Some Quick Tips To Understand FHA and VA Mortgage Loans

As the number of homes for sale continues to grow across America, home buyers are constantly looking for more home loan choices before making their purchase offers.

With home loan interest rates at multi-decade lows, it can be a stimulant for qualified home buyers to hunker down and make the buying decision they have been delaying. But everything is not Mom’s apple pie. The underwriting guidelines from lenders has become substantially tighter and prospective buyers will encounter a bit of research and denials before embarking on the right mortgage loan.

As an example, the only zero down home loan financing choices remaining are for military veterans who qualify for V.A. benefits and Rural Development Housing loans from the U.S. Department of Agriculture. Each of these home loan choices have particular borrower conditions so consult with a competent exeprienced mortgage company so you fully understand all limitations.

One of the most popular types of mortgage home loan currently is by the FHA (Federal Housing Administration) currently requires the borrower to have at least a 3 1/2 percent down payment along with funds for closing costs. However, the closing costs can be a gift from a qualifying relative. Again your mortgage company will consult with you all of these conditions with you.

Fortunately, for borrowers who already have an FHA mortgage on their primary residence, FHA Streamline Refinances exist them and can save them a bundle. By refinancing under this government loan, you can take advantage of this refinancing choice to reduce your mortgage interest rate while saving a lot on your closing costs. Many times borrowers pay nothing out of pocket and do not increase their current motgage balance. In essence, a true rate reduction mortgage. So, it is still advantageous even if you reduce your current rate by 1%.

If your current home loan is a V.A. mortgage, you too can have a streamline refinance choice. It is typically known as the Interest Rate Reduction Refinance Loan and it is a optimal way for eligible veterans to experience substantial monthly savings on their mortgage payments. This refinancing choice also features low closing costs linked with it. As is customary, certain conditions must be met in order to be eligible for a V.A. mortgage refinance. The main concern is there are no late mortgage payments and the home’s value.

So, you see that government loans offer some attractive choices for homebuyers and current homeowners. And with the current low interest rate environment, borrowers who do not qualify for government mortgage programs cans still get a great deal as well due to some prediction so perhaps fixed interest rate around the 3.5 percent range which is unheard of. . Yes, we live in some interesting and perhaps one of the best investment eras in quite a while. Will you take advantage or be caught in the headlights.

About The Author:

Frank Collins is a real estate investor and recommends learning about FHA Streamline loans for borrowers with who already have a FHA loan or are searching for VA Home Mortgage programs for active duty armed forces and veterans in your area

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Bonuses, windfalls and your mortgage.

Your work bonus can do more for you than help you buy Christmas presents or the latest electrical gadget. It can help you buy a home or help you pay it off a lot sooner. Investing your bonuses and extra income in your home can pay off in a big way.

Your work bonus may help you buy a home. While some lenders might look at bonuses with a suspicious eye, there are provisions in the FHA for regularly received or earned bonuses. This can help you qualify for a mortgage that you otherwise might not be able to obtain.

The 4155 (the FHA "bible") states, "Both overtime and bonus income may be used to qualify if the borrower has received such income for the past two years and it is likely to continue. The lender must develop an average of bonus or overtime income for the past two years and the employment verification must not state that such income is unlikely to continue." Furthermore, it goes on to say, "Periods of less than 2 years may be acceptable provided the lender justifies and documents in writing the reason for using the income for qualifying purposes."

In order to qualify your bonus as income for the purposes of the FHA, you must have pay stubs, W2s and income tax forms for the past two years or for as long as you've been working. Two years or more is optimal, but if you are applying only after a year or so, it can't hurt to make a case for your yearly bonus program to be included in your overall financial outlook.

Be careful about depending on your bonus for income if it isn’t guaranteed. If your financial picture would be seriously affected by the lack of a bonus, you might want to reconsider using it as collateral for your mortgage.

One option that might drastically help your financial outlook is if you apply the bonus to your mortgage principal, which will reduce the amount of the principal that you pay interest on. Another option is to put your bonus and any other “windfall” income into a high-interest savings account and make a lump sum payment on your mortgage principal every year. However, the more frequently you pay money towards your principal, the smaller the amount of mortgage you have to pay interest on, so in many cases it is preferable to put money towards your mortgage as soon as possible.

It is very tempting to treat extra money as “free spending capital”, but in the long run, you’ll do a lot better to invest your extra dollars in your home or in a portfolio that will see some long-term return.


About The Author:
Joshua Sloan is your experienced REALTOR® for San Diego real estate. Visit his website at SanDiegoRealEstateBuzz.com to find San Diego home values, property listings and more.

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What To Know About A Poor Credit Home Loan

The economy lately has taken everybody on an amusement park ride the likes of which hasn't been seen in at least two generations. People have been hit hard by its ups and downs, and many have seen their ability to make timely credit payments impacted a bit, even though they're all paid eventually. Are you considering using a poor credit home loan because of circumstances such as the above? Then read on.

To begin with, the term "poor credit home loan", can go by different names. In the mortgage and real estate business these are called "subprime loans", for the most part. This term, especially, has been the subject of much debate since about October of 2008, when the housing market began to fall apart, somewhat due to the effect of too many of these loans being held in too many lenders' portfolios.

Now, it's not that there's anything inherently wrong with a poor credit home loan being extended, when the conditions - and the buyer - are a good risk. There's a world of difference between a buyer who may have had a few slow payments on some credit cards and one who's just went into - or just emerged from -- a major bankruptcy. These days, it's almost a certainty that the latter buyers will have a difficult time in getting a loan.

