VA Loans

VA Loans – A Perfect Option For Veterans Looking to Purchase a Home

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You’ve joined the service. You’ve served your country. You left the service. Now what? It’s time to buy a home and start the next chapter of your life, and there are resources out there to help you do that. VA loans are available to veterans looking to buy a home for the first time, and they’re definitely a great thing to look into.

As you can imagine, it’s worth your while to look into VA loans because they have a lot of benefits than other types of loans just don’t have.

What is interesting about a VA loan is that it’s actually something that allows you to get a home under the assumption that if you were to default, the VA would repay a loan of the loan they guaranteed for you. Having such a powerful organization as Veteran Affairs behind you means that you’re going to get some pretty nice rates. 100 percent financing is also another benefit that veterans receive from the VA. You don’t have to put down a single cent, which means that you can get a home a lot easier than someone that has to put down 20% to avoid PMI. There is no PMI with VA loans, another benefit that servicemembers get to enjoy.

If you’re worried that you’re not going to qualify, don’t. The truth of the matter is that VA loans actually are easier to get than traditional conventional loans. The requirements are a lot easier, which means that you actually have an advocate in your corner that’s going to work with you.

What happens if you come into a lot of money and you want to pay down your mortgage? You won’t have to face pre-payment penalties the way some conventional loan homeowners have to, and you can have a higher debt-to-income ratio than other loans as well.

Refinancing is also easier — everything is already streamlined.

So why don’t people take advantage of VA loans? Fear, mostly. They worry that the limits of the VA loan will not let them get a home in a higher cost of living area. The truth is that VA loan limits have been increased a great deal in a short amount of time, as the department realizes that the costs of homeownership have also gone up.

Since you have so much backing behind you with a VA loan, sellers will do a lot to get your business. This might mean paying 6 percent of the closing costs and other concessions, because they know that your loan is a lot less risky than someone else’s.

Is it right for you? You’ll still need to find a mortgage broker that handles VA loans, but this is pretty easy to find. In fact, if you already live in a military community, most of the real estate outfits will be able to refer you to the right people will no problem.

We thank you for your service and encourage you to seek out VA loans today — it could be the best decision you’ve ever made!

Ready to Use Automatic Debit to Pay Your Mortgage – Read This First!

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Are you really ready to start paying your bills directly through your checking account? If that’s the case, you definitely want to make sure that you are always able to get the best terms possible in your favor. In other words, if you really want to make sure that you can pay your bills through your checking account automatically, you want to make sure that you stay on top of it. From a purely financial position, the biggest thing that you do not want to do is just to assume that you won’t have anything to think about when you set up automatic payments. If the company makes a mistake and pulls the money at the wrong time, it can end up costing you a bundle in late fees as well as overdraft charges.

Think that account resolution would be a snap? Think again — it’s all what the terms and conditions for that particular mortgage company state. For example, if the payment is set to be due on the 13th of the month, and the terms say that it is allowed to be debited up to 7 days before the due date, then you cannot be upset with them if they debit your account on the 8th of the month. It’s all in the terms and conditions, which means that if you make the mistake of getting the debits wrong in your account, then you will be responsible for any and all fees associated with your mistaken.

So, if you’re really serious about doing automatic payments, especially for something as important as your mortgage, there are a few things that you will need to pay attention to. First and foremost, you must read the terms and conditions associated with your payments. While it’s true that this point was just addressed, it truly does bear repeating. Your contract terms will specify all the important information, including what type of fees would be associated with the automatic debit service, if there are any fees for the service to begin with. In order to encourage people to actually make their payments on time, some mortgage companies simply give a slight interest rate discount. Don’t overlook this discount at all, since it can help you save a little bit of money over the course of a year. In fact, some people save so much money that it actually adds up to a full mortgage payment at the end of the year — how cool is that?

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Yes, It’s a Great Idea to Turn to a Mortgage Calculator

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A mortgage calculator is a beautiful thing. Of course, you might think that we’re just being over the top. On the contrary, you future homeowner you — using a mortgage calculator might be the smartest thing that you’ve ever done, right up there with deciding to ditch those rent payments and invest in your family’s future. This is a tough decision that’s been made even tougher as credit markets freeze up and lenders start getting nervous. While this doesn’t mean that it’s impossible to get a mortgage, it does mean that your lender is looking at your application with a bit more scrutiny — and denying you on small things that might have been overlooked in the past.

