Home Mortgage and Refinancing » credit

Do National Housing Trends Mean Anything?

admin — Wed, 09 Sep 2009 08:15:14 +0000

Every day the news gives a different picture of housing trends on a national level. Sometimes the story reflects that property prices are done deflating while others say that the devaluation process will continue. However, for the individual homebuyer these national trends mean very little because they generally do not apply to local markets.

The movement of each housing area is different; some areas have seen values driven up by speculators, some are still experiencing a decline in values, while yet other markets have stabilized. Because of this it is important to know that local market activity could be very different than the national housing trends so paying attention to national reports is of little value. It is imperative that potential homebuyers give strict attention the activity of the local market before making a home purchase there.

If the potential home buyer is using a real estate agent, the agent is likely to provide an accurate assessment of the situation. However, a real estate agent has a vested interest in making a sale, so the information they provide might be overly optimistic. While the advice of an agent is a good place to start, their advice should not be considered exclusively.

Websites like Trulia (www.trulia.com) make doing your own research easy. On websites such as this a homebuyer can find a wealth of information about the market being considered including current home values, what they are selling for, and pricing history. There may also be a local site that would include the same information if the larger sites do not cover a certain area. If there is no information online, research can be done through public records. This would provide information about current sale prices.

The real estate bubble burst in 2007 making it imperative that anyone considering a home purchase finds out how the local market has cycled and what is currently happening there. If there has been a decline in the number of homes for sale, and an increase in prices this indicates that the market is climbing up from the bottom of the cycle. It also indicates a fairly favorable time to invest in a home. However, it is important to find out if buyers are purchasing multiple properties. If this is the case it indicates that speculators are driving up home values and it does not necessary mean it is a good time to buy. Talking to real estate agents and taking a look at the public sale records can help a purchaser recognize the actual state of the market and improve their investment choices.

Regardless of what national or regional trends say, when it comes to real estate these trends are virtually meaningless. Careful research of the local conditions and markets is vital to making a wise investment.

How to Win the Mortgage Application Game!

admin — Tue, 08 Sep 2009 07:55:40 +0000

While most people know that a good credit rating is an important part of being approved for a mortgage loan there are other things that a lender looks at when making the loan decision. When deciding whether or not to approve a mortgage the lender looks at several elements; the credit report is only part of the data they review. For this reason mortgage applicants are required to furnish information that a lender cannot obtain by themselves.

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.

Mortgage lenders also look at the applicants other assets besides his regular income to determine if the applicant has the means of making an equity investment, or down payment. If the client has large additional assets and they are fairly liquid ” like a large stock portfolio ” this may help offset other factors, such as a less than optimal debt ratio. If the applicant has enough additional assets to make mortgage payments outside of his regular income, this is viewed favorably by most lenders. This information is usually not included in a credit report and is why a mortgage lender will ask for statements from the applicants brokerage accounts and retirement accounts (IRAs, 401(k), etc.).

There is one important element of loan approval has nothing to do with the applicants credit score or overall financial status. This factor is the property being mortgaged. Every lender will want to see an appraisal of the property that their client wants to purchase. This ensures that the lender will not loan more than the property is worth. The resell value of every property must be enough to cover the original amount of the loan in case of foreclosure.

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.

Mortgage Loans Are Not Impossible To Find

admin — Mon, 07 Sep 2009 19:04:37 +0000

Are you having trouble making your mortgage loan payments every few weeks? Maybe times are tight and you could really use a little space to breathe than your budget currently gets you? Consolidating mortgage loans might be just the thing you need.

When most people think of loans, especially mortgage loans, they usually think of rates of interest. These interest rates can be a life saver or a killer, with a possible payment difference in tens of thousands of dollars. But with a mortgage loan consolidation, you can lower your interest, which will be a big decrease in the total money you end up paying back on the loan in the long run.

There isn?t a ?magic formula? to secure a home loan when you don?t have great credit. What you have to do is keep working and trying. Don?t give up.

Many mortgage brokers work with multiple lenders, so you can look at up to 4 offers off of one application. You can find companies like this on the internet. They actually send your paperwork to hundreds of companies, and they give you the top few suggestions. This can help you refinance, get a home equity loan, make a new purchase, or take out a second mortgage. These companies can?t help you in every state, so check before you start.

Yet another option for decreasing those monthly payouts is to make use of a mortgage loan consolidation service to lengthen the overall duration of a loan you’re dealing with. The top priority thing for you to remember in that kind of situation is that it’s a temporary bandaid fix that won’t save you money over the long haul. But if you just need some breathing space right now, it might be the way to go.

