Tag: FHA

Currently in the market there are three most important types of mortgage loans.

Are you in search of mortgage loan? If yes is what you have answered then it is wise for you to know the types of mortgage loans that are presently popular in the market. Most of the times, you might get confused which type of loan is suitable to you. Thus it is vital for you to all the three types of loans in brief so that you can take the right decision.

Below mentioned are the three types of loans that most of the banks and lenders lend people. Take some time out and know about them in brief so that you can be sure which one suits your requirements the most.

Type #1

Fixed interest rate mortgage loan:

This is one type of mortgage loan that is very popular and most of the people prefer taking this kind of loan due to a number of benefits. As the name says, the interest rate in the mortgage loan is finding in this type. This means that you know how money you have to keep aside for paying the interest plus the principal amount for the loan. This is the main reason as well as the benefit why people prefer this kind of loan. In this type of loan, the term of the loan usually is 30 years. Thus you know much money you need to pay monthly for 30 years for the loan.

Type #2

Convertible loans:

This is the type of loan is becoming more and more popular these days because of the flexibility that it offers. This kind of loan keeps all the loan options open for the borrowers. This is considered to be one of the most important benefits as well as reasons why this type of loan is becoming popular.

In case you find that the interest rates are too high, then you have an option in convertible loans. You can convert the loan into fixed interest rate mortgage loan. If you find that the interest rate is low, then you can convert the, loan into ARM based loan.

Type #3

Special mortgage loan:

This is a type of mortgage loans that are offered only to a group of people. For instance, the FHA type of mortgage loan is only offered to people who are buying homes for the first time or even people having bad credit.

The above mentioned are the popular types of mortgage loans in the market. Choose the one that suits your needs and budget as well.

Credit history plays a vital role in approval of mortgage loans or any other loan. People with good credit will hardly find any sort of complications in their loan procedure but those who have bad credit history are the major victims of loan rejection. In case you are one among the later category of people and are looking for mortgage loan then here are few tips to help you out

Steps to buy Bad credit mortgage loans Wisconsin

Have a look at your Credit History Report
The first step to apply for bad credit mortgage loan Wisconsin will be to make an updated report of your credit history. It is a mandatory procedure for every person who is applying for any sort of loan.

Bad credit means higher Rate of Interest
With a bad credit history you will need to prepare yourself to pay more for the rate of interest. In such a situation flexible mortgage loan is good alternative for you to choose.

Show a Stable Income
You need to show the mortgage lender that you are now having a good job with unwavering income. This will give the lender an assurance of repaying the loan on time.

Clear previous Debts
In case you have any outstanding payments to make, ensure that you pay them before applying for the bad credit mortgage loan Wisconsin. A credit report without any kind of debts is impressive among the lenders despite of having a bad credit history.

Down Payment should be huge
If you are willing to get good mortgage loan then you need to surrender as much as you can while making your down payment. This will let the lender believe in your earnestness in taking the loan and repaying with without losing your beloved house.

Address your cleared debts in detail
Even though you will clear the debts they still appear in the report. You need to clarify the reason behind the debts genuinely to the lender. This will make your loan procedure simpler as the lender gets an easy way to decide.

Prefer government Schemes
Going to bad credit mortgage loan Wisconsin under the government schemes like FHA or VA will be helpful for you. Their credit requirements are not as strict as the private lenders.

Prefer Joint Loans
Adding an additional person with a good credit history to sign your Bad Credit Mortgage Loan Wisconsin will guarantee the lender that your payments will be done on time. However remember in case you fail to repay the loan on time, the lenders will get hold of the co signer and he will be liable for the rest of the payments.

Before you start shopping for a home in Weatherford real estate, it would be wise if you first look for a loan and get pre-approved. This way, sellers are more likely to accept your offer.

Generally, the available loans that buyers can avail are categorized into three: government or private, adjustable or fixed rate, and new loan or assumable.

