Second home-loan-report
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Second home-loan-report Document Transcript

  • 1. FIRST and SECOND HOME LOANS by Stephen Holden
  • 2. TABLE OF CONTENTS The 5 Most Important Questions to Determine if You are Ready for a Home Loan ......... 3 Now You Can Get an Equity Home Loan, Even With Bad Credit .................................. 5 The Simplest Way to Find Great Home Loan .................................................................... 7 Why You Should Consider an FHA Home Loan?.............................................................. 9 What Is the VA Home Loan Guaranty?............................................................................ 11
  • 3. The 5 Most Important Questions to Determine if You are Ready for a Home Loan The most important purchase in your life will probably be that of buying your first home. It is a huge step to go from renter to homeowner! Before you take this step and become a home owner, you need to consider the following: 1. Can you actually afford the payments? 2. Can you afford the insurance and taxes? 3. Do you have a good credit history? 4. Do you have a good employment history? 5. Do you have a down payment? Let’s go over each of these questions. 1. Can you actually afford the payments? This may seem obvious but you have to make sure that you can the mean to purchase a home. The number of expenses you incur when owning a home can be overwhelming so you need to count the various costs as well as have an emergency fund. 2. Can you afford the insurance and taxes? As a renter you probably had insurance on your belongings. The price for renters insurance is just a fraction of the cost of home owners insurance. Call your agent to get a ballpark figure for home owners insurance for your price range. Taxes are another factor that renters typically don’t have to consider. However home owners will have pay city taxes as a minimum and sometime even county taxes. These are yearly costs that are typically due quarterly. 3. Do you have a good credit history? When you apply for a home loan, the representative will examine your credit history. Your credit history needs to show well and you shouldn’t have any bad credit reports or you will be a credit risk. Your credit history will be a huge factor in whether or not you will qualify for a home loan as well the terms of the loan and interest rates. The mortgage company is looking for consistency in debt payments. If you credit history is flawed, you be looking at higher interest payments and more stringent requirements before your loan can be approved. 4. Do you have a good employment history? Your employment history is as important as your credit history. If you haven’t been able to hold down a reasonable paying job then you are a bad credit risk.
  • 4. On the other hand if you have been steady with your employment, the lender will have more confidence that you will be able to handle the payments. 5. Do you have a down payment? A majority of mortgage companies require a 15% to 20% of the purchase price as a down payment. The less cash you have the more difficult it well be to qualify for a home loan. Sometimes you can get a break on the down payment requirement if you have an excellent employment and credit history. I have seen down payments of 5% in some of the rare occasions. Owning your own home can be one of your proudest moments but remember that it is a huge step. Make sure your employment and credit histories are good. Then start saving for your down payment and various other expenses. I strongly recommend that you have six months of emergency funds sitting in a savings account. It may take you a few years to be a position to purchase a home but it is well worth the wait. For more information on obtaining a second home loan, go to http://123homeloanhelp.com. Stephen Holden, Second Home Loan expert.
  • 5. Now You Can Get an Equity Home Loan, Even With Bad Credit Although you have worked hard to stay out of debt, we all encounter financial problems which cause our credit report to get a few bad marks. The problem is that even if you get the issue resolved, and you complete the necessary payments, your credit report still may have a black mark. However, there is quite a lag between getting your credit problems resolved and getting a clean credit report. Although it may seem unfair, credit reporting agencies continue to show resolved problems for some time. On occasion you can question the lag and get the report updated but only time will clear up the rest. It is an understatement to say that this delay can make receiving a home loan a very tough proposition. However, take heart. There is some good news: home loans are possible even if you have problems with your credit report. If you are fortunate enough to have been consistently making payments on your current home, chances are that you have built up some equity which makes securing a home loan easier. Even if you have bad credit, typically mortgage lenders will approve persons having home equity. The risk to the lender is significantly less when there is equity in the home. Another consideration is to consolidate other outstanding loand and credit card debt into a new home loan. You would do this only if you can reduce your total monthly payments. Any mortgage holder would be delighted to see you lessen your monthly payments since that generally leads to a greater certainty that you will not be late on your paymernts If you use a home equity loan to reduce your overall debt you will most likely get your credit rating back to excellent shape. This benefit will vary greatly depending on the lender. Make sure you shop around a bit and look at all the options before choosing a lender. You want to get the best deal possible. I would recommend that you first to your local mortgage lender and ask them about the specials they are running on loans. Once you have a figure, compare all other offers against this number in order to get the best deal possible. You can also search online for home loan options for lenders who will deal with applicants who have a bad credit report. There are several companies who specialize in offering loans to clients with bad credit. You can also search for lenders who help individuals as well who are currently homeowners and also have bad credit.