This is where your mortgage calculator comes in, actually. Instead of worrying about whether or not you can really afford that mortgage payment, you’ll be able to find out in a flash.

Now, at this point you might think that there’s really no need to go with a calculator — after all, the bank has already preapproved you for a certain amount after a lengthy mortgage application.

Not so fast.

Just because you’ve been preapproved — that is, that the lender has told you how much house they will help you finance — doesn’t mean that you should go out and get that much house. That’s a good way to find yourself in foreclosure land before you’ve even gotten to enjoy the benefits of owning a home.

Using a mortgage calculator is pretty easy. You fill in the first field with the total amount that you are having financed. Now, this isn’t always the total amount of the home — after all, you should have a down payment, right? Right. You will need to enter in the down payment as well. Along with these two fields, you will need to make sure that you note the interest rate. If you don’t have it, you can always estimate.

Plugging in the numbers isn’t the hard part. It can be hard to realize that you really can’t afford the house that you ultimately wanted in the first place. It’s better to know that the numbers don’t work. After all, you have to calculate in maintenance — there’s no landlord to call when the pipes burst, or when you have to replace rotted wood. If that wasn’t enough, you have to think about taxes and insurance — on top of principal and interest! Yikes!

Overall, using a mortgage calculator is really what’s necessary if you want to make sure that you have not only enough money for a mortgage, but for the rest of your life as well — get started today!

Two-Step Mortgage

What is a Two-Step Mortgage?

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When you’re looking around for mortgages, it definitely helps to have an idea of all of your options. If you think that your only option is a fixed rate mortgage, you might want to think about. Now, a lot of people are fans of fixed-rate mortgages, and that’s great. However, we like to look at other types of mortgages as well. Will every real estate broker offer these mortgages? Not always. Will you have them without mortgage points? Not always.

One mortgage type that a lot of people are interested in is definitely the adjustable rate mortgage. However, they would like a little bit more stability than what they’re getting. Does this mean that it’s the end of the world and you aren’t going to be able to find the best of both worlds? Not true at all!

Welcome to the two-step mortgage. These are mortgages that literally combine the features of the fixed-rate mortgage with the features of the adjustable rate mortgage. As you know, it’s easier to get into an adjustable rate mortgage because you don’t have to put as much money down. This gives cash-strapped couples a chance to be homeowners without having to have a large nest egg built up. On the other hand, the other half of the two-step mortgage gives them a chance at having a loan that will remain fixed for a certain period of time.

Now, most of the time it’s the other way around — you get the fixed rate portion up front, and then the mortgage resets. Given these parameters, you might wonder when it’s a good time to look at a two-step mortgage. The best time to really think about a two-step mortgage is when you know that you’re going to be able to refinance later. That way you can get the original mortgage paid off and then go with a more traditional mortgage. The other time is when you know that you will want to move in five to seen years. Having a mortgage that has fixed payments for the times where you’re going to live there is definitely a good thing. Generally speaking, you’ll get a nice low interest rate at the start, which turns into low monthly payments. From a budget standpoint, this gives you a lot of free cash flow that you wouldn’t have if you had simply gone with a traditional mortgage with a higher interest rate.

Keep in mind that you are still going to have to prepare for getting a two-step mortgage like you would with any other mortgage. For example, you still need to make sure that your credit report is as clean as possible — you don’t want to end up with mistakes and errors on your credit report– this can really cost you in the long run. Give yourself plenty of time to correct your credit report before you actually think about applying for a mortgage — especially the two-step mortgage. Coming in prepared means a higher chance of actually making a good mortgage deal — which is exactly what you’re looking for in the first place!

A Return to the Fixed Rate Mortgage

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The subprime mortgage crisis scared a lot of folks out of saying the “M” word, but that doesn’t mean that you have to follow suit. The truth is that mortgage isn’t a dirty word. It’s still a powerful word. Let’s go for a change in perspective, shall we?

If you wanted to buy a house in a world without mortgage loans, you would be looking at a lot of cash. Even if you managed to save up part of the money, you would have a long way to go. Now, you might think that saving up the money for a house in your area isn’t too hard. There are people that live in areas where homes are still in the $40,000 range. However, what about if you live in Virginia, right around Washington, DC? There’s no way that you’re going to be able to find a house for $40,000 out there. There are plenty of other metro areas that this logic still applies. Quite frankly, a house is one of the most expensive investments that you’ll ever make. Yes, it can be worth it in the end, but it’s really not about money.