1. Government or Private Loans

The money from government mortgage loans like FHA and VA loans are not actually lent by the government but instead, insures or guarantees to repay lenders in case of defaults. These loans have advantages — they call for a lower deposit than other loans and usually have lower points or interest rates. The disadvantages: they have a certain limit on how much can be borrowed, the process is longer, and the closing costs are sometimes higher.

Most loans are made by private institutions like mortgage companies, banks, and savings institutions. Lenders generally require borrowers to get mortgage insurance, especially if the down payment made is low. This is because such insurance gives the lender a certain degree of protection if ever the borrower defaults. The insurance may possibly be added to the amount of loan or financed at closing.

2. Adjustable or Fixed Rate Loans

Adjustable rate mortgages, also called ARMs, have monthly payments or interest rates that change over time; it may ascend or descend. Typically, these mortgage loans begin with lower monthly payments, interest rates, points and fees compared to a fixed rate. For this reason, ARMs often appeal to first time buyers and young couples who are expecting that their incomes would grow, and also to those people who do not have that much cash to pay for deposit and closing expenses.

If you choose this type of loan, be sure to ask the lender to have the terms completely explained to you. You should ask about the index that will be utilized to compute the interest rates in the future, how the index charges would influence your loan, and the interest rate cap or the maximum limit on the amount of interest rates that will be charged to you no matter how high it goes in the marketplace.

On the other hand, on fixed rate mortgages, as the name implies, the interest rate do not change during the life of the mortgage loan, which can be from 10 years to 50 years. This means your payment will stay the same, with the exception of changes on the insurance and taxes.

3. New or Assumable Loans

You may also choose between a new loan or an assumable one during the process of buying a property from the available Weatherford homes for sale. This means you may get a new loan or assume a loan that already exists, which are often on the same terms and conditions as the last owner. Some examples of assumable loans are FHA loans, VA loans, and other adjustable rate loans.

Home mortgage refinancing is a development that has caught the fancy of a number of home owners irrespective of their credit score ratings. It is witnessed that home owners with very good credit score rating can secure advantageous results from conventional mortgage loan refinancing while home owners with poor credit face problems in the process. Whatever is the credit circumstance of a property owner, what needs to be kept in brain prior to availing FHA Mortgage Refinance is whether the refinance is in fact needed or is just a trick to retain up with the developments. The very best time to opt for FHA home loan refinance is when the FHA refinance mortgage prices are at an all time reduced.

FHA property home loan refinance is usually advised to all property owners with negative credit as the probabilities of securing standard mortgage loan refinancing at very low rates is slightly significantly less as in contrast to FHA refinance home loan loans. Getting an FHA refinance property financial loan can also be helpful in the extended run as the individual will be capable to refinance once more with no any appraisal and no credit qualification. Availing Refinance FHA Loan will decrease the trouble even more as the requirement for paperwork will lower substantially and the man or woman will be capable to secure the FHA property mortgage refinance loan without getting to wait for a extended period of time.

If you wish to get advantage of this loan refinance, then there are many mortgage loan companies available that offer you assistance to obtain affordable loan that is best suitable to all your requirements and financial condition. All the assistance offered by these loan companies are carried out by their team of skilled and knowledgeable mortgage loan specialists, who posses years of expertise and knowledge in the field of mortgage loans and Hoboken Housing Market. The main objective of these companies is to fulfill each and every requirement of their clients related to housing finance and mortgage refinance in very effective and best manner possible.

The mortgage loan companies also offer assistance in Mortgages For Foreign Nationals, Non-warrantable Condo Projects and various other mortgage loans. So if you want to get assistance in obtaining mortgage loans, then what are you waiting for? Simply go through the internet and locate out the trustworthy and reliable mortgage loan company that goes well with all your specific needs, preferences and financial statement as well.

