Showing posts from 2016
Things That Can Drive Your Mortgage Rate Higher

Mortgage lenders everywhere typically offer the same set of mortgage programs with both conventional loans underwritten to Fannie Mae and Freddie Mac guidelines to government-backed loans such as VA, FHA and USDA programs. And while all lenders compete for your mortgage with the best combination of interest rate and closing costs, there are some things that will make your interest rate go higher than they otherwise would be. What are they?
Your credit score can cause a rate to be higher. Borrowers with a credit score of at least 740 are offered the best combination of rate and downpayment requirements while those scores as low as 620 will have a higher rate and might be required to have a higher down payment.
If you’re buying an investment property, rates for those will be higher compared to financing a home as a primary residence. Lenders know that should borrowers experience some sort of financial duress, the investment property will m…
How to Budget When Living Alone for the First Time

Whether you’re just graduating from school or your roommates have told you they’ve signed a lease to live somewhere else, you’ll soon find yourself living alone. You can always find a new roommate but for many who have had roommates or lived with others it’s time to get a place all to themselves. Before you make your own move, here are some tips to help manage your finances and not worry about your bills.
Before you do anything, sit down and create a reasonable budget. No longer will you be pooling your money together to pay for the utilities or rent, it’s all coming out of your take home pay. Itemize the expenses you know you’ll have such as your mobile phone bill and car payment. Then consider other expenses you’ll definitely need such as food and entertainment. Figure somewhere around one-third of your gross monthly income for rent.
It’s the unplanned expense that wrecks most budgeting plans. Advertisers pay lots of money to people…
How to Get Rid of Your PMI

Private mortgage insurance, or PMI, has been around in some form since the late 1950s. Prior to that period, conventional loans underwritten to Fannie Mae and Freddie Mac guidelines required a down payment of at least 20%. That kept millions from buying a home they truly wanted because they didn’t have enough down payment. They either had to wait or take out a government-backed loan program that limited the amount they could borrow. PMI stepped in and fixed that.
PMI is an insurance policy with the premium typically paid by the borrower in favor of the lender for loan balances that are greater than 80% of the sales price. The insurance policy paid the lender the difference between a borrower’s down payment and the 80% limit. For example, on a home selling for $300,000 and the borrowers put down 5.0%, or $15,000, the PMI policy would pay the lender $45,000 in the instance of default. The most common PMI premium is an annual one paid out in monthly installment…
Is It Easier to Get a Mortgage With a Low Credit Score?

 Yes, much easier. But there is some background on that and there are other choices you’ll need to make. This means speaking with a loan officer and finding out which loan programs will work in your situation.  FICO scores are the score of choice for mortgage companies when evaluating a loan application. The credit score is a three digit number ranging from 300 to 850. Anything above 740 is considered “excellent” credit while anything below 620 is considered “poor.”
Just a few short years ago when lenders required higher credit scores in order to qualify, when someone had a credit score of say 680, they found it was difficult to qualify for a home loan. As lenders began to return to traditional underwriting credit requirements, guidelines turned from “strict” to “easier.” The credit score not only helps someone qualify but can also determine the minimum amount of down payment needed in order to qualify for a mortgage.

Whenever you buy a home in the US, you get a bank loan that has to be paid back either over a period of 15 or 30 years. When it comes to choosing from the two options available, it is always advised to take the 15-year loan if you can easily afford the house you want to buy with a 15-year loan. On the other hand, the interest rates are going to be at least 4% higher, and your prospects for investing will not be that hot either. You should take the 30-year loan plan if the interest rate if very low, or atleast lower than 4%, or if you’re getting a good rate on your investment, 6.5% or higher for instance, and are going to invest the money you save because of the lower monthly payments on the 30 vs. the 15. People should also choose the 30-year option if people are unable to afford the 15-year loan plan, which makes the 30-year loan the best choice. For example, if you refinance a loan amount of $200,000 at a fixed 30-year rate of 4%, you would make 360 mon…

Those who have a mortgage have all gone through what you’re about to go through. And they will all tell you it was nothing more than going through the process while some learned some things the hard way they didn’t have to. There are several tips and tricks to make the loan approval process go much more smoothly and they’ll gladly share them with you if you ask them. But you don’t have to. Here are seven things you can do to get the home loan you want.
Check your credit early.  Don’t get a copy of your credit report only after you’ve applied for a mortgage. Get one in advance and regularly look at your credit. What you’re looking for are mistakes, which unfortunately is all too common. If you find a mistake, document the error and let your future lender correct the mistake for you.
Decide what you want to pay each month.  Lenders use a debt-to-income formula when determining affordability and most want to see that ratio of debt to income be somewh…

For those who have conventional loans, switching to FHA loans could be beneficial for a wide-range of reasons. A loan that is supported by the Federal Housing Administration (FHA) can offer guidelines and terms that are more desirable than a conventional loan or mortgage. The FHA is not the direct source of the loan, but a FHA loan guarantees the loan amount in the borrower's name to the lender. The Federal Housing Administration determines a loan amount based on the average property value in the area and if a buyer needs a specific loan for a mobile home or condominium. 

