Showing posts from July, 2016

It’s not uncommon for someone to have bad credit. Unfortunate things happen to very good people and as such they can fall into some uncomfortable economic situations. When lenders first extend credit they look at the ability of that person to repay the debt along with looking at previous payment patterns with past credit accounts. If the lender doesn’t think the person will pay back a loan based upon the lender’s terms the loan won’t be made. Lenders don’t enter into loan agreements with the understanding they won’t be paid back. Nor do borrowers enter into a loan agreement with the intention of not paying back the loan. Yet bad things do happen sometimes and good credit can turn into bad credit. A divorce. An extended illness or even death of a family member. A loss of a job or income. These are all the most common reasons bad credit is formed.
Okay, so if you do have bad credit, should you apply for a mortgage? Before that question is …

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…

When you head to the settlement table, you’ll see a copy of your note. This is a contract between you and the lender and spells out specific tasks both you and the lender are bound to perform. This contract is rather wordy and your settlement agent and loan officer will help point out the important items but you can expect to read the following:
Your interest rate will clearly be highlighted. This is not the annual percentage rate provided to you when you first applied for the loan but the rate lenders use to calculate your monthly payment. This is your note rate. The mortgage contract will also show when the payments are due, when considered past due and how much the late fee would be if you don’t pay on the first of the month. Most mortgage contracts require the loan to be considered past due five days after the first and asses a late fee of 5.0% of the past due amount on the 15th of the month.
The amount borrowed is your original loan amount and…

Before you go shopping for a home, you’ll first need to shop for your financing. And at that time, you might very well be surprised at the number of choices available to you. A loan officer will ask several questions about what you’d like to buy and where as well as general information about your income, employment, funds available and credit. From that, the loan officer will provide your available mortgage options. It might be a bit overwhelming at first but there really are only two types of mortgage loans- conventional and government-backed.
Conventional- Conventional lenders provide mortgage loans underwritten to standards issued by Fannie Mae and Freddie Mac and by far make up the largest categories of loans issued. When a lender approves a conventional loan should the borrowers default on the mortgage, the lender absorbs the loss and forecloses on the home.
Conventional loans offer both fixed and adjustable rate loan programs. Fixed rates ar…

There are so many new terms you’ll discover once you submit your application for a home loan but one of the first might be presented prior to submitting any application whatsoever- prequalification. As you prepare to go shopping for a home and you first speak with a real estate agent, the agent will want to know if whether or not you’ve spoken with a lender. If you say that you have and you’re prequalified, it’s possible the agent will ask you to take the next step and get preapproved before getting into the agent’s car to look at homes.
When you first get prequalified, you’re given a certain comfort level about how much you can afford. A prequalification is typically issued after a conversation with a loan officer, usually over the telephone and after answering a few questions. The loan officer will ask about your employment to determine you’ve been working for at least two years. How much cash do you have available for a down payment a…

You don’t have to have perfect credit in order to buy a home. Well, in the aftermath of the housing debacle around 2008 you might have needed perfect credit. Too many lenders got into the subprime mortgage business not documenting any income and not requiring credit scores contributed to the end of many successful banks yet today those lenders and loan programs that made such loans are no longer around. But lenders did slowly move back into the mortgage market and while they stopped making loans to those with poor credit they did gradually move back to the established lending guidelines mortgage companies used for decades.

But it can’t be stated more clearly- you don’t have to have perfect credit. Or even excellent credit. Credit profiles today are viewed by lenders using credit scores. Excellent or Very Good credit is indicated with a credit score of 740 or higher. Scores range from 300 to 850 on the credit score scale. Poor credit is indicate…

If you’re one of the lucky that are VA home loan eligible, you should know that it’s hands-down the best mortgage in today’s marketplace for those wanting to come to the closing table with as little cash as possible yet still have a competitive mortgage rate. If you’re soon to explore getting a VA home loan, here are six things you need to know about this earned benefit.
1: Only your Certificate of Eligibility determines whether or not you have access to the VA home loan program. You can obtain this certificate directly from the VA or you can work with your loan officer who can obtain this certificate instantly from the VA on your behalf.
2: There is no monthly mortgage insurance payment, helping you to qualify for the home you really want. Other mortgage programs do require a monthly mortgage insurance payment, increasing your monthly payment and reducing the amount you can borrow.
3: The VA home loan can only be used to buy and finance a primary…

For those whose retirement days are still somewhat far into the future, perhaps the only nod to retirement is a 401(k) program at work or contributing to an IRA every year. But retirement will come whether we want it or not and few have an exact date they’ll quit their jobs. There are those who work for larger employers or government jobs that provide a full pension after so many years of service but there are also so many more that will rely on their savings to take care of the bills once retired. For most, their home is their biggest asset. And as retirement arrives, how do you buy a home in retirement and what should you consider?
Where do you want to live and have you been there before? If you’re not familiar with the area and only so because you’ve heard a lot about it or traveled there before, it might ultimately be your best move. For instance, you’ve had it in your head you’d like to live in the mountains and northwest Colorado has always appealed …

Political pundits, consumer groups and policy activists decry the amount of student debt amassed over recent years. Colleges are more expensive as campuses across the country are raising tuition pretty much on a yearly basis and anyone who has looked at a tuition statement recently see that tuition is only part of the problem. It’s also the fees that can add up in the thousands. To handle this debt, student loans are a must for many. But it’s not the financial burden the media thinks it is. It makes a good story but digging a little deeper into the facts of student loans tells us perhaps a different tale.
For those with student loans, the average debt load is around $28,000 per borrower. And that’s a lot. But it’s not necessarily interfering with the housing market. Homeownership rates have fallen over recent years while at the same time student loan debt has been on the rise. But there’s a big difference between causality and coincidence.…