Current Housing Market Status:

In the last 3 or 4 years, a
large number of homeowners have been trying to complete a “loan workout”
with their current mortgage lender to lower the interest rate and
improve the terms of their loan. Many lenders have chosen not to accept
any new terms, rather, let the property go into foreclosure.

Because
lenders have an overwhelming number of properties in foreclosure, they
are starting to accept loan modifications via their loss mitigation
departments. The time is ripe for consumers (who own homes) to take
action and request that their loans be modified towards better terms and
a lower interest rate they can afford, if they have high interest rate
sub-prime loans or are at risk for foreclosure.

Since, the rate of
foreclosures is increasing, everyday, the federal government, congress
and the president have approved and signed a new bill which will allow
homeowners to take advantage of a new “FHA – Hope for Homeowners
Program” designed to save more than 400,000 homeowners from foreclosure.
This program will go “live” on October 1st, 2008.

The new FHA
loan program will assist homeowners who are currently in foreclosure,
close to foreclosure or those who have high interest rate mortgage loans
like those called sub-prime loans. The program is different than a loan
modification in several ways.

The following is a bulleted layout
of the deference’s between completing a loan modification and getting
approved to do a FHA -Hope for Homeowners program.

Loan Modification:

1.
You can recast your current loan into different terms, with the hope to
benefit from a lower interest rate, which is fixed rather than an
adjustable interest rate.

2. The costs of the loan modification are rolled on the “back-end” of the loan, which will increase the amount of money you owe.

3.
The loss mitigation department may choose to keep the amount (that you
own on your loan) higher than your current home value. Or they may
choose to lower that amount, some, but not as much as it could be to
make your new payment comfortable in the long term. This could mean that
you may be in financial jeopardy, in the future.

4. It’s a fact,
what cause your current lender to be interested in keeping your loan on
their books are the servicing rights. They make money servicing your
loan over the term of the amortization schedule. The problem is that
many lenders have filed for bankruptcy or just got out of the business
(due to poor credits markets) and the servicing rights have been sold to
other investors. This often causes a strain, since; the servicer does
not actually have your loan documents at their facility, so they rely on
others to get your original loan information to them for review. This
process can cause the loan modification workout to be slow, in many
cases. Timing is very important, since, homeowners are not knowledgeable
in the process and they often wait to late to get the loan modification
process started. It is important to communicate with your current
lender and get the loan modification process stated, months before your
home goes to foreclosure sale.

5. If your request for a loan
modification is rejected, you may want to try it again in a few months,
since; some lenders don’t document the loan modification attempt you
made. They are often motivated by changes in the housing market and
their intent changes as more and more loans go into default. It does not
hurt to try again. It is smart to work with a loan modification
specialist, a seasoned loan officer or an attorney who specializes in
real estate, mortgage lending and loan modifications. They understand
how to speak to loss mitigation department, personnel and can get a
general idea of the mood and trends of your lenders loss mitigation
department.

6. Many loan modification specialist work together
with attorney firms to get the loss mitigation departments to act in a
timely manner. Those same attorney firms work with the loan modification
specialist to make sure the original loan documents are not fraud
ridden. This is a good approach, yet it can cost the homeowner
additional money, since both the loan modification specialist and the
attorney need to be paid for their services.

7. Homeowners are
required to pay the loan modification specialists and attorneys for the
services, provided. Many homeowners think that the cost will be included
in the new loan amount, but this is not the case. Logically, lenders
are already losing money when they agree to modify the loan terms and
conditions for the homeowner, so, you can bet that they will not agree
to “package” the costs of doing the loan modification into the new loan.
That cost is paid by the homeowner, directly to the loan modification
specialist and/or the attorney. The cost can range between $995.00 and
$, 5000.00; as an average. Many loan modification specialist, senior
loan officers and attorney firms can work out a payment plan, yet, many
require at least 1/2 upfront before they start the loan workout.
Understand, there is no guarantee that your loan modification or loan
workout will be accepted. You will still have to pay your representation
your agreed amount. A large percentage of loan modifications and
workouts are accepted. So, it’s a good bet, since, most people do not
want to loose their homes to foreclosure.

