have different business strategies. Competition between the two ensures that the ultimate beneficiary is the consumer in the form of lower housing costs.Both Freddie Mac and Fannie May are a stockholder-owned corporations. The former was chartered by Congress in 1970, the latter in 1968. Both were designed to create a continuous flow of money to mortgage lenders in support of home ownership and rental housing. They do so by purchasing mortgages from primary lenders-- banks, savings and loans, etc. with whom the consumer primarily does mortgage business.

Home Finance - Different Alternatives Available for You to Purchase Your Home

When it comes to buying a house it is not easy to pay all the money up front. Also, even if you have the ability to do so, you never need to make such payments as you have reasonably good hire purchase arrangements at your disposal to finance it. With a small down payment, you could buy your house on a mortgage. There are several methods to do it.• Get a conventional mortgage on the property you buy.
• If your credit score is not good, go for alternative mortgage.
• Get owner financing to close the deal quickly.Conventional mortgage
If you are able to fulfill all the requirements of a conventional mortgage to finance the property you are going to buy, that is the best way to get a mortgage. You only need to fill up your application and submit to your lender. After careful scrutiny of your credit score and other details he will provide you with the mortgage. Then it is a case of making a small down payment and subsequent monthly installments. The mortgage may span a long term of 10 or 20 years.Alternative mortgage
In case you are not in a position to go for a conventional mortgage due to your not having a good credit score, you have the option to look for an alternative mortgage company. When you go for this type of mortgage you could not expect the same treatment as for a person who has a good credit score. Instead, they could offer you finance on stricter terms. They could ask for stricter terms on the following.• Down Payment.
• Interest rate.
• Loan amount.You could get your mortgage on higher down payment and interest rate. In addition to that they could limit the amount given on the mortgage also.Owner financing
If you are unable to get conventional mortgage due to your poor credit score or because you want to pay your debt quickly and own the house quicker, getting the owner to finance the hire purchase is the best. There is no third party involved in an owner financing deal. The owner will tell you his terms and if you agree, the deal could be closed. You will make a down payment agreed upon with the seller and afterwards will pay a monthly sum. In a short period of around five years, you will finish the payment to own your house.

A Step-By-Step Guide For Home Financing

Getting the right financing for your home can make a huge difference for your financial situation over the long run. If you sign the wrong agreement, you may end up owing more money than you had anticipated. Housing markets change as well, and this can introduce even more uncertainty into the equation, usually at the most importune of times. The following are a set of steps you can take while financing your home to get the most out of your mortgage and avoid the dreaded refinancing blues.1.) All financing starts with your home. Make sure that the property you pick is something you love, but also make sure that it falls within your price range. If you do not anticipate that you will be able to pay for that nice new place over the long run, you will run into financial difficulties later on. Consult a Realtor who will find something in your price that will work over the long run. It's your best bet.2.) In most cases, do not go for an adjustable rate. The housing market is just like any market. It has its ups and downs. Typically, house prices are also linked to the larger economy. One indicator that the economy is not doing well is when house prices go down. This also means jobs are likely to disappear. If you buy into an adjustable rate, you could end up both losing your job and having to pay more money per month to keep your home. To make things worse, in times like this, banks get inundated with refinancing requests. All of your efforts could end being too little too late. Don't let this happen to you.3.) Hire a mortgage broker, if necessary. Not everybody has the time to look for the best mortgage for their dream home. Mortgage brokers have years of experience searching for the best deals for their clients. Not only will you save yourself the headache of doing a long search, you will probably save money in the process.4.) Communicate with the bank if problems arise. In many cases, frequent communication can make things much easier for people who have just lost their jobs and are unable to pay their mortgages. You may be able to avoid foreclosure altogether. Your bank has invested in you and has a stake in your well being. Do not hesitate to let them know your financial situation. You might just be pleasantly surprised.If you follow these four steps, you will be in the clear when it comes to financing your home. Many of this advice is common sense. Don't overshoot the mark when it comes to getting a mortgage. Use the knowledge of professionals like Realtors and mortgage brokers to make the process as smooth as possible. Don't buy into deals that sound too good to be true at the moment because those deals turn sour after just a few years. And lastly, enjoy your new home! It will be one of the most exciting decisions you will make in your life!

Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit

Having poor credit alone cannot hold you back from getting the home loan you want. Buying a home that is everything you want in a home, is a very exciting experience. The blemishes on your credit history will not alone keep you from getting the home you want and the home you deserve.Here are some things to keep in mind when moving forward in the application process to get your home loan:Contact or apply to many different lenders or brokers - Online you can fill out many mortgage applications where the lender or mortgage service company does not pull your credit history. If they don't ask for your social security number, they usually cannot pull your credit. Brokers usually use the initial application or inquiry form and what you tell them about your credit to make a decision about whether they should pursue the application and pull your credit or not. Many lenders will tell you that you are not going to get approved anywhere and that if they can't help you, no one can. That is not true. All mortgage brokers have access to very different mortgage programs and some brokers are more creative in their financing techniques than others.Fill out your application or inquiry as accurately as possible - Inflating your income on your application or inquiry form, to be higher than you know you can verify your income to be, will only delay the process of getting pre-approved. The broker will work the fastest for you if he/she is working with the exact information he/she needs to be able to verify. That's the best way to get approved and through the pre-approval process smoothly.Be persistent - This is the key when seeking a mortgage loan pre-approval with poor credit, be optimistic. Look for creative ways to get financing and contact as many brokers as possible. There is one or more out there that can help you. The key is to find them.Start house hunting - Sometimes the key to getting into a house is finding the right one and a seller that is flexible enough to help you do some creative financing work. For example: the seller carrying back a small percentage of the loan, the seller paying your closing costs or you being able to purchase the house for significantly lower than market value.To view a list of our recommended poor credit mortgage lenders, visit this page: Poor Credit
Mortgage Lenders.

Building Your Own Custom Home - Finance Issues

When building your own custom home, perhaps the biggest problem people have to face is getting finances for starting and finalizing the project. This implies purchasing the piece of land, paying the architect for the plan, purchasing the tools and construction materials you need, taking into consideration the design issues and so on.The best, but not the happiest way for someone to obtain finances for these types of projects is a loan. It's not music to your ears, but, still, it's the best possible way when you need lots and lots of money quickly. There are loaners who offer finance possibilities for building custom homes, but they have severe rules when helping you building your own custom home by offering you the money you need for this.The disadvantages for this are quite worth to be taken into consideration: they want the house to be completed in time and on budget. A very good solution for you in order to get rid of the extra cost issues that appear on the run is to go for a construction cost estimation solution. This way, you will know exactly how much money you need and what quantity of construction materials is required. Although this can be a bit costly, it's very efficient when building a home with a fixed sum of money - the one that the lender offers you.Should you have a bank account with some saved money, it's not very wise from you to spend it all on building up the house. You have to struggle to keep the price score down so as to finalize the project successfully. Remember that there are registered a few custom home construction disasters due to the lacking finances for project completion. So, analyze all the offers lenders have on the custom home construction loans and then take the wisest decision.

Home Financing Under Islamic Banking

The major reason for the current financial and economic crisis in America is said to be a rash of Bank failures. And Bad Home Loans are said to be the major reason for the Bank failures in the United States.Quite simply, American Banks had been over financing home buyers. Suppose a potential home buyer approached his Banker for a home loan, and his credit rating and financial standing would entitle him to a home loan of, say, USD 100,000.00, his Banker would gleefully advance him say USD150,000.00! Naturally this borrower would not be in a position to repay the stipulated installments because of his lower repayment capacity. This would eventually lead to a default on part of the borrower, rendering his loan account a non performing asset.In the light of the Banking crisis in the United States and also in Europe, it would be worthwhile and also interesting to have a look at the home loan financing scenario under the Islamic system of Banking.Typically, under the Islamic Banking system, home loan financing is based on the principle of Profit Mark Up on the cost of the property, by mutual consent of the Bank and the Borrower. This type of financing is usually done under the contract of Murabaha.It goes like this. Suppose you are interested in buying your dream home (who's not!). You approach the Islamic Bank with your requirements with regard to the financing. The Bank in turn would assess your requirements as well as evaluate your eligibility for the financing based on your income and repayment capacity. After taking an overall view of your financial standing and credit rating, the Bank would fix a eligible amount of home loan for you. Let us say the Bank fixes a home loan limit of USD100, 000.00 for you.This amount would include their mark up on the cost of the property. This mark up is fixed by mutual consent. Suppose the mark up is say USD 10,000.00. That means the net amount of your home loan is USD90, 000.00. The next step for you, the borrower, is to identify your dream home in the range of USD90, 000.00. After that you give details of the property thus identified to the Bank, who in turn will negotiate with the owner of the property and make a purchase of the same specifically to sell it to you.The next step would be to complete the formalities in regard to documentation etc., after which you get the possession of the home, though you are still not the owner of the same. The ownership will vest in you once you repay the stipulated number of installments within the repayment period fixed. Then your dream home becomes really yours!The main characteristics of the above type of home loan under Islamic Banking are: a proper evaluation and assessment is made of the repaying capacity of the borrower and fixation of the appropriate loan amount. Another notable feature, which is in fact the bedrock of Islamic Banking, is the absence of Interest on the loan amount. Instead the Bank adds up a profit margin to the cost of the asset and divides the total amount into equal installments payable usually monthly.The above example is a simple type of home loan under the Islamic Banking System. Within this system, variations are possible to suit the specific needs of the borrower.

