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Showing posts from November, 2015
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WILL TEMPORARY LOW INTEREST RATE AFFECT YOUR MORTGAGE CHANCES?
The September meeting of the U.S. Federal Reserve board did not increase the federal funds interest rate which affects the rates given to other financial instruments such as car loans and home mortgages. Although a rate hike was expected in September, the Feds nixed that plan, citing that the American economy wasn't strong enough as the prime reason. The Feds' decision, however, created what could be considered a temporary low-interest rate for the American housing market.

How this will affect home buyers is unclear as how much the Fed will raise base interest rates is still unknown. All indications point to an interest rate hike that will happen soon, most likely by the end of 2015. If the rate hike is around 0.25%, homeowners will hardly notice the difference. The difference will come when, and if, the Fed continues to hike interest rates as the economy improves.

Most experts agree that a 25 or 50 point rise in inte…
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WHAT YOUR CIVILIAN SPOUSE MAY BE WONDERING ABOUT YOUR VA LOAN AND VA IRRRL ELIGIBILITY
While buying a home is the American dream, the process can keep you up at night. And when you find yourself suddenly awake with a mind full of questions, don't be surprised to find that your spouse is staring up at the ceiling as well. This is true of the majority of homebuying couples but especially so in military marriages like yours where one partner is a civilian. If you could eavesdrop on your partner's doubts and what ifs, you might hear questions like:
Will my income or financial standing get in the way of our getting a VA loan?What if mortgage rates go down? Can we re-finance?What happens, if God forbid we divorce.... or worse? Will the mortgage be affected?
The answers will all reassure him/her.
When it comes to co-signing the loan, yes, the second income will impact the loan, but for the better. In fact if it's substantial enough, it may even serve to qualify you for a larger loan…
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WHY YOU SHOULD REFINANCE UNDER HARP 2.0?
We can think of four great reasons that you should refinance your home under HARP 2.0:

Many people had complaints about the original HARP program set up in 2009. For one thing, HARP capped the amount of the loan at 125% of home value. For homeowners seriously underwater on their loans, this was a problem. In addition, some lenders imposed a cap even lower than the 125% stipulated by HARP. When HARP didn't turn out the popular program it envisioned, the Federal Housing Finance Agency revised the program in 2011 and HARP 2.0 took its place in the mortgage world. The 125% cap on loan to home value no longer applies.One of the incentives the Federal Housing Finance Agency included to entice lenders to participate in HARP 2.0 was by providing a shield so that refinance lenders would not be responsible for any fraud that had occurred in making the original loan. This made more lenders willing to make HARP 2.0 loans.Many homeowners who found themsel…
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FIRST-TIME HOME BUYERS AND A NEW MORTGAGE, HOW MUCH CAN YOU AFFORD?

If you're looking to buy your first home, find out how much you can afford. New homeowners may underestimate affordable amounts, especially with current interest rates remaining low. In addition, your monthly house payment could actually be lower than your monthly rent.

Consider gross income and all monthly expenses to figure out how much you can afford in a new mortgage. For example, suppose you and your spouse together earn $5,000 in gross monthly income. You have no outstanding debts, such as car payments or credit card balances. On a 30-year new mortgage with a 4 percent locked in interest rate, you could afford to pay approximately $1,400 monthly on a $280,000 mortgage.

Suppose a single person with the same income, roughly $2,500 monthly, also has a $300 monthly car payment and pays a $50 monthly credit card payment. This greatly reduces how much the person could afford to pay on a new mortgage, no more than $46…
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WHAT ARE THE PROS AND CONS OF FHA AND CONVENTIONAL LOANS? WHICH ONE TO CHOOSE?

In your search for a mortgage loan, you will come across two options. The first is called a FHA loan and the second is called a conventional mortgage loan. FHA stands for Federal Housing Administration and offers mortgage insurance on the loans that are made by FHA approved mortgage lenders. The FHA doesn’t lend the money, but rather, insures the loan in order to minimize the lender’s financial risk.


Pros and Cons of FHA LoanProsA major advantage of an FHA loan is that you don’t have to make a large down payment. Instead, the down payment can be as low as 3%, which is not much when compared to the initial payment of 20% required with conventional loans. The minimum payment makes this loan ideal for those who have not been able to save enough money for the purchase. Cons
The property will have to be appraised by an FHA approved appraiser, and it must also meet the required conditions. The biggest disadvantage h…
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HOW INTEREST RATE, APR, AND POINTS ARE CALCULATED?
Even after doing their research before getting a mortgage, many people often find it hard to compare the loan terms and the points to get a lower interest rate. Here, we are going to try and shed some light on the how these three work.

The Interest RateThe interest rate of a loan is the amount of money you pay to the mortgage lender annually. It is the most obvious difference between mortgage loans. They also happen to be the most important one since even a slight difference can add up or reduce your monthly payments in the long run. You can find out the interest rate of your home by checking out the mortgage rate tables of your area online. Since interest rates can be somewhat unpredictable, you can also use online calculators to find out the interest rate.