If you pulled aside ten homeowners and really asked them why they thought about buying a house, a good majority of them are going to tell you that it’s really for security’s sake. They want to know that they have an address where no one can kick them out. As long as they continue to make payments on the house, they will always have a place to live. Of course, property taxes and other associated expenses are still important too. There’s no reason to feel like buying a house has to be something that you can only do when you’re trying to make a profit. Despite what reality TV wants you to believe, you don’t have to become a house flipper just to buy a home.

Yet the conversation about mortgages seems to bore people. We aren’t real.ly sure why this is when there really is so much to talk about. For example, let’s take a closer look at the real high points of a fixed rate mortgage.

The fixed rate mortgage is really like the tofu of the finance world. OK, tofu not your thing? Let’s try yogurt. Yeah, that’s it. Everyone likes yogurt, right? Well, if you really had to choose between ice cream topped with all of your favorite trimmings and yogurt…well…we understand if you’re going to choose the ice cream.

But hear us out, we defenders of all things yogurt — sometimes, yogurt really is the better choice.

We can’t predict the future. We can’t think to ourselves that suddenly, we will have more money than where we began. Things happen. People can lose their jobs and have to go off of savings for a while. Either way, you don’t want to have to really think about the future from a position of fear — who wants that? We all want to see our future as a thing of hope and joy, and fixed-rate mortgages can help you do that. Even though you can’t predict the future, you will always be able to figure out where you stand in the world of mortgages. You will always know your monthly payment.

That type of security in a chaotic world is a truly worth its weight in gold. When you’re thinking about how to move forward, it’s important to keep your financial foundation on stable ground.

Now, the other side of the coin says that adjustable-rate mortgages are better in areas where home values are on the rise and interest rates are low — but the reality is that nothing low stays fixed that way for long — except your fixed-rate mortgage, of course. Unless you have it set up where you aren’t going to have your payments go up, your adjustable-rate mortgage might “reset” and your house payment goes up past the level that you can afford. That interest rate doesn’t seem so nice now, does it?

There are some disadvantages. A fixed-rate monthly payment for your mortgage means that most of the money at the start of the loan is going towards the interest rather than the principal. This means that it’s not a suitable mortgage choice for someone that wants to flip a property, since the property would be harder to sell.

You can adjust your scheduling so that you pay more each month, which can actually help you pay your mortgage off faster. Becoming mortgage-free is very appealing to people — as you pay off your mortgage, you’re actually building equity in your home. Equity is definitely a good thing! Speaking of changing the scheduling on your mortgage (amortization schedule, to be proper about it), you might want to look online for a free calculator that can print your amortization schedule for you. This can help you plan your budget for all different types of scenarios. If you expect to come into a large sum of money through work or inheritance, you need to know where to park the money.

If you’re a first-time home buyer, you should really think about going with a fixed-rate mortgage. One of the biggest challenges you’ll face as a new homeowner is trying to make everything work in your budget. After all, you aren’t buying a home in a vacuum, and you shouldn’t think that you are. If you focus more on the big picture, it won’t take you very long to get into a house that’s not only well within your means, but gives you a comfortable place to raise your family!

Mortgage Lenders

Surprise! Your Mortgage Lender Will Demand More Than You Think!

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Thinking about getting a home for your family? You’re definitely not alone. Many people dream of owning a home that they can expand their family in, or just enjoy for themselves. No matter what you want, you’re going to want to make sure that you can really get a home that you’ll enjoy for many years to come.

On this note, the first thing that you’re going to have to realize is that you have to impress your mortgage lender. Of course, with so many applications, you might think that your mortgage lender will just green light your application without too much comment. That might have been true a long time ago, but those days are long gone now. Lenders today want to make sure that you are truly going to be able to afford the property in question not just in the short term, but in the long run as well. The problem is that in the past, lenders were way too lax about the type of applications they approved. When the housing bubble burst, the lenders paid for it with a lot of losses and a lot of problems. Now that the economy is starting to come back again, it’s time to start thinking about the type of people that are trying to get homes now. They need to be able to pay the mortgage each and every month, no matter what happens.

Good credit is going to be the name of the game here. If you don’t have at least a 650 credit score, you need to wait until you do. Even then, that’s a bit lower than what lenders want to see. So you will want to look at your credit report for anything that is an error or something that you can correct in a different way. A lot of people have had a history of making late payments, which is something that can only be fixed by choosing to pay all of your payments on time from here on out. It can take a lot of time, but it’s definitely worth it. Now, we’re not saying that a mortgage lender would refuse to approve your mortgage application if you don’t have a super high credit score, but you’re going to pay through the nose. Everyone gets a different interest rate, and the best creditworthy types are the ones that are going to get the best interest rate.

