Archive for the ‘Credit Facts’ Category
Tuesday, May 4th, 2010
Today many large lenders are advertising nothing but the interest rate. They would have you believe that the rate of a Mortgage is the most important component of your loan. We feel that rate is only a small piece of the loan puzzle.
With the increased frequency of people changing jobs in the United States, individuals rarely stay with the same companies for the duration of their careers. This translates to people moving around more frequently than in the past. People who stay in the same house for longer than five years are quickly becoming the minority in the real estate market. The need now for competitive products to facilitate these changes in housing is more important than ever. Borrowers need options that allow them more flexibility to move around.
So which is it?
To answer this question let’s take a look at a 30yr fixed loan. Consumers choose a 30yr fixed based on two things-a low fixed rate and a low fixed payment. Contrary to public opinion, the interest rate on a 30yr fixed rate mortgage is not fixed. Let’s use the example of a 30 year fixed rate mortgage of $150,000. In the first ten years of your loan you would pay the bank $84,000 in interest. Only $25,000 in the first ten years would go to principal. After 21 years, half of the initial balance is still owed. At this point, the consumer will have paid $226,000 with only $75,000 of it going to principal. All of a sudden, that low fixed rate you received does not seem as low. With people only staying in a home for 5-7 years, paying the bank interest is not as appealing to today’s consumer.
Is there a solution? The answer is “yes”. Loan products such as Adjustable Rate Mortgages (ARM’s) or first position lines of credit allow consumers to pay less in overall interest during the course of their loans. We believe that matching up a consumer with a product that better fits their needs is far more powerful than trying to find the lowest rate. “But who needs these types of Mortgages?” A regional manager for a large retail chain would be good example. These positions come with a higher rate of relocation. In this case someone who knows they are only going to be in a house for a couple of years would be better served by a product that offers them payment options and possibly a low introductory start rate. This would allow the consumer to pay more towards the principal balance of their loan rather than paying most of the money to interest. Also, it helps the consumer generate more equity in their home by putting greater distance between what is owed on the home and what the current value is.
In the lending world there are a vast number of loan products and loan programs. Keep an open mind about the loan process and be open to the advice that a seasoned mortgage professionals offers. Rates may look great on paper but in the larger financial picture, they are not as important as the products they are associated with. We strive to find our clients a perfect balance between rate and products, and believe it to be the path to greater financial prosperity and less unnecessary debt.
Your best days are ahead,
Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information. To claim your copy, simply click here:
or visit the Empower Home Loans website by clicking here:
Tags: 10/1 arm, 15 year fixed, 3/1 arm, 30 year fixed, 40 year fixed, 5/1 arm, calculator, conventional loans, conventional mortgage, empower, fha loans, First Time Home Buyer, fix and flip, hard money loans, Home Loans, house flip, interest only loan, interest only loans, investor financing, jumbo loans, loan calculator, Mortgage, mortgage banker, mortgage broker, Mortgage Tips, rate vs product, Refinance, rent or buy, rent vs buy, today's rates, va loans, www.empowerhomeloans.com
Posted in Credit Facts, First Time Home Buyer, Home Loans, Mortgage, Mortgage Tips, Personal Finance, Refinance | 7 Comments »
Monday, April 19th, 2010
Over the years, a number of new mortgage options have become available to prospective buyers that ease the burden of buying a home. Buyers can now obtain a mortgage with a variable interest rate that rises or falls with the market or even a mortgage that requires only interest payments for the first few years of the loan term. This allows buyers to make smaller payments early in the repayment schedule while purchasing a more expensive home than they otherwise might be able to afford. The payments would increase in later years, but so, presumably, would the income of the buyers, so that the home would still be within the buyers’ range of afford-ability. A relatively new mortgage option that may soon adjustable rate mortgage and the interest-only mortgage in popularity is the mortgage with a 40 year term. While most mortgages offered today are for either 15 or 30 years, the 40 year mortgage has been available for nearly 20 years, but few lenders offer it as an option, as they are often reluctant to tie up their money for such a long period of time.
