Category Archives: Home Purchase

Hemet Home Loans and Interest Rate Info

Posted on by

Lendergroup.net: The financial marketplace for straight forward home loan mortgage information and lending programs

The key in choosing a home loan mortgage programs that will satisfy your interest rate expectations as well as your specific credit, income, and payment profile is to evaluate your budget and choose the  mortgage loan type that fits your financial situation, as well as your long and short-term investment strategy. A common mistake many consumers make is to choose a loan product that will allow them to buy the home they want without fully understanding the repayment terms associated with lower interest rate programs. Choosing the right home mortgage lenders can be a daunting task. Read through the home mortgage articles on this site the help you make the best descision you can when searching for a home loan program in the Hemet Ca., region.

Hemet Home loans and mortgage information

This section is to inform readers about the most common loan types available and to identify the strengths and weaknesses associated with each home loan mortgage program.

There are two basic of mortgage types: the fixed rate mortgages, and adjustable-rate mortgages (ARM). Within these two divisions, there are many variations. The primary factors to consider are how predictable the payments are and affordable they are over time.

Home loan mortgaqe rates and programs

Borrowers tend to choose fixed-rate home loan mortgage program because their payments are steady and predictable. At present, with the historic low rates for fixed rate loans, this mortgage product is the loan type of choice.  In times of high rate fixted mortgages, the adjustable rate mortgage may be a prefered option. However, payment volitility is a primary factor to consider with adjustable rate mortgages.

Get the best home loan interest rates in Hemet Ca.

The principle reason for borrowers choosing an adjustable-rate home loan mortgage program is usually do to the lower initial payment offered by this home loan type. Prior to the mortgage market crash of 2008 and beyond,  this loan type was frequently used as method for low income borrowers to qualify for a home loan with anticipation of higher incomes associated with inflation in the future. This proved to be a significant factor in the current foreclosure rates of today. Deflation of home prices, combined with stagnet income growth, and mortgage rates adjusting to thier 3, 5 & 10 year adjustments resulted in a many homeowners finding themselves in homes worth less than they paid, higher payments, and unable to make their monthly payments. With some loan programs, many mortgages actually increased loan balance due to negative amortization.

To recap, getting a home loan mortgage program with adjustable payments results in lower payments at first but exposes you to risk of high payments at a later date. Traditionally, locking in steady predictable and consistant payments gives you a higher initial payment over that of the ARM, However, knowing what you owe in principal and interest at any given time helps to maintain your budget.

Get the Best Mortgage Quotes Online

Posted on by

If you are interested in buying a home in the near future, then getting the best mortgage quote online is something you will need to have your ducks in row for early in the process. Some of the things you should have underwraps are the various income documents, contacts, and credit issues that may effect your interest rate.

To get the best mortgage quote, you need to shop around. This is important because when you have more than one mortgage quote you can compare the different lenders and find the one that is best for you. Frequently, the average mortgage quote online will be lower than the average mortgage quote from your neighborhood bank. Since every penny counts and you want to save as much money as possible, get a mortgage quote online as well as from your neighborhood lenders to find the best deal for you.

The following suggestions will help you find a the very best mortgage quote online as well:

Mortgage Quote Tip: Consider getting bids from multiple mortgage lenders.

Bid for Quotes The best way to get a mortgage quote online is to visit the sites that ask for some general personal financial information and then submits it to various lenders. Then, all of the lenders respond with a mortgage quote for your personal financial situation. Once you receive the mortgage quote it is up to you to forget it or contact the lender that provided you with that particular mortgage quote.

Mortgage Quote Tip: Do your homework and make sure you are dealing with professionals.

Professionals You want a professional and real mortgage quote, so make sure you are dealing with a professional company that will provide you with a legitimate mortgage quote online. If not, you will be wasting your time and risking your investment by dealing with a sketchy company.

Mortgage Quote Tip: Spend a few dollars to have a qualified attorney check out your quotes.

Although you want the lowest mortgage quote possible, you need to make sure the mortgage quote is realistic within the scheme of things. If you receive a mortgage quote that is several percentage points lower than the lowest mortgage quote you have seen, you might want to question it. While there are many reputable online mortgage quote companies, there are those out there that are not professional. Spending a few dollars to have an realestate attorney to check out your mortgage quotes before you sign on the dotted line.

If you are looking to make the best deal, and get the best mortgage quotes online, then follow the steps above and you will be glad you took the time to follow these tips.

