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28 02, 2015

Is a Short Sale Home a Good Option?

2021-09-28T16:57:33+00:00February 28th, 2015|Blog|

 

iStock_000007246498SmallYou have come across a home that you love; its in the right neighborhood, its the ideal size for your family, and has all the bells and whistles you were looking for in a home. The only problem is that its a short sale. This is a common thing within the housing market right now. Many homeowners are finding themselves upside down in their mortgage due to a job loss, aggressive borrowing against their home when credit was easier to obtain, or an unforeseen circumstance. These same homeowners are opting for a short sale option in order to avoid a possible foreclosure of their home. This is where it can get tricky for the individual looking to purchase the home. Lets first discuss what a short sale entails.

What is a short sale?

A short sale is the sale of a home in which the proceeds from selling the home/property will fall short of the amount of debt that is owed on the home/property. The property owner is not able to pay the remaining amount owed on the loan and the lien holder or bank will then release the loan by accepting a lesser amount of money than what is owed on the debt. For the lien holder or bank, this is an alternative option to a foreclosure where the bank is able to recoup some of the money on the loan as opposed to losing more more money on the loan to a foreclosure.

Are you a good candidate for a short sale?

Since the bank is losing some money on the short sale it can take several months for an approval. When it comes time to make the decision to purchase a short sale home you must have patience. Even after you have come […]

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18 02, 2015

Understanding How Your Credit Score Affects Your Mortgage

2021-09-28T16:57:35+00:00February 18th, 2015|Blog, General, Mortgage 101, Tips & Advice|

 

Approved Credit report form with paperwork Approved Credit report form with paperwork

Have you ever taken the time to check your credit score? If not, it may be worth doing. Your credit score determines so much when it comes to buying a car, financing a home, obtaining lines of credit, and much more. Knowing your credit score will help you better understand what kind of mortgage you might qualify for or what steps you need to take to fix your score.

Where does a credit score come from?

Your credit score is different than your credit report. Just like a report card from school, you have a final letter grade but the report itself may show you how you came to get that grade. A credit score is based on your credit report. Your credit report shows your payment history, length of credit history, amount of debt owed, and any other factors that may play a role in determining your score. FICO or Fair Isaac & Co. then assigns you a number based on these factors. Since there are three different credit-reporting bureaus you will usually have three different credit scores, although varying slightly.

What is considered an A+ rating? 

FICO scores, or credit scores, can range anywhere from 350-850. An 850 is the ideal number as this is considered a perfect score. A 723 is considered a median score for the U.S., but it is fair to assume you can expect good rates when you have a score anywhere from 720 and up. If you are a first time home buyer you might be considering an FHA loan. These loans require a borrower to have at least a 620 score or higher if you are looking for an approval.

 Obtaining your credit report

Nowadays your credit reports is […]

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9 02, 2015

Mortgage Tips for The New Year- Part #2

2021-09-28T16:57:38+00:00February 9th, 2015|Blog, Buying a home, General, Mortgage 101, Tips & Advice|

iStock_000019781099_Small

 

Last week we covered part one of our two part series on ‘Mortgage Tips for the New Year’. This week we will continue with more useful tips that will help to save you time and money when you are ready to get your first mortgage.

Tip#6 – Prepare to Write Letters

Most lenders today will want to know every detail of your financial life. If something looks odd, or doesn’t make sense they will want to have some sort of explanation. This means that you will have to write letter explaining everything. For instance they may want to know why a credit card issuers pulled your credit three months ago when you were trying to apply for store credit, or why you changed jobs a few months ago or why you have moved from job to job over the last couple years. It’s best to write them and explain everything in full detail and move on. They do this simply to verify your financial stability and it is usually something that is requested from time to time.

Tip# 7- Receive any Financial Gifts Early

If you are receiving any sort of financial assistance or even a financial gift for your down payment from someone make sure that you are depositing it into your account at least two months prior to applying for your mortgage. That way the bank will not need to source the large deposit. If this is not done then the gifter will have to write a letter stating that the money was truly a gift and not a loan. If you are needing a loan for the down payment the lender may see this as a sign of financial dependence and it may hurt your chances of obtaining a loan.

Tip# 8- Self Employed? […]

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2 02, 2015

Mortgage Tips for The New Year- Part #1

2021-02-24T22:13:18+00:00February 2nd, 2015|Blog, Buying a home, General, Mortgage 101, Tips & Advice|

Was one of your New Year’s resolutions to finally buy your first house? If so, these mortgage tips will help you navigate the mortgage process with ease.

Tip #1 – Pay Less Mortgage Insurance

Conventional loans require a home buyer to make a 20 percent down payment and many home buyers don’t have enough cash on hand to make that down payment therefore they are required to pay for mortgage insurance as part of their monthly payment. This insurance protects lenders if a borrower should default on the loan. Until late 2014, Fannie Mae and Freddie Mac required down payments of at least 10 percent. This requirement pushed many home buyers into Federal Housing Administration loans or FHA loans, which have a 3.5 percent minimum down payment. The problem is that FHA premiums are costlier than private mortgage insurance. But in 2015, qualified buyers will be able to get Fannie and Freddie backed mortgages with down payments as little as 3 percent. These premiums will be dependent on credit scores and the size of the down payment. Private mortgage insurance premiums are generally more affordable than FHA premiums.

Tip #2 – Get a Thorough Pre-Approval

Sellers often prefer buyers who come with a pre-approval by a lender. This makes their offer more attractive and can help to avoid any problems that may arise down the line. If  you are looking to get a pre-approval, a mortgage broker or bank loan officers will pull your credit and submit any supporting documentation to their automated underwriting system. This allows the bank to give you more accurate loan terms based on your actual credit score, debt obligations, and income. This will also help you to get ahead of the process when you find the home you want and are ready to go into contract.

Tip #3 – Monitor […]

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