Income is going to be another issue that you will want to look into. A lot of the time people only look at their take home pay, and they’re missing part of the picture. You see, if you have other forms of income that are going strong, you will definitely want to include those. There are people that receive checks every month from royalties — those can be included as income. This is also the case with investments — there’s no longer a need to keep those things off the table. Of course, proper paperwork is a must — the mortgage lender isn’t going to just take your word for it.

One thing that you will need to make sure that you don’t do is apply for too much credit around the same time that you’re trying to get the home. Generally speaking, lenders don’t like it when you have two major purchases competing with each other. A house and a new car can be expensive together, and this increases the risk of default. Therefore lenders are not keen to greenlight you if you have a car loan hiding out there somewhere.

Another point that will become important is the down payment that you’re bringing to the table. The higher down payment that you have, the better terms that you’re going to be able to negotiate for. Lenders want to make sure that you’re serious, and that you’re committed. Cash is the best way to really assure them that you’re committed. You don’t have to show up with a suitcase stuffed with cash, either — simply having certified funds is more than enough. You can pick up a cashier’s check for the amount from your bank. Make sure that you talk to your banking representative for more information on that — every bank has their own policies, so we don’t want to get too specific here.

Overall, impressing your lender is a matter of being honest, having sufficient income, low debt, and good credit. As long as you can back up your claims with the proper paperwork, there’s no reason why you can’t move into the home of your dreams sometime in the future!

How Does A Natural Disaster Affect Your Mortgage?

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If you’ve been following the news, chances are good that you realize that the country has been wracked by a ton of natural disasters lately. If you own a home, it might mean that you have a lot of clean up to do — or worse, you have to make massive repairs to your home just to make sure that you actually have a place to live in at the end of the day. While you’re dealing back and forth with government agencies and insurance companies, there’s one organization that you’re going to need to deal with above all others — your mortgage lender.

In a sea of phone calls, letters, and email reminders, you might not realize that you really do need to make things right with your mortgage lender, but you really do need to think about them. Far too often homeowners need help but they think that they can just bury their heads in the sand and the lender will understand. The truth is that you’re going to have to stand up for yourself, be firm and try to work things out with your lender. The reason why homeowners don’t need to fear the lender is because it’s a lot cheaper on the lender’s behalf to work things out with you than to just foreclose on the property in question. Also, lenders realize that if they were to just push forward and start levying foreclosures and other issues, they would lose a lot of reputation points in the public eye. Nobody likes reading reports of lending companies screwing customers over for things that are outside of their control.

So, how do you actually get started? Well, you’re going to need to make sure that you gather as much paperwork as possible. If you have a camera or a camcorder, taking video and pictures of the damage can definitely help build your case. You don’t want to look like you’re just trying to capitalize on the disaster zone. It also helps if you can prove that the area in question is a nationally recognized disaster zone. This can help you because then the lender knows that you are actually in need of assistance and you’re not just trying to take advantage of them.

The next point that you will want to make is to make sure that you definitely look into the options that the lender has. The more options you have, the easier it will be to actually choose one. However, you want to be realistic. If you haven’t lost your income, you’re going to want to make sure that you actually make your mortgage payments. You might be able to get an interest reduction temporarily, or otherwise make less than your usual payments. If you really do need to skip those payments so you can get back on your feet, this is something that you definitely want to tell the lender. The more they understand about your situation, the easier it will be for them to work out a mutually agreeable situation.

No matter what type of arrangements you have worked out with your lender, it’s very important that you stick to them. The trouble with loan modification is that a lot of people tend to blow it off. In other words, you don’t want to be one of those people that beg for a solution and then you don’t stick to the plan in question. It’s easy to simply assume that you can do this, but the lenders have caught on to that game — you will end up being on the hook for the original agreement or worse — a lump sum pay or quit situation where you have to catch up the payments or face foreclosure.

Another point that you need to keep in mind is that even if your home is declared a total loss, you are still responsible for the mortgage in question. Most lenders are still going to force you to uphold the terms of your contract — including the full price of the home and all of the interest accrued up to that point. This is why lenders strongly suggest that you get as much homeowner’s insurance as you possibly can. It’s not just enough to protect your stuff — you want an insurance policy that’s going to cover your needs even when you have a total loss on your entire home.

