Entries Tagged 'Home Loans' ↓

Government-insured (Federal Housing Administration) FHA loans now make up about 25% of the mortgage market. Here are five reasons you should consider an FHA loan, if you’re looking to purchase a mortgage loan:

1. Chances are good that you’ll come across one.
2. Borrowers can qualify with any income. Historically FHA loans have gone mostly to low-income borrowers. But, in fact, there’s no cap on what someone can earn.
3. Expect a tough appraisal. The home will need a clean bill of health from a government-approved appraiser, and the seller must fix any issues before a buyer can close on the loan.
4. These loans are pricier than they seem. Nominal rates on FHA mortgages are comparable to those on conventional loans. But hefty fees on the FHA variety up the cost.
5. They’ve gotten easier to obtain. FHAs once had a well-deserved rep for onerous paperwork and a longer, more difficult closing than conventional loans. But thanks to a new automatic underwriting system and the looser repair requirements, FHA mortgages take only a few days longer than conventional loans to close, says Bill Banfield, a vice president at Quicken Loans.

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President Obama’s mortgage refinance stimulus plan makes an estimated 9 million homeowners eligible for a home mortgage refinance at a 4.5% fixed rate. Hundreds of dollars per month can easily be saved on mortgage payments. This will restore confidence in the market and home values will start to rise again and will stabilize the housing market.

Advantage of this “Home Affordability Plan” from Obama:

• The amount remaining on the mortgage must be  less than $729,500
• The home mortgage must have been closed on and finalized before January 1st 2009.
• The homeowner must use the house to be refinanced as a primary residence.
• Your income levels must be verified through the use of tax returns or pay stubs
• A letter of “Financial Hardship” handwritten and signed by you is needed. This can be a loss of income, job, high medical bills or other expenses leading to your financial hardship.
• The homeowner must agree to get credit counseling if monthly debts, including the mortgage, exceed 55% of the homeowner’s gross monthly income.

After Obama’s plan, the bank or mortgage lender can lower your monthly mortgage payment to 31% of your gross monthly income. Home interest rates can go as low up to 2% in order to meet guidelines given by President Obama. Now homeowners will not have to pay any fees for home loan modification as it was done by them only but now Government will pay this as part of the mortgage bailout plan. The bank or mortgage lender has the option of setting up a balloon mortgage payments end if the monthly payments were too low. Any balloon payments will have to be paid off in full should the homeowner want to sell or again refinance their property Incentive plans are in place, backed by the government, which will gradually reduce the homeowner’s principal over the course of 5 years, up to a maximum of $5,000, for making mortgage payments on time. The mortgage interest rates are adjustable after a 5 year period. The low 2% and 4.5% mortgage interest rates are temporary fixes to help homeowners get out of their financial problems.

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“Bank of America Corp. and Wells Fargo & Co. were the worst performers among the biggest U.S. banks in modifying loans for stressed homeowners, according to a Treasury Department report”, says Bloomberg. It further says that Bank of America had 27,985 trial loan modifications, or 4 percent of its eligible loans, under the government’s Making Home Affordable Program started this year. Wells Fargo had a 6 percent rate, trailing JPMorgan Chase & Co.’s 20 percent and Citigroup Inc.’s 15 percent. Wachovia Corp., which Wells Fargo acquired, had a rate of 2 percent.

The government is trying to clutch improved results out of its main anti-foreclosure program, which has put about 235,000 borrowers on the path to loan modifications out of the 4 million targeted for help.  Read full story at Bloomberg.

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Due to the recession there’s been observed a major decline in average credit score. This decline is the major reason that bad credit home loans are an option that many Americans are taking right now. It is very difficult and unfair to blame anyone if their credit score has declined because the overall economy has been extremely horrible.

The one good thing about the recession is that due to the financial situations, it’s become easier to get a bad credit home loan.  One other reason for the popularity of bad credit home loans is the facts that average mortgage rate remain at historic lows.

You do not have to look very far to find bad credit home loans lenders.  It seems each time you turn on the television you see ads for these loans.  There are also ads all over the Internet too. Being on internet makes it very easy for you to access these companies.  The majority of the ads offer an 800 number for you to contact and speak to a representative.  It might be smart way to actually call them and see what types of deals they can offer you.  You might get a heck of a deal for being a first time customer. By doing so you can compare different companies and can go with the best choice.

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There may be various other reasons for which first time home buyer should opt for FHA loans, but here are some tops ones:

• FHA loans only require minimum down payment, i.e. 3.5%.
• You may get the allowances for past credit problems with a FHA Loan.
• There is a shorter time from bankruptcy before you are eligible.
• With FHA Loans. the first time home buyer also qualifies for the $8,000 Tax Credit.
• FHA appraisals do not have to be ordered through the HVCC (Home Value Code of Conduct).

If you’re also a first time home buyer, you must not ignore the FHA loan option. To discuss it in detail with us fill out the form here or call us at

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Owning a home is an ultimate wish of almost everyone, but for many home buyers and builders, getting a home may perhaps seem like a scary experience. Apart from being expensive, you might come across BIG words like realtors, agents, credit scores, home loans, pre-qualification letters, buyer loyalty agreements, sales agreements and so much more.

You must’ve heard people around you facing difficulty in approval for a mortgage loan. Loan applications are rejected left and right, and even those with good credit can’t seem to find a way through. I came across a 25 year old, having enormous 30% deposit cash in hand, still crying for not getting a mortgage! Things may seem depressing, but in reality it’s not as bad as it’s depicted. When properly guided, you may be closer to buying the home of your dreams than you can think.

All you need is to keep in mind that you follow these instructions:

• Do proper research
• Don’t forget to count your affordability
• Always remember the ‘three rule’: shop, evaluate & negotiate

With these three tips you can qualify for a mortgage loan without the fear of being rejected:

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Homes have now become a sort of investment asset for most homeowners and cash-out refinancing is one way where you can take advantage of your home. With this opportunity, you can refinance your home greater than its actual value and keep the additional cash at closing. This extra money you get can be used in any way you desire; you can use it for debt consolidation, college fees, home repair, or possibly anything you want to do with that much amount of money.

If you want to utilize your home equity by paying off your current mortgage with a new one, cash-out refinancing may help a lot. Home equity builds from many factors including timely loan payments, increase in home value, making ample down payments etc. not only this, but you can also obtain a considerably lower interest rate with cash-out refinancing. To know more about this aspect, check with your tax advisor for all the options available for you.

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