 

Buying your first home – How to get the best deal

Posted on by

Buying your first home is probably one of the most exciting and stressful things you will ever do in live.  There are a lot of factors you need to understand before you rush head long into purchasing your first home.  A successful purchase of your first home will depend on real estate laws in your area, your credit, financial situation, employment and a variety of information your lender will need to know before you are able to close in on your first home. There are basic steps that every first home buyer needs to know and accomplish.

Know Your Finances

Establishing credit is very important especially when you are looking to purchase a large investment like a house. Your credit reports reflects how you manage your finances. Study your credit report and your financial history so you are familiar with it before applying for a mortgage. These reports will be needed for the mortgage approval process in finding out the interest rate and other loan terms.

Get Familiar With the Home Mortgage Process

Do your research. Finding the right loan and lender is extremely important to your home purchaseing success. Choose the lender that is best for your needs but be sure to understand the loan process as much as you can before talking to a lender so you don’t feel completely lost.

Get Pre-Approved for a Home Loan Before You Make an Offer

Once you talk with a lender, you should be given an estimate of how much you can afford for a house. Being pre approved can help you in a variety of ways. So if a home seller gets two offers, one being yours with a pre approved letter from your bank saying you have been approved for the amount offered, and then there is the other person with no letter, your chances of getting the house are much better.

Determine what you want, what you need, and what you can afford

Buying your first  home isn’t as challenging as might  think. If you familiarize yourself with the real estate market and narrow down what you want and need before purchaseing house the process will run a lot smoother. Be sure to understand agent duties and devotion because some real estate agents represent purchaseers, sellers, or both or depending on the state they can work as neutral facilitators for either party.

Starting the Search for Your First Home

Your agent will most likely give you multiple listing sheets to review. You might have also picked up a real estate magazine in your area and found a house through that, shop online, or find ads in the newspaper. Other ideas can be driving around the neighborhoods that have houses for sale. Either way you look, consider these home purchaseing search tools in your search.

Home purchasing Search Methods

  • Consider houses that others may overlook
  • Get out there to see what’s out there
  • Look into public versions of multiple listing service web sites
  • Search for real estate agent web sites
  • Browse real estate search engines and networks
  • Find for sale by owner properties
  •  Look at magazine and newspapers in print
  •  Find foreclosed homes

Handle Pre-Offer Tasks

When looking at houses be sure to look at its structure and features which can help determine if its something you want or not.

Making an Offer for Your First Home

There’s no one specific set of instructions that cover all the differences in real estate laws and customs that exist throughout the United States, so when putting in an offer on a house, it will depend on your location.

A Home Inspection can Save you Money

Some states allow home inspections before the final contract is signed where as in other states inspections take place after the contract is signed. No matter when you have to do them, it’s very important to decide which inspections and tests you want done. Discuss with your real estate agent or if you don’t have one, then an advisor to find out when inspections should happen and if additional types of testing are needed for a specific area.

Avoid Last Minute Problems – Get your documents and facts together quickly

As the closing date approaches, everyone involved in your real estate transaction should be checking the progress on a daily basis. That way if a problem arises it can be taken care of right away.

The Closing

Also called settlement, is the event that transfers ownership of the property from the last owner to you.

When buying your first home, do your homework, plan in advance for the best deal, don’t get too excited at the first home you see. Buying your first home can be fun, and get you started with the American Dream.

Home Purchase Downpayment Assistance

Posted on by

If this is your first time purchasing a home and don’t have enough money for a downpayment, then you might consider a downpayment assistance program for first time home buyers.

Your Down payment plays a huge role in financing your home purchase.  It’s the portion of your property’s purchase price that you must pay up-front to the lender out of your own verified money. The amount that you put down can determine how much you are able to borrow, the size of your monthly mortgage payments, and the amount of cash that you have available for other home buying costs.

From a lender’s perspective, the greater the downpayment, the greater your stake in the home, and the less risk you are of a possible foreclose on your property later on. Even though most lenders are insured against losses from foreclosures, it still costs them money if you default on your mortgage. Lenders with many foreclosures run the risk of having to pay higher insurance premiums.

It turns out that buyers who invest at least a 20% down payment are significantly less likely to default on a mortgage and walk away.  This makes sense, if you think about it:

  • If you have enough for a 20% down payment, you show that you can manage your finances and save money
  • With more of your own money invested in the house, you have a lot more to lose if you default on the loan
  • A bigger down payment means you borrow less money, so your monthly payments are smaller, and therefore, less of a burden on your budget

Don’t have 20%? If you can’t put 20% down (and most first time buyers can’t) the lender requires you to get a third-party to guarantee the loan.  There are a variety of commercial and government programs that will do this.

