A Guide for the First time Home Buyers
As a first time home buyer, do know the first thing about the cost of buying a house? Most first time buyers don’t. Here are some things to keep in mind when you get ready to make the largest financial decision of your life. A mortgage broker marketing company will be your best bet to get all the information you will need to make the purchase. Use this as general information or your personal mortgage marketing tool. [More...]
Mortgage Loan Approval Sometimes Need a Human Touch
In the mid 1990’s, the mortgage industry saw the credit score and its predictive power to assess a borrower’s ability to repay a mortgage step into the limelight as one of the most indicative factors for loan approval. After conducting statistical test after statistical test, Fannie, Freddie and Ginnie, the 3 big lending institutions, mandated that the credit score should be used in conjunction with manual underwriting to assess loan approval. Not too long after, automated underwriting systems (AUS) were developed that expedited and streamlined the underwriting process even further for lenders. A loan officer today simply inputs a borrower’s key information into the preferred underwriting automatic engine, such as his/her credit score, income, amount being borrowed, cash reserves, employment and housing history, and the value of the property. A response is returned by the underwriting engine recommending approval or denial for the loan.
If your loan receives a denial from an AUS, the buck doesn’t necessarily stop there. Life happens to people, and oftentimes it’s going to take a real live person understanding the nuances of a file to make an underwriting decision. That’s when your lender may suggest submitting your file to underwriting for a manual review. After all, not everything in life can be automatic, right?
A perfect scenario for a manually underwritten file would be someone who has no credit scores. No credit scores? Yes, it is possible. I’ve had customers who, being old school and always having paid for everything in cash, had never established traditional credit lines that reported to credit reporting bureaus. In a case such as this one, I had to submit non-traditional lines of credit to underwriting, something a machine can’t assess. This means I had my customer bring in bills he had paid on time for the past year to create a credit history. Typical ones used are car insurance, utility bills, cell phone bills and cable bills. You can expect to have to provide 3-4 different trade lines if you haven’t established a traditional credit history and score.
“The most typical reason we see a file submitted to us for manual underwriting is for either no credit score or an error reported on a credit report,” reflects Patricia Haynes, onsite Government Underwriter at Mortgage Investors Group. “For instance a judgement that doesn’t really belong to the borrower. Maybe it’s really Dad’s judgement reflected on the son’s report because Junior and Dad have the same name. That’s when I can overwrite an AUS decision because I have the documentation to support my decision to do so in front of me.”
Another very common reason to submit a loan for a manual underwrite is when your customer’s credit score is below 620 and gets an AUS denial. If this is the case with your loan, be prepared to provide more than average documentation about your credit history, as well as written explanations as to why your credit score has suffered recently. Maybe two years ago you had a financial meltdown due to a medical illness, but in the last twelve months, you can prove you are back on your game and have been repaying debt. However, your credit scores haven’t exactly caught up with your actions. An underwriter is going to piece together the different aspects of your file and see if it makes sense. Your home lender should be able to review your file and guide you as to what documentation an underwriter will want from you to grant you loan approval.
Naturally, if your credit score is really low and you have very little explanation for your state of credit affairs other than you failed to pay your bills on time, don’t hold your breath for loan approval. An underwriter can see through smoke and mirrors. After looking at files as long as they have, they can basically sniff out a loan that has merit from the ones that are too risky.
So, even as our world gets more and more automated every day, it’s nice to know that you can’t replace genuine common sense, even in the mortgage industry. And it’s nice to know that you can plead your case for credit worthiness to a real live human being. [More...]
Florida FHA Mortgage Qualifying with ((No Min FICO Score))
Florida FHA mortgage Qualifying is Easy with FHA [More...]
Need Cash for a Home Closing? Consider a Gift
I saw a cartoon the other day that was pretty funny, but also pretty sad when you think about it. It showed a couple sitting across from a mortgage lender, and the caption read, “We’re here to apply for a tank of gas.” With increases in prices for just about everything, it gets more and more difficult to stash away a nest egg for a down payment. And pretty much every loan requires some part of down payment, even if you get a 100% financing loan. After all, you still are generally going to be required to put down some earnest money on your contract and in most cases, pay for an appraisal up front. You may have been trying to save it up on your own, but it may be time to accept some help from your family. [More...]
