Showing posts from January, 2016

As the economy was struggling to regain its footing toward the end of the last decade, Congress passed the initial Home Affordable Refinance Program, or HARP, to help homeowners refinance their mortgages and thus reducing their monthly payments even though they owed more than their home was currently worth. Conventional refinance guidelines ask that the refinanced loan be no greater than 90 percent of the current market value of the property. Without the necessary 10 percent in equity a refinance is not possible. Mortgage rates had begun to drop but millions couldn’t take advantage of the lower rates due to valuation issues. HARP addressed this valuation issue by allowing the homeowners to refinance if the mortgage was as high as 125 percent of the current market value. While that helped, there were millions more that were still shut out of the refinance bonanza.
Enter HARP 2.0. In 2012, an updated version of the original HARP p…
Buying and financing a manufactured home isn’t really any different than buying any other type of primary residence. Yes, there are a few things that are different, primarily making sure the manufactured home is built to proper specifications as well as the foundation and attachment is up to lender standards, but beyond the structure, purchasing a manufacture home is easy once you know what to prepare for.
First, how is your credit? If you’re not sure about your credit report, you can get a free one provided by the three credit repositories of Equifax, TransUnion and Experian at Different lenders may have different credit score requirements but most will accept a credit score of 620 while other lenders will accept even lower. For instance, FHA guidelines don’t ask for a minimum credit score but lenders can set their own standards as long as the lender has documented a decent credit history.
You can finance a manufactu…
BENEFITS OF TIMELY MORTGAGE LOAN REPAYMENT Building and keeping a good credit profile is one of the keys to financial well-being. For those who have yet to buy and finance their first home, they may not yet realize how important timely mortgage payments are and how they impact a credit score. What are the benefits of a timely mortgage loan repayment?

Mortgage payments are made in arrears, exactly the opposite of how rent works. When rental payments are made, the payment is for the preceding month whereas with a mortgage, the payment is for the daily interest accrued from the previous month in addition to a portion toward the principal balance. Mortgage loans are due and payable on the first of every month and most loans have a grace period up to the 15th of the month without incurring a late payment penalty.

This date typically coincides with the payroll dates for many employees but if the payment is 16 or more days late, the lender might begin to make a few courtesy calls to check up on…
When you're buying your first home, you are going through such an exciting and stressful time. Buying a home is a huge commitment, and you constantly worry that you might be making a mistake. Though you've undoubtedly done your fair share of research, there are still a few things that you might not know about the home buying process.

You Don't Always Need 20% Down
Saving up 20 percent for the down payment is the gold standard, and most people have come across this advice.  Unfortunately, it's a big hurdle for many people. If it's hard for you to save up that much money, but you still think that you could afford a home, talk to a lender about your options. Some loans only require 3 percent down payment, and there may be ways that you can get some grant money to help with the down payment, depending on your income. The "catch" is that you'll have to pay an extra fee each month for private mortgage insurance (PMI). For many …
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. …

