Archive for March, 2010

No Documentation Loans for 100% Mortgage Financing

March 31st, 2010

Although home prices in Florida have slowed a bit, over the last 5 years or so Florida real estate appreciated rapidly. The cost of buying a home in Florida is much higher than in many other states. Record numbers of families are saying good-bye to cold winters and snow and headed to sunny Florida for it’s mild weather and satisfying way of life.

Many of the families migrating to Florida are changing professions or starting new careers when moving here. This makes it difficult for them to qualify for conventional style mortgage loan programs. With my many years of experience in the mortgage industry I am seeing a large trend toward stated income and no documentation mortgages.

A stated income mortgage loan can provide up to 100% financing when purchasing a home. However, the borrower must be in the same line of work as he/she was previously. If the borrower is self-employed, he must provide the lender with a CPA letter verifying the business has been active for 2 or more years, as well as a business license or articles of incorporation. Sometimes this isn’t possible for the new Florida resident seeking a home mortgage. So, now we will discuss the three main types of “No Doc Mortgages.” They are known as NINA (no income – no assets provided), SIVA (stated income – verified assets), NIVA (no income – verified assets provided). The NIVA loan product is the most popular and can provide the Florida home-buyer with up to 100% financing.

The NIVA loan product is great for Florida home-buyers that have changed jobs frequently over the last 2 years or recently moved to Florida and changed career paths. It is also excellent mortgage program for Florida home-buyers that are retired or semi-retired. Credit requirements vary from lender to lender. Some lenders require a 720 plus credit score for 100% financing.

However, some lenders will consider credit scores as low as 620. The higher your score, the better your interest rate and terms will be when getting a no-doc mortgage in Florida. Florida is predicted to be the fastest growing state in the USA over the next 20 years, so it’s a fact that real estate will continue to appreciate more consistently than most states. many of my customers, friends and clients ask me when is a good time to buy a home?

My answer is this: When considering buying residential Florida real estate, just look back 10 years and research 1997 home prices in Florida. Now look at the cost of that same or like home presently. When is a good time to buy I answer, NOW!

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Posted in Home Loans Articles

Tags: documentation Financing Mortgage

Low Income Loans – Easy Low Rate Loan For Deprived People

March 31st, 2010

There are numbers of people who do not earn enough to provide for buying necessities to have even minimum standards of life. Such people fall under the category of low income. But these people also get loans thanks to many sources in these days available to them. Low income loans are what they can relay on for meeting their expenses. Through low income loans they can even buy a home, a car, clear past debts, go for a holiday tour etc.

Low income loans are meant for those who have a very low or low to moderate incomes. Income is defined usually on the basis of area median income. If the borrower’s income is 50 percent of area median income then it is very low while 50 to 80 percent is low income. Those people who are without sufficient housing but are in a position of making housing payments including principal amount, interest on it, taxes and insurance, are eligible for low income loans.

Low income loans can be availed from governmental sources with ease or there are private lenders who are willing to provide financial assistance to such borrowers. Low income loans provided by government bodies or subsidiaries are easier and take especial care of the personal circumstances of such borrowers. For instance, if a low income earner wants to buy a home, he has many options in taking loan from government through programs like Freddie Mac and Fannie Mae, Federal Housing Authority, Veteran’s Administration Home Loans, Rural Housing Authority and many other state sponsored programs.

Then there are many private lenders who are providing low income loans at cheap rate of interest keeping typical personal circumstances of these people. These loans providers can be located on internet. In offering low income loans these lenders are also ready to relax conditions and therefore even bad credit borrowers are able to take the loans easily. The loan thus gives opportunity in improving credit score of low income earners.

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Posted in Home Loans Articles

Tags: Deprived Income People

Obama’s Home Affordable Loan Modification Program Can Help Millions, If the Lenders Allow It

March 30th, 2010

Now more than ever, loan modification is more attainable than ever for households who can not afford their monthly mortgage payments. This is thanks to Obama’s Home Affordable Loan Modification Program, which has set previously unseen easy requirements to qualify for home loan modifications.

Obama’s Home Affordable Loan Modification Program hopes to reach out to three or four million American households in need between 2009 and December 31, 2012. The $75 billion plan was written up in response to rapidly decreasing property values and the inability of millions of Americans to afford their mortgage payments due to circumstances hat are beyond their control. Lenders are just as happy to accept the plan as the in-hardship homeowners are. Under the plan, if a lender successfully negotiates a loan modification and the homeowner pays their new lower rate each month, the lender will get $1,000 for 3 years. While the chances of all homeowners paying their new mortgage rates, no matter how small are they, there will always be some who successfully pay each month. At the end of the year, that can be a pretty penny for a lender, especially since loan modification cuts the lender’s profits in mortgages because the interest rates are reduced along with the monthly payments.

