Archive for April, 2011

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FHA home loans on conventional home loans

April 30th, 2011

Before you ask your financial institution for a standard, conventional home loan, consider asking about a Federal Housing Administration (FHA) loan instead. In this article we’ll cover the basics of an FHA loan, why you should ask for one and how they measure up to conventional home loans. Keep reading to learn more.

What is an FHA home loan?

An FHA home loan is still issued by a private financial provider, but it’s insured by the Federal Housing Administration (FHA). Essentially, this provides the lender with greater security and you with lower monthly payments.

Why should I ask for an FHA loan instead of a conventional loan?

1. It’s easier to qualify for an FHA loan. Because the mortgage is insured by the FHA and the U.S. Department of Housing and Urban Development, lenders are more likely to issue the loan.

2. You can still qualify with poor credit. Even with past credit problems like a bankruptcy, an FHA loan is easier to qualify for than a conventional mortgage.

3. A lower down payment. An FHA loan only asks for a 3% down payment, which is significantly lower than some banks’ requirements of 10-20%.

4. The loan costs less in the long term than a conventional loan. Because the FHA can offer more competitive interest rates, you’ll often receive lower rates which will save you a lot of money over the term of your loan.

5. FHA offers foreclosure protection. Unlike many lending institutions, the FHA doesn’t want to see your mortgage foreclosed. So, they have a number of programs designed to help homeowners who are in trouble. This can be a great resource if you hit hard times.

6. Energy efficiency credits. The FHA allows prospective homeowners to include the cost of energy efficiency upgrades into their mortgage, meaning you can get extra cash to make your new home more energy efficient.

How do I qualify for an FHA loan?

1. You must meet the basic FHA credit rating requirements. While these are lower than most banks and lending institutions that offer conventional loans, you’ll still be subject to a credit check.

2. Your mortgage must not exceed the maximum amount available in your county. On their web site at http://www.hud.gov, the U.S. Department of Housing and Urban Development maintains a list the maximum amounts are sorted by county.

3rd The property you are buying may not exceed four units.

4th The potential of the property must be evaluated and tested. You can deduct the cost of this from your down payment requirements.

All in all, an FHA loan is a much better deal with clients from a conventional loan.

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Low Credit Score Home Loans – mortgages for people with poor FICO Credit Score

April 28th, 2011

Whether you are refinancing, getting a second mortgage or home equity loan, getting a mortgage loan with poor credit history can be tough. In the eyes of the lender, having credit problems puts more emphasis on the other qualifying factors to determine whether or not you can get approved.

Here are some tips to help you get approved for a mortgage loan:

1. Consider ways to come up with a down payment – Even a 2-3% down payment can affect your ability to get approved for a mortgage loan or help you get a lower interest rate on your loan. There are many creative ways to come up with a down payment. Sometimes it can be worth saving for a few extra months or a year to come up with a down payment.

2. Lenders will be looking closely at your income and job history – With bad credit, lenders are going to want to make sure that your income is more than enough to cover all of your minimum payments. The longer you have been at your job, the better. If you are close to the one year mark for your employment, consider waiting a little longer at your job before you apply for your mortgage.

3. Lenders will want to see your most recent debt payments being made on time – Even if you have had credit problems in the past, lenders will be looking closely at your payment history over the last year or two. They will be most interested in how you make your auto, utility and credit card payments. If you are consistent with those payments now, the lender may be willing to overlook past credit problems.

4. Try using techniques to increase your credit score – There are many tips available online to help you raise your credit score. There are 16 ways to improve your score here. You can dispute online, for free, any inaccuracies that are shown on your credit report. This can begin raising your score, sometimes within 30 days or less.

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Facts and advice for new construction home loans

April 24th, 2011

New construction home loans are not the same as your typical, everyday home loans. They tend to have different requirements and adhere to different rules. If you wish to know more about new home construction loans, read on. You just might find an easier way to own your dream home.

The Definition of New Construction Home Loans

When you ask for this type of loan, you’re asking the mortgage provider to give you the money you need to build your own home.

The Basis of Approval

First and foremost, your mortgage provider would require a detailed explanation as well as accounting on the estimated costs for your home-building project. They’d want to know how much experience you have in the field of construction, how much you estimate you’re going to spend on your house and how it’s going to look in the end.

Only after you’ve passed the initial screening, they ask you to submit the usual documents that would enlighten them about your earning capabilities and credit reputation.

The Types of Construction Loans

There are different types of construction loans.