Home Financing

If you have the desire to own a home, there are thousands of programs available that will help you accomplish the American Dream. Owning a home is one of the best investments that you can make. Home ownership is like having money in the bank. Owning your own home will give you tremendous bargaining power and great net worth. The major fear that most people encounter when trying to purchase a home is financing. Some people believe that home ownership is impossible for them because they have challenged credit.However, this is not true. You can still become a home owner by using creative financing resources. Creative financing programs offer people with credit issues such as bankruptcies, foreclosures, repossessions, charge-offs, late payments, judgement, liens, medical bills, student loans, and low income achieve home ownership. American citizens have been crippled over the past years by the issues listed above. Home ownership does not have to be impossible. It is important that you invest in a home now since mortgage rates continue to rise. Mortgage companies are eager for your business and many of them have finance programs that will help individual qualify for the home of their dreams.For more information visit - []

Who Else Wants The Insider Secrets To Mobile Home Financing-"Pre And Post-Hud"

Financing a mobile or manufactured home many think is next to impossible. In many cases that may be true. However, our vast years of experience has shown that many of the obstacles can be addressed and in many cases rectified prior to getting the dreaded "turn down notification letter." Before the dreaded notice is a reality consult with an experienced mortgage broker with solid references.On June 15, 1976, the U. S. Government enacted significant legislation regarding the construction and safety standards for manufactured homes. This federal act has become the major dividing line concerning the registration, regulation and financing of manufactured homes. Without getting too technical, here are some of the major points of this act that are significant to consumers thinking about buying a manufactured/mobile home:1. Homes manufactured after June 15, 1976, (post-HUD), have a "data plate" permanently affixed to the outside of the home. Among the number of things required to be on this data plate are:a. The name and address of the manufacturing plant.b. The serial number and model designation, and the date the unit was built.c. A statement that the home was built to comply with Federal Manufactured Home Construction and Safety Standards in force at the time it was built.d. A list of the major factory-installed equipment and/or appliances.The above are some of the major provisions. Practically, what they mean to the consumer are:a. California, through the Department of Corporations, maintains a record of post-HUD units, similar to what title companies do for real property. You can find out a lot of information. Pre-HUD homes may have little or no information regarding the unit's identification numbers, construction, manufacturer and what the home came equipped with. Result-you know more about what you are buying with a post-HUD.b. Perhaps as importantly, because of this HUD system, a few conventional lenders will finance "qualified" post-HUD units as real estate. Pre-HUD units are financed as chattels, or personal property. There are fewer lenders, qualifying is usually more difficult, and rates and terms are not as attractive as post-HUD units. As a final comment, pre-HUD "single-wides", as opposed to double-wides, are almost impossible to finance.Bottom Line: Because of the problems associated with pre-HUD homes, some of which are enumerated above, these homes built prior to June 15, 1976, have become "bargains." They are often very attractively priced for one simple reason. They can't be, or are very difficult and/or expensive to finance. If these homes can be financed, often potential purchasers simply can't qualify under the stricter lender guidelines. Thus, the market for these types of homes has become a "cash on the barrel" market. People who bought pre-HUD homes for cash, or perhaps found a lender some years ago, when financing was more available, now find themselves unable to sell their home, or they must reduce the price, or even carry back a loan on the property in order to move it. CAVEAT EMPTOR!