Millennials, all 80 million of them, might finally be taking the plunge and stop renting and start buying. This vast group of consumers, those born between 1980 and 2000, has recently overtaken the so-called Baby Boomers as the largest generation as the Boomers are riding into the sunset. What has kept the millennial generation on the home buying sidelines and why might they be changing their collective minds?
Millennials entered their young adult years very near the beginning of the Great Recession when foreclosures were all the rage. Banks failed, at least the smaller ones, and it was plain to them that should the economy ever “go south” then they could lose their homes, ruin their credit and be unable to sell the home should they get into financial straits because home values plummeted. “No thanks, not me!” they said.
This group, around 36 and younger, has now reached an age where their jobs are more secure, pay checks p…

According to recent statistics, millennials receive an average federal income tax refund of just over $3,000 and an additional amount from state income tax refunds. And while those who do file income tax returns and expect an income tax refund, it’s often with no shortage of anticipation waiting for the tax refund to hit their bank account. For most, it’s free money but in reality it’s not. You just loaned it to the federal government interest free. Yet the feeling can’t be ignored. It’s found money. And often spent on some short-lived luxury item that wouldn’t otherwise be purchased with funds from a pay check. Yet that same refund doesn’t have to go toward a high-end HDTV. It can help buy a house.
Most loans, with the exceptions of VA and USDA mortgages, require some sort of down payment. The FHA program asks for a less than 4% down payment of the sales price. For a $150,000 sales price, that’s $4,500. With an average tax …

If you want to increase your buying power and keep your payments lower than they would be otherwise, then yes. But there are more variables at play in addition to lower rates. Here are some things to consider when thinking about buying a home and financing it with a mortgage.
Don’t buy just because of an interest rate. When rates drift lower and you know a few real estate agents you might get a postcard in the mail that says something to the effect of, “Interest rates are low, take advantage and buy a home today!” But do you buy anything else on credit just because interest rates are low? Do you buy a new car because rates are low or because it’s time to replace that thing in the driveway with a new ride? Buying a home means more than the payment.
Do you want to move? Are you outgrowing your house or soon will be? Maybe you’re downsizing and looking for a retirement home. Move to a better public school district? Job transfer looming? Th…

When potential homeowners or those currently with a mortgage begin searching for interest rate quotes from various lenders, they’ll soon find they might have their work cut out for them. Mortgage loan officers quote interest rates, fees and monthly payments to potential borrowers all day long. It’s easy for them. It’s what they do for a living. But those in the industry do admit sometimes it can be a very confusing process comparing one lender’s offering with another. That is unless you follow these very important tips.
The first tip is to decide the exact type of loan you want. It’s an impossible task comparing a 30 year program from Lender A with a 15 year loan from Lender B. Yes, they’re both fixed rates and only the term is different but the monthly payments are much different and the amount of interest paid to the lender is significantly so. No, instead choose a mortgage and stick with it.
Next, offer up a simple scenario for…

Millennials today have yet to enter the home buying market.  While it might be understandable why a 20-something isn’t ready to buy a home, but those approaching 30 years old, may still have some reservations partly because they’re getting some bad information from somewhere. Or, they’ve simply formed their own opinions without enough solid data. Let’s look at seven myths millennials believe about mortgage lending.
1.You have to have perfect credit. You don’t have to have perfect credit. In fact, borrowers can have what some might refer to as just “average” credit. That translates to a credit score somewhere in the 620 range and not 750 or above.
2. You have to have a big down payment. Not true. The most-used mortgage loan program for first time home buyer is the FHA program which requires a less than 4% down payment of the sales price of a home.
3. Closing costs are too expensive. There are closing costs associated with all mortgage loa…

It might very well be right now. This might be the best time to get a VA loan. Or maybe not. You see, getting a VA loan isn’t really a timing issue. A VA loan in the spring is no more or less desirable than one in the fall simply based upon the time of year. Instead, a VA loan has to be right for you when it’s time for you. Let us explain.
Real estate agents will tell you that if you’re going to sell your home you should do so in selling “season” which is typically the time when school ends in the spring and starts in the fall. More buyers are out and many choose to buy a home in the summertime and make major moves when the kids aren’t in school and things around the house are slowing down a bit. Real estate agents may also say that buyers might think about buying in the slower months of the year when sellers may be more willing to negotiate a better deal when there are fewer offers out there. But in either case, in the summer or winter, the best …

When wondering if it’s a good idea to refinance your existing VA loan, by running the numbers with your loan officer, the math typically points the way. If the numbers work out they’ll say so and it’s an easy process from there. There are two ways to save money when refinancing your VA loan, both in the short and long term.
If interest rates have fallen and they’re lower than what you now have that will pretty much tell you a refinance is in your future. But it’s not just about the interest rate but what your new monthly payment will be. A smaller loan amount will have a smaller decrease in payment compared to a larger VA loan using the very same interest rate. So it’s important to look beyond just the rate and what the rate actually represents. In addition, you’ll need to compare the monthly savings with the amount of closing costs needed to close your VA refinanced loan.
There are different opinions sometimes between loan officers about…

Depending upon which definition you accept, so-called “millennials” are those born from around 1980 to the early 2000’s. Essentially, they’re the group sandwiched between Generation X and Generation Z. Why is this important at all? One of the reasons is this group will very soon have a major impact on our economy, even more so than the Baby Boomers who were born in the mid-forties, fifties and sixties as the millennials begin to supplant their baby booming parents and grandparents. They’ve just started opening up their wallets, but, so far, have not had much of an impact in the housing market. This may change soon.
The biggest obstacle in buying a home is coming up with the down payment. Yet more loan programs are coming into the market with lower down payment requirements. The FHA program, which requires a low down payment, is one of the most widely available mortgage programs and is not restricted by location or first time homebuyer status, alt…