8. Loss mitigation
representatives, (most often) do not require you to pay for a new
appraisal. Instead, they have your representative provide census track
data, a BPO (broker price opinion) or a print out of valuation from
title company market sales data. 9. If you are in foreclosure and costs
have been incurred from posting your foreclosure sales data, attorney
fees, title costs or other costs; you could be liable for those costs,
if our current lender requires it (as a requirement to the loan
modification).

10. Loss mitigation departments may choose to
approve you for a new loan which is (another adjustable or tiered -fixed
loan). Be careful. Do your homework or “talk-it-over” with your
representation.

FHA- Hope for Homeowners Program:

1. The
federal housing administration (FHA) has required that all homeowners
who become approved for this program accept a 30 year fixed rate
program. No other loan types will be accepted. You can only qualify for
this program.

2. FHA will loan up to 90% of the current value of
your property. This means that if you purchased your property for a
higher purchase price and currently have a loan amount higher than what
the value of the property is presently, you can become approved to do a
loan amount at 90% of what your current house is worth.

3. If you
have more than a 1st trust deed lien (subordinate liens) on your
property and your property value has severely, diminished; your current
lenders may take the loss when you get approved under the “Hope for
Homeowners Program”. Usually, the subordinate lenders loose, unless they
purchase the primary lien. Most do not purchase the 1st trust deed
lien. So, the subordinate lender takes a loose on their investment.

4.
FHA’s goal is to keep as many homeowners in their homes. They
understand that it would be better to do a loan for a homeowner rather
than have that property go into foreclosure, be place into the retail
real estate marketplace, causing a further degrading of the housing
market.

5. The FHA underwriting guidelines are currently more
liberal than any other loan guidelines in the current market. FHA is
more forgiving in their approach to mortgage lending.

6. The FHA underwriting guidelines have not been
disclosed. As October, 1st, 2008 approaches, lenders, processors and
underwriters will have a more clear idea as to what is required to get a
loan approval.

7. Homeowners will (probably) be required to pay
for a new FHA appraisal, as a condition for loan approval and closing.
Underwriting guidelines will determine if this is true. The average
costs for an FHA appraisal is ranges, $300 - $450.

8. Income to
debt ratios will be determined and posted in the underwriting
guidelines. Consult your loan modification specialist or loan officer.

9.
The loan servicing companies that service, sub-prime loans will
(probably) be more inclined to accept a loan modification, since they
will want to transfer the lien to FHA, rather than keep it on their
books. They have taken huge losses and have an overwhelming desire to
get rid if their current problems. Have patience with these lenders,
since, they do not keep your actual loan documents at their facilities.
They will have to request them. Many loss mitigation personnel are
stressed and will want to make a determination as to your file, fast.
This is an advantage to you! Work closely with your loan officer to get
the items needed for loan submission.

10. If you live in a heavily
populated area like Los Angeles, Orange County, San Francisco, Seattle,
Portland, Denver, Miami, etc., you will more than likely have a higher
percentage of success with a loss mitigation department. This is because
there are more homes in foreclosure in concentrated housing areas.

11.
Even though we have not seen the FHA underwriter guidelines, (since
they have not been delivered to the underwriters) they will be available
on or before October, 1st, 2008. We can expect that the guidelines will
probably focus on a person ability to make the new housing payment and
not the persons credit score. We call this "ability to pay"!

12.
If you're, FHA -"Hope for Homeowners Program" loan application is
accepted by FHA; your current lender will still have to accept the
condition which FHA places on the loan. This means that your current
lender may to take a loss in equity by accepting the FHA loan buyout,
offered.