That may change, however, as Fannie Mae has announced their intention to purchase more 40-year mortgages. With Fannie Mae purchasing more 40-year mortgages on the secondary market, lenders will probably be more willing to offer them to customers. Interest rates will likely be somewhat higher for a 40-year mortgage than a 30-year mortgage, but the extra length of the loan term will keep the payments lower than with a traditional mortgage. Prospective buyers should be aware that they will pay more in interest on a 40-year mortgage than they will on a traditional 30-year note.
Studies show that most homebuyers do not stay in their homes for anywhere near 30 years, let alone 40. Over the last few decades, it has been common for people to stay in their homes only 5-7 years at a time. This being the case, the market for 40-year mortgages may remain fairly small. However, cash is king, and the payment is much lower with a 40 year mortgage. But for some buyers, it may mean the difference between continuing to rent and buying the home of their dreams.
Your best days are ahead.
Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information. To claim your copy, simply click here:
or visit the Empower Home Loans website by clicking here:
Tags: 10/1 arm, 15 year fixed, 3/1 arm, 30 year fixed, 40 year fixed, 5/1 arm, calculator, conventional loans, conventional mortgage, empower, fha loans, First Time Home Buyer, fix and flip, hard money loans, Home Loans, house flip, interest only loan, interest only loans, investor financing, jumbo loans, loan calculator, Mortgage, mortgage banker, mortgage broker, Mortgage Tips, rate vs product, Refinance, rent or buy, rent vs buy, today's rates, va loans, www.empowerhomeloans.com
Posted in Credit Facts, First Time Home Buyer, Home Loans, Mortgage, Mortgage News, Mortgage Tips, Personal Finance | 19 Comments »
Tuesday, April 6th, 2010
Do you want to know more about the how the mortgage process works? Are you to embarrassed to ask any questions? Don’t be. When you make a real estate decision, that’s a big move. Even refinancing your mortgage is a big deal and should be treated with care and a lot of education. Follow this link from our friends at How Stuff Works to learn more about the process:
Link to How Stuff Works Mortgage page
Your best days are ahead.
Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information.
To claim your copy, simply click here:
or visit the Empower Home Loans website by clicking here:
Tags: 10/1 arm, 15 year fixed, 3/1 arm, 30 year fixed, 40 year fixed, 5/1 arm, conventional loans, conventional mortgage, empower, fha loans, First Time Home Buyer, fix and flip, hard money loans, Home Loans, house flip, how do mortgages work?, interest only loan, interest only loans, investor financing, jumbo loans, loan calculator, Mortgage, mortgage banker, mortgage broker, Mortgage Tips, rate vs product, Refinance, today's rates, va loans, www.empowerhomeloans.com
Posted in Credit Facts, FHA, First Time Home Buyer, Home Loans, Mortgage, Mortgage Tips, Personal Finance, Refinance | 2 Comments »
Saturday, March 20th, 2010
The VA Loan was introduced in 1944 through the original Servicemen’s Readjustment Act (also known as the GI Bill of Rights). This Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home without a down payment. This feature was designed to provide housing and assistance for veterans and their families, and made the dream of home ownership a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and also to the growth of the nation’s economy.
VA guaranteed loans are made by private lenders, banks, savings & loans co, and mortgage companies to eligible veterans for the purchase of a home, (and must be for their own occupancy). The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.
VA will guarantee a maximum of 25 percent of a home loan amount (up to $104,250, which limits the maximum loan amount to $417,000). The reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.
Just like a conventional loan, VA requires a borrower to have sufficient and adequate income to cover the repayment of the mortgage. Before a borrower can be approved for a VA home loan, the past stability of income and the continuance of the borrower’s income must be established through acceptable sources of income, the borrower’s past employment record, and the employer’s confirmation of continued employment must be established.
Stability of a person’s income is generally derived from their employment history. VA requires verification for the previous two full years and must be documented through lender verifications of previous employment or W-2′s. This income must be analyzed to determine whether it can be expected to continue through the first 3 years of the mortgage loan (if the borrower intends to retire during this period, the expected retirement income, social security benefits, etc. should be used). It is important to note that any gaps in employment must be reasonably explained by the borrower. Schooling or education for the borrower’s profession (e.g. nursing school) can be counted towards the 2 year requirement and allowances for seasonal employment, such as is typical in the building trades for example, may be used. Unemployment or other issues may present a challenge with qualification approval.