PointsPoints will comprise of the largest part of what has to be paid up front to the mortgage lender. Points are considered as prepaid interest which can lower the overall interest …
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ARE YOU ELIGIBLE FOR HARP 2.0 REFINANCING?
HARP 2.0 is considered as the more generous descendant of the original Home Affordable Refinance Program. The new program is basically designed to allow those people who own their homes to refinance their mortgages even if they owe the mortgage lender much more than what their property is presently worth.

While the original HARP was designed just a few years ago and did not get as many takers as the Obama administration forecasted at the time. The newer version of HARP has been created to attract more refinancers in the U.S. That said, not every mortgage borrower is eligible for this particular refinancing program. Here, we are going to find out which borrowers are eligible for the HARP 2.0 refinancing.


Is your mortgage owned by Freddie Mac or Fannie Mae?First of all, you will have to find out whether your mortgage is owned by Fannie Mae or Freddie Mac. You can do this by going online and looking it up on their website; or you could call them on…
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THE FACTS YOU NEED TO KNOW ABOUT AN FHA LOAN 
There are different kinds of loan programs out there. So many different ones it can be confusing, especially if this is your first home purchase. There are conventional loans using Fannie Mae or Freddie Mac guidelines. VA loans are available for qualifying veterans and service members. USDA loans are designed for rural areas. But if you’re a first time buyer or otherwise want to put down as little as possible while still having a competitive interest rate, if you’re not VA-eligible, then the FHA loan is your best choice. Here are some facts you need to know about an FHA loan. FHA loans are government-guaranteed. When an FHA lender approves an FHA loans using proper underwriting protocol, the loan then carries a specific guarantee to the lender. Should the loan ever go into default, the lender is compensated for the loss. That’s why lenders like to make them.You don’t need perfect credit. FHA lenders don’t ask for a pristine credit file. You …
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WHAT IS A CASH OUT REFINANCE?
A cash out refinance is a transaction where the borrowers take out equity in the form of cash while refinancing an existing mortgage. Homeowners who financed their homes have the opportunity to refinance an existing mortgage for a variety of reasons and it’s not only because interest rates are lower than the one they currently have but for most, that is the primary driver. There is no reason to not refinance to a lower rate should a lower rate become available and the process of refinancing is very much like taking out the original loan.
Say that a borrower has an interest rate of 5.00% on a 30 year note and rates have fallen to 4.00%. By refinancing to the lower rate, the borrower saves on interest. Or, the borrower could elect to change from a 30 year note to a shorter term loan. Doing so saves on long term interest and the loan is paid down at a quicker pace. And refinancing from an adjustable rate loan or a hybrid is also a good option for many borrow…
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REFINANCING FOR THE RIGHT REASONS
When interest rates start to fall, it’s inevitable you’ll soon hear mortgage companies talk about lower rates and how you should pick up the phone and refinance right away. But while a lower rate sounds intriguing it’s not always the best move. Sometimes it’s better just to stand pat. But for most, refinancing an existing loan is a way to save money both over the short and long term. Just remember that it’s not always about the interest rate. How do you know if a refinance will work in your best interest?

When rates fall, borrowers have the opportunity to lower their monthly payments. It makes perfect sense. Lower rate, lower payment. But the interest rate is only part of the equation, so too are the loan amount and the cost of the refinance alone. How does that work?

Let’s say someone has a 30 year rate of 4.50% on a loan amount of $150,000 and rates fall to 4.25%, is that a good idea? If you just consider the rate and nothing else at first glance it …
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IS IT A GOOD IDEA TO REFINANCE AN FHA LOAN?
That depends upon a lot of things, but those “things” are rather easy to identify and whether or not it’s a good idea to refinance an existing FHA loans can be answered with a short conversation with your loan officer. But to see whether or not it’s a good idea, here are a few reasons to explore refinancing an existing FHA loan.
Are current mortgage rates lower than what you have now? That’s the first question to answer and if they are you then need to consider the closing costs needed to refinance your current FHA loan. Compare the lower monthly payment should you refinance with your current payment then divide that difference into the closing costs on the loan. The result is how many months it will take to “get back” those costs.
You might also think about replacing your existing FHA loan if you have an adjustable rate on a hybrid loan. Fixed rates are very competitive today and if you have some type of ARM you might want to refinance int…
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HOW TO REFINANCE SUBPRIME MORTGAGE LOANS
For many, getting a subprime mortgage at some point provides an opportunity to reestablish credit. There aren’t as many subprime mortgage programs around, much less lenders who specialize in them, but over the years they’ve garnered their share of the spotlight, and not always in a good way. However, when properly applied, a subprime mortgage can be a good option. When consumers damage their credit it’s never done on purpose but as a result of other life-altering events such as an illness, a divorce or extended unemployment.

One of the best ways to repair poor credit is to obtain a mortgage and make timely payments. Once that credit has been repaired, borrowers can refinance out of an existing subprime mortgage into a conventional one. How do you refinance a subprime mortgage loan?
When refinancing an existing subprime loan the primary reason is to get a lower, more competitive interest rate as subprime loans require higher rates to offset the …