A construction to permanent loan is a two-in-one loan ideal for most people since it would only require you to submit documents and pay closing costs once. This type of loan is a combination of a construction loan and permanent financing. Rather than applying for a construction loan initially, then following it up with a typical home loan, an approved CTP loan can help you save money and time.

A remodeler loan is a second mortgage that’s designed to provide financing for a home improvement or remodeling project.

A bridge loan allows you to use the equity on your present home as down payment for your new home.

Lastly, a lot/land loan gives you money to buy land instead of building a home.

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Home Loan – low interest rate refinance loans

April 24th, 2011

The state of Utah is located in the West of the United States of America. Most of the population of this state lives in the city of Wasatch Front and is urbanized. Utah is known to be the most religious state in America. The centers of attraction in this state are information technology and research, transportation, government services, tourist spots and mining.

The residents of Utah should know that the Utah refinance rates are quite low than they were ever before in history. This fact can provide so many benefits to the consumers who were fed up from the economic instability of the country and were struggling hard to control their debts. Now with the refinance loans they can stay away from filing for bankruptcy and still be able to get rid of their debts.

Earlier, the economic instability caused the inflation to reach up to the seventh sky and many businesses to suffer huge losses. That is why the consumers were questioning the government that why have not they provided any incentive to control the situation. Thus the government came out with many debt relief schemes and low interest refinance loan is one of them. You can easily get rid of your debts once you have applied for refinance loan and live a peaceful life.

However, before you make deal with any lender, you need to gain as much knowledge about refinance loans as you can so that you make the most appropriate decision for yourself. There are various types of refinance loan and you have to choose the one that you can afford and that provide with the maximum profit. Moreover, there are many scams present in Utah that dupe people by offering them attractive deals and then they steal away their money leaving them in more trouble. Hence, only consult those lenders that you come to know about from authentic sources.

You need to know what the lowest rates are being offered to the consumers because the lender you are talking to might offer a high interest rate refinance loan. Then you will need to negotiate with him and ask for the rate that everyone else is getting in the market. Once you reach that speed, you need to make such an arrangement would pay the amount due each month. Remember that you must pay each month otherwise you lose your equity.

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The truth about home loans

April 22nd, 2011

Originally, the term mortgage was used to refer to any type of simple transaction or trade that took place where the purchaser used either physical property (such as a boat) or a plot of land as a form of payment. Nowadays, when you hear the word mortgage, all you can probably think of is paperwork, foreclosures, and debt. It’s true that mortgages have gotten more complicated over the years, but getting a home loan is a lot less scary once you understand what exactly it is you’re getting into.

Types of Home Loans

There are really only about 5 or 6 different types of loans:

o Fixed Rate – If rates go up, your rate stays the same, but know that rates can also go down (and are known to do so from time to time).

o Adjustable Rate – Means that your interest rate is controlled by the lender. Usually have a fixed increase amount (lender may only increase the rate by so much each year).

o Amortized – The most common type of loan. Payments are made on a regular basis (usually monthly).

o Negative Amortized – This is when the amount paid (or “amortized”) isn’t enough to cover the amount of interest due. The unpaid interest is just calculated back into the loan.

o Piggyback Loans – A second loan that typically covers about 80% of the first loan.

o Private Mortgage Insurance – Referred to as PMI, reimburses the mortgage lender in case the home buyer isn’t able to afford their payments.

Factors that Determine your Qualification

The goal of getting a home loan is to get pre-approved. Lenders look at several factors to determine if you may qualify for a loan.

o Credit score – Having a bad credit score doesn’t always mean you won’t be able to get a loan, but having a good score does help. If you do have a low credit score, there are plenty of mortgage options that are designed for people with low credit.

o Assets – A lender typically needs to know if you currently have enough money or to pay off your loan.

o Debt Ratio – One of the biggest determining factors. This is your income to debt ratio. Typically this ratio needs to be at least one.

o Property – Back to the original meaning of a mortgage, the home itself must be worth enough to act as collateral for your purchase.

Down Payments, Up Payments, Left Payments, Right Payments

What exactly is all your money going to each month? With the increasing cost of housing in recent years, many home loans don’t require you to put very much down, and even more are starting to offer loans with no down payments at all. A typical monthly payment is broken down into four parts:

o Principal – The total amount of the loan left to pay.

o Taxes and Insurance – The cost of any damage to the home and what the local Government charges.

o Interest – The cost of borrowing money, month after month.

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