Creative Home Financing - What is Creative Financing

Creative financing refers to a way to own real estate outside of conventional means such as traditional mortgage loans. Traditional mortgage loans are not always the best option for every circumstance, and this is where creative financing techniques can help home buyers get in to a home. Creative financing can help people with less than perfect credit own a home.Creative financing techniques are also commonly used by investors in order to gain control of properties with the least possible out of pocket expense.As the name suggests, there are numerous options for creative financing. Before you choose to use any method of creative financing, it is best if you research all of your options and become familiar with how it all works.Here are several common methods of creative financing that are used...Rent to Own / Seller Financed MortgageIn a rent to own situation or a seller financed mortgage, the current owner of the property holds back the mortgage on the property. Typically, in a rent to own, a portion of your monthly rent goes towards a future down payment. This has advantages over renting because you rent is not going to "waste" so to speak. If you decide to purchase the property at a future date, you can use the down payment portion to help you qualify for a traditional mortgage.In the case of a seller financed mortgage, the seller acts in the same capacity as the bank and holds the mortgage on the property that you then pay back with interest. Typically, arrangements like these are more common in times when the real estate market is moving more slowly. Both sellers and buyers can benefit from such a situation as the buyer gets in to the home and the seller is able to sell the home as well as collect interest on the deal.80/20 Home MortgageAn 80/20 home mortgage is actually two mortgages, a primary mortgage an a second mortgage. The concept and idea of an 80/20 home mortgage is to reduce the amount of liability towards any single lender, finance 100% of the purchase price and avoid paying PMI.You have several options that pertain to the 20% part of an 80/20 mortgage. The second mortgage can either be fixed or a line of credit. The benefit of choosing a line of credit over a fixed rate in this situation is that the interest rates can often be 2 - 5 percent lower than a fixed rate.Government Backed Loan ProgramsSome government back loan programs are also considered creative financing. There are several state and federal loan programs offered that allow for 100% financing. Closing costs can also be rolled in to the loan in some cases.Because these programs are government subsidized, income qualifications are a common restriction of eligibility. These programs are aimed at people with mid to low income as a means of helping everyone experience home ownership.Hard Money LendersHard money lenders are traditionally used more for investment purposes than for a primary residence. A hard money lender loans money privately usually with higher interest and shorter terms compared to traditional mortgages.While this is no means a complete run down of creative financing techniques, as you can see there are many options when it comes to financing real estate outside of traditional means.

VA Mortgage Loans - 100% Home Financing Options For Veterans

Veterans can obtain cost-effective home financing with VA mortgage loans that enable purchasing and refinancing up to 100% loan to value. In order for veterans to qualify and benefit from VA home loans it is important to understand the loan eligibility requirements, the VA entitlement and various loan types allowed with VA mortgages. Clearly, military veterans should understand the differences, advantages and disadvantges when comparing VA mortgage loans to conforming home loans.First and foremost, VA is not a mortgage lender. The Department of Veterans Affairs does not make loans, but VA does guaranty the VA mortgage loans that traditional lenders make. The Veteran Administration does provide any lending services but they do guarantee that the qualified vets repay of the loan or they will pay the insurance portion of the mortgage that poses the most significant risk for mortgage lenders. Because of the government guarantee reduces the risk of payment default, vets can benefit from low interest rates whether they are buying or refinancing a home.When applying for a VA loan you must have your certificate of eligibility and the VA mortgage lender will likely access your credit report and request income documentation like pay-stubs and W2's.There is an automated certificate of eligibility that enables borrowers or lenders to access when submitting a VA mortgage Loan into process. The Veterans Affairs Dept. recommends working with a credit counselor in an effort to repair your credit if needed. Like FHA loans, VA mortgage loans are more flexible and understanding with credit. Credit scores are not the driving factor for VA qualifications, but income and debt to income ratios are important factors for getting a VA loan approved. The VA guaranty is only available if your income and monthly expenses suggest that you can afford a new home loan.The most obvious advantage with VA mortgage loans is that they are offered up to 100% loan to value for buying or refinancing. That means you will not be required to put money down in a purchase transaction or need any equity to refinance for a better mortgage payment. Again, No down payments are needed if you can get approved for a VA mortgage loan. Since there is a government guarantee to the mortgage lender provided by the VA, additional private mortgage insurance is not required. The VA mortgage rates are low with 30-year fixed interest rates and the VA funding fee is only.5%.

