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A Discussion On Zero Down Mortgage Loans

Nov 14, 2009 Mortgage Loan

For the first time in years, the price of a home has decreased, giving more and more people the option of owning their first home. There are a few different programs that offer even more savings, such as low to zero down mortgage loans. These various programs give the first time home owner incentive to take advantage of the low cost of buying a home.

A few notable mortgage brokers programs are offered to those who have marginal to fair credit scores and want to buy their first home. These are a couple popular mortgage lenders that offer really good deals for zero or low down payment.

1. USDA is offering no money down on land in select rural areas. Some income restrictions do apply to receive this offer. Not only do the select few get a mortgage with no money down, they also get a low interest rate of 3.50%.

2. A lender known as Crown Financial Solutions has a program that targets those with a low to moderate credit score. The interest rate for this program hovers around 3%.

The United States government also has a popular option for first time home owners, known as the FHA. This is targeted towards those with not so good credit to get a loan by just looking at the past few years of payments. There can’t be any bankruptcies over the past two years and credit scores have to be good after the discharge.

Owning a home is fairly easy as long as your credit history is fair to moderate. With zero down mortgage loans and the price of homes lowering, it is easier than ever to buy the first home. With the prices of homes and programs such as the ones mentioned, it truly is a great time to buy a home.

If you are in the market to Buy a Home then check out Rob Kosbergs’ Detailed No Cost report on Attaining your PerfectHome with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage

Investors In Residential Real Estate Now Have New Limits Because Of New Mortgage Rules

Aug 17, 2009 Mortgage Loan

In its last act as a semi-independent company, Fannie Mae altered mortgage guidelines for real estate investors last Friday. It was Fannie’s 22nd update this year.

There are several parts to the new guidelines. Part one involves number of properties owned by one person. Formerly, one person could own 10 properties. However, now, if a person applies for a mortgage loan, Fannie Mae will not grant the loan for second homes or investment properties if the applicant already has loans on more than 4 properties.

There is a loophole, however. Fannie Mae will not count properties against the 4-property limit if they are held in the name of a corporation. This holds even if the real estate investor is the sole owner of said corporation.

So, it will be important for investors to consider restructuring their real estate holdings in to the corporate framework and negate the 4 property limit. Even though such action is sometimes taken for tax/liability reasons, now it is good for mortgage approval reasons.

Secondly, some of the guidelines do not have such a loophole. All investment property mortgages will be assessed with new loan-to-value based loan fees by Fannie Mae.

- 1.75% loan fee for loan-to-value less than 75% - 3.00% loan fee for loan -to-value 75.01-80.00% - 3.75% loan fee for loan-to-value 80.01-90.00%

These fees, along with other risk fees assessed by Fannie Mae are mandated to be paid by the buyer. The other risk fees are a minimum of % for investors.

The government hasn’t released any information about possible relaxation of mortgage guidelines since their Fannie Mae/Freddie Mac takeover. If the guidelines loosen up, this would be helpful for real estate investors. If those who want to mortgage property can’t qualify for a loan, lower rates aren’t going to be a lot of help.

If you’re currently in the market for an investment property (or two), consider that it may be cheaper and simpler to purchase over the near-term versus the long-term. And consider moving your existing properties into a corporate structure first.

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage

Avoid 6 Things While You Are Waiting For A Mortgage Approval

Aug 12, 2009 Mortgage Loan

A home buyer should know that there are 2 stages to mortgage loan approval. We have heard of preapproval. When the buyer submits the loan application to his loan officer for preapproval, Stage 1 begins.

When pre-approval is requested, it will be a preliminary home mortgage approval indicating that the mortgage will likely be approved for a certain down payment and purchase price.

This preliminary approval becomes obsolete once the buyer signs a purchase agreement. Stage 1 is now over because the buyer must now secure the actual loan from an “underwriter” and not the loan officer.

Stage 2 of the process occurs when a mortgage underwriter is reviewing credit, income, assets, job history and probable other things. It is the job of the underwriter to insure that the buyer can meet the lending institution’s criteria for loans.

This procedure should be a formality if the Stage 1 loan officer did an appropriate job. Usually this stage moves along as anticipated. However, sometimes the buyer changes his loan “risk” without intending to do this, but affecting the mortgage approval. The buyer doesn’t mean to decrease his loan probability, it “happens.”

During the mortgage approval process, the buyer must not do anything that will increase his loan risk during the time between Stages 1 &2. Risk needs to remain consistent. The following are 6 things of the “Honey Don’t” list for this interim period:

1. Don ‘t miss a payment to a creditor 2. Don’t transfer large amounts of money in or out of your bank accounts (large may have different meanings to different people) 3. Don ‘t accept gift of cash without talking with your loan officer first (There are rules for gifts) 4. Don’t buy a new car (or increase loan or lease payment) 5. Don ‘t quit your job or change career(don’t switch to a “commission” job ) 6. Don ‘t open a new credit card (no matter the deal)

There’s other items, too, but this a good start. Now, avoiding these mistakes may not be practical for everyone. Therefore, if you know you’re going to violate a “rule”, check with your loan officer first. There are a lot of “gotchas” in mortgage lending and it helps to have professional guidance for your individual questions.

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage