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Advertised Mortgage Rates: Don’t Always Believe What You See

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Rate Sharks: Misleading Advertised Mortgage Rates

Rate Sharks: Misleading Advertised Mortgage Rates

Advertised Mortgage Rate: Don’t Believe the Sharks

When you are looking to buy a property for the first time, you may be drawn in by the great advertised mortgage rates. Unfortunately, advertised mortgage rates are not always as they seem. There are many reasons the advertised mortgage rates may not be applicable to you, and in most cases there are very few who can take advantage of the great rates you see posted online.  Just read the fine print. I would like to tell you why and how you can get the best mortgage rate for your circumstances.

The first affecting factor is paying points. A point is a fee equal to 1% of the loan amount. If you are borrowing $100,000 a point is $1,000.  Most of these rates have you paying two points.  That is a huge cost!

The second is your credit score. A higher credit score generally means you will be more likely to receive a lower rate than someone with a lower one. A moderate credit score is about 695, but you would often need a score of above 740 to be eligible for the advertised mortgage rates.

Your credit score can differ from one credit bureau to another, which means it can be difficult to find out your own credit rating accurately. Although many lenders will use FICO, there are others that will use another credit scoring service such as Experian or TransUnion. They are all rated in different ways, for example Equifax have a score from 280 up to 850 but Experian’s goes from 360 to 840.

The term of your loan is also a contributory factor. If you take out a loan under 20 years you would pay a lower rate than you would if you were to spread repayments over 30 years.

We can help you to get the best rates possible for your circumstances.  As brokers we can choose from many lenders based on what you qualify for and have the tools to find out in real time. Many of the offers are time sensitive so it is important to have someone professional on your side who can keep you abreast of the changes.

We choose not to post any advertised mortgage rates as they just don’t make sense.  We take a personal approach and don’t bait and switch.

When you feel the time is right to take out a mortgage on your future home or investment property give us a call.

 

Buying a Home if You Are Self Employed: File Those Taxes!

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File Your Taxes on Time!Buying a Home if You Are Self Employed (or Refinancing): File Those Taxes!

Buying a home when you are self employed, or even refinancing, can be a struggle. The main reason for this is not what you think; it’s not about irregular income amounts. It is more to do with having a two year tax history.  Filinng your taxes on time is essential and it can help you get a mortgage on a home of your own.

Proof of Income

You don’t need to shop around to find a lender that is happy to lend to self-employed people, it is possible here. You will need to provide proof of you income, but as you will be unlikely to have a pay stubyou will need other documentation. You can get this by keeping on top of your tax returns. If you don’t we will have no solid proof to go on.

Return your tax information on time

Your taxes should be returned by the 15th of April, so plan well in advance to ensure you get it in on time. You will need a minimum of two years proof of income to show and should ensure that the only reductions shown on them are legitimate, as those that are not could greatly decrease your disposable income. The reductions could mean that you are not eligible for a loan as high as you would without.  Writing off all your income is a BAD thing for buying a house!

Provide quarterly statements

You will also need to provide a statement if buying a home self-employed showing quarterly gains and losses, so should keep on top of these too. Even if it is going to be a while before you apply, it will help you or your accountant to stay on top of your books. The better you keep your books up to date and file tax returns, the faster you will be eligible for a mortgage.

Improve your credit rating

In addition to needing to have tax returns to get a mortgage, you will also need a good credit rating. This too can be difficult if you can’t provide proof of income. You can use your tax returns to obtain a credit card if you don’t already have one to prove you can keep up with repayments. Although it may be tempting to spend what you are given in credit, you should only spend what you can pay off each month as this will look good on your credit report and be appealing to potential lenders. Use the card to purchase gas or something easy and ensure you have a personal card, not just a business one to support your application and always pay your balance down!

Conclusion

There is no need to be penalized because you don’t work for an employer. Many self-employed people even after deductions are able to earn more than those who are working for a company, which is why it can be frustrating when they are refused a mortgage they know they can afford. Remember, the cutoff date for returns is April 15th. It will not only help you with buying a home self-employed, filing your taxes on time could stop you from being penalized in other ways too!

Buying a home if you are self employed is possible! Contact us to find out how.