Commercial Programs

Most first time buyers use a commercial program to guarantee their mortgage. It is fairly easy to qualify for these programs, but they can be expensive. Here’s a look at two common options:

  1. Private Mortgage Insurance (PMI) You can pay an insurance company to insure the mortgage. If you default, they pay the lender what you still owe on your loan.Many PMI policies have a large, up-front cost. This fee ranges from one month’s payment to a year’s worth of payments collected at closing by the lender and paid to the insurer, and two month’s worth of premiums held by the lender as a reserve.Typically, you can drop PMI coverage when you have at least 20% equity in your home. Make sure to read your contract to see if this is allowed under your agreement since some lenders require the insurance for the life of the loan.You should track your PMI policy over time. When you approach the 20% equity level, contact the lender to see what the requirements are for dropping coverage. Some lenders require an appraisal, paid for by the borrower, showing at least 20% equity, or similar proof. Try to get confirmation of termination policies in writing when negotiating the loan.
  2. Piggy Back Loans: 80-10-10/75-15-10 Lenders are happy to lend you 80% of the purchase price when you can come up with the 20% down payment. If you can’t put that much down, they may lend you 90%, but they are taking a greater risk and therefore require you to pay a higher interest rate.

80-10-10

Rather than just giving you a loan for 90% of the purchase price at a slightly higher rate, you could get two loans. The first loan is for 80% at a standard rate, and the second, “piggy back” loan, is for 10%, but it has a much higher rate (often more than two points higher than the 80% loan).  The second loan is usually a balloon loan, with the balloon payment due within the first 10 years of the loan.

75-15-10

If you’re borrowing less than $240,000 (a conforming loan) on the first loan, you might want to consider a 75-15-10. It offers a conforming rate rather than the jumbo rate you automatically get with an 80-10-10.

PMI vs. Piggy Back Loans

A lot of borrowers hear that they should avoid private mortgage insurance (PMI) at any cost. Paying high interest, however, isn’t much better than paying for insurance.  You need to make sure that you would actually save money with an 80-10-10 or 75-15-10. The high interest rate may end up costing more than your insurance premiums.

We recommend getting a quote for both. You can then compare the monthly interest on the 10% or 15% loan to your monthly mortgage insurance premium.

Government Programs

There are a number of state and federal programs designed to help people make a down payment.

  • FHA Loans With FHA loans, you can put as little as 3% down, but there are lots of limitations on who qualifies.There are several benefits to getting a FHA loan:
    • Requires a down payment of only 3%
    • No prepayment penalty
    • Lenient qualifying guidelines

    To be eligible for an FHA loan, you must:

    • Intend to occupy the home you’re purchasing (not renting it out or using it as a vacation home)
    • Have a satisfactory credit history
    • Borrow less than $151,725 (amount varies by area)

 

  • VA Loans If you’re a U.S. military veteran, you may not have to make a down payment. For a fee, the federal government will guarantee your loan as long as it falls within limits.   If you are a U.S. military veteran, a VA loan is a great way to buy a new home without making a large down payment.There are several benefits to getting a VA loan:
    • No down payment required
    • No monthly mortgage insurance required
    • Free personal loan counseling from the VA

    To be eligible for a VA loan you must:

    • Be a veteran of the U.S. military
    • Intend to occupy the home you’re purchasing (not renting it or using it as a vacation home)
    • Have a satisfactory credit history
    • Have sufficient income to cover the monthly mortgage payments
    • Borrow less than $184,000

    To get a VA loan, you must pay a fee to the VA. The amount is based on the down payment amount and whether you served full-time, in the reserves or the National Guard.

  • FmHA Loans In rural areas, the Rural Economic and Community Development (formerly the Farmer’s Home Administration, FmHA) offers direct mortgage loans to buyers who fall within some relatively strict guidelines.This program is a straight government subsidy, with money allocated to local offices on a quarterly basis.The office processes the mortgage application as soon as you apply, generally before you’ve found a house, and then notifies you when the money becomes available.  Depending on the area, some offices will have money available immediately; others will have a waiting list up to several months long.The program targets buyers who can’t get financing elsewhere, generally with low family income, and bases the mortgage payment structure on that income.To learn more about FmHA loans, and to find a lender that offers them, contact your local housing authority.

How to qualify for a home loan

Posted on by

If you want to qualify for a home loan, there are documents and proceedures you must deal with before you get your home loan. There is no secret to qualify for a home loan, but you need to have your ducks in a row if you want to get the best interest rate available. Below are the things you need to know about before you begin the home loan qualification process.