Those other buyers, though (those who have had only a few issues in the past) can still get, even in these toughened economic times, home loans, and that's as it should be. The interest rates will be somewhat higher (anywhere from 1 to 4 or more points) than the prime rate offered to people with scores better than poor, but that's to be expected.

Nowadays, "excellent" credit is usually defined as that which has a score (called FICO) from 700 to 800 points, with greater than that (up to the max, 850) being outstanding. If you have a score in that range, you won't need such a thing as a subprime loan. If the score's below 700, though, make sure that any delinquencies in the credit report are caught back up. A lender usually won't make a decision until that's done, by the way.

In fact, poor credit home mortgageclearing up a credit report should be the goal of anybody prior to applying for even a poor credit home mortgage. In many cases, this can mean saving a full percentage point on the cost of any home loan, sometimes resulting in the savings of at least 100 dollars a month, and thousands over the life of the mortgage.

About The Author:
Even if the credit markets are tough, and the home buying markets are even tougher, there are still home loans available out there, even for people with poor credit. Go to http://www.badcredithomemortgage.org for more information and articles about all aspects of poor credit home loan

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Refinancing Your Parents' Home: Stumbling Stones

A lot of people nowadays consider the possibility of refinancing their homes as a good way to get some profit from their home equity and to improve their financial situation. Refinancing your home may be a very helpful source of money for home improvements you've planned or may simply allow you to take advantage of lower interest rates. Besides, quite a frequent situation is that people, in order to help a family member, consider refinancing a family member's home in their own name. This situation is mostly common between parents and children, but whoever the person whose property you want to refinance in your own name is - be it your parent, brother, cousin or a total stranger - that doesn't change the procedure or main principles much.

When you sign or even co-sign for someone, it's your personal income, credit history and debt/credit ratio that will determine what amount of money you are be able to refinance in your parents' home. The main concern of home mortgage lenders is whether you are able to fulfill the terms of a refinanced home loan, and thus they will only be willing to approve your proposal if they are sure that you are creditworthy enough for what you propose.

Another concern for the lenders is whether you can afford the monthly payments, which will primarily depend on your income, your financial lifestyle and your current financial obligations. If the latter include student loans, auto loans, debts on credit cards or, most importantly, your own home mortgage payments, this may well urge the lenders to abstain from approving your loan. Generally, mortgagers tend to approve loans if the borrower's total mortgage payments do not exceed 36%-40% of the borrower's total monthly income, and thus whether your lender will agree to your refinancing scheme largely depends on your financial ability to make an extra monthly mortgage payment.

Finally, when refinancing a parent's home, your potential home mortgage lenders will require a collateral. They are always concerned in security, because banks and most lenders prefer receiving due cash payments every month to the possibility of foreclosing and seizing your land. Banks work with money - not real estate, but, on the other hand, they need to be sure that, in case you will be in default on your loan, they will be able to get back the money they have lent you. If the home you want to refinance is in someone other's name, this may become a problem in course of security risk evaluation performed by the bank with regard to your potential loan.

So, before you do any important planning, consult with your personal lender or a real estate attorney about relevant local or state legislation that can make if difficult for you to refinance your parent's home in your own name.

About The Author:
Arthur York is a home loan expert working for NorthAmericanLoans.net. To get aid in buying a home of your dreams and finding the right loan to save you thousands of dollars each year, please visit us at www.northamericanloans.net.

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Right Time for Refinance your Home Mortgage

Applying a refinance mortgage loan at right time make sense for your mortgage requirement. If you’re thinking about refinancing your mortgage with a little bit confusion whether it is the right time or not, let our article helps. A clear financial objective in mind helps you to choose the most appropriate loan.

If you’re a homeowner and you have significant debt, refinancing might just solve your problems. To enjoy a break on high monthly mortgage payments it’s time to refinance your home with the benefits of low interest rates. Cash out option will allow you to fund your business or use funds for investments. Refinancing your mortgage could gain you to save money on your mortgage in this recession period.

These are the reasons to choose refinance right now by homeowners for their mortgage. Present interest rates are only part of the equation. Setup your goals, check out your options, and make the decision that suits you best.

All of these are important points to keep in mind to choose refinance option. You can choose any type of refinance loans available to pay off your mortgage. Different types of mortgage refinance loans that are available in the market are mentioned here.

Depending upon interest rates

There are up or down trends in mortgage interest rates, depending on the rates you have to choose suitable mortgage for you, either it is a fixed rate or adjustable rate mortgage.

Since fixed rates are relatively low right now, you will get significant cost savings over time by refinancing your ARM to a fixed loan.

Depending on Payment conditions

1. Interest-only mortgage refinance loan: Here you will pay only the interest for a certain period of time. After that you will have to start making payments towards the principal.

2. Fully-amortizing mortgage refinance loan: Here monthly payments are a combination of interest charges and payments towards the balance.

3. Balloon-type mortgage refinance loan: Here initially low, fixed interest rate. After the period for the low interest has passed, full payment is required on loan balance.

4. Home equity mortgage refinance loan: Here you actually apply for a loan using the equity you have stored in your home as your security for the loan.

Tips To Avoid Mortgage Mistakes

1. Approach a trusted lender and ask plenty of questions about your loan and payments.

2. Careful to avoid any interest-only mortgages or adjustable-rate mortgages unless you truly understand how they work.

3. Spend money wisely for mortgage payments, don’t spend too much or too low. Keep some money liquid for future expenses.

4. Check all the costs, and make sure that you're clear on exactly what you're spending.

About The Author:
He is a mortgage expert provides beneficial solutions to mortgage buyers for their mortgage related problems.

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