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Archive for Home Loan Tips

If you are a first time home buyer considering jumping into the market next year, you will likely consider FHA home loans.

Getting approved for home financing has become challenging for most Americans so we decided to explore why FHA has become so popular with first time home buyers.  The Federal Housing Administration was created by the U.S. government during the Great Depression in an effort to promote home ownership across the country.

Since then more than half of first time home buyers have chosen FHA mortgages for many reasons. Over the last 20 years, FHA has dominated the market for first time home buyer loans.

1. Borrowers only need a 3.5% down-payment to purchase a home compared to 10 to 20% needed for traditional loans from private lenders.

2. FHA interest rates are as low as any interest rates in the land helping to ensure that purchase mortgage financingis affordable.

3.  There is no penalty for home refinancing or early pay-off.

4.  Americans also like FHA because they are lenient with their credit guidelines. Consumers with a range of credit scores can get financing at the same interest rate regardless of their credit. This government program encourages lenders to offer a home loan for bad credit if the borrower can demonstrate significant compensating factors like solid money in savings or the ability to to make a larger down-payment.

5.  FHA makes refinancing easy with flexible guidelines that do not require as much equity as private home loan lenders. People can refinance easily with only 3.5% equity because the loan to value guidelines permit refinancing up to 96.5%.

6.  FHA even allows you to get cash out and refinance debt up to 85% loan to value.

7.  FHA even offers the streamline refinance in case the interest rates fall after a new home buyer gets a mortgage.

We anticipate that FHA will remain popular in 2012 but if HUD continues to raise the mortgage insurance rates we predict their will be a backlash against government financing. Many finance executives believe that private money lenders will roll out some aggressive home loan programs in 2012 and 2013 and that could erode the FHA market-share as well.

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Buying a house can be a wonderful experience if you are prepared with a pre-approved home loan and have hired a good local realtor that understand the market and your needs. Obviously signing a hundred legal documents that commit you to a thirty-year mortgage and a house that requires 360 monthly payments will make you think. Home ownership certainly brings new opportunities and tax deductions that are appealing financial, but you want to make sure you are ready before making this major commitment.

With that being said, most people want to own a home in their lifetime so I am asking you this question – – – What are you waiting for? If you have the financial means to come up with the required down-payment and demonstrate enough saving for 3-6 months of housing expenses, then you should pull the trigger on buying a home.  Here’s why: Home prices have dropped drastically to 2003 levels and home mortgage rates have declined to an all-time low. Therefore it is unlikely that you will ever see home financing loans more affordable in our lifetime.


Get Organized and Layout a Strategy to Finance a Home in 2012

The reality is that as soon as banks can recover from the foreclosure crisis and property values shift towards positive territory, interest rates will climb significantly. According to a Mortgage Bankers Association spokesman, “Having the ability to get approved for a fixed rate 30-year mortgage below 4% with only a 3.5% down-payment is a beautiful thing.” This type of low down-payment home loans will disappear and likely not return in our lifetime.  Therefore, the sense of urgency to get approved for home purchase loan today is very real and if we recommend striking while the iron is hot. Nobody knows when interest rates will start to climb, but when you consider history it is very possible that rates double in three or four years.

Choose from the Following Home Financing Programs:

  • Loans for First Time Home Buyers
  • Mortgage Bad Credit Insured by the FHA
  • No Credit Home Loans
  • Conventional Home Mortgages
  • Military Financing with a VA Loan
  • USDA Mortgage up 100% LTV
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Buying a house and qualifying for a purchase mortgage can be a nervous time for first time home buyers, but if you prepare yourself it is possible to have a pleasant experience. Home prices have fallen considerably and home loan interest rates remain at record lows, so the timing could not be better.  The fact is that once again we can say that this year, we have seen the best fixed mortgage rates of our lifetime.

Getting a pre-approved mortgage is the important qualifying procedure in which the underwriter will review your credit history, income and monthly obligations in an effort to determine your debt to income ratio. It is important to get a home loan approval before making an offer on a house, because sellers will consider your offer to be stronger if you have already been pre-approved by a bank or lender. You should know that government loans, like the FHA mortgage requires a monthly mortgage insurance payment. When figuring out your budget you need to make sure you are considering the mortgage payment, mortgage insurance payment, property taxes.  One significant benefit is that you will be able deduct the interest on your mortgage for tax purposes. Qualifying for a first time home buyer loan can be challenging but again being prepared and working with the right lender is an important first step.

