The days of easy lending are clearly over. At this time last year, the money flowed. Predatory lenders signed people up for mortgages without paperwork, gave out loans that covered 100% of the home's value and weighed them down with outrageous payments that exceeded their income. The fallout has been tremendous, leaving the banks scrambling to clean up a mess of foreclosures and defaults in the aftermath.
They've also tightened the purse strings - especially when it comes to the subprime market. Lenders are demanding documentation, downpayments and turning back to more traditional methods of qualifying loans. Those with a long history of paying bills on time won't be affected, but first time buyers or buyers with spotty credit histories need to get their paperwork in order.
The good news is that there's no great trick to it. With a good realtor, lender and a bit of financial diligence you can realize your dream even if you're not a prime borrower. The right home and mortgage are out there for you.
FIVE WAYS TO MAKE YOUR REAL ESTATE DREAMS COME TRUE
1. Find a banker or mortgage broker you can trust
2. Improve your credit rating: even if you're a year or more away from making a purchase, it's never too early to start. Don't kid yourself - anyone can do it
3. Clean up your report: scrub any problems or errors on your credit report clean
4. Educate yourself: learn the terms and take time to build your team
5. Work with a REALTOR: a good realtor will always save you time and money in a real estate transaction
NURTURE YOUR RELATIONSHIP WITH MONEY
There are a wide variety of loan types out there and you should never settle for the first one you see. While interest rates are usually the first consideration, the terms of a loan can be equally important to your long term financial well being. Sorting through the options will be easier and far more effective when you have a strong relationship with a banker or mortgage broker you can trust. That's why it's more important than ever to shop around for this key member of your real estate team. In most cases, this should be the first step in your search for a home.
A loan officer at a bank will be able to provide you with the range of lending options available through their institution. There is no charge for this service, though loan officers often work for commission. Banks often have a local advantage and a better understanding of the property you are interested in purchasing.
A mortgage broker on the other hand, is not limited to products from a single institution. The broker works for a fee, most often taken They will shop around to find a loan that suits your needs and will work with the chosen lender until the deal closes. Brokers can often find a lender for a loan that most banks would refuse.
WORK WITH A REALTOR
Your realtor knows the local market and who plays in it. Remove some of the guesswork from your search by taking advantage of their expertise and connections. They may be able to recommend a reputable financier, give you additional information on areas or properties you're interested in, or even help you find an interior designer when the deal is done.
Buying a home will probably be the single biggest financial investment you'll ever make but it doesn't have to be your biggest risk. With the right real estate agent, financing, information, and financial management, you will be the path to a brighter future of home ownership.
loans
Saturday, August 25, 2007
Thursday, June 7, 2007
Mortgage F.A.Q
How can I benefit by using Mortgage Quote Advisor?
Our site is for anyone who knows what type of loan they want and who is looking for a low cost loan with fast and easy approval. Check out the rates on the other Web sites, and then come to us for a low cost, efficient loan on the Web! It's fast, it's easy, and it's totally online.
What happens after I apply with Mortgage Quote Advisor on this Web site?
You will receive an e-mail within 24 hours of submission of your application. This e-mail will indicate the status of your application and the next steps you need to take.
How do I know how much house I can afford?
Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value.
Which is better - a fixed or adjustable rate mortgage? When mortgage rates are low, a fixed rate mortgage is the best bet for many buyers. Over the next five, ten, or thirty years, interest rates are more apt to go up than further down. Even if rates could go a little lower in the short run, an ARMs teaser rate will adjust up soon and you won't gain much if you plan to stay in the house more than a few years (the broker can tell you your break-even point). In the long run, ARMs are likely to go up, meaning many buyers will be best off locking in a favorable fixed rate now and not taking the risk of much higher rates later. How much do I need for a down payment? What is private mortgage insurance (PMI)? What are points? How do I determine my own credit status? Excellent Credit Good Credit Fair Credit Poor Credit What does my mortgage payment include?