Home Finances - How to Budget Your Hard-Earned Dollars

The financial crisis of the past two years has hit many households where it hurts most - the wallet. Money has become tight and for an unfortunate many jobs have disappeared. Making ends meet these days has become a challenge. If your home finances are in disarray; and the ability to plan your future well-being is on the back burner, you'll find yourself building more stress in your life than is necessary.The best way to face your financial challenges is to meet them head-on - with a budget. The days of operating a household without knowing where you spend your hard earned cash are gone. So, let's sit down and make plans that will help you organize, prioritize, and meet important financial goals.Knowing where you spend your money is important. Let's gather a few things together and see exactly where your money goes.In order to meet this goal you will need to keep a receipt for every purchase you make. Receipts for groceries, home repairs, doctor visits, incidental spending, and everything else, will need to be kept and listed.All your fixed bills will also need to be recorded. These include the phone bill, water bills, electric bills, medical insurance bills, rent, mortgages, etc.If you have a checking account and use a debit card in conjunction with your checks you can print your last three months of statements and get to work immediately without the hassle of building a list from scratch.Planning is an essential part of developing a simple budget. You can use a paper spreadsheet or one on your computer if you have one. Assuming you are using a computer, you'll be making several columns.List your income for the month. Start the first column on the left hand side. Don't forget to include child support, and other sources of income. Make a category for each income item, i.e., Bill's pay, Sally's pay, and child support. In column two list your actual income for each category.Expenses are next. In the same row under your income column list your expense categories, making one for each fixed expense; i.e. a line for electric, phone, water, and so on. The next column will contain the amount spent for each of your fixed items. Example: in this column you'll place $52 next to electric, as that is the average amount you spent on electric over the past three months. Complete this line item for each fixed category.Next take a look at your other expenses tallying the amount you spent for each category over the last three months. Example: You ate out, ordered pizzas one night a month, and bought lunch four times a month instead of carrying your lunch. Your monthly average totals forty one dollars. Place $41 dollars in your dining-out column for a budgeted amount.Example two: You had to purchase a new faucet for the kitchen and make minor repairs around the house. In three months you spent $83, for an average of $28 a month. Place that figure in column two next to home repairs.Try not to make a miscellaneous column, as this catch-all column has the tendency to grow out of control. Instead, take the time to list the expenses in a category, no matter how small the items listed are. Clothing, pet food, vet costs, and other discretionary spending should each have their own category.Don't forget to plan for upcoming birthdays, a gift category. If you pay your property taxes separate from your mortgage make a category for it in the fixed expense section. Likewise make a category for car insurance in your fixed expenses whether you pay yearly, quarterly, or monthly. Other category items to remember may include school supplies and entertainment items such as movie rentals, book purchases, and even the newspaper.The goal is to capture all you expenses, a must if you are serious about planning to meet your expenses with a limited budget. When your spending money is listed is it simplified and you can more easily keep track of where your money goes.If your home finances are being stretched thin, it is more important than ever to set a budget and stick to it. Realize this may be much easier said than done. Especially since your next step will be to prioritize your spending.

Budget Your Home Finances Properly

Budgeting should be the first step a financial adviser takes when advising a client, however if you are not willing to pay for a professional adviser, you should still take the time to understand your situation and budget your home finances yourself.Budgeting is the process of looking at all your incomes and expenditures, and finding the difference between the two. This is so important as this can show you how much money you have available to save each month, or if you do not have enough money coming in to meet your needs.A simple spread sheet program is the easiest way to do this, but pen and paper with a calculator will do just fine but may take a little longer. This can seem a daunting task if you have never done it before but can actually be quite rewarding, especially if you find ways of cutting expenditures and start to see the amount of disposable income you have.On one side you need to list all your income. This can be salaries, any benefits or tax credits, as well as any other regular income you receive such as interest on savings. If you have regular overtime or bonuses these should be included but be careful if these are not guaranteed. You may want to make a sub heading for income that you can't rely on.Depending on your circumstances you may want to do these figures both net or gross. If your main income is salary then it will be easier to just work with your net income. However, if you have many different sources or are self-employed, it will probably be easier to use gross figures and then calculate the tax and other deductions at the top of the expenditure column.Expenditures are likely to be a longer list than incomes. Most large bills can be identified easily from your bank statements, but to get a complete view it is best to keep records for a month to account for everything you pay. Even small expenses can add up, so include as much as you can.To prioritize your expenditures it is normal to break them up into three groups. Essential expenditures are the priority bills, and this is important if you are struggling with meeting your payments. Essential expenditures are obviously items like your housing costs and utility bills. The next level is everyday spending, items which you really need like food and travel. The final section is discretionary spending which covers everything else like vacations, clothing, entertainment and dining out.The final task is to total both columns and determine the difference between the two. In doing this process, you will see obvious expenditures that your can cut out or reduce to improve your bottom line. Ultimately if you want your savings to be higher, you will have to either earn more or spend less, but at least you will now know where to start. Hopefully reading this article will help you in some way to budget your home finances.