Tag archive for ‘loans’

Boost Your Credit Score in Three Simple Ways

by Admin - on Sep 19th 2016 - Comments Off on Boost Your Credit Score in Three Simple Ways

credit scoreSo you’ve saved up for the down payment on a new home, but have you taken a long, hard look at your credit score? Your credit score will determine the interest rate you will qualify for on your mortgage, primaryresidentialmortgage.com explains. It’s important you’re credit-aware.

An average credit score is good, but it’s not great. And with today’s market demands, you need great credit to qualify for a mortgage and buy your dream house. The good news is you can still do something about it.

Here’s how you can improve your credit, and get a better chance of getting approved:

Pay off your credit card debts

Let’s put it this way: if you’re drowning in credit card debt, lower your expectations. Both your debt-to-income and credit utilization ratio will be high, and that means your lenders will think twice before offering you a loan.

The solution: pay off your balances before submitting mortgage applications. Better yet, add a little extra to the minimum monthly payments. Other than lowering your debt load and boosting your credit score, it can also save you money on interest and show lenders you’re more than qualified.

Stop applying for new credit

A new house can also mean a new car and new furniture. But refrain from applying for auto loans and new credit cards until you’ve locked down your mortgage, or this can raise some red flags.

Shop with intent

It’s smart to shop around for the best rates, but keep the search focused and brief. Over time, your FICO score can start showing your applications as separate inquiries, which can hurt your credit score. It’ll even lower your chances if the lender is using an older version of the FICO score, which reads mortgage applications as separate inquiries when they’re not within two weeks of each other.

Your credit score can sometimes make or break your chances of getting approved for the mortgage of your dreams. Take steps in improving it as early as now, so it’s easier to apply for a mortgage now and other credit lines down the road.

Insufficient Funds for a 20% Down Payment? Go FHA-Loan Then

by Admin - on May 3rd 2016 - Comments Off on Insufficient Funds for a 20% Down Payment? Go FHA-Loan Then

FHA LoanThanks to the Department of Housing and Urban Development’s Federal Housing Administration (FHA), you can now obtain a home loan from a private lender much more easily. With the benefits that HUD FHA-backed loans offer, you should now consider making the transition from a tenant to a homeowner.

Why go HUD FHA instead of conventional?

The primary reason many home buyers in the country opt for loans backed by the FHA is because they can rest easy knowing that, in the event they default on their loan, the administration will take responsibility for repaying the lender. Bonneville Multifamily Capital points out because the government insures these loans, lenders are at less risk of losing money from defaulting borrowers.

The results? Lower loan interest rates as compared to conventional mortgages, which then give you a greater opportunity of home ownership.

The down payment advantage

Another advantage of securing an FHA-insured loan from the HUD is a smaller down payment requirement. Since you do not have to make the usual 20 percent down payment that most private lenders require, you will find it easier to buy a home and afford paying for your mortgage.

Satisfy the requirements set by the HUD for their FHA loans, and you would only need to come up with a minimal 3.5 percent down payment.

Less worries about closing costs

Most traditional lenders charge borrowers closing costs, further taking mortgage payments higher and making it even more difficult for home buyers to secure a loan. Although FHA loans still come with closing costs, they are far lower than traditional loans. Through an FHA-backed loan, your HUD multifamily lender may only charge you up to one percent of the amount you borrow.

You still need to meet certain requirements and qualifications when applying for an FHA loan, but these are far easier to satisfy and complete compared with conventional loans.

3 Things to Consider When Choosing a Mortgage

by Admin - on Apr 7th 2016 - Comments Off on 3 Things to Consider When Choosing a Mortgage
Mortgage Loans in Salt Lake CityFinally deciding that it’s time to buy that home you’ve always dreamt of can be thrilling. Purchasing a home is a huge investment and knowing what to expect can help you avoid falling into common pitfalls first-time buyers find themselves in. With a variety of mortgage products in the market, how do you decide which home loan to choose? 

Here are some guidelines that will make the process of choosing home loans in Salt Lake City much easier.

Types of Mortgages

There are mainly two types of mortgages: the government-insured loans and conventional loans. Government-backed loans can come in three forms: USDA loans which are backed by the Department of Agriculture, VA loans backed by the Department of Veterans Affairs, and FHA loans which are insured the Federal housing Administration.

Conventional loans are backed by a banking institution or a private company. These types of loans are available for various terms such as 15, 20 and up to 30 years. Furthermore, they require at least 5 percent down payment which can sometimes go up to 20 percent depending on your credit history and the type of lender you choose.

Government insured loans only require you to have a solid credit and a stable source of income. For example, FHA loans only require a 3.5 percent down payment and a credit score of at least 580.

Type of Interest Rate

There is a fixed and adjustable rate. Fixed rates never change and are perfect for people who are looking to repay their loan within 15-30 years and have a stable income. Nonetheless, it’s important to note that other fees such as homeowner’s association dues and annual property taxes may result in fluctuation.

Adjustable rates are those that reset after a certain time. At the start, they may be lower than fixed rate loans. However, after the initial terms end, your monthly payments increase annually based on a margin and on an index.

Size of the Loan

Classified as either conforming or non-conforming, the size of the loan is another issue to consider. Conforming loans are limited to $417,000 for single-family homes. For high-cost areas, the price may go up to $625,000. Non-conforming loans are riskier and come with a high down payment requirement.

Getting a home loan largely depends on your credit history, your income and future financial goals. Before applying for any loan, check to see if your credit score allows you to borrow. And if not, try to boost it. Talk to a mortgage broker to get the best rates.