Home Mortgage and Refinancing » Home Financing

The Process of Applying for a VA Loan

Mortgage Maven — Tue, 31 Aug 2010 21:12:05 +0000

A VA loan is a loan through a private lender that is partially guaranteed by the government. It is available for active and retired military members. Spouses of deceased military members are also eligible if the deceases spouse died in the military or due to their military experience.

VA loan applications are available online and by mail. Active members of the military and veterans can fill out the entire application online. Spouses of deceased military members must request an application and mail it in. First, you have to obtain a certificate of eligibility called a VA Form 26-1880. After you approved for a loan you can select a home you wish to purchase and sign a purchase agreement. Then you must have it appraised by the VA. Most lenders that work with the VA loan program are familiar with appraisers and can help you with this step.

After the home has been appraised, you can then apply for the loan. Some lenders are able to approve the loan very quickly without waiting for a credit check. For other lenders they will have to send the VA loan application to the VA for approval and wait for authorization.

Though income guidelines may vary by the lender, generally your gross monthly salary must be greater than 28% of the of the monthly mortgage payment and tax payments. Your gross monthly salary must also be greater than 35% of the monthly mortgage payment, the mortgage insurance payment, and other monthly expenses.

To determine how much you can borrow, you can use an online calculator to enter your monthly salary and bills. You can also estimate your monthly mortgage payment online. You’ll need to enter the number of years the mortgage is for, the amount borrowed, the percentage rate, taxes, and insurance rates. You can also compare up to three different loan types with different amounts borrowed.

Obtaining a VA home loan is relatively quick and easy. Most realtors and lenders will be able to assist you through the application process. Before beginning the process, it is recommended that you use the online calculators to determine how much you can borrow before looking for a house.

Buying Short, Buying a Foreclosure – Is it worth it?

Mortgage Maven — Fri, 23 Jul 2010 17:23:05 +0000

Are you planning to go for a short sale or a foreclosed property? Have you looked into its benefits and difficulties? Is it really worth your time and money? Is it a good investment? You will get many more questions after listening to the amazing deals on such properties. Local Realtors confirm your fears saying that it is not an easy task. You will need money for purchasing Orlando investment property, for example, but that is alone not enough. You will need a lot of time, smartness, patience and expert advice to go through a successful investment in such property. There are times when this purchase will have great values for the buyer, since there will be less focus on inspection issues but the process tends to be mostly long and frustrating. This will certainly not suit an impatient buyer or those looking for quick occupancy.

The buyer will require lots of money for property investment in Orlando FL (using the above situation) since he/she will also need to fix things up and get it ready for renting or re-listing. Consulting an experienced lawyer to manage such transactions and a licensed real estate agent will help a lot. At times, these transactions can be endless owing to difficulty in closings. Since the bank needs to approve, this process can last for months but later get rejected outright. The lender thus may not own the property, since it is sold to the purchaser and entity has to weigh in.

Bank-owned foreclosures may proceed quickly when the banks need to dispose the property off but others pose difficulty. It is the duty of the agent and the lawyer to deal with such silences and communicate openly with the purchaser if they want the transaction to proceed and end successfully. Thus it is recommended to approach an expert who can help in purchasing foreclosures or other investment opportunities.

FHA Mortgage Loans

Mortgage Maven — Thu, 17 Jun 2010 21:59:04 +0000

In good times and bad, there is always a segment of the population that is in the market to purchase a home. For those starting a family, or simply trying to establish themselves in the world, FHA home loans are a great option.

What is a FHA home loan?

The FHA home loan is a federal-assistance mortgage loan that was first introduced during the Great Depression. It was made to allow lower-income Americans to borrow the necessary funds to be able to purchase a home. It has since developed over time, and now aids people who cannot qualify for private mortgage insurance.

How does it work?