Fixing Your Credit to Buy a Home

Fixing Your Credit to Buy a Home

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Fixing Your Credit to Buy a Home

Fixing Your Credit to Buy a Home Starts with Responsible Use of New Credit

Tips for Fixing Your Credit to Buy a Home

Your credit score is important in our world. It is a record and or proof that you are a responsible person and can pay your bills on time. The world doesn’t “take your word for it” when it comes to determining your ability to be responsible. Especially when it comes to large amounts of money that is in question. This is completely understandable. However, we are human and sometimes we stumble. That’s life. Maybe you lost your job at one point and were late on your car payment here and there. It happens. And this too is understandable. But, you have wanted to buy a home – the big dream most of us wish to fulfill. Came to find out though, your credit score is a bit low. Ok, so now what? How do you go about fixing your credit to buy a home? There are several things you can do. Here are some tips to fixing your credit.

Tip #1: Get and review your credit report.

You really should get your credit report from time to time. So you can review what it actually on it. This gives you an idea of what your history looks like. Plus to make sure your report reflects your history. Sadly, in some cases a low or bad score is the result of mistakes and or an indication of identity theft. If either of these things are noticed in your report, you should get a hold of your creditors and make a formal inquiry. By law they need to resolve the dispute. Especially if it is proved that there is a mistake after all. They have to correct and remove it from your report. Make sure that anything that gets changed or adjusted in your report is put into writing. It can be your proof and or defense against any problems.

Tip #2: Seek out a debt professional or counselor.

It can be tough managing your debt on your own. Find a trustworthy debt or financial counselor. You really need to get a pin point on what you owe and find ways to pay those debts off. They can help you in getting in touch with your creditors to go over your debt and make a better plan for you pay your bills. This can help you in so many ways. Perhaps you can go with debt consolidation to help making managing your debt easier. It’s easier to put your debt into one payment instead of keeping up with several different accounts. The bottom line here is to start paying off your debt. It will one improve your score and two teach you money management.

Tip #3: Organize your bills and implement a schedule.

The best thing you can do for yourself is make time to pay your bills. Know when they are due and mark them on a calendar or have some kind of reminder for yourself. The point of the credit system is to show you are responsible. Be responsible. Pay your bills ON TIME every time. Get current on your bills and stay current. This is the most solid tip to really improve your score. It will bump your score up to fixing your credit to buy a home. Continuing to do this will get that score high and you will never have to worry again.

Tip #4: Credit cards.

Credit cards are good to have to help bump up your credit score, BUT only when you know how to use them. Try not to use them too much. Much of the debt people are in is due to credit cards. They are a helpful tool in emergencies and things of that matter. However, most people abuse them. They tend to spend beyond their actual means. The best option in curbing your credit card debt is to get rid of excessive amounts of cards. Credit cards are not free money; you do have to pay them back. Canceling a credit card does not remove it from your credit report. Keep the card that you have had the longest.

So this is it?

Seems so simple right? Well, it really is this simple. All you have to is treat your credit how you should have treated it in the beginning. Follow these tips and keep following them until, well, forever. All you have to do is be patient. Fixing your credit to buy a home needs to be done right. There is risk when you try those quick fix companies out there. They can actually do more harm than good sometimes.

buying a home after foreclosure

Is Buying a Home After Foreclosure Possible?

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buying a home after foreclosure

Buying a Home After Foreclosure Possible? You may be eligible in 3 years!

Is buying a home after foreclosure possible?

Foreclosure is devastating. Life can get tough and we sometimes lose our grip on being able to pay our bills. Perhaps you lost your job, or got injured and were not able to work.  Whatever the situation, you have worked hard and you are ready to start over and get another home. It is possible to consider buying a home after foreclosure. Your options become lesser. But, it is not the end to the dream of owning a home either.

How foreclosure affects you:

When you go through foreclosure it essentially destroys your credit score. So much so, that you are often no longer eligible to get a home loan. Most, if not all banks will turn you down if you have gone through foreclosure. You may not be eligible for at least seven years or longer (don’t give up yet, read on!). You could wait this long to buy another home but it is not a guarantee that you will become eligible after this time.

Credit bureaus keep the mark on your credit report for seven years. Once the seven year mark comes up they send a letter to debtee to inform of the mark on the credit report of the said debtor. If the debtee doesn’t reply to renew this mark it is then removed. If the debtee does reply, the mark will stay on your report for another seven years. By law, credit bureaus have to do this.

Foreclosure is not the end, 3 years instead of 7!

Fannie Mae has made some concessions recently. If your foreclosure was the result of extenuating circumstances then you could be in luck.  The limit has been changed in special cases from 7 years down to just 3.  Buying a home after foreclosure might be possible if you were foreclosed on because of a divorce, job loss, change in circumstances or a tragedy.

Yes, it is possible buying a home after foreclosure. You just need to weigh these options and find which works best for you. You just need to take the time to look around, save some money, work on your goals, repair your credit as best you can for other major purchases. Have patience. Perhaps see a financial adviser to help you to ease the dent of any possible debt and get yourself back on track and prevent any more devastating financial hardships. Home ownership is still possible.

buying a home after a short sale

Is Buying a Home After a Short Sale Possible?

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buying a home after a short sale

Buying a Home After a Short Sale? It is a waiting game..

Buying a Home After a Short Sale is Possible!

A short sale is basically selling your property for less than the balance still due on the property.  A short sale is often used as an alternative to foreclosure, but it is not the best option if it can be avoided as a short sale does have a negative impact on your credit score.  Although you will probably not get the best rate in the market, this does not mean that you can’t look into buying a home after a short sale.

So what are my options?

You have a couple of options in this situation. You do qualify to apply for a conventional home loan after a two year waiting period and with a twenty percent down payment. A ten percent down payment after a four year period and a ten percent or less down payment in seven years. If you are trying for an FHA loan you’ll have to wait three years with a three and half percent down payment. These waiting periods start after the date of sale on the short sale listed on the credit report.

During this waiting period there are things you should do. You have time to rebuild your credit again and but together a plan to save for that down payment. The wait isn’t too long really; this option can get you in the position to buy a home after a short sale.

Buying a home after a short sale is very possible. Just be sure to do your homework, save money for a down payment and keep working on your credit rating. It does take a hit after a short sale. Build it back up as it will be in your best interests to raise that score as high as you can. It will give you a leg up once your waiting period is over and you start applying for a home loan.

A short sale is not the end your home buying dreams at all. These are the options out there for you.  Give us a call or apply today, we are here to help!

Better Customer Service

Choosing A Mortgage Broker – Part 4 – Better Customer Service

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Better Customer Service

Better Customer Service

Brokers Offer Better Customer Service

Choosing a mortgage broker just makes sense. Qualifying for a good home loan can be confusing. Mortgage brokers are trained and licensed to know how to get the best mortgage rates possible with simple mortgage guidance. The paper work involved in buying or building a new home can be overwhelming. Often reading the terms and agreements can seem like reading a different language.

Benefits of Choosing a Mortgage Broker

  • When using a broker to find a lender to finance your new home, you have someone who knows the language of real estate. They will know the terminology. A broker will know difference between fixed or adjustable rates and market fluctuations. They will know what a balloon payment is. PMI may be a term you have never heard of, but a broker know what it is and how to avoid it.
  • A mortgage broker is not trying to sell a certain financial institution’s mortgage loan. They work with several lenders to find the best mortgage terms for a new home purchase. When using a broker, you can apply for several financing options, with just one form.
  • You do not have to pay for the broker’s service; the chosen lending company pays most brokers. Like a finder’s fee. The lender, for bringing your business to their company, rewards the broker.
  • When using a broker, there are many lenders from which you may choose. A bank or other financial institution may have different types of mortgage loans, but do not have access to other loans or lenders that may have better terms.
  • If you have questionable credit, a broker can be extremely helpful in finding a mortgage loan. A broker has access to many types of loans from many different sources. Having a choice of private lenders and financial institutions with simple mortgage guidance, a home loan is within the reach of almost everyone.
  • Choosing a mortgage broker is the best way to get a mortgage with terms and conditions that you can financially live up to. It is the brokers job to offer the best customer service for you, not the lender.
  • A broker is more than a loan officer at a financial institution. A lender may not have experience in property investment specifically. Brokers often specialize in the different types of mortgages available.

Many shopping for a new home look to the guidance of a mortgage broker to find the best financing possible. They work to find the best loan with the terms that will match your budget. Buying or building a home using a mortgage is a huge step. It will take a large part of your personal budget to finance. A mortgage broker has the tools and knowledge to know where to shop for a home mortgage loan for any size budget.

Loan Options

Choosing A Mortgage Broker – Part 3 – More Mortgage Loan Options

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Loan Options

Loan Options

Loan Options: Brokers Have Better Access

A mortgage broker has access to several different sources for many loan types. Unlike a loan officer at a financial institution, a broker is able to work with any loan company. When looking to finance a newly constructed home, choosing a mortgage broker that has experience with construction loans is important.