Credit report. A lender will run a credit report on you; this record of your credit history will result in a score. Your lender will look at a mortgage credit report that consists of three credit scoring models and then average them to arrive at your middle FICO score. What’s a FICO good score? FICO scores range from 350-850. FICO’s median score is 723, and 680 and over is generally the minimum score for getting “A” credit loans. Lenders treat the scores in different ways, but in general the higher the score, the better interest rate you’ll be offered.

Down payment. Traditionally, lenders like a down payment that is 20 percent of the value of the home. However, there are many types of mortgages that require less. Beware, though: If you are putting less down, your lender will scrutinize you even more. Why? Because the less you have invested in the home, the less you have to lose by just walking away from the loan. If you cannot put 20 percent down, your lender will require private mortgage insurance (PMI) to protect himself from losses. (However, if you can only afford, for example, 5 percent down, but have good credit, you can still get a loan, and even avoid paying PMI. Ask your lender about an 80/15/5 loan — an 80 percent first mortgage, followed by a 15 percent second mortgage, and 5 percent down. This gives the lender more security, while saving you the cost of insurance.)

LTV. Lenders look at the Loan to Value (LTV) when underwriting the loan. Divide your loan amount by the home’s appraised value to come up with the LTV. For example, if your loan is $70,000, and the home you are buying is appraised at $100,000, your LTV is 70%. The 30 percent down payment makes that a fairly low LTV. But even if your LTV is 95 percent you can still get a loan, most likely for a higher interest rate.

Debt ratios. There are two debt-to-income ratios that you need to consider. First, look at your housing ratio (sometimes called the “front-end ratio”); this is your anticipated monthly house payment plus other costs of homeownership (e.g., condo fees, etc.). Divide that amount by your gross monthly income. That gives you one part of what you need. The other is the debt ratio (or “back-end ratio”). Take all your monthly installment or revolving debt (e.g., credit cards, student loans, alimony, child support) in addition to your housing expenses. Divide that by your gross income as well. Now you have your debt ratios: Generally, it should be no more than 28 percent of your gross monthly income for the front ratio, and 36 percent for the back, but the guidelines vary widely. A high income borrower might be able to have ratios closer to 40 percent and 50 percent.

Automated Underwriting System. The days when a lender would sit down with you to go over your loan are over. Today you can find out if you qualify for a loan quickly via an automated underwriting system, a software program that looks at things like your credit score and debt ratios. Most lenders use an AUS to pre-approve a borrower. You still need to provide some information, but the system takes your word for most of it. Later on, you’ll have to provide more proof that what you gave the AUS is correct

How to get a home purchase loan

Posted on by

 

In General….

A home purchase will more than likely be your largest financial transaction to date, so it’s important to make the right decisions and to keep an eye on the details. With the assistance of your Real Estate Agent and Mortgage Loan Officer, it should be an efficient, pleasant, and ultimately rewarding experience.

Count On Your Real Estate Agent To:

  1. Preview available homes to weed out those that are overpriced, or undesirable in some other way.
  2. Present the homes that suit your needs as you’ve defined them.
  3. Help you determine the difference between a “good buy” and a property which, because of its nature (neighborhood, market appeal, etc.), might have to be discounted if you decide to sell in the future.
  4. Negotiate the best deal for you. With a Pre-Qualification letter from us in hand, You have the upper hand. Your Real Estate Agent will be able to demonstrate that you are a qualified and capable borrower. This will strongly influence the Seller, and may make the difference between the Seller accepting your offer or someone else’s — even if your offer is lower!

What to expect from your Mortgage Banker and Loan Officer:

  1. Assist you in selecting the best loan to meet your personal situation and goals. (This single decision can save you thousands of dollars throughout the years!)
  2. Keep you informed of your loan status throughout the entire process.
  3. Keep your Real Estate Agent informed of your loan progress (Note: your personal information is always kept confidential between you and you mortgage loan officer; only deal points and progress are shared and only with your prior approval).
  4. Get the appropriate loan for you at the best rates and fees. This will save you significant money “up front” and throughout the years to come.

What you should do:

  1. Keep your Real Estate Agent informed of any questions or concerns as they develop.
  2. Most IMPORTANT! – Keep the process moving by providing documentation and decisions as soon as reasonably possible. By doing so, many of the details are taken care of early in the process so you can comfortably concentrate on any last-minute details or events that require your attention.
  3. Enjoy purchasing your home, but do remain objective throughout — to make the business decisions that are best for you.
  4. Make sure you are pre-approved as early as possible. This will put the power of financing behind you so you can concentrate on selecting your home and negotiating with the sellers.