By far, more first time home buyers choose the FHA mortgage loan to buy and finance a home. There are other loan types out there, but the FHA program is the favorite choice for those buying a first home. Why is that? There are few reasons and if you’re thinking of buying your first home, here’s why FHA loans are a good choice for you.
Low Down Payment- FHA loans require a down payment around 3.5%. While there are two other government-backed loans, VA and USDA, the FHA loan can be used almost anywhere and by anyone. VA loans are reserved for veterans and certain military personnel and USDA mortgages must be located in an approved area with income restrictions on the borrowers. FHA loans have no such restrictions.
Competitive Interest Rates- Conventional loans also offer lower down payment loans that don’t require a 20% down payment but when a borrower purchases a home with 5.0% down, the interest rate can be higher. FHA loans don’t change their rates just becau…
UNDERSTANDING MORTGAGE RATES AND THE APR AS NEW HOME OWNER One thing that potential new home owners will immediately recognize is there are a lot of numbers. Perhaps the most important number is the interest rate. The interest rate helps determine your mortgage payment along with the term of the home loan. A lower rate will allow you to qualify for more home. Or, if you’re refinancing an existing loan, a lower rate can save you money each month and throughout the life of the loan.
New buyers will also see numbers reflecting closing costs associated with the loan in addition to the interest rate. There are lender fees and there are non-lender fees. Lender fees might include costs associated with processing the loan application and origination fees. There are fees for an appraisal and credit reports as well as a fee paid to see if the property is located within a flood zone. Non-lender charges are those reserved for title insurance and settlement fees. Property insurance and property taxe…
ARE YOU ELIGIBLE TO REFINANCE YOUR MANUFACTURED HOME AND SHOULD YOU? Manufactured housing has come a long way over the years, so much so that many new manufactured housing looks nothing like a traditional mobile home. But it is a certain lifestyle, a lifestyle that many choose do to certain advantages owning a manufactured home. Manufactured homes are more affordable than their stick-built counterparts. Buyers can select from a variety of floor plans and amenities then have the factor build the home to suit the construction process is quick as in weeks, not months. They’re energy efficient, too. But if you already own a manufactured home and are making monthly payments, should you refinance your manufactured home and is your manufactured home eligible?
There are two primary ways of financing a manufactured home, a personal (chattel) loan and a real estate loan. To get today’s more competitive rates, your manufactured home must meet certain conditions. To be eligible, the home must be af…
There is a great deal of information first time home buyers need to know during the process of purchasing their first home. One term first time home buyers can familiarize themselves with is LTV and its importance. 

What is LTV?LTV is an acronym that stands for loan-to-value, which is a ratio that describes the amount of the loan to the value of the property. In order to obtain this ratio, one must divide the amount of the loan and the sale of the property's price or the appraisal value of the property. In most cases, the lower of the two amounts is used to calculate the loan-to-value ratio, which is a percentage. If a mortgage has a high LTV, then the funds that are loaned are high in relation to the down payment or the equity.

Why Does a LTV Matter When Buying a Home?When purchasing your first home, a LTV is an important consideration. If the ratio is high, then it will have an impact on the risk of the loan, the fees, and the interest rate. Th…
Getting ready to apply for a mortgage? You certainly have no shortage of places to get a home loan but you also have no shortage of loan types from which to choose. Here’s a starter list for you—an adjustable rate mortgage, or ARM. A hybrid. A 3/1, 5/1, 7/1 and 10/1. You can choose a fixed rate loan. A  VA loan. FHA. USDA. A conventional mortgage underwritten to guidelines set forth by mortgage giants Fannie Mae and Freddie Mac. Confused yet? 
It can be confusing but the most popular loan choice for borrowers today and over the years is a plain-vanilla conventional fixed rate mortgage. What are the benefits of a conventional fixed rate loan?
These loans are underwritten and approved by universal guidelines established by Fannie Mae and Freddie Mac and there are more conventional loans issued then any other type of mortgage. Every mortgage lender that offers residential financing will have a fixed rate conventional mortgage. More …
REVISED GUIDELINES MAKE REVERSE MORTGAGES MORE ATTRACTIVE Reverse mortgages are finally getting the attention and respect they are due as a financial planning tool for seniors. The reverse mortgage concept allows a borrower, typically a retiree with no existing mortgage, to leverage the equity in their home with a loan that has deferred payments until the borrower dies or sells the home. The interest is added to the balance every month and the full amount is due in a lump sum payment. 