Getting loan options for a newly constructed home is different than getting a loan for a home. There are several more steps to obtaining this type of loan. Choosing a mortgage broker to get through all the steps will make your new home dream come true.

What is a Mortgage Broker?

Using a mortgage broker is like applying for several loans, with just one person. Mortgage brokers have many different types of loans available. More than just a banker, a broker will have access to private lenders and many other types of loans to finance your dream home, and not leave you broke.

When looking into getting a loan to build a new home, a broker will do the loan shopping for you. You tell him what you want, how much it will cost and what you can afford to pay. The broker does the rest. When constructing a new home, there is always the chance the unexpected expenses will occur. A mortgage broker can often take care of the extra funding.

If you broker chooses a private lender, there will be more loan control. The decision is made right in the broker’s office, not in a boardroom, closed-door meeting where people who do not know you decide if the funding is approved.

When a broker lands a loan from a private party, the payments can be deferred until construction is complete. The loan will still be charged interest, but your payments will not start until the construction is complete.

When building a new home, it is important that you, the borrower, knows what is going on. After all, it is your money. Choosing a mortgage broker will help the process go faster and smoother. Brokers are able to find a loan deal that will meet your budget needs faster than you could on your own. Building or buying a home is a huge step. Finding the right loan on your is a lot of work. It requires you to be informed of all the changes in mortgage regulations, terminology and how the entire system works. Choosing a mortgage broker will make the process go faster and more efficiently. A broker will have the knowledge and the tools to find the best mortgage possible for your individual situation.

When considering a large loan to build a home, talk to a mortgage broker, they will help find the best loan options for you.

Better Rates

Choosing A Mortgage Broker – Part 2 – Better Rates

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Better Rates

Better Rates

Brokers Can Offer Better Rates by Shopping Around

Buying a house is a big project. Doing it alone is possible. If you know about mortgages and loans, it is a piece of cake. The reality is not everyone who purchases a home knows how it all works. For those who do not know the ins and outs of mortgages, choosing a mortgage broker to weed through the potential lenders and get the best mortgage lender with the best deal.

What is a Mortgage Broker

A mortgage broker is an independent loan agent. They don’t normally work for a particular lender, they have several lenders that they work with to get their clients the best mortgage possible They are licensed by the Nationwide Mortgage Licensing System & Registry (NMLS) to work with multiple lenders. A broker will handle all the loan applications for you and help the whole process move along faster and more accurate.

What Makes a Good Mortgage Broker

Finding a good mortgage broker is simple if you know what to look for. Here are a few things to consider when choosing a mortgage broker.

  • Ask for references. Better yet, ask around for a recommendation from someone who has used a good broker to purchase a home. A good broker will have several references that you may contact to vouch for his or her service. A good friend or family member will have had experience with a broker.
  • Interview a potential broker. Find out if they are up to date on the ever-changing mortgage laws. A broker must know what the rules are and how to work them to the advantage of the homebuyer.
  • Does the broker have an office and are they available to you for questions? A good broker will be available to his or her clients when they have questions or are viewing a potential home.
  • Make sure the broker has access to many mortgage lenders, not just one or two. To get the best mortgage deal, there must be choices.
  • When interviewing you will get a feel of how personable and sincere, the broker is. Even though the lender will pay the broker, he or she should still have your best interest in mind. They should care that they get the best mortgage deal possible for you.

These are just a few of the things that make a good mortgage broker. Ultimately, a mortgage broker will have access to better rates for mortgages that will work with your budget. Working with a broker will not cost more money, it will save money by landing a loan that you can afford.

Choosing a Mortgage Broker,

Choosing A Mortgage Broker – Part 1 – Basics & Licensing

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Choosing a Mortgage Broker,
Brokers Approved by the NMLS

In order to choose a mortgage broker, it is important to know what a mortgage broker is. It is not really a big mystery, but the mortgage broker is a bit of a misunderstood occupation.

Choosing a mortgage broker is a proactive step when shopping for a new home loan. A mortgage broker will be connected with many lenders and loan options. It is their job to find the best rates for your new home loan. A broker does not work for one mortgage company. Brokers have the ability to contact a large number of lenders that will have competitive rates for home mortgages.