A FHA loan features insurance to lenders that the Federal Housing Administration will pay a borrower’s loan if the borrower defaults. It is this guarantee that makes lenders willing to give mortgage loans to borrowers. The FHA further assists borrowers by asking for just a small down payment of 3.5%. In exchange for this, the FHA charges borrowers a fee, a fee for every monthly payment, and requires the borrower to pay a mortgage insurance premium of 1.5%. It is these collected funds that the FHA uses should the borrower default on the loan.

There are, however, limits on the amount a borrower can get. This used to be a problem in areas such as Southern California, where the amount of a typical San Diego Mortgage was well above the national average. But in the last few years, the limits have been adjusted to reflect the sales prices in any particular region.

Eligibility for FHA loan

In order to be eligible for a FHA loan, the borrower will have to have a reasonable debt to income ratio, along with a decent credit score. Generally, a debt to income ratio of at least 29/41 is required. There is, however, no income limit, so as long as the debt to income ratio is met, almost anyone with an income is eligible to get a loan.

So for people wishing to purchase a home, but who do not have the normal means to do so, the FHA home loan is definitely a good option. Read more about popular loan programs at MySanDiegoMortgage.com.

What will I have to Pay in Closing Costs?

admin — Wed, 09 Sep 2009 23:42:41 +0000

After all of the expenses of buying a home, many new owners are shocked to see how much more they have to pay at the closing. It is important to understand these fees, especially if you are considering re-financing your home, since any savings on a new rate may disappear once you have to pay the closing costs on a new loan.

You would expect the lender to charge something for creating a new loan. Needless to say, the bank is not going to absorb these costs, but rather pass them on to the borrowers. (Although, in competitive loan markets, banks have used lower closing costs as a factor to attract new borrowers, by absorbing part of the fees.)

Depending on the state where you live, there may be even more.

If you are concerned about these costs, you may be able to lower some of them to a certain extent. In some markets, banks may be willing to reduce or eliminate fees that they themselves charge, such as application fees. But many of the fees involved in the closing of your mortgage are not under the control of the bank, such as the appraisal fee, the legal fees, etc.

One of the first steps you should take is to get a good faith estimate of the closing costs. Be careful that your lender has not offered you a great loan rate, but then padded the closing costs to such an extent that they recover the difference.

If you do find that any of the costs are not in line with market rates (you can call another bank and ask them what their fees are-this will apply in some areas, such as an appraisal or a credit search, or you can file another application and get another good faith estimate), call them on it and request to negotiate the item.

Now you understand how much your closing costs are going to be, and you have made some efforts in reducing them, you can calculate if refinancing is really going to be worth while by using an online mortgage calculator to find out the costs left on your present loan.

To the total cost of the new loan, be sure to add the closing costs, since you will not have them if you stay with your present mortgage. Now you can decide if it is worth taking out a new loan on your home.

Lease Purchase Agreements – Things You Should Know

admin — Wed, 09 Sep 2009 15:13:18 +0000

Lease purchase agreement is a contract under the owner allows the tenant to occupy the house for a certain period of time after which the tenant can buy the house. This agreement is useful to those people who do not want to take a mortgage due to various reasons.

This contract is also helpful to those persons that do not qualify for a mortgage due to a poor credit score or other reasons. With the changing scenario of the real estate market, it has become essential to offer more innovative policies and methods to tenants.

A lease purchase agreement is just one such popular method which has been successful in the real estate market. It combines the house purchase and lease agreement together. It makes for a nice combination of the two agreements.

Such a contract often lasts for several years. Once the legal contract period has ended, the tenant can purchase the property according to the terms and conditions. A mortgage agent can be helpful in such cases.

There are many ways in which a mortgage agent can be useful to you. You need a correct appraisal of the property before signing the agreement. A mortgage agent can study the market and tell you whether you are going to make the deal at the right price or not.

Before making a lease purchase agreement, you should also consult a good real estate lawyer who can help you prepare an agreement which suits both the owner and the tenant. This is to ensure that there is no trouble afterwards.