The idea behind reverse mortgages is to allow seniors to supplement their retirement income by using the equity in their homes without being burdened by monthly payments. New guidelines established by the Home Equity Conversion Mortgage (HECM) ensure that minimum lending criteria  are established--borrowers must demonstrate standard debt-to-income qualifications so that properties don't fall into foreclosure due to unpaid taxes and insurance bills. Also, borrowers can now choose between a consistent m…
UNDERSTANDING MI ON FHA LOANS You may know there are conventional and government-backed mortgages. Government-backed mortgages are those that carry an inherent guarantee to the lender that owns the loan. These three loan types are VA, USDA and FHA mortgages. As long as the lender approved the loan using the required guidelines, the lender is compensated should the loan ever go into foreclosure. Sounds like a good deal, right? It is, and lenders like making these loans, even though they require very little down.
This guarantee however isn’t without cost. The guarantee is funded by a type of insurance premium that is paid for by the borrower with benefit to the lender. For FHA loans for instance, the minimum required down payment is 3.5% of the sales price.  To offset the increased risk for a lender making a loan with very little to nothing down, the government-backed guarantee accompanies the FHA loan and is financed with a type of mortgage insurance, or MI as l…
Many couples struggle when they decide to buy their first home. They might argue over their wants, needs, and their budget. Many couples make a lot of mistakes along the way with their new mortgage. These mistakes can happen during the mortgage process while others will happen after they buy the home.
Here are some common mistakes that first-time home buyers make.
Not being pre-approved for a loan. If you are pre-approved for a loan, you already have a lot of the paperwork done for a mortgage. You know that you are likely to be able to get a loan when you find a home that you like. You also know what your price range will be when you start looking at homes.
Forgetting about other costs. There are more costs to consider than just the mortgage and settlement. You are going to need to get an inspection, an appraisal, along with other costs. As a home owner, you are going to have to pay property taxes and home owner’s insurance. You will also …
The HARP program has undergone some changes as of late. The requirements have been updated to help more homeowners qualify for refinancing.

You may qualify for HARP 2.0, even if: You currently owe more than your home is worth/you have no equity in your home with your current mortgage. You were denied for a HARP program in the pastYou have no large deposits on your bank statement -- previously, you would have had to show these deposits on the statement With many homeowners struggling to pay their current mortgage payments, being able to refinance their loan and lower their monthly payment could be the difference between being able to keep their existing home and having to find a new one. It can also mean having enough money to pay an extra bill, get a little more at the grocery, or pay a medical copay.
Here are a few of the qualification requirements to keep in mind when deciding on whether you would like to go forward with refinancin…
HOW DOES BANKRUPTCY AFFECT A BORROWER'S ELIGIBILITY FOR AN FHA MORTGAGE? Bankruptcy has devastating credit consequences for up to 10 years. Fortunately, the impact diminishes as the years go by. Although a recent bankruptcy makes obtaining a mortgage difficult, you can eventually qualify for a Federal Housing Administration loan, referred to as an FHA loan. You'll need to wait at least two years after bankruptcy before you are eligible for an FHA loan.
General Time Requirements According to the U.S. Department of Housing and Urban Development, (HUD), bankruptcy doesn't disqualify you from an FHA loan if two years have elapsed since the discharge date of the bankruptcy. This won't be the date you filed, but instead the date the court officially approved your petition for bankruptcy.
Additional Requirements Time isn't the only requirement after bankruptcy. You'll need to establish good credit after filing bankruptcy or have chosen not to open new accounts and credi…
YOUR PERSONAL GUIDE TO HARP 2.0 The Home Affordable Refinance Program has helped millions reduce their monthly mortgage payment, even though they may have owed more on their mortgage than the home was currently worth. Traditionally, a conventional refinance is allowed as long as the home owner has at least 10 percent equity in the property at the closing table. This means if the home is appraised at $250,000 the amount refinance can be no greater than 90 percent of that amount, or $225,000. Without this equity position, a conventional refinance isn’t possible. That is until the introduction of HARP and HARP 2.0.
The original HARP was introduced in 2009 and addressed valuation issues millions of homeowners faced when trying to refinance a conventional mortgage. As property values fell, owners were “upside down” and couldn’t take advantage of lower interest rates. Seeing this problem, Congress introduced HARP and while this helped, millions more still couldn’t refinance because they owed …