What is a Mortgage Broker Q & A

1. How does a mortgage broker get paid?

A: A mortgage broker makes a commission from the lender. Lending companies pay mortgage brokers a percentage of the total loan amount. It does not cost more for the new home shopper to use the assistance of a mortgage broker. Some mortgage brokers do charge a small fee, but not many do.

2. Can a broker find a lender even if I have bad credit?

A: Yes (most of the time). A broker will have many lenders to choose from and many rates, depending on your credit history. The broker will find the loan that will work best with your budget and credit rating.

3. Will I save time using a mortgage broker?

A: Of course you will save time by choosing a mortgage broker. The broker does all the pesky paper work involved with applying for a mortgage. You will meet with the broker, go over your finances, fill out one form, and the broker does the rest.

4. What will a mortgage broker do for me?

A: A licensed mortgage broker will

  1. Find the home loan that will fit your budget.
  2. Negotiate the best loan terms.
  3. Handle the paper work when applying for several loans.
  4. Give you options and guide you to the best financial solution.

5. Does a mortgage broker need to be licensed?

A: Yes. All mortgage brokers must be Nationwide Mortgage Licensing System & Registry (NMLS).

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There can be hundreds of choices when it comes to finding the perfect mortgage loan. Using a mortgage broker will save you time and money by finding the right loan for you and your financial situation. A good mortgage broker will narrow your choices down to the lenders that will work the best deal for you. Since this is a free service more new home shoppers should consider using one to negotiate the many lenders that are clamoring for your business.

Looking to purchase a new home is a huge financial responsibility that should be taken very seriously. Utilize the free services that are available to you. A mortgage broker can save time and money when you are looking for a new home to purchase. Make sure the broker that you employ has a good record of accomplishment, is flexible, has appropriate licensing required within your area and can provide you with references. A good mortgage broker will have many lender choices available to find the best new home loan for you and your budget. 

what is mortgage insurance and how to avoid it

What is Mortgage Insurance and How to Avoid It

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what is mortgage insurance and how to avoid it

PMI – Mortgage Insurance

When purchasing a new home, it is important to become educated on what some terms and services really entail. One of the most important things you should know about is; “Just what is mortgage insurance?” Once you discover what it is, chances are you will then want to know; “How can I avoid it?”

Most borrowers purchase their home with less than the desired twenty percent. Most borrowers pay a monthly fee for not having the ideal down payment. Most borrowers do not even know they are paying for this option. Signing a mortgage to purchase a home is a huge step. As a responsible consumer, it is your responsibility to know what you are paying for when you sign the final ownership papers.

What is PMI?

Private Mortgage Insurance (PMI) is a fee some home loan lenders charge homebuyers for not having a down payment. The fees for this insurance vary from lender to lender. These fees can be quite excessive. In theory, once a homeowner has attained equity of 80% the insurance is no longer required. Many mortgage lenders do not drop this policy automatically when you have reached the 80% mark for equity. There are some lenders that require this insurance for at least five years.

How to Avoid PMI

  • PMI can be avoided. The number one way is to of course make sure you have the required down payment.
  • If you have been paying on your home for a while, talk with your lender and determine if you have reached the magic 80% equity threshold. As long as all other terms have been met for your lender, the PMI will be cancelled.
  • Refinancing is an option at 95% equity. When refinancing, you will have the option to pay a onetime Premium Mortgage Insurance payment.
  • Home improvements can add up. If you are making your payments on time, every time, and this is the only way you are adding equity to your home, it could take a while to get to the 80% equity needed. There are many home improvement projects that will increase the value of your home and property.
  • Keep an eye on area property values. If they are rising, refinancing at a lower rate will also eliminate the PMI payment included in your mortgage payment.

PMI is Not Buyer Protection

Even though it is insurance, it does not cover the borrower. This insurance is designed to cover the lender in case of default. It will not take away any responsibilities of the borrower for the payment of the loan. The insurance is to protect the lenders investment. The most common reason PMI is attached is because of a low down payment or a low credit score. It can often mean the difference of qualifying for a loan or not.

Of course if paying this insurance is your only option, knowing what it is and how to eliminate it will help in future financing options. The most important thing in every mortgage deal is to be sure you can afford the payments. A PMI payment could be 200.00 or more per month of your required mortgage payment.

Many states have different remedies for those paying PMI, or are upside down on their mortgage. It is important that you, the borrower, become informed and understand what is available and how you can benefit.

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