HOME DEVELOPMENT

Archive for August, 2009

Get your credit reports from all three credit bureaus–Experian, Equifax and TransUnion and make sure your bankruptcy accounts are accurately reported. Chances are all the 30 day, 60 day, 90 day, collection, and charge-off derogatory information will still be on your credit reports for the accounts that were discharged by your bankruptcy. Thus, the first thing you need to do is to make sure all these accounts are updated to say “included in bankruptcy.” Under the Fair Credit Reporting Act (FCRA), both the consumer reporting agency and the information providers (creditors) are responsible for correcting any incorrect, incomplete or outdated information in your report. Otherwise, your credit score will be unnecessarily lowered, and you will probably more interest on your loan than you should.

Start researching mortgage lenders. Remember to keep interest rates, points and fees in mind, as well as the costs involved with refinancing. You definitely will pay a few percentage points more than a traditional mortgage, so try to shop for a loan package with low fees.

Because of your bankruptcy, you are a target for predatory lending practices. Be sure you know the going rates for bad credit loans with sub-prime lenders, pay close attention to the terms of a loan including the type of mortgage, the presence of prepayment penalties, balloon payments, low or high down payment, mortgage insurance requirements, payment schedule, lock-in period and other loan features before signing the papers.

Home mortgage rates are the rates of interest that are to be paid along with the capital for taking the mortgage loan. Home mortgage rates do not remain steady over a long period of time. A lower rate means lower monthly payments, leading to lower costs on the property. Depending on the kind of interest rate, there are two kinds of home mortgage loans: Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs). FRMs are mortgages for which the rate of interest remains the same for the entire period of the loan. These can be for a period of 10, 15, 20 or even 30 years. Adjustable rate mortgages, on the other hand, have fluctuating rates of interest. This is ideal when there is likelihood of the rates to decrease. ARMs are preferred by people who plan for shorter periods. ARMs are offered at lower rates than FRMs to attract customers, but they also contain a certain level of risk. The fixed rate mortgages are a very predictable, safe option.

Mortgage rates fluctuate on the basis of an economic index. The mortgage bond market works according to a process called securitization. This securitization enables creation of more loans and greater mobility of funds by keeping the mortgage rates low and allowing more credit for ideal customers

If you work in seasonal employment, like in the tourist industry, you may find that paying an interest only monthly mortgage payment allows you the freedom to pay a minimum amount when you are in “off season”.

But during the time you are working, you can make accelerated payments off the principle in addition to the interest.

The risk of paying an interest only mortgage loan repayment is that the principle is not being repaid. Unless the price of homes in your area rises, you don’t build up any equity in your home.

Paying the monthly mortgage payment on an interest only mortgage can become like paying rent. You don’t have the safety net of being able to sell your home to raise cash if you are faced with some emergency in your life.

As a young professional just starting out on your own, this might not be an issue you need to consider. But if you are married and have a family, you should seriously consider the implications of not having the kind of mortgage that allows you to build a financial safety net.

If you are on the market looking for a new home, you might want to consider buying a home with no down payment, known as 100% financing. The advantage of purchasing a home with no down payment is that you will be able to use the cash you usually would use for a down payment for other things. For example: closing costs, a kitchen, furniture’s or anything else you like.

How about my credit and home mortgage?
One of the requests for purchasing a home with no down payment is having superb credit, or at least, next to superb credit. When borrowing up to 100% of the value of a house, the lender may charge a higher interest rate. The lender does this because they are taking on more of a risk.

Can anyone help you with a home mortgage?
Mortgage brokers are not real lenders. Their job is to shop around, finding a home mortgage for you. A mortgage broker has access to hundreds of wholesale lenders who lend to people with credit issues or a unique situation. So if your consider yourself to be in that category, a broker may be perfect for you. Allow for up to four brokers or loan officers to consider your situation, and then wait for them to come back to you with an offer. The broker that finds you the most excellent deal within reason should be the one you give most of your attention.

Final word about home mortgage.
With a bit of effort you will find the home mortgage that is just right for you; with or without a mortgage broker to help you.

There are several companies that offer home mortgage rates. One company you might consider is
found online. It is called E-loan at eloan.com. This company offers various home mortgage rates.
One rate they offer is at 5.8 percent. This is for an 80/20 loan. This means you take out 2
separate loans, one for 80 percent and one for the remaining 20 percent. You are not required to put
any money down for those of you that do not have any extra cash but would still like to own their
own home. The 5.8 percent rate is fixed for a term of 30 years. This means you do not have to
worry about your house payment constantly changing as it would if you had a variable rate. This is a
great home mortgage rate, but do keep in mind that low home mortgage rates such as this are only
available to people with good credit.

Another company you may consider for great home mortgage rates is Countrywide. Countrywide can be
found online at countrywide.com. This company also offers various rates. The top rate they have
now is a 6.1 percent rate for a 30 year loan. Countrywide also offers ARM payment options. ARM
stands for adjustable rate mortgage. With this type of loan, you will get an extremely low rate
for the first 5 years of a 30 year loan. After the first five years then your rate will jump much
higher. This type of mortgage rate is good for someone who only plans to own the home for 5 years
or less and then sell it or for those of you who plan to refinance after 5 years. Countywide also
has an added benefit if you choose to use them. First of all, your home mortgage rates will be
very low if you have good credit. Second, with good credit they promise only half of the paperwork
needs to be filled out!