FHA loans are pretty unique in that they permit a homebuyer to use a relative to help them qualify for a home even if that relative will never live in the home. They are in effect a non-occupant co-borrower. The normal conventional loan is more stringent on this type of qualification which is why it works well for FHA loan financing.The relative who will not occupy the property is primarily assisting the owner-occupying relative qualify with income, not their credit score or history. All borrowers will need to qualify on credit.As a result there is a lot of popularity in FHA loans. The amount has increased by 300-hundred percent [...] Continue Reading…

Many experts in the real estate industry predicted the credit crunch to have eased by now but that is not the case. Good borrowers with excellent credit payment histories are being turned down due to rising foreclosures from borrowers who cannot afford their mortgage payment. Some of the keys to getting approved is the loan guidelines have become more strict and underwriters are eyeing loan applications with more scrutiny. The borrower never gets to speak with the underwriter and probably never will. So, the approval is in their hands.An experienced loan officer can convey or send your message to the underwriting department along with your application which could be [...] Continue Reading…

The current real estate situation is a killer for most borrowers. While prices are down to very attractive numbers, getting funding to buy a home is very tough given the current credit crunch.If you want to get funding these days, you need to eliminate the risk most lenders feel in providing loans. Specifically, you need to come up with sizeable down payments. Using a 20 to 25 percent down payment is going to make a lender feel more comfortable giving you money. Whereas a person putting down 3 percent wont be particularly bothered about a short sale or foreclosure, one that puts 20 percent down will!Now, 20 to 25 [...] Continue Reading…

In this modern economy, lenders provide loans tailored to just about any situation. Balloon loans are one such loan, but carry a serious downside if youre not careful.Balloon LoansA balloon loan has nothing to do with hot air or floating around the world in 80 days. Fail to plan very carefully when using one of these loans, however, and your financial world will definitely go down in flame like the Hindenburg.A balloon loan is a mortgage with a fixed interest rate for a set period of years. Unlike traditional fixed rate home loans, the interest rates on balloon loans are nearly as low as those found on adjustable rate [...] Continue Reading…

Get a lower interest rate If you have 20 percent of the value of the home to put down as a down payment, you can find yourself having a lower interest rate and you won’t have to pay private mortgage insurance premiums. Investing the 20 percent of the money in a down payment can be a great way to invest your money in your real estate and secures your money for you for the future.Invest your money elsewhere If you don’t have the 20 percent to put down or if you have a lot more than 20 percent to put down as a down payment, you should first look [...] Continue Reading…

An Adjustable Rate Mortgage is also referred to as an ARM. This is a mortgage with an interest rate that can change; this is usually in direct response to changes in the Treasury bill rate or the prime rate. The function of the interest rate adjustment is predominantly to bring the interest rate on the mortgage in line with market rates. The mortgage holder is sheltered by a maximum interest rate (called a ceiling), which might be reorganize annually. ARMs typically start with better rates than fixed rate mortgages, in order to recompense the borrower for the further risk that future interest rate fluctuations can create. The first [...] Continue Reading…

Getting an FHA loan used to be a person’s last choice when sales of homes were thriving. Prospective homebuyers did not want to go through all the documentation and sellers didn’t like the requirement by FHA for any needed repairs to be completed before closing.Now that home prices have been declining, asking for a FHA loan has become routine.Mortgages insured by the Federal Housing Administration are enjoying a crowd pleasing comeback due to lenders making it difficult to be approved for conventional loans. People who have refinanced or bought a home this year using an FHA loan has increased over last year by well over 150 percent and refinances [...] Continue Reading…

In today’s real estate market things have changed a lot when borrowers are pursuing a home loan qualification or approval.It was only 12 months to 24 months back, that all you needed to qualify for a loan was a credit score and a job. The creativity to get you approved was endless. Terms could be made for almost anyone.Want to pay interest-only and get qualified using the interest only payment? It’s a done deal. Can’t afford the even the interest only payment, pay less than interest only? OK, you’re approved. Were you self-employed for less than two years? Not a problem. No income documentation or asset evidence? That is [...] Continue Reading…

A down payment is very important when you are buying a home because it can lower your monthly mortgage payment and also build your credibility with the bank. In this economy the banks are looking for a 15-20% down payment because the real estate market has been going down. As the market goes down the bank has less of a chance to get their money back if you don’t pay the loan.Your down payment will also increase the amount you can buy because it will be less of a monthly payment. The amount you can borrow from the bank is based on your monthly income so if your mortgage [...] Continue Reading…

In the mortgage industry, there are mortgage loans approved without requiring proof of the borrower’s income or assets. These are termed as “liar loans”or Alternative-A loans (ALT-A loans for short). Some of the worst types of these in involve proving no income, no job and no assets. This is known as the “ninja loan”. The industry calls them bad but in fact if utilized the correct way by requiring a down payment and not offering them to investors. These loan types would still be in favor. It just so happened that wall street money offered them to people with ridiculously low credit scores and sometimes zero down payment. It’s [...] Continue Reading…