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Applications with Mortgages

admin — Thu, 19 Nov 2009 04:36:26 +0000

According to a recent article in the Los Angeles Times, mortgage interest rates are at their lowest levels in five weeks, and not surprisingly more people are seeking home loans. However, the increases had been driven by the refinance market and not necessarily by new purchases.

This is both a positive and a negative for some homeowners. On the positive side, this means they are able to refinance their homes at a lower rate and take advantage of equity in their homes. But on the negative side, this assumes that the borrowers who are purchasing new homes still have good credit, can make at least a 20% down payment on residences with value of no more than $417,000.

Having indicated the above, it should be noted that there are loan programs available to the consumer whether refinancing or purchasing a new residence. An example of a lower down payment program is the FHA financing.

FHA loans are guaranteed by the government and offer more flexible guidelines than traditional mortgages.

Two important keys to this type of program:

• Loan amount available up to the maximum JUMBO FHA limit in your area
• FHA financing is for Everyone and not limited to first time homebuyers

When considering to refinance or purchase, a new property, the consumer must be prepared to present a complete financial package to their lender.

Products with Home Mortgages

admin — Tue, 17 Nov 2009 01:31:36 +0000

The key for the consumer is to understand what loan product will best serve their needs for now and in the future. The problem in the past has been consumers have been placed into programs that were not compactable with their cash flow or their future plans.

One product for the consumer to consider is FHA Financing. FHA loans are guaranteed by the government and for the new home buyer offer low down payment options that are in some cases have more flexible guidelines than the normal traditional mortgages.

Some of the features to this type of product are but not limited to depending upon the consumer’s situation are as follows:

• Down payment of 3.5%
• Allows for lower credit scores
• Cash out refinance transactions up to 85% loan to value
• Loan amount available up to the maximum Jumbo FHA limit in your area
• No minimum or maximum income limits

As a consumer if you are considering a refinance or a new purchase, you need to have all of your financial information available. By having all the information available, the lender will be able to assist you and explain to you all your various options whether under a FHA financing program or another loan program.

When meeting with your lender

admin — Wed, 11 Nov 2009 05:02:14 +0000

When meeting with the lender, the consumer must be do the following:

• Always be truthful to the lender
• Have complete copies of last two (2) federal tax returns including all W-2’s on all borrowers
• Have copy of most recent paystub for all borrowers on the transaction
• Have a copy of last two (2) months bank statements on all accounts and any stock/investment accounts
• If refinancing, have a copy of most recent mortgage statement
• If refinancing, bring copies of original documents in regard to mortgage
• Prepare a list of all assets, including names of banks, average balances along with a list of all liabilities, i.e., auto loans, credit cards, 2nd home mortgages. Note the lender can receive this information via a copy of your credit report. But having the information available at the meeting is important.

At this meeting, the lender will be able to approximate, what your debt to income ratio. The final ratio is determined by credit underwriting.

By having this information available, the lender should be able to discuss with the consumer various types of loan programs, which will meet the consumer’s financial position. If you are a new home buyer, it is important that you have money available for a down payment. A new home buyer should not be pushed into any program or loan that is at more than 80 percent of the lendable value of the home.

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admin — Thu, 24 Sep 2009 15:16:26 +0000

What do I need to know about Consumer Credit Counseling?

admin — Tue, 04 Aug 2009 22:13:14 +0000

What do I need to look out for and stay away from if I am going to sign up for one of these programs? • Large up front fees. CCCS will typically charge you a $10 set-up fee. If you are paying more than this you may want to look elsewhere. There are hundreds of firms out there in the marketplace. • The company is not accredited. A reputable firm will be listed with the BBB and the Asscociation of Independent Consumer Credit Counseling Agencies. • Delayed Payments. If the company is pocketing your first month’s payment, your credit score will probably suffer. Some programs take this payment as part of their fee. If you start the program with good credit scores (which many people do) and they take your first payment as a fee, then they will not be paying your bills until the second month. When this happens your creditors will report your payments late and your credit score will drop like a rock. Find out where your money is going before you sign the contract and get it in writing. • Blue Sky Promises. If the program or the promises made by a counselor sound too good to be true it probably is. There are plenty of other companies to work with so go with your gut and instinct. If you are not behind on your payments, beware. Many of these companies will try to get you started on a program in hopes of lower interest rates. They do not care if you need the program or not. They know that consumers get frustrated with the high interest rates that their credit card companies are charging them. If you are interested in lower rates, just call the credit card companies yourself and negotiate a lower rate.
What About My Credit Scores?
You may be wondering what will happen to your credit and credit scores if you sign up for a credit counseling program? First of all, it is not the same thing as a bankruptcy and it will not trash your credit if the program is delivered properly by the CCCS Company. Creditors are very pleased with the results of their clients who enroll into a counseling program. The Fair Isaac Corporation has no negative association with a credit counseling program in relation to your credit score. In fact it is ignored. So if things go correctly, your scores shouldn’t be impacted. Hopefully this information is useful to you. My advice is to not get into debt. The reality of debt is that it must be taken on in a responsible manner. Too much debt limits your choices for buying a new home, or a new car. Getting out of debt can take you a life time so be careful what you charge or decide to pay for later. I will take peace of mind any day versus worrying about making payments month to month. Live by your needs and not your wants. You will be much happier in the long run.