By increasing the duration of the loan you’ll end up paying more interest overall. But the benefit is that the load of those regular payments is immediately lightened for you. It’s a matter of weighing your immediate needs against your future ones.

Lenders will also have some ideas about how to increase your credit score. So don?t let bad credit keep you from buying a home. Keep trying and make sure you have looked at all the options. There are plenty of mortgage service companies and lenders out there. Using the internet will save you time and effort as well. It will get you more offers more quickly.

Avoid Foreclosure By Mortgage Modification

admin — Mon, 07 Sep 2009 02:06:19 +0000

Its really terrible the way that the national media has so poorly portrayed the Loan Mod process due to the deeds of some very sad and Scamming individuals.

Loan Modifications are still one of the good options for stopping foreclosures, the only difference as opposed to when they were first gaining recognition is that now the public must go to further lengths to educate themselves on the Loan Mod and Foreclosure process in order to select the right representation. Awareness is key to avoiding the status of the many Homeowners who acted without educating themselves and became sad stories from the statistics here about on the news daily.

In the Loan Modification area there are allot variables that can affect the end result. My family has gone through the entire process myself and we unfortunately owned several properties which we could no longer afford due to both personal and professional hardships which took place simultaneously in our life sending my family and I down a very hard road to travel. I still cant understand sometimes that after 16 years of good credit and not even one late payment, We somehow found ourselves in a real jam with terrible credit facing several foreclosures, and even the loss of our very own home.

Aside from a messy personal hardship, my professional career was a sparkling example of a Real Estate and Mortgage success story turned bleak almost overnight. Once I was able to cope with my personal hardship I realized I needed to act fast if I wanted to at least save my own primary home of 3 years. After a couple failed short sale attempts I immediately sought out a job in the loan modification and foreclosure defense industry in hopes of finding an answer. I really didnt want to sell my home anyway, my greatest wish was to keep it. With a solid history of successful mortgage/real estate experience it was not long before I got the job I wanted.

During my time working in the Business I learned a lot. In my experience with the company I can most certainly say that I would only use a Licensed Attorney to handle anything regarding matters such as Loan Modifications, Loan Mediation, Loss Mitigation, and Foreclosure Defense.

Mortgage Loan Modifications are also referred to as Loan Mods. In some loan mod companies, an attorney can even fight for a change in your loan’s balance. In any case, the loan modifications are intended to make it easier for you to complete payment, so that the bank and the Homeowner can both come to an agreement. Although Mortgage Loan Modifications have gotten some bad press recently, if you make sure to Hire an Attorney who specializes in Loan Modification & Foreclosure Defense you have much greater chances of quality service because they have to adhere to the standards of their governing Bar association.

If you know that you want to obtain a loan modification or Foreclosure Defense law office in order to save your home, you need to understand a few things that can keep you from scams that can lead to the foreclosure of your home. Some people are using the hope and fears of those in need of loan mods services to feed their greed and fill their pockets.

You really have to be careful when fighting a foreclosure by being selective on the Law Firm you choose to represent you. Make sure you get all their credentials and they are a licensed member of the Bar Association in your state.

It can not be stressed enough make sure the attorney handles Foreclosure Defense and Loan Modification. You want someone who specializes in this day in and day out, a Firm who really knows how to negotiate with the banks and how to get you a true reduction. Don’t hire a ticket lawyer to do your loan modification. Remember this is your home we are talking about, it is the single most important tangible asset you can own in your life because it is the one the one that gives you shelter at night and keeps your family safe!

Make sure that you are dealing with skilled lawyers who have supporting staff with mortgage industry backgrounds. search them out on the web for bad comments and look at the local state bar association website to make sure they and their company are in good standing.

Remember Loan Mods can be a really good option for keeping your house as long as you select the right Law Office to get you to the best results.

Here are some tips below:

scam foreclosure help organizations may promise to take care of your problem with your mortgage lender or to obtain a refi for you. They also ask you to make mortgage payments directly to them.

These scammers have even been known to ask the homeowner to hand over the property deed, claiming that if the borrower then makes the mortgage payments to them, they will be able to in stay in their home. Instead of contacting your lender or refinancing your loan, the con artist pockets all the money you paid, and then files a bankruptcy case in your name – sometimes without your knowledge.

A bankruptcy filing often stops a home foreclosure, but only temporarily. If a bankruptcy is filed in your name but you do not go to the case, the judge will drop the case and the foreclosure proceedings will continue. If this happens, you will lose the money you paid to the scam operator and you could lose your home. You will also have the bankruptcy on your credit for at least 10 years.