This is also a good time to make sure that you have an emergency fund. A lot of people think that credit cards are the best way to go, but there’s nothing like having cash of your very own to take care of things quickly. Even if you are covered by insurance, it can take several weeks for the insurance company to get you the cash that you’re entitled to. Till then, you’re going to have to operate on your reserves in order to get things done — who really wants to do that?

Overall, the time is right to make sure that you know everything you can about what your lender will and won’t do. Even if you haven’t been caught in a natural disaster yet, the future is always changing, right? Right — don’t get caught being unprepared, as it would not end very well for you!

The Self-Employed and a First Home Purchase – It Can Be Done!

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If you think that being self-employed means that there’s no way that you can get a good home, it’s time to definitely think twice about this. You see, if that really were the case people would be without homes that would otherwise deserve them. Remember that a mortgage lender is looking for one thing above all others — your ability to repay the loan. If that means that your money is coming from stable investments and businesses, then so be it. However, you are going to have a work a little harder than someone that is employed by someone else.

This is because the past history of “liar’s loans” or stated income loans, is coming back to haunt the entire industry. Before the mortgage meltdown, a lot of people were able to basically just make up an income and be taken at their signature. Upon later research, the lenders found that people had grossly inflated their incomes in order to get into certain homes that had to be later repossessed by the lender — at a significant loss, of course.

So if you want to get home loans or personal loan, you’re going to have to make sure that you have all of the necessary paperwork.

First and foremost, you need to make sure that you’re looking at your budget clearly. You really, really, really want to make sure that you can afford a new home. This isn’t just the down payment or even the monthly payments on the house. You want to make sure that you have significant savings. It might not seem like the case at first, but the truth is that homeownership is expensive. There’s always something that needs to be repaired and guess what? There’s not going to be a landlord to take care of things for you. This means that you’re going to have to work hard to ensure that little repairs don’t turn into big problems. Yes, it’s hard work but it’s worth it when it comes to having your own home.

So after you look at your budget and make sure that you keep your debts low, you’re going to want to gather up the paperwork. Proof of income and self-employment is the name of the game. In order to be taken seriously, you really want to make sure that you incorporate your business. Yes, it’s technically not necessary to incorporate your business but the truth is that if you don’t incorporate, you’re going to face an uphill battle in being taken seriously. The lender will process your application and they might feel that if you didn’t take the time to register your business properly and treat it like a real business, then you might not take your home seriously, either. Yes, this is an assumption but the lend ahs the power to make those assumptions. Prove them wrong but filing with your state for incorporation. In most states this is actually very cheap and can make it easier to get funding for your company and even discounts from suppliers. It’s just a matter of making sure that you really look through all of your options. Read more »

Is an Adjustable Mortgage Ideal?

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Before even getting an adjustable rate mortgage (or ARM), you have to know how it works.  You have to see to it that this will be favorable to your current personal as well as financial condition.  If not, you will find yourself paying huge amount of dollars without and getting stuck in debt.

First and foremost, ARM is not similar to a fixed rate mortgage (or FRM) in terms of the interest rates applied on them.  In an FRM, the rate of interest does not vary no matter what the economic or market condition may be, or how long you intend to pay your loan.  The interest is based on what is agreed upon by the creditor and debtor.

On the other hand, an ARM is contradictory to what an FRM is.  For a specific period, an ARM will have a fixed and low rate of interest, then after the period lapses, a debtor already has to pay varying and fluctuating rates depending on the market condition.  So, if you get an adjustable rate mortgage, you cannot predict how much you will be paying next month or the following months.

In an ARM, you will not be able to budget your income efficiently as you do not exactly know how much will be allocated for your loan.  If the amount that you will be required to pay for this month has enormously increased, your budget will surely be ruined.

However, ARM is not at all that bad because it has some advantages.  For instance, if you are planning to move to another place and stay there for only three to five years, then the ARM is ideal for you.  This is because ARM usually starts with a fixed and low interest rate for a certain period of time, which is at least two to five years.  This means that you will be paying low monthly mortgage repayments for this specified period and you will just have to deal with an adjustable interest rate for the remaining years or months, or you do not even have to.

But if you intend to stay for a longer time or even forever in your home, then the FRM is more recommended.  When you know what your monthly loan obligation is, you will have an easier time to budget your monthly income.  Even when the market condition is unstable  and the interest rates are high, it is definite that you will never get affected by these circumstances.

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