Under the Home Affordable Loan Modification Program, the modified loan is extended over a five to forty year period, under which the homeowner pays lower monthly mortgage payments, and the total interest is lowered according to the homeowner’s financial hardship. The rate the homeowner pays is fixed up until the end of the five year period, where ballooning to make up for the lower payments can occur. The rise at the end of the term does not mean that the overall mortgage has risen over the five years, rather that the lender needs to catch up with how much the homeowner owes.

For homeowners who do not qualify for Obama’s Home Affordable Loan Modification Program due to not being in hardship in the eyes of their lender can attempt to get refinancing under the new Home Affordable Refinance program, which is similarly targeted towards four to five million people. However the Refinancing Program is targeted towards the homeowners whose property value is steadily falling. The two programs, the loan modification and refinancing, while milestones in availability, are useful for entirely different scenarios.

Lenders are slowly opening up to accepting loan modification applications under the new loan modification plan, but it is not instant, as entirely expected. Under the new plan for loan modification, lenders must take a financial hit since the interest rates are lowered, and there is no guarantee that every homeowner will pay on time every month, so the $1,000 bonus is not a sure thing. The system will work itself out in time, but for now there is doubt on the lender’s side and great need on the homeowner’s side

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Posted in Home Loans Articles

Tags: Affordable Lenders Millions Modification Obama's Program

VA Home Loan Refinance

March 30th, 2010

If a person misses payment, makes late payments, or has too many outstanding debts, then that person gets a bad credit or poor credit rating. With bad credit, refinancing is nearly impossible. In such cases, mortgage lenders help to refinance the current mortgage and qualify for home loan.

Unemployment, illness, and unexpected expenses affect bad credit. With refinancing, it is possible to get cash back to pay off debts and restore credit rating. VA home loan refinancing helps to take the benefit of existing lowest interest rates and converting the loan into a low-interest-rate mortgage compared to what you are currently paying. This ultimately translates into huge savings. You can refinance existing VA home loans with a lower rate loan by using a VA IRRRL (Interest Rate Reduction Refinancing Loan).

For a VA home loan refinance, the mortgage rate may range from half a percent to 3%, 4% or slightly more, depending on the personal situation. For those who finance the fee with the home, some unknown cost may be involved. A surviving partner who has obtained a VA home mortgage with the veteran prior to his or her death may obtain a guaranteed interest rate decline on VA loan refinancing. Though most lenders do not provide construction loans, after the home is complete, the borrower can take a VA home loan in order to refinance the construction loan. This loan can be used to refinance an existing home loan up to 90% of the VA-established reasonable value or to refinance an existing VA real estate loan to reduce the interest rates.

By applying to refinance a mortgage, one can save money on monthly mortgage payments in a very short period. Lenders will offer advice to improve the credit rating. VA home loans are more secure, so the risks for the lender are much less than with a non-secured loan.

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Posted in Home Loans Articles

Tags: Refinance

Your FICO Score and Getting a Home Loan with Poor Credit

March 30th, 2010

Your FICO score is a credit score used by lenders to determine how risky it is to loan you money. The lower your FICO score is, the harder it will be for you to get approved. This article offers information on how your FICO score affects you, as well as information on getting a home loan with poor credit.

Your FICO score is determined by your borrowing record. Things that affect your FICO score include the amount of time a credit account has been established, the amount of credit used vs. the amount of credit available, late payments, and negative credit information, such as bankruptcies, collection action, and bad debt write-offs. With just a few blemishes in your credit history, your FICO score can be seriously tarnished.

Raising Your FICO Score

There is no way to increase your FICO score overnight. Credit repair takes time and serious effort. However, if you need to raise your FICO score as fast as possible, the following tips will help:

· Pay your bills on time.

· Get your credit card balances below 30% of your credit limit.

· Pay off any old negatives that are on your credit report.

Getting a Home Loan with Poor Credit

If your FICO score is less than perfect, and you don’t have time or the resources to correct matters immediately, all is not lost. In fact, getting a home loan with poor credit is becoming easier than ever. Many lenders will be willing to work around your credit history and get you the home loan you need to make your property purchase. If one lender tells you no, speak to other lenders until you get the approval that you are looking for.