How does a Mortgage Pre-approval work?
Posted On: February 8th, 2012 by James Posted In: FHA Mortgage • Financial Health • Mortgages
Many of you have heard about “getting pre-approved” with a lender. It should be pretty obvious what this means, but what most people don’t know is how an approval is determined. You might be surprised to find out that mortgage borrowers