Avoid loan modification companies that call themselves attorney based or backed. A loan modification attorney should be the one doing a loan modification and being backed by one is usually just a play on words to make you feel better.

If refinancing is underway, never sign any document that you can not fully comprehend. And always make it a point to have all the concessions or agreements in writing.

Your main focus right now should be to avoid losing your home to foreclosure. Such an event can seriously damage your credit rating and your capacity to borrow money later on. This is why it is important for you to qualify for a loan modification. You can go about your application on your own. But it is important that you know what you are doing.

Nevertheless, you can always consult with any loan modification attorney. These firms often provide consultations that are free of charge. And most, if not all, of these firms are legitimate and can provide you with a good service that you deserve. In fact, if you want a smooth sailing application, you need the services of licensed professionals that are trained and experienced in loan modification.

Buying a Home: Calculating Your Debt Ratio

admin — Fri, 04 Sep 2009 08:01:03 +0000

An borrowers debt ratio is one of the primary things that a mortgage lender looks at when deciding whether or not to give a loan approval. This is essentially the ratio of the applicants personal debt to his net income. Debt ratio is also one of the factors that the applicant can change before applying for a mortgage, and as such is something that any potential home buyer should consider

While different lenders have different precise formulas for determining an applicants debt ratio, the general rule is that the lender wants the applicant to have about 30% more net income than his total debt and expenses. Ideally, the applicant wants to have his outstanding debt at between thirty and forty percent of his income. If the applicant has more debt to service than income available, adding a mortgage payment to the mix is not a good idea. The debt ratio is also one of the key determinants to how much a lender is willing to loan and what the monthly mortgage payment should be.

Dividing the applicants net income in thirds, and lowering that number by the amount of outstanding debts determine the basic debt to income ratio. In other words, if the monthly income amount is $9000 and there is no debt then the lender will say that $3000 is available for a mortgage payment ($9000 3=$3000- $0 debt =$3000 available). If the applicant has outstanding debts equaling $3000 then the lender will perceive that there is no money available for a mortgage payment ($9000 3= $3000 – $3000 debt= 0). Having $9000 net income with $3000 in debt might not seem so bad, but a mortgage lender would not view this in a positive light despite the variances in their calculations.

When lenders go about determining an applicants ability to pay and how much their payment should be every month they so look at more than just the debt to income ratio. There are certain factors, such as large down payments and equity investments can make a difference in what a monthly payment will work out too. Semi-liquid assets such as retirement plans and large stock portfolios will also help to mitigate an imperfect debt ratio. However, it is important not to neglect the debt to income ratio because it is such an important part of whether an application is approved.

Of all the steps in preparing for the mortgage loan application process adjusting the debt to income ratio is one that can be adjusted quickly. Having debts paid off before filling out a mortgage application can greatly improve not only the financial picture but also improve the odds of approval and the terms of the loan.

Obtaining A Mortgage Despite Bad Credit

admin — Fri, 04 Sep 2009 00:35:51 +0000

Mortgage loan shoppers who happen to have poor credit know just how tough it is to get approval when your credit history isn’t perfect. If you have a credit history with a few bumps in it, you might have to put in a bit of extra effort to get that approval you need for a mortgage loan with a good interest rate.

The majority of mortgage brokers will say that if they’re not able to help you out, there’s no one else who can do it, either. But don’t fall for it! Each individual mortgage lender or broker accesses very different programs for loans, and a loan program that could be completely undoable for one particular broker could be easy as pie for another one. A few mortgage brokers even have available loan companies that focus specifically on mortgage loans for customers with shaky credit ratings, and these companies maintain their niche by having looser restrictions for qualifying than most of the competition.

As with most things in the world, the important part of getting approval for a home mortgage loan with a less than perfect credit history is plain and simple stubbornness.

Make applications with brokers on the internet who will in turn send the applications to several different lenders, saving you time and legwork. Usually these kinds of companies will give out your application to dozens or even hundreds of lenders that are all eager to help you out with refinancing, purchasing, and so forth, and then narrow it down to the top four. Services online for mortgage brokering are active almost everywhere in the United States.

A credit report will not be pulled until the lending process is initiated. This is good because little risk is involved and too many inquiries into your credit will have a negative impact on your credit score. A low credit score does not need to go any lower.

Talk with different mortgage loan brokers, and if possible have one of the brokers to pull your credit so that you can see your credit score. Next, go to other lenders you are interested in working with and talk to them about your situation. Discuss your credit score, income and how much you are able to put down on a property. Before your credit is pulled, have them to give you some estimates of potential costs.