Different states in the US have their own real estate laws governing lease and purchase. So you need a lawyer who has experience in dealing with the local real estate laws. Only then he can help you in a better way.

Careful examination of all the facts is required before making a Lease purchase agreement. An expert lawyer can handle all the things on your behalf and ensure that every term benefits you.

Current UK Property Market

admin — Tue, 08 Sep 2009 18:35:53 +0000

Due to the current economic climate, in recent months, the UK housing market has been in dramatic decline. A staggering 16.6% decline has been seen, to date with a total of 1.3% of that amassed during January 2009.

Whilst searching online it is not hard to find information regarding the current economic climate. It has been reported that the housing market in the UK could fall further still and any improvements are still some time away.

It has been predicted, by the Royal Institution of Chartered Surveyors (RICS) that there will be a further 10% decrease in the number of houses sold, this year. The housing market is currently in the worst position seen in many, many years.

Although house prices will begin to rise again in the year 2011 a further 10% decrease is expected this year, therefore people will have to recognize that the price of their house is currently much less than it was not so many years ago.

The UK housing market has been damaged by the current economic climate therefore a number of houses are being repossessed and resold at a far cheaper rate, therefore it is a very good time to purchase, for first time buyers and people looking to invest in property alike. However, it is not such a good time to sell property within the United Kingdom.

Within the next year the finance industry expects to see an increase in houses being repossessed. This is as home owners struggle to meet mortgage repayments. They are predicting that in the current UK property market; a further 34,000 homes will be repossessed.

listed below are some of the main reasons why the UK property market has fallen dramatically over the last year.

(1) Mortgage companies are far less willing to provide finance to those people who want to purchase a home. This is because many people are unsure whether they will have a job or not and whether repayments for these mortgages can be met.

(2) Mortgage lenders are demanding a higher down payment from first time buyers, doing this makes it difficult for the buyer as normally they do not have the money.

(3) As house prices fall, many buyers are holding off from buying more as they think prices will drop further.

(4) Even with cuts in the banks base rates, people still find it difficult to get the mortgage they want. Over the last 2-3 years the mortgage prices have not really moved, people have just been holding off remortgaging.

Above we have looked at the reasons why the UK property market looks the way it does. As we watch the market closely, there certainly seems to be no chance of the problems easing for many homeowners in the coming months. But it is not just homeowners who are suffering with this current slump. In recent months there have been many construction workers laid off and many estate agencies closing.

Get Your Lender to Say YES!

admin — Sun, 06 Sep 2009 07:20:54 +0000

Everyone knows that in order to be given a loan, especially a mortgage, that a good credit rating is vital. However, this is just the beginning of what a lender considers when reviewing an application. The lender looks at several different aspects of a persons financial health to gain an understanding of their situation. Much of this information is not found on a credit report. Since lenders generally cannot obtain this information themselves they require the applicant to bring in the documentation they need.

One of these key factors is the applicants debt ratio. This is the ratio of an individuals debt and expenses to his net income. The lender compares the potential borrowers current debt load and living expenses with his income. This is why applicants are expected to provide pay check stubs, tax returns, and other documents that cannot be obtained from the credit reporting agencies. The ideal debt ratio is about 1.3, meaning that the applicant has about 30% more income than is required to pay for his current debt and expenses.

An applicants payment history is also a key element of the application, lenders look very specifically for late payments. Lenders view a habit of making on-time payments very favorably. While payment history information is part of the credit report, a mortgage lender weights this information differently than the credit bureau reporting FICO scores. Because of this mortgage lenders study the applicants credit report to find all the information possible about an applicants payment habits. If there are habitually late payments showing on a credit report it is a good idea to attach a letter of explanation to the loan application.

