Archive for the ‘ Financing, Mortgage and Home Loans ’ Category

Taking Advantage of the USDA Home Loan

Deciding to purchase a home can be an overwhelming experience for any potential home buyer. In addition to taking the time to scour through newspaper ads and online searches to find an ideal home, buyers also have to worry about securing adequate financing which isn’t always easy in today’s economy.

Conventional lenders are more strict than ever before when it comes to borrower eligibility. With most programs, applicants must have stellar credit scores and histories and are generally expected to have a down payment near 20 percent of the home’s sales price simply to secure financing. For a modest home purchase of $125,000 that means borrowers are expected to put down $25,000 out of pocket, not including other costs normally associated with purchasing a home.

For many interested home buyers, conventional lending options simply make home ownership either unaffordable or inaccessible to obtain. However, the USDA home loan program tends to alleviate the major costs associated with financing so that more people can have access to the dream of home ownership.

What is the USDA Home Loan?

The USDA home loan is a home financing option provided by the USDA’s Department of Rural Development that has been designed to make securing a mortgage easier for those interested in living in rural or outskirts areas. There are two types of home loans generally provided by the program, the Direct and the Guaranteed, and both are 100 percent backed by the government. By providing interested home buyers with a loan option that is backed by the government, borrowers are able to save out-of-pocket expenses through various benefits.

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Posted by: HG Blog Admin on January 19th, 2012 under Financing, Mortgage and Home Loans

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NAR: How About a Common Sense Approach to Credit?

Want to give an immediate boost to housing sales? Ron Phipps has a suggestion: Mortgage lenders should look beyond borrowers’ credit scores.

Phipps knows of what he is talking. He’s the president of the National Association of REALTORS and the broker/owner of Phipps Realty in Warwick, R.I. He says that home sales would quickly rise if mortgage lenders used just a bit more flexibility in deciding which borrowers qualified for mortgage financing.

Phipps told me during a recent phone interview that Fannie Mae and Freddie Mac are now looking for borrowers to have FICO credit scores of just under 760. That’s a big change from the days when credit scores in the high 600s were considered strong.

It’s true that borrowers can get conventional mortgage financing with credit scores lower than 760. They may, though, have to pay higher interest rates. And these higher rates might knock some buyers out of the market.

“That 760 score is just so much higher than what the average American homebuyer today has,” Phipps said.

Tightening credit standards have played an important part in the housing slowdown, Phipps said. According to data from the National Association of REALTORS, about 15 percent of creditworthy borrowers haven’t been able to get mortgage financing because of the stricter credit-score requirements of Fannie and Freddie.

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Posted by: Dan Rafter on April 19th, 2011 under Financing, Mortgage and Home Loans

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Mortgage Alternatives

There is no better time to purchase real estate than in today’s economy as prices have evened out, and the inventory proves that it is indeed a buyer’s market. There are many options in which to purchase a real estate investment, whether it is cash or through the traditional methods of conventional mortgage financing, but there are some instances in which homebuyers cannot obtain either. Because of the challenges due to the economy there may have been instances where individuals have suffered a bankruptcy, foreclosure, slightly blemished credit, or perhaps one has a sporadic income in which lenders raise questions about. Whatever the case, there are indeed other alternatives to obtaining a mortgage to purchase real estate for those who are ready and willing to do so.

1. One can choose to borrow from a whole life insurance policy. Whole life insurance policies are insurance policies in which the cash value accumulates over a period of time and it is possible to borrow against the cash value of the policy. One of the best features in borrowing against a whole life policy is that there is no loan qualifying process to go through. It is important to keep in mind though that by borrowing against a whole life policy it does diminish the face value of the policy. If this is an option, it is important to ask the insurance carrier of the whole life policy several questions such as: is there an interest rate on this loan, is the amount I withdraw taxable, could my policy lapse because of this withdrawal, can I pay back the loan to bring back up the original face value that the policy once had? Be smart and realistic. Ask if the negatives outweigh the positives when thinking of borrowing against a whole life policy.

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Posted by: Tim Ryan on April 15th, 2011 under Financing, Mortgage and Home Loans, HomeGain

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Give Thanks by Spreading the Word About Veteran Benefits

The fact that Veterans Day and Thanksgiving are just weeks apart is a historical quirk.

But it sure feels right, doesn’t it?

As we take time this week to craft a list of family, friends and other things we’re thankful for, consider adding another line item to the list: those who have fought for our freedom. And, of course, those who continue to do so.

During this month of giving thanks, one of the best ways to honor American service members and their sacrifices is to make sure they’re aware of the myriad benefits available to them. From health benefits to education opportunities and beyond, there’s an array of significant benefits that provide some small measure of gratitude to those who have sacrificed so much.

There’s certainly one major benefit in particular worth exploring here — the VA home loan program. This unique purchasing option has helped more than 18 million veterans and their families become homeowners since the waning months of World War II.

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Posted by: Chris Birk on November 23rd, 2010 under Financing, Mortgage and Home Loans, Guest Bloggers, HomeGain

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Mortgage Rates are Great but Should We Wait For Home Prices to Drop Further?

Freddie Mac says that we have the lowest mortgage rates EVER!!  Well maybe not ever but since they started tracking the rates.   So maybe in the last 50 years or so…..

Additionally, home prices have dropped to some of the best prices in a long, long time.   So now the question is:  Do we wait to see how low home prices may go before we buy?

Here is some food for thought……

  1. Many people believe that home prices have found the bottom and are making a turn upward.
  2. Mortgage rates are at the lowest rate in 40 or 50 years.  It is hard to believe they will drop any further and are more likely to move upward.
  3. We should look at the math.

What if………
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Posted by: Wayne Long on August 10th, 2010 under Financing, Mortgage and Home Loans, Guest Bloggers

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What is a Strategic Default?

A strategic default is when a homeowner walks away from their home when they owe more on the home than it is currently worth. In some circumstances, the homeowner can afford to make the mortgage payments, but due to the decreased value of the home under the current market conditions, they feel it is a financially sound maneuver simply to leave their home behind and rent or try to find another home which has also lost value.

Thousands of homeowners have strategically defaulted on their homes and have left the mortgage company holding the bag. The mortgage company now has an asset for which they do not have a revenue stream. Plus, the property is now a liability because the mortgage company is obligated to maintain the property so that adjacent homes do not further lose value.

Due to the enactment of new Fannie Mae regulations, a strategic default will now have more severe consequences for the homeowner than in the past. Continue reading this post

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Posted by: Peter McCullough on July 30th, 2010 under Financing, Mortgage and Home Loans, HomeGain

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