  • 6. Your Primary Goal: find a mortgage lender who can help you consolidate all other debt into one home Make sure you discuss all their services and fees. Most online companies provide a phone number so that you can get an immediate reponse. Your main goal is to find a lender who will be able to consolidate all of your other debt with one home equity loan. Do not be afraid to contact a lender online if you have any questions about their services. You will find that most lenders are very eager to get your business since you are a homeowner, even if you have bad credit. Bottom Line: If you already have a home loan and want to use that equity to get another loan it should be pretty easy to get a loan even with bad credit. (Even if you have trouble on your credis report. Make sure you consistently make payments on your loan to build your credibility and eventually you will see your credit score improve. For more information on obtaining a second home loan, go to http://123homeloanhelp.com. Stephen Holden, Second Home Loan expert.
  • 7. The Simplest Way to Find Great Home Loan You’ve made the decision to own your own home. You have reviewed the requirements for down payments, interest, taxes, and other expenses and are comfortable that you can handle the cost. You have a good employment history as well as a flawless credit history. Any mortgage lender is going to first check your financial status. They will run a credit check as well as verify your employment history. If these two don’t come back clean, then you are pretty much assured of being declined a home loan. If, for some reason, either your employment record or your credit history has any major blemishes, you may want to get those in shape before you attempt to secure mortgage. If you're confident in your credit and employment status, then your next decision will be where to go for your home loan. Now you are ready to start shopping for a mortgage. If you are a member of the military or were married to someone who was killed in action in the service, you may qualify for a VA loan. This should be your first stop if you meet the requirements. Remember you are not limited by local mortgage providers. If you deal with a mortgage company already they may be your best bet for a new or second home loan. You may also want to consider a home loan at the same bank which handles your checking and savings account. As a matter of fact this is one of the first places that you should begin, as some banking institutions will be a little more lenient with their current banking customers than they would with someone who is not a current customer. Your local bank may be able to offer you some very attractive interest rates if you have been with them for a long time. If you are unable to secure a loan with favorable terms, then it may be time to go elsewhere. The next logical step would be to head to the Internet and do a little comparison shopping. One of the great things about using the Internet in shopping for a mortgage is that you are able to do side-by-side comparisons with many lending institutions at the same time. By shopping on the Internet you can find out current interest rates, as well as what type of programs they may have for individuals with less than perfect credit. Buying a home is a very important decision which is going to obligate you for many years to come.
  • 8. You will most certainly want to shop around and get the best mortgage package you possibly can, so don't be timid about using all of the resources at your disposal to find the perfect home loan. Since most home loans are financed for 30 years, it will pay you in the long run if you do plenty of research before you sign on the dotted line. For more information on obtaining a second home loan, go to http://123homeloanhelp.com. Stephen Holden, Second Home Loan expert.
