A wide array
of mortgage programs are now offered in todays market. Loan
approvals with 100% financing that allows for seller concessions
means that a buyer may come to the closing with no money.
It's
important to prequalify for a mortgage loan prior to searching for
your future home. A prequalification will determine the amount of
mortgage loan that you may be able to borrow that fits into your
budget and allows you to address any credit issues in advance. Often
a prequalification letter is required by the seller when an offer to
purchase is made.
Programs
available:
- 100% financing - Programs
available for up to 100% financing for purchase or refinance.
- Fannie Mae
- Ginnie
Mae
- Freddie Mac
- My Community - Purchase
program offered to first time homebuyers or borrowers that have
not owned a home in the last three years. This program allows for
100% financing with seller concessions up to 6% of the purchase
price.
Alt A - Designed for borrowers with good credit
where loan amounts exceed Fannie Mae guidelines. Examples would be
loan amounts that exceed $417,000 with loan to value amounts up
to 100% loan to value. Many of these loans are stated income,
stated income/stated asset and no doc loans.
- Stated Income / Verified
Asset -
This mortgage program allows you to "state" your income. This
is a great loan for any type of job where income may be difficult
to document. At one time this loan was typically made to self
employed borrowers, but recent changes in the industry allow wager
earners and commission/tip employess to qualify as
well. Assets are verified for the previous two months
to strengthen the credit file and may be used to verify the
reasonability of the stated income.
- Stated Income/Stated Asset- This program allows
the borrower to state the income and state the assets (amounts in
savings, bonds, etc) without providing a paper trail. Again, this
is a wonderful program for self employed
borrowers.
- No Doc- This loan does not require income,
employment or assets to be listed on the loan
application.
- Limited Bank Statements- This loan program
typically require 6 months or 12 months bank statements and
averages the deposits to derive and income that will be listed on
the loan application. This program offers better rates than a
stated income type loan.
- No Ratio - Income is listed
on the loan application and documented but the ratio of income to
debt is disregarded. This loan must have other strong compensating
factors.
- Non Conforming - Often
referred to as "subprime". This loan is for the credit challenged
borrower and can often be a band-aid to assist the borrower in
re-establishing their credit rating. This loan can help a borrower
purchase a home even though blemishes are listed on the
credit.
- Grant Assistance Programs- Programs allowed by
the County, State, Non Profit agencies, etc. to assist first time
homebuyers with low income the opportunity of homeownership by
offering grants to borrowers which qualify.
- Interest Only - This program
allows the borrower to pay interest only payments without paying
toward the principle balance. The interest payment is available
at 5 years or 10 years. After the interest only period has
ended, the loan is recast and the inter
Fixed
Mortgages
Adjustable
Mortgages Secured Option Arm
Second Home
Programs
Investor
Programs
Hybrid Mortgages
Credit Issues
Late payments
For most people, problems with their credit
report are likely related to late payments on a debt. If you were
late one month in paying off your credit card, but otherwise have a
good payment history, chances are most lenders won't be too
concerned. But if you have a history of late payments you'll
need to document the reasons why. A slow payment history won't
necessarily get you turned down for a loan, but you may have to pay
a higher rate of interest or otherwise prove to the lender that you
can repay your loan in a timely fashion.
Errors on your credit report
Many people are surprised to learn that credit reports can often
contains errors or inaccurate information. If this is the case with
your credit report, you'll need to contact the reporting agency or
creditor to have the problem resolved. This can sometimes be a slow
process, so make sure to give yourself time to clear up the mistake.
Bankruptcies and foreclosures
There's no getting around it, a bankruptcy on your credit report
is not a good thing. But that doesn't mean you still can't obtain a
loan. Even though a bankruptcy may stay on your credit report for
seven to ten years, lenders will often consider the circumstances
surrounding a bankruptcy (family illness, injury, etc.). Moreover,
if you have reestablished good credit since the bankruptcy, a lender
will be more inclined to approve your application.
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