FHA Loans Are Beneficial to Those with Damaged Credit 
For those with a blemished credit history, a FHA loan is more forgiving than a conventional loan. If an individual has faced financial trouble in the past, then he or she may still be able to qualify for a FHA loan. Furthermore, those who have declared bankruptcy will be able to qualify for a FHA loan o…
Should I Sell My Home in the Fall or Winter?

There seems to be a season for everything, right? And with real estate, there is no exception. Or so many think. Is there a right time of the year to sell your home? Isn’t springtime the best time to showcase your property? And aren’t there fewer home buyers in the market during the colder, fall and winter months? Sure there are, but that doesn’t necessarily mean holding off on selling your home. If for example, you’ve decided to sell and your real estate agent tells you your home will sell for a certain amount and you like what you hear, why wait? There’s always the market can turn. If home sales in your area begin to slow or even if there’s a recent foreclosure in the neighborhood, it’s possible your property value could take a hit. But let’s look at why some say it’s best to sell in the spring or summer.
For many, buying a home in the spring or summer is a matter of convenience. For families, they can buy a home, sell theirs and make the…
How Can I Qualify for HARP 2.0?

It’s easier than you might think. In fact, there are estimates that more than one million homeowners could qualify for and take advantage of a HARP 2.0 home loan that have yet to apply. But for those who aren’t sure if they do, perhaps it’s because the initial HARP program kept millions more out of the program.
The original Home Affordable Refinance Program, or HARP, was introduced in 2009 for homeowners who were “upside down” with their mortgage. In other words, they owed more on the mortgage than the home was actually worth. Conventional loans require at least a 10 percent equity position in order to refinance. The HARP program was introduced that allowed homeowners to take advantage of lower mortgage rates as long as the new HARP loan didn’t exceed 125% of the current market value of the home. That means a home worth $100,000 could still refinance an upside down mortgage as long as the new loan didn’t exceed $125,000. While that helped, it still wasn…
Fall Gardening: How to Prepare Where You Live

If you’re an avid gardener, it’s not time to store up the tools. While early spring is the traditional time to start a garden, the fall months offer the perfect time of year for certain crops. And depending upon where you live, mostly anything you can successfully plant in the spring can also be planted in the fall. Let’s take a look that some of the crops that actually do better with a fall plant compared to spring time. Leafy vegetables for example such as lettuce, cabbage and kale flourish with a fall planting.
In the northeast, you get much cooler weather sooner than in other regions. Plants that do well in your region include carrots, lettuce, broccoli, turnips and arugula. If you wait until after the first frost before planting your carrots will be so much sweeter as well. In the Midwest region, you can plant pretty much what those in the northeast do. You can also add sweet or green peas to the mix as well as greens such as mustard …
Refinancing Your VA Loan: Traditional or IRRRL?

Are you finally getting around to refinancing your VA mortgage? Maybe you put it off waiting for rates to fall further but decided the time is now? Or maybe your hybrid mortgage is about to adjust soon and you’d like to switch from a variable rate to a fixed? You have more options than you might think when refinancing an existing VA loan and your loan officer can help you choose which is your best option. Here are the main differences between a traditional and an IRRRL transaction.
First, you may not be familiar with the IRRRL acronym. IRRRL stands for the “Interest Rate Reduction Refinance Loan” and commonly referred to by lenders as a streamline. They do so due to the reduced documentation needed when refinancing an existing VA loan. The IRRRL does not require a credit report check or an appraisal. This simply means there are no minimum credit scores required and there are no valuation issues. If you owe more on your VA loan than the p…
Boo! Is Your House Ready for Halloween?