There is other information that lenders want that is not included on a credit report. Having an understanding of an applicants other financial holdings helps them know whether or not there are means to make an equity investment, or down payment. Also, semi-liquid assets like retirement accounts or large stock portfolios can soothe over not so perfect debt ratios. Most mortgage lenders like to see that an applicant has additional assets that make it possible to make mortgage payments out of regular income. Since this information is not available as part of a credit report, applicants should be prepared to provide this information to a lender.

Another factor that lenders take into account has nothing to do with the applicants financial position, but deals with the property in question. All mortgage lenders will require a comprehensive appraisal of the property that the applicant is seeking to purchase. This prevents the lender from lending out more money than the property is worth. Should the loan turn bad and result in foreclosure, it is crucial to the lender that the resell value of the property be enough to cover the amount originally lent out.

This guideline can help a potential homebuyer in examining his own credit and make adjustments before applying for a loan. Having everything in order can streamline the process and be advantageous when the application is reviewed.

Benefits Of House Loan Refinancing

admin — Sat, 05 Sep 2009 23:50:56 +0000

Home loan refinancing is a significant concern, particularly when you have choice of several different loan products. The loan you opt for the most expensive asset and debt has the influence to significantly manipulate you’re in general monetary condition maybe in a good way or in a harmful manner. For instance, if you refinance a home but on the other hand do not plan to stay in the home long enough, in that case you are spending money on something that will net you absolutely no benefits, as you will not be able to truly realize the savings you should have.

Refinancing for debt consolidation does not indicate that the homeowner is simply combining their debts. With debt consolidation refinancing, the homeowner in reality goes for a new home loan to pay off all of the existing creditors. These creditors can be automobile dealers or credit card companies. The homeowner’s level of debt will remain unchanged. However, the homeowner is then accountable for repayment of the new loan. When the refinancing is complete and all the creditors have been paid off, the homeowner is now locked into the terms and conditions of the refinancing loan. All terms and conditions linked with credit issued by earlier lenders are no longer in force. In addition, interest rates valid to the refinancing loan will now be relevant as opposed to the past creditors’ interest rates.

On the other hand, if your finances are more uncertain than they were earlier although you look forward to that it will alter in future, a two-step mortgage could be the type of economic vehicle that makes the most logic way out. This type of loan is one more 30 year mortgage, however rather than offering the flat interest rate from beginning to end, it has at first lower monthly payment, typically for about five to seven years, and after that the payment increases to make up for the missed principal amount that was not paid in the beginning.

Here are some tips one can follow:

A person should plan his/her budget before hand; calculate the amount he/she has to borrow.
He/she should try to go in for the Today’s Mortgage Rates.
He/she should select the Mortgage rates which he/she should be able to repay it without disturbing the present expenditures.
One should also find out if there is any redemption penalty.
Last but not the least, one should also know what would happen if he/she misses to pay one or two installments. My father had taken the assistance from the Mortgage refinancing Vancouver when he wanted to modernize his house.

These variable rate mortgages are often preferred to make payments on a more costly property, making matters worse. This may critically hurt the wallet once time to adjust interest rate upward comes. On the other hand, for an investor this is an ideal mortgage to promptly find investment properties with the help of this type of loan, and while he/she may not plan to keep this property/loan for 30 years, it makes available the money required right away. This is also precise for a balloon rate mortgage like Mortgage Refinancing Vancouver that at first keeps payments small however in due course have need of a huge payments to make up for the money accumulated.

Home Loan Modification vs Mortgage Refinancing

admin — Tue, 28 Jul 2009 16:31:10 +0000

During these difficult economic times, more people are losing their jobs and having a tough time making their mortgage payments. This has resulted in millions of foreclosures and millions of people on the verge of losing their homes. Fortunately, there are opportunities out there that can help homeowners stay in their homes. Two options are Home Loan Modification and Mortgage Refinancing. When considering these two options, it is important to understand their differences.

