Know The Loans

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 mo...

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 installments...

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. Gov...

15 YEARS VS. 30 YEARS 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...

YOUR FIRST HOME LOAN: 7 TIPS FOR SUCCESS 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 t...

WHY YOU SHOULD DITCH YOUR CONVENTIONAL LOAN FOR AN FHA LOAN 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...