  1. Know your credit score before shop mortgage lenders online.
  2. Save money for the down-payment of the home purchase loan.
  3. Use a mortgage calculator to determine how much you can afford to spend on a new house.
  4. Compare conventional and FHA loans for first time home buyers.
  5. Consider the pros and cons of an ARM versus a fixed rate mortgage.
  6. Get a mortgage pre-qualification with a letter from a credible lender.
  7. Make sure there is no pre-payment penalty with home loan you choose.

Homeownership offers many financial benefits but in most cases there will be new costs that you must account for. Before committing to a buying a house you should get a home inspection and make sure that you are emotionally and financially prepared for being a homeowner.

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More and more people are shopping home loans online these days.  Most consumers trust mortgage lenders for assistance with home purchase loans, equity loans and mortgage refinancing rate options. We head to the internet for everything from online banking to credit cards and home buying to loan financing.  There are some fantastic home loan lending companies online, but there are also thousands of fraudulent and predatory websites out there preying on people who don’t know how to find the best mortgage lender online.  Savvy shoppers know to shop for home loans from mortgage lenders that have experience.  More than that, they know to look for lenders and banks that have experience with the type of loan you need specifically.  For example if you need a FHA mortgage, then find a FHA lender that specializes in government home financing.

The reason you look for lenders and banks that have experience with the type of loan you need to find the best lenders is simple.  They have streamlined processes that make getting a mortgage easy and straightforward.  Here are a few tips on how to find the best mortgage lenders online in addition to choosing to shop for mortgages from lenders that have experience.

One of the most important items to look for when you want to know how to find the best mortgage companies online is the website itself.  Most lenders, both online and in a traditional office are going to need your personal and financial information to offer an interest rate and loan terms.  The best mortgage lenders keep this information confidential and very private.  On the internet, this means that the website needs security.  Look for the icon on the website that indicates a secure connection for entering your information when you shop for mortgages from lenders that have experience.  Look for lenders and banks that have experience with the type of loan you need and that interact with you in a secure manner.

You can check on the companies you are considering by seeing if they are a member of the Mortgage Bankers Association or the Better Business Bureau.

 

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After lending institutions started feeling the effects of the downturn in the housing market, they tightened their belts in regards to offering loans to homebuyers. One of the popular types of loan packages that were prevalent before the foreclosure crisis was the stated income mortgage. After the number of individuals and families that started to lose their homes rose, no income home loans were eliminated. The banks were trying to protect themselves from riskier investment opportunities. For the less established individual, this hampered their ability to quality for a home loan. Now that conditions are beginning to stabilize, many financial companies are returning to previous lending practices.

Home Loans for the Self-Employed

The mechanics of a stated income mortgage are fairly straightforward. The requirement is that many self-employed borrowers need stated income loans in order to qualify for a loan to provide funding for a house. These methods of borrowing money to streamline refinance do not require income documentation like W2’s to ease the overall process. It provides kind of a loop hole to overcome the difficulty that self-employed individuals may face when attempting to finance an investment property. Banks that feel more secure in the stability of the economy have once again begun to offer this type of financing.

  • No Income Refinancing
  • Stated Income Home Loan
  • Limited Documentation Loans

Using personal tax returns and paystubs, the interested individual can begin the application process. When working with the employees of a lending company, be sure to state the intention of applying for a stated income mortgage. This will prevent any undue complications and speed up the process for acquiring the needed funds. Since this alternate form of supporting a loan application is different from the norm, ensure that all documentation is in order. Any discrepancies can cause delays in processing the inquiry. Understanding the terms of the program is recommended before seeking out this form of funding.

The more common form of mortgage applications may not require documentation for the lending institution but they verify with your employer that you do work there. For the self-employed, there will not be any way to confirm the place of employment other that personal integrity. This is why the stated income mortgage requires personal tax forms to supply the needed references. This added wrinkle in the home loan application process is a small obstacle to overcome. For most people, it will not be a major deterrent. Rather, it will require that the individual continues to rely on themselves to make the process happen successfully.