Home Loan Modification

Home Loan Modification is when a lender and mortgage holder change the terms of a mortgage by changing the amount of the monthly mortgage payments. The goal is to make payments more affordable for the homeowner. If a lender is owed money, they will often prefer modifying a home loan instead of advancing with a foreclosure as there are many fees associated with the process. Giving a mortgage holder the chance to bring the mortgage up to date and provide better terms is much easier and less expensive. Other benefits of a home loan modification include: it does not depend on a persons credit score, it usually results in a lower interest rate, and it allows lenders to get rid of a bad asset and sell the new loan on the open market. For many homeowners, refinancing is not an alternative. For homeowners who cannot make monthly payments or have recently lost their job, a home loan modification may be a good solution. A homeowner will have to provide proof to show that their current loan has put them in substantial financial difficulty.

Mortgage Refinancing

Mortgage Refinancing means the terms of an existing mortgage are withdrawn and a new mortgage is put in place that offers better rates and terms and conditions. You are actually paying off your existing mortgage with a new mortgage. The conditions and terms are negotiated by the lender and homeowner and they both agree to the new terms. The result is usually better terms and payments. The major difference from home loan modification is that mortgage refinancing will involve fees and penalties, and home loan modification does not have these fees. Mortgage refinancing involves paying such fees as title fees, escrow fees, lender fees, appraiser fees, and taxes. Most home owners refinance in order to lower their interest rate, to extend the life of their loan, or to pay off other debt. Lenders normally require that homeowners who are looking to refinance have a good credit score, equity in their home, and proof of job security.

Deciding which option is best often depends on the homeowners personal situation. There are advantages and disadvantages with each type of home loan. If you have built up a lot of equity in your home, you should consider refinancing. If you have a poor credit rating, you may want to consider a home loan modification. With the increase of mortgage defaults, homeowners should know there are options out there to save their home from foreclosure. It is just a matter of researching and choosing the best option that meets their particular needs.

Homeowner Loan – Know The Facts

admin — Mon, 20 Jul 2009 21:11:45 +0000

There are a several types of loans that are available to consumers who qualify. People do not need to be paying such high interest rates or to be struggling to pay their loan off each month.

One of these loans is the homeowner loan. This loan has been benefiting knowledgeable homeowners that know how to take advantage of good offers.

A homeowner’s loan is a type of secured loan where the homeowner will use their property against the loan. If the borrower was to default on the loan there is a risk the property will be taken away. This means less risk for the lender which means attractive rates are more available for the borrower.

The lender is looking for a loan that will give borrowers the motivation to make sure that payments are met, that way the lender will see the return on their investment. There is more motivation for the borrower to pay back the loan as they know there is a chance of losing their home. This is why the lender is happy to give better interest rates because the motivation is there.

It is always important to read through the contractual agreement between the lender and the borrower as some lenders may try and force some unfair terms on to the borrower, such as the homeowner losing their home after one late payment. Everyone knows that missing a payment can happen for whatever reason, this should not warrant a homeowner losing their property. Shopping around for the best deals can prevent this from happening.

There should be a special note made on predatory lending, the reason being homeowners put their most expensive items up their house in case of a default on the loan. Lenders practicing under unfair terms can obtain the house and benefit from auctioning or selling the house.

A lot of homeowners like to rush into getting a secured loan because the interest rate is so appealing to them.
Homeowners need to be careful when reading through the contract taking notes on the finer points. If one does not understand questions that may arise it is important to seek the help of someone who understands the topic. It is better to pay for professional guidance rather then losing one’s home because the terms of agreement were not understood properly.

Last comments

Borrowers need to heed advice, that before taking out a loan it is important to make sure that the contract is fully understood, if not seek professional help from someone who knows the topic or a lawyer. With predatory lending and unfair terms so frequent it is vital to find the good lenders and be very aware of the bad lenders.

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Steve Smith is Editor in Chief for All About Loans. Our visitors have access to homeowner loans of all types: From self employed loans to bad credit tenant loans. Visit today http://www.allaboutloans.co.uk/