As mentioned earlier, persistence is the key to you successfully obtaining a loan in spite of your bad credit. It is possible to boost your credit score; however, do not let your poor credit deter you from your quest for home ownership. You should be persistent in your search by talking to as many lenders and companies as possible. Finally, the online application is easy, fast method to apply and receive quick responses.

Finding the Best Mortgage for You!

admin — Thu, 03 Sep 2009 01:22:50 +0000

When it comes time to take out a mortgage there are many things that make it difficult to decide between a bank and a mortgage broker. It is a complicated choice because of the needs of each borrower and the sheer amount of different mortgage products to be considered. The choice is not simplified by the fact that mortgage products are generally under constant revision and changes are hard to keep up with increase the difficulty of making a wise choice. This means that if you found the perfect mortgage and lender a few months ago, it may not be the best choice now. However, this general guideline can be helpful in making your mortgage lender choice.

First of all, banks have a tendency to be conservative than brokerages; their policies and practices are traditional and they will only offer you mortgage products from their institution. Banks know that having more products to offer will help them gain return customers. Because banks only offer their own line of mortgage products they usually offer better terms and discounts to their customers. Bank customers that have substantial holdings in two or more accounts should consider getting their mortgage at their own bank first.

If the potential home buyer does not already have a strong relationship with a particular bank, then going through a broker may be more appropriate. A broker usually represents a number of different lenders selling different lines of products. A good broker can review an individuals circumstances and recommend a specific lender and product that can best meet the clients needs. Further, a broker will provide advice on how to present the clients financial information and will do much of the leg work involved in getting the process underway.

Generally brokers do not receive payment until the mortgage is closed, although some do charge a fee up front. While this can mean that a broker will be invested in helping a client obtain lending, it also means that the broker wants the client approved for any loan, and possibly one that is not idea for the homebuyer. Inappropriate mortgage approvals were a big factor in the sub-prime mortgage bubble burst of 2007.

Once the decision to use a mortgage broker has been made the next step is to make a list of brokers to check into. Start by gathering names from friends and family who have worked with brokers, and also the names of local brokers. Then you can begin to research, making sure they are properly licensed, if there are many customer complaints about their service, and if the broker has had legal difficulties. You can check this information with news sources, the Better Business Bureau, and the Attorney Generals website. At this point the list should only include those brokers that have a sterling reputations and no problems with licenses, legal problems, or customer complaints.

Once a homebuyer has researched the list and narrowed it to reputable brokers then it is time to interview or consult with each one. Consultations are important because each broker will have a different group of mortgage projects to offer. Interviewing brokers gives the homebuyer a pretty good idea about which broker can help them get the best mortgage for their needs.

The Perfect Mortgage–Shopping At A Bank or Brokerage

admin — Thu, 03 Sep 2009 01:10:39 +0000

There is no simple answer to the question of whether mortgage brokers or banks offer the best chance to find the ideal mortgage. This is because there are many different mortgage products available and each borrowers financial situation is unique. Further, the products available are subject to constant change and revision, so just because one lender seemed desirable six months ago does not mean it still is today. Nevertheless, there are still a few simple guidelines that can be followed to determine whether to use a bank or a broker.

In general, banks tend to be more conservative in their policies and practices and only offer their own line of mortgage products. However, they also know that the more products they sell to customers, the more likely they are to retain that customers business. For this reason, they frequently offer better terms and discounts to existing customers that are interested in one of their mortgage products. If a potential home buyer already has two or more accounts with a particular bank and has a notable amount of money held there, this bank should probably be the first place to look for a mortgage product.

Obtaining a mortgage through a brokerage may be a better choice if there is no strong relationship with a banker. A broker has many different products to offer because they represent several lenders with a wide variety of financial products. A good broker can do a lot to help find the ideal mortgage by studying the applicants situation completely so they fully understand the needs of the borrower. This puts them in a position to recommend the best possible mortgage product and lender for an individual. A broker can be invaluable by doing much of the beginning application work and advising clients on the best way to display their current financial statements.

Once you have decided to enlist the help of a mortgage broker then it is time to begin researching your options to find the most reputable broker to help you. Start by making a list of brokers that have worked with and are recommended by friends and family. You can also include brokers working in the general area. Once there are several brokers on the list start doing research to make sure they are properly licensed. Checking with the Better Business Bureau or Attorney Generals website can reveal if there have been many customer complaints about the broker or if there are legal difficulties he or she is dealing with. Any broker that has complaints, legal problems, or lacks a proper license should be removed from the list of potential brokers.

Poor Credit Home Loans

admin — Thu, 30 Jul 2009 13:37:44 +0000

Lenders assign you a credit score any time you apply for credit. This is there way of them determining whether you are a likely candidate to give credit to, or not.