  • 9. Why You Should Consider an FHA Home Loan? Do you have a dream of owning your own home? If you do, you are not alone. However in this economic climate it is more difficult to qualify for a home loan. If you are one of the millions of renters who would like to take that huge step, you are not alone. If you have already considered all the requirements for applying for a home loan, you may want to consider an FHA home loan as one of your options. What is an FHA Home Loan? FHA is the acronym for Federal Housing Authority. The Federal Housing Authority is one of many government home loan programs. Established in 1934, the Federal Housing Authority was instituted to help families/individuals who could not afford most mortgage requirements with large down payments and high interest rates. What is the Advantage of an FHA Home Loan? The biggest advantage of an FHA home loan is the reduced down payment as well as a lower interest rate. Most FHA home loans only require the homeowner to pay an average of 3% of the home’s original purchase price as a down payment. This is a substantial reduction in considering that most lenders will require a minimum of 20% down when securing a home loan. Most people are not aware of the fact FHA does not in fact make home loans. Instead, it insures the loans made by FHA qualified private lenders. In order to get an FHA home loan, you must meet certain financial criteria, as it was conceived to help low to moderate income families finance a home of their own, without having to worry about the large down payments many of them simply cannot afford. Even though lenders traditionally try to give good rates on FHA loans, it is always a good idea to do your due diligence and shop around for the best FHA home loan packages. Once you have found a lender with a package you are happy with, it is time to begin the process of buyer risk assessment. The lender will want to know everyone and everything you currently owe, so they can do a proper debt to income ratio assessment. This allows the lender to know whether you qualify for a loan, and also lets them know what kind of payment you can afford.
  • 10. Credit worthiness is also surveyed by checking into your credit history to see if you have any unpaid bills, or if you are late on any payments. Many people make the switch from renter to homeowner and never pay a penny more than they did while renting. If you are currently in the market for a home, you should really consider applying for an FHA loan. You may walk away with a smaller mortgage payment than you ever thought possible, and a nice new home to boot! For more information on obtaining a second home loan, go to http://123homeloanhelp.com. Stephen Holden, Second Home Loan expert.
  • 11. What Is the VA Home Loan Guaranty? A VA home loan is a loan in which the VA makes a guaranty to the lender of up to 25% of the value of the purchased home. This allows the lending institution to have a certain amount of security in the repayment of the loan, and it allows the buyer to purchase the home with no money down. This service can save the homeowner as much as 20% of the purchase price of the home which is required up front as a down payment in most home loans. There are set limits that the VA will allow, in the amounts of $104,250 for the guaranty, and $417,000 as the full home loan. In the majority of cases, the amounts are equal to the reasonable current value of the home, plus the funding fee. The actual VA loans are made by participating lending institutions such as banks, savings and loans and general mortgage companies. Lenders view VA loan holders as less of a risk, so they’re able to get a home loan with no down payment and in most cases a better interest rate. Even though the VA bill was set up for veterans, one still must meet certain eligibility requirements in order to secure a VA loan. Generally, the eligibility rule is that all veterans that have served on active duty and have been discharged favorably after having spent a minimum service time of 90 days during a time of war, or those who have spent at least 181 days in continuous service during a time of peace are eligible for a VA home loan. There are also additional requirements which include a two-year service if the veteran had enlisted and began service after September 7, 1980, or began service after the date of October 16, 1981 as an officer. Those who served in the National Guard and in the reserve units are required to have six years in the service, and meet other criteria before being eligible for a VA loan. Just because someone is a veteran doesn’t mean they’re not held accountable for their credit standing when it comes to securing a VA loan. Having a good credit history is important when it comes to securing along the matter what the lending source, or who is guaranteeing the loan. A person’s credit history not only shows how an individual has handled their payment obligations in the past, it also acts as a roadmap for the lender on how the individual will handle their finances in the future. Generally, the VA will pay strict attention to the past 12 months of the applicant’s credit history. If there have been any missed or slow payments, the VA will not look favorably upon the applicant as a prospect for a home loan.
  • 12. For more information on obtaining a second home loan, go to http://123homeloanhelp.com. Stephen Holden, Second Home Loan expert.
  • 13. APPENDIX A Great Way for Keeping up with Your Mortgage Payments http://behindinmortgagepayment.com/to-keep-up-with-your-mortgage-payments-try-this/ How to Understand the Cost of Affording a New Home http://behindinmortgagepayment.com/understanding-how-to-afford-the-cost-of-a-new- home/