13. The good news is that your current lender (already)
understands that they will take a loss in equity, if the property goes
into foreclosure. If they don't accept the FHA buyout, they may have to
place your foreclosed property into the retail sales marketplace. This
means that they may have to pay a Realtor up to 6% commission, wait for
the property to be purchased, incur additional holding cost, pay a
gardener, electricity and water bills. All the while, they realize that
the property will probably be reduced in value even more as additional
foreclosure properties come on to the marketplace. This is not a rosy
situation for them, so, most will realize that it would be better to
sell the loan to FHA and take less of a financial loss.

14. The
main benefit to your current lender in accepting the terms of a FHA
buyout is that under the FHA guidelines, they can benefit from a portion
of any equity gain in the property for up to 5 years, at the time FHA
buys the loan. If the homeowner chooses to sell the home within the 5
year period after the close of the new FHA loan; the lender can
participate in a percentage of any equity gain. This single condition
will cause many lenders to accept the FHA loan buyout. Ask your loan
officer for information regarding lender participation in an equity
gains.

15. Many lenders are fully; "FHA approved lenders" and will
require that your loan be recast within the FHA loan department of your
current lender. Therefore, ask your loan officer if your current lender
(note holder) is FHA licensed. This will save you time and headaches,
since; many loan officers will try to do the loan on your behalf without
determining if your current lender wants the new FHA loan on their own
books. This may be a condition for an FHA loan approval, by your current
lender. If our current lender is already an approved lender, they might
as well sell the loan to FHA, direct, correct?

16. Third party
cost like, attorney fees, loss mitigation fees, foreclosure posting
fees, etc., will be absorbed by your current lender under the FHA - Hope
for Homeowners Program. You will not incur these fees under the
program. The lender will take this loss, too.

17. As part of the
Foreclosure Prevention Act of 2008, 1st time homebuyers are encouraged
to purchase homes between April, 2008 and July 2009. They can receive up
to $7500 dollars in tax credits from the federal government. This
program has been established to speed up the housing recovery by getting
people to purchase homes. Additionally, it will cause home sellers to
purchase homes, as well, since they are often "move up" buyers. This
program is part of the overall attempt to correct the bad housing
market.

18. Credit Score vs. Your Ability to Make the Payment:
These two factors will be outlined in the underwriting guidelines. I
would expect that the ability to pay will override the credit score
issue, since, most people having problems making their housing payments,
already, have degraded credit scores. Consult your loan officer for
details.

Summary:

Loan Modification:

Consumers, now
have several options to preserve home ownership. If one option does not
work try the other. Remember, time is of the essence, so act promptly to
give your self time to use one or both options.

1. Loan
modification is a good option for many, if your have proper
representation and get a favorable deal. 2. You will have to pay the
costs for this type of loan modification. 3. You will not have to pay
for an appraisal, in most cases.

Visit this site for more information: http://www.LoanModificationContacts.com

FHA - Hope for Homeowners Program:

1.
This program may be a better deal for you, if your lender is no longer
in business (sub-prime lenders and prime lenders). It can still be a
great benefit to you if your lender is still in business and wants to
remove some bad assets from their books (understanding) you might become
one of those bad assets. Your loan officer can provide this information
for you.

2. Since, FHA will go to 90% of the current value of
your property; you can be the real winner. This simple fact means that
you will have a better opportunity to qualify under a 30 year fixed loan
and your housing payment will be more affordable, then what you are
currently paying.

3. You will most likely, be required to pay for
an appraisal. Ask your loan officer about this, since; the underwriting
guidelines have not come out, yet.

4. You may or may not have to
pay for the closing cost to procure the loan. It has not been
determined, who actually pays for the closing costs. It will be in the
underwriting guidelines, when they come out. Ask your loan officer.

5.
Credit Score vs. Ability to Pay: Underwriting guidelines will determine
these two factors. FHA underwriters will probably be more forgiving and
weight their approval on your ability to make the monthly housing
payment. We will have to wait for the underwriting guidelines. Ask your
loan officer about these two factors.