The credit score is a 3 digit number, typically in the range of 300 to 850. At the low end 300 means you have very bad credit and would be unlikely to receive a loan, and on the other end of the scale a credit score of 850 would have the lender salivating at the opportunity to loan you a heap of money.

Although there is no hard and fast rule about the way the credit score is calculated (and indeed many institutions have their own formula’s which are adapted from the standard way of calculating) here is a general guide to how it is determined (these figures are approximate).

35% of your score will be based on how on time your payments are (or how late they are/have been).

30% of your score will be based on the total amount of debt you currently have versus how much available credit you have. You would add up the total balances of all your debt to get the first figure, and then add up the total credit limits of your cards, and other loans to get the second figure.

15% of your score will be based on the amount of credit history on file.

10% of your score will be based on the type of credit (this area is a little vague and can be adapted by each lender).

10% of your score will be based on the amount of credit recently obtained and/or the number of recent applications for credit.

Again, these figures are only a rough guide and there would be numerous overrides built into the systems by each lender. For example if you had a number of very overdue payments this could drop your score well over 35%. Also things like bankruptcy, foreclosures, and judgments would dramatically decrease your score.

There would normally be a process where the lender would enter your details into their computer system and if the score came out lower than the minimal they have decided on for a particular loan, your application would get rejected.

When considering poor credit home loans ; we suggest you do some diligent research first. So what can you do to improve a bad credit rating?

1. If not already doing so, ensure you are making all payments on time, or even a little early. Paying a little extra can also help in some cases.

2. If you have any judgments on your credit report for unpaid accounts, get them sorted out. Either pay the account, which will in some cases get the item removed from your credit report (if it is not removed, at least the lender will see that it has been paid), or double check it is correct (sometimes incorrect information gets put onto your report). Sometimes using a credit repair company it is possible to get your credit repaired. But be sure to do your research to find reputable companies.

3. Limit the amount of applications you are making for credit.

4. Consolidate your debts. For example if you have three items of credit, get rid of two of them, and just use one.

Or get the credit limits reduced on your credit cards. Sometimes a lender will look at the total amount of credit you have available and decide not to loan you money because that number is too high! Reducing your credit limits on each card, and / or reducing the number of cards would assist here. Unfortunately this can sometimes work against you as well, if the lender believes you have done this purely to obtain the loan.

5. Savings – Sometimes, showing a decent amount of money you have saved over a period of time will give the lender confidence in your ability to manage money.

6. If you have overdue accounts now, get them current now, and contact your creditors immediately to discuss – Don’t wait till the situation gets worse.

The problem of a bad credit rating does not go away quickly of it’s own account (generally an item on your credit report can last up to seven years), so prevention i.e. without a doubt paying your accounts on time is the best cure.

If you are stuck with a bad credit rating now and need a loan, there are bad credit lenders who specialize in lending funds to people in your situation. You will usually have to pay a higher interest rate but this can generally be a good way to start getting your credit score improved.

Don’t Fear Fixed Rate Mortgages

admin — Tue, 28 Jul 2009 16:06:50 +0000

With more and more banks establishing more stringent lending standards and interest rates being high for loans but low for savings, it is even more important than ever before to secure fixed rate mortgages.

In fact, many mortgage borrowers have already opted for fixed rate mortgages because of some of the benefits they offer, namely the fixed payment, amortization and rate to name a few. However, others who are new to fixed rate mortgages are probably nervous about whether they are getting the “best deal” out there. Here are some of the things you should do to make sure find the best rate:

1. Ask around. Ask friends, family members and colleagues for financial institutions that offer great rates. You may be surprised to find that your local bank has an even better rate than the national bank that you’ve belonged to for many years.

2. Do your homework and never settle for the very first mortgage that is presented to you, no matter how appealing it might be. Make sure you do a bit of research to ensure you are indeed being offered a fair if not the best rate out there. By weighing your options, you will literally save tends of thousands of dollars over the term of your new fixed rate mortgage. There are many sites out there that monitor regional and national rates and will allow you to determine if the deal before you is indeed worth considering.

3. Consider paying points up-front at closing. If you are looking at maintaining a particular payment over the term or if you want to minimize the interest paid over that same term, consider paying points at the beginning of your term (or at closing in the case of a purchase). Although this will require cash up front, it can either lower your payment or reduce the total cost of borrowing over the term.

In conclusion, finding the best fixed rate mortgage requires a bit of effort but could very well be worth it. Simply ask around, do your homework and consider paying points. By doing this, you will likely end up with a great rate that you can be proud to call your own.