You know they’re coming. Those ghosts and goblins creeping around in your neighborhood asking for candy. Your doorbell will ring and you’ll hear a chorus of “Trick or Treat” for hours. To get you in the spirit of this fun holiday, let’s talk about getting your house ready for Halloween to entertain your trick-or-treaters or entertaining guests with your very own Halloween party. Here are some ideas you can put to use.
Your Lawn. Let the fall leaves stay where they are for the next couple of weeks then rake them into a pile. Stuff an old pair of blue jeans with newspaper and have them stick out of the pile of leaves. Top it off with a pair of old boots. The party store down the street sells fake spider webs. This spooky stuff is cheap and makes a great spooky look. You can also make fake headstones out of heavy cardboard and a can of gray sprain paint. Prop them up with a wooden stake. A blue floodlight makes the finishing touch.
Your Front Deck or…
The FHA Refinance: Streamline or Traditional?

Did you know you had a choice when refinancing an existing FHA loan? You do. You can refinance the traditional way or you can choose the “streamline” option. Which one is right for you? Your loan officer can review your situation to help guide you through the process and choose the right program. Refinancing an existing FHA mortgage is in fact getting a brand new mortgage, you’re not modifying the existing loan. That also means you don’t have to use the same lender when refinancing an FHA loan. But the FHA program has refinancing options that other loans don’t have.
The streamline is so-called due to the easy of qualifying and much less documentation required.  With the streamline, there is no appraisal required. This means even if you owe more than what your home is worth you can still refinance to get a lower rate or switch from a variable rate to a fixed. With a streamline, there is no employment verification, either. Your lender doesn’…

We all have our own monthly obligations and expenses we must consider each month. Many of our expenses are mandatory while others are by choice. We need to pay our mortgage each month. The electricity bill. Mobile phone. Insurance. Car payment. These are just a few of the monthly bills we have to pay but when we add in additional discretionary spending, especially just after the holidays when we might have spent more than we had planned, making monthly payment on time can be a bit confusing even overbearing at times. At other times of the year, expenses are more easily handled and bills paid on time when discretionary spending is lower. Yet keeping track of all these bills and making sure there are no payments made after the due dates can be a challenge sometimes. Here are a few tips to keep you on track.
Set Up Auto-Pay
This is the most convenient way to make sure your payments are made on the due dates. Remember, even though credit r…
Cash-out Refinancing: Everything you need to know What it is and when to use it?If you have a significant amount of equity built up in your home and would like to convert that equity into actual money you can use, a cash out refinance From Majestic Home Loan may make sense for you. Here are some of the key things you should know. What is a cash out refinance?A cash out refinance is when you take out a new home loan for more money than what you owe on your current loan and receive the difference in cash. For example, if your home is worth $300,000 and you owe $200,000, you have $100,000 in equity. With cash out refinancing, you could receive a portion of this equity in cash. If you wanted to take out $40,000 in cash, this amount would be added to the principal of your new home loan. In this example, the principal on your new mortgage after the cash out refinance would be $240,000. When is a cash out refinance a good option?A cash out refinance makes sense in a number of situations: When yo…

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 in…

The military is always good about coming up with acronyms and the Department of Veteran’s Affairs is no stranger. The VA IRRRL stands for the Veteran’s Administration’s Interest Rate Reduction Refinance Loan. If you currently have a VA mortgage and are thinking of refinancing, your mortgage lender will no doubt talk about this special mortgage program. It’s easy to qualify for as long as the existing and future loan meets certain conditions. So easy that it’s nicknamed a “streamline” mortgage by VA lenders. What’ so special about the IRRRL they call a streamline?

The reason the loan is so easy to qualify for is because there is hardly any documentation needed to approve the loan. In fact, it probably takes longer to list what isn’t needed compared to what an approved VA mortgage lender will ask for. What surprises most streamline borrowers at first is there is no income documentation required. When borrowers first take out a VA loan they’re asked to provid…

First time home buyers soon find they’ll need to save up some cash for a down payment on a home but may also be somewhat surprised at the amount of closing costs involved. Closing costs aren’t overwhelming by any means but buyers soon discover there is more to save than just for the down payment. Even for zero down payment loans such as VA and USDA mortgages, closing costs must still be considered. And even those who are in the process of saving for a down payment and closing costs can find the “perfect” home a bit before enough funds have been saved. Yet that’s where the MyHome Assistance Program can help.

This program here in California provides up to 5.00% of the sales price of a home to assist with a down payment and closing costs. For a $200,000 home, that’s up to $10,000 and can go a long way to help secure financing. The MyHome Assistance Program comes in the form of a second lien on the property and is used in conjunction with a CalHFA mortgage. …