How Home Buyers or Builders Can Obtain Mortgage Loan
For many home buyers and builders, getting a home may perhaps seem like a scary experience. Apart from being expensive, you might come across BIG words like realtors, agents, credit scores, home loans, pre-qualification letters, buyer loyalty agreements, sales agreements and so much more. [More...]
Unsecured Loans and Alternatives
Unsecured loans can be very difficult to get. There are many factors a bank is going to consider that might make it impossible for you to achieve a positive response about unsecured loans.Unsecured loans are loans for a business where the company doesn’t have to put up any collateral for the loan. These unsecured loans are common for very successful businesses that show a lot of revenue and assets. It is very difficult for most people who want an unsecured loan for a business to get a good response from a bank if they don’t meet many different stipulations of unsecured loans.The unsecured loans stipulations usually required from a bank when you are asking for unsecured loans usually require good credit. You must have a high credit score for some of the unsecured loans. The company must have a proven track record of high revenues and success for the past year or two for some of the unsecured loans. The company must show more assets than liabilities and not be in the negative on the books in any way to receive most unsecured loans.There are alternatives to unsecured loans if lenders are not seeing the big picture that you do. The best alternative to a lender giving you money is through a friend or a family member. If you have a friend or a family member who has the money to help you with the money you need then you won’t have to worry about getting turned away from the banks. A friend or family member also won’t charge you large interest rates like a bank will on unsecured loans.Another alternative to unsecured loans is by finding government grants for your small business. There is millions of dollars that goes unclaimed every year and if you can get a grant you won’t even have to repay the money but show the government that you spent it on your business. This is an excellent idea for any type of small business because you don’t have to pay all grants back like unsecured loans. Grants are free money the government sets aside for small businesses as a way to stimulate the local economy. Most small business owners never consider business grants before they ask a lender for unsecured loans.For more information about unsecured loans and how everyone can be approved please visit BusinessCashAdvances.com. [More...]
Tips to Remember While Opting For Refinance
Once a somebody is behind on a large number of mortgage payments, he or she should act as quickly as possible. [More...]
Arm Loan a Good Idea?
When deciding upon a home mortgage, one of the most common options to consider other than a fixed rate loan is an ARM loan. ARM is an acronym for adjustable rate mortgage. With this product, a starting rate is fixed for a certain period of time, and then when that time is up, the rate can adjust depending upon a pre-determined index and margin. This period can be from anywhere of 1 month or 10 years, and can reflect principal and interest or sometimes interest only payments. The adjust results in the mortgage payment either increasing or decreasing. There is also a cap on how much the interest rate can go up or down. Many people today are afraid of ARM loans and automatically only consider a fixed rate loan when applying for a mortgage. Depending on the market, this philosophy is sometimes the most economical route. But many times it may be worth your while to consider an ARM loan.Within the past year or so, there wasn’t any real discernable advantage to considering an ARM over a fixed rate loan. The rates were comparable. But lately, the rates in general have crept up and, when comparing them, the ARM rates can have a healthy edge.When I take a loan application, I ask my customer what their future plans are. Only going to be in town for a couple of years? Do you work for a company that relocates often? Do you plan to expand your family any time soon? Answering yes to any of these questions is a trigger for me to present an ARM loan as an option. The average homebuyer only stays in their home 7.5 years. I recently had a customer who knew she would be in town for only 3-4 years. The difference between a fixed rate and an ARM rate was .375%. The ARM rate was fixed for 5 years before any adjustment would occur. No brainer.There are a myriad of mortgage products out there for the consumer to consider. Ask questions of your loan officer, and more importantly, expect your loan officer to ask questions of you. And if you can’t sleep at night because you know that one day that ARM loan can adjust, just remember one thing. You can always refinance your loan when that time comes. Now, get some sleep.Kristin Abouelata mortgage website [More...]
Feldman Law Center – What Do Banks and Lenders Think of Loan Modifications?
Feldman Law Center – News by Feldman Law Center
The whole reason a loan modification becomes necessary is because the borrower needs the loan to be more manageable, so that he or she can continue to pay for it. The purpose of a loan modification is for the borrower, or someone on the borrower’s behalf, to negotiate a more feasible mortgage with the lender. At first glance, this deal seems like a good one for the borrower. And oftentimes it is. But what about the lender? [More...]
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