It depends. Because interest rates and mortgage options change often, your choice of a fixed or adjustable rate mortgage should depend on:
Most lenders offer financing programs that allow the borrower to finance up to 100% of the sales price of a new home. However, if no down payment is made, the borrower will be required to pay for private mortgage insurance (PMI), see question ten, below, for further information on PMI. If you can afford to put more money toward a down payment, it will reduce the amount of your monthly mortgage payments. Some loans programs offer 3% down payments if you meet certain income standards.
Private mortgage insurance or "PMI" policies are designed to reimburse a mortgage lender up to a certain amount if you default on your loan and your house isn't worth enough to entirely repay the lender through a foreclosure sale. Most lenders require PMI on loans where the borrower makes a down payment of less than 20%.
In the special vocabulary of mortgage lending, "points" are a type of fee that lenders charge (the full term to describe this fee is "discount points"). Simply put, a point is a unit of measure that means 1% of the loan payment. So, if you take out a $100,000 loan, one point equals $1,000
You may use the following categories as a general guideline in evaluating your own creditworthiness. Please note that these are general guidelines only-other factors will often be included in the loan approval or credit evaluation process:
For most homeowners, the monthly mortgage payments include three separate parts: Principal: Repayment on the amount borrowed Interest: Payment to the lender for the amount borrowed Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
Smart Home Buying
t's a sorry sight when you see so many homes being repossessed. Repo's and foreclosures and more prevalent than ever before as first-time home buyers are making some cardinal mistakes during the buying process that are leading to problems later on. One of the biggest mistakes people are making is not having their finances completely in order and arranged before buying a home. The buying of a home is an awesome responsibility both financial and otherwise and not being prepared for those responsibilities is one of the largest causes of repossessions and mortgage defaults.
Your credit is intricately tied into the purchase of a home. In fact, your credit will determine the amount that you will be able to afford to borrow on a home. Get in touch with your credit bureau and get a copy of your report. This will detail your credit history and allow you to discover anything that may be detrimental to your mortgage application. Outstanding credit issues can dramatically reduce the amount you are eligible to borrow, so it's a good idea to see to any of these things. Pay them out if necessary and get release letters from the debtors so that you can show them to a prospective lender if the paid debts have not yet been removed off your report.
The next logical step is to secure a pre-approval from a mortgage lender. This will take some careful shopping to find the loan that is right for you. There are so many different kinds of mortgage available it pays to take the time to investigate not only the loan but the lender itself. Make sure you are borrowing from a lender who has a good reputation and a good track record. This is critically important as there are many fly-by-night lenders who will take advantage of a borrower who does not do their homework. Make sure you ask about interest rates and whether or not they are fixed or variable. This can have a big impact on your monthly payments so make sure you ask about all aspects of the loan before signing it.
Finally you should be able to start looking for a home. Be careful in recognizing the difference between your needs and your wants in a home. Don't look for more home than you can handle. Be choosy when looking and if you find a suitable candidate make sure that you look it over a few times before making an offer.
Your credit is intricately tied into the purchase of a home. In fact, your credit will determine the amount that you will be able to afford to borrow on a home. Get in touch with your credit bureau and get a copy of your report. This will detail your credit history and allow you to discover anything that may be detrimental to your mortgage application. Outstanding credit issues can dramatically reduce the amount you are eligible to borrow, so it's a good idea to see to any of these things. Pay them out if necessary and get release letters from the debtors so that you can show them to a prospective lender if the paid debts have not yet been removed off your report.
The next logical step is to secure a pre-approval from a mortgage lender. This will take some careful shopping to find the loan that is right for you. There are so many different kinds of mortgage available it pays to take the time to investigate not only the loan but the lender itself. Make sure you are borrowing from a lender who has a good reputation and a good track record. This is critically important as there are many fly-by-night lenders who will take advantage of a borrower who does not do their homework. Make sure you ask about interest rates and whether or not they are fixed or variable. This can have a big impact on your monthly payments so make sure you ask about all aspects of the loan before signing it.