Before you start the loan process, you’ll need to have some information at hand for all loan applicants:
- Social Security numbers
- Residence addresses for the past two years
- Names and addresses of your employers over past two years
- Your current gross monthly salary
- Names, addresses, account numbers and balances on all checking and savings accounts
- Names, addresses, account numbers, balances and monthly payments on all open loans
- Addresses and loan information of other real estate owned
- Estimated value of furniture and personal property
- Certificate of Eligibility and DD214, (for veterans only)
- W2′s for the past two years and current check stubs
- For self-employed individuals, you will need to provide personal tax returns for the past two years, current income statement and balance sheet for the business
In addition, be prepared to pay for a credit report and appraisal of the property. Though the process can involve a lot of paperwork, it is important to ask questions from your representative to make sure that you are not lost and do not feel rushed. This is your dream! Understand it to the fullest!
Your best days are truly ahead.
Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information.
To claim your copy, simply click here:
or visit the Empower Home Loans website by clicking here:
Tags: 10/1 arm, 15 year fixed, 3/1 arm, 30 year fixed, 40 year fixed, 5/1 arm, calculator, conventional loans, conventional mortgage, empower, everything you need to know about va loans, fha loans, First Time Home Buyer, fix and flip, hard money loans, Home Loans, house flip, interest only loan, interest only loans, investor financing, jumbo loans, loan calculator, Mortgage, mortgage banker, mortgage broker, Mortgage Tips, rate vs product, Refinance, rent or buy, rent vs buy, today's rates, va loans, www.empowerhomeloans.com
Posted in Credit Facts, First Time Home Buyer, Home Loans, Mortgage, Mortgage News, Mortgage Tips, Personal Finance, VA | 23 Comments »
Monday, March 8th, 2010
Still on the fence?
It is understandable that some individuals or couples have put off buying their first home because they are smart, responsible people and have strived to make the best financial plans for their future. Maybe they had been waiting on Real Estate prices to be in their favor, maybe they were looking for great rates. Prior to say – right now – this made a lot of sense. Right now, there are no excuses. Period. With low rates and incredible property prices, now more than ever is the time to get off of the fence and take advantage of this opportunity for your potential First Time Home Buyers $8,000, $6500 Tax Credits*.
Pack up. It’s time to move.
We all crave our own space, good neighbors to share a back yard barbecue with, a place for the kids, some flowers and a few tomato plants. Many first time home buyers can’t wait to say goodbye to property managers that enforce restraints where they live, and decorate their own homes in their favorite colors to express their personal style.
As the responsible, financially savvy people you are, investing instead of throwing money away on rent, makes so much sense to you. Home ownership has historically outperformed the stock market in investment return for years. Interest rates are at historic lows, home prices are down, and sellers are motivated! Looking for great Realtors? Just ask. We partner with the best Realtors and provide you with HD Video tours of local real estate listings. Check it out here: http://youtube.com/user/empowerhomeloans
Your best days are truly ahead.
Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information.
To claim your copy, simply click here:
or visit the Empower Home Loans website by clicking here:
Tags: 10/1 arm, 15 year fixed, 3/1 arm, 30 year fixed, 40 year fixed, 5/1 arm, calculator, conventional loans, conventional mortgage, empower, fha loans, First Time Home Buyer, fix and flip, hard money loans, Home Loans, house flip, interest only loan, interest only loans, investor financing, jumbo loans, loan calculator, Mortgage, mortgage banker, mortgage broker, Mortgage Tips, rate vs product, Refinance, rent or buy, rent vs buy, today's rates, va loans, www.empowerhomeloans.com
Posted in Credit Facts, FHA, First Time Home Buyer, Home Loans, Mortgage, Mortgage Tips, Personal Finance, Refinance, VA | 2 Comments »