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Millions of homeowners have benefited significantly by remodeling their house that was financed by a tax deductible home improvement loan.  Remodeling and redecorating living space is a favorite interest of many home owners. Not only does it provide an enjoyable way to pass the time, but it can improve the value for an investment property. Getting cash with a home improvement loan is an effective use of services offered by lending agencies. The increased value in a home can offset any interest payments that may be realized as a result of the loan. Another possibility is the determination if cash out loan packages from a refinance mortgage can provide the needed funds to begin the renovation project. This can be useful if the house needs repairs and the family is getting ready to place the property on the market.

For a major remodeling project, getting cash with a home improvement loan makes the most financial sense. Instead of using personal savings from a retirement account and risk losing out on long term gains, an equity loan is a better financial move. You must make a decision between a home equity line of credit and a fixed home equity loan.  A credit line is a flexible source that borrowers only pay interest on when they actually use the funds, but the interest is variable.  The home equity loan is a lump sum loan that disperses all of the funds when the loan closes, but the interest rate is fixed. The value of the dollar associated with a home equity loan will lessen the financial impact for long range planning. This is an easy way to acquire the needed funding resources to being the construction project without disruption of a robust savings plan. The interest rates associated with these types of loans equate to better use of investment funds.

Remodeling Can Increase the Value of a Home

The effort that goes into a home remodeling project can be time consuming and encompassing. To ensure that needed resources are available for unexpected situations, getting cash with a home improvement loan is an effective way to react to these circumstances. Finding a financing option with a low rate credit line will limit the impact that an unplanned occurrence will have a bearing on a tight project deadline. In an effect to keep tasks on track, the acquisition of these additional funds will prevent any undue delays in completing the renovation in the time required.

There are many options to consider when getting cash with a home improvement loan. Not only is it important to review the history and reputation of the lending company, but the decision to either choose between lump-sum equity loan or flexible line of credit packages is a prerequisite. Carefully plan the requirements of the project before making any financial commitments. This will help realize the best options to finance home remodeling and most effective use of available funds. A successful remodeling project will improve the living conditions of the property as well as leave the owner in better financial shape. Take a few minutes and complete the form for a free lender quote so you can get financing advice from a loan professional at Nationwide.

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If you have decided that now is the time to make your first home purchase, you probably have a great deal on your mind.  Instead of trying to save for a very long time, you can benefit from first time home buyer loans to help your dream come true in an affordable way.  There are various kinds of loans that may interest you as a first time home buyer.  The top most popular options may vary depending on your qualifications and needs. Buying a home in today’s mortgage climate requires good credit scores and steady employment. FHA is a little more forgiving than Fannie Mae or Freddie Mac, but all three of these 1st time homebuyer loans requires the borrower to document their income.

Four Home Loan Options That May Interest You

  • Conventional Loans
  • Jumbo Loans
  • FHA Mortgage
  • VA mortgage

There are two types of conventional loans that may interest you as someone looking for a first time homebuyer loan product.  Fixed rate purchase loans last for 15, 20, 25, or 30 years.  The rate you pay is fixed for the duration of the loan.  Adjustable rate loans change the interest rate yearly depending on the weekly average yield on United States treasuries.  The rate you pay will adjust annually after an initial fixed period of 1, 3, 5, 7, or 10 years.

Then, there are jumbo mortgage loans for high cost regions.  Home loans that exceed $333,700 can be accommodated by these kinds of first time home buyer loans.  Because giving out a higher loan amount presents more risk for the lender, the interest rates for jumbo loans tend to run higher.  Fixed rate loans can be set for 15, 20, 25, or 30 years.

To get a FHA mortgage loan, or Federal Housing Commission mortgage, your situation must comply with limits based on housing types in the specific state and county they are located in.  You can get an FHA loan if you are looking to purchase a house or refinance your mortgage, providing you with great flexibility in obtaining you loan today and refinancing your home in the future.

A VA mortgage loan is available for armed services veterans.  If you qualify, you will be able to get you a zero down mortgage.  Whether you are currently in active duty, the reserves, or you are married to someone who is, you may qualify for a home purchase loan that is guaranteed by the VA.  There are both fixed rate and interest rate reduction refinance options, but the fixed rate option will be what you will need if you are seeking first time home buyer loans.  These and many other kinds of loans are available to help you get into the home of your dreams quickly at an affordable housing rate.

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