Finally you should be able to start looking for a home. Be careful in recognizing the difference between your needs and your wants in a home. Don't look for more home than you can handle. Be choosy when looking and if you find a suitable candidate make sure that you look it over a few times before making an offer.
Reverse Mortgage
You are debating whether getting a reverse mortgage on your home is the best way for you to ensure you financial security in retirement. But your home is you most valuable asset and you do not want to take the chance of encumbering it with a loan from an unscrupulous lender.
You need reverse mortgage information which will tell you both how a reverse mortgage works, and where you can find trustworthy lenders. Reverse mortgage information, fortunately, is widely accessible.
What You Don’t Have To Worry About
The first pieces of reverse mortgage information which you might find helpful are those which dispel some commonly held notions. A reverse mortgage is not the same as a home equity loan, so you will not be making monthly payments on it. Your eligibility for a reverse mortgage is not determined by your income level or credit history, but even so it is not a magical answer to your financial problems, and it will accrue interest just like any other loan.
The Requirements
Any reverse mortgage information you get should explain that you must own, and be living in at least half of each year, the home of which you want to take the mortgage. You, or the youngest homeowner of the home--for instance, your spouse--must be at least 62 years of age; and your home itself must qualify for a reverse mortgage.
You will be required to consult with a reverse mortgage broker or lender, who will provide you with reverse mortgage information on the mandatory home appraisals and inspections, and the various financing terms for which you qualify. You should talk to as many brokers and lenders as your comfort level requires in order to feel that you have all the reverse mortgage information you need.
You need reverse mortgage information on the options for receiving your money; you may choose to have it in a single amount of cash; in monthly payments; as a line of credit to be accessed at your discretion; or as some combination of all three.
Spending and Repaying The Money
The final pieces of reverse mortgage information concerns the way in which you can spend your money, and your repayment obligations. This is usually good news; you will have to use it to pay off any existing obligations on your home--mortgages or liens--but after that the money is yours to do with as you please.
As to repayment obligations, there are none, as long as you remain in your home at least half of each year. You will have to maintain you home’s condition, continue your home insurance coverage, and pay property taxes, but until you leave it for good, sell it, or the last of it owners passes away, the loan will not have to be repaid.
You need reverse mortgage information which will tell you both how a reverse mortgage works, and where you can find trustworthy lenders. Reverse mortgage information, fortunately, is widely accessible.
What You Don’t Have To Worry About
The first pieces of reverse mortgage information which you might find helpful are those which dispel some commonly held notions. A reverse mortgage is not the same as a home equity loan, so you will not be making monthly payments on it. Your eligibility for a reverse mortgage is not determined by your income level or credit history, but even so it is not a magical answer to your financial problems, and it will accrue interest just like any other loan.
The Requirements
Any reverse mortgage information you get should explain that you must own, and be living in at least half of each year, the home of which you want to take the mortgage. You, or the youngest homeowner of the home--for instance, your spouse--must be at least 62 years of age; and your home itself must qualify for a reverse mortgage.
You will be required to consult with a reverse mortgage broker or lender, who will provide you with reverse mortgage information on the mandatory home appraisals and inspections, and the various financing terms for which you qualify. You should talk to as many brokers and lenders as your comfort level requires in order to feel that you have all the reverse mortgage information you need.
You need reverse mortgage information on the options for receiving your money; you may choose to have it in a single amount of cash; in monthly payments; as a line of credit to be accessed at your discretion; or as some combination of all three.
Spending and Repaying The Money
The final pieces of reverse mortgage information concerns the way in which you can spend your money, and your repayment obligations. This is usually good news; you will have to use it to pay off any existing obligations on your home--mortgages or liens--but after that the money is yours to do with as you please.
As to repayment obligations, there are none, as long as you remain in your home at least half of each year. You will have to maintain you home’s condition, continue your home insurance coverage, and pay property taxes, but until you leave it for good, sell it, or the last of it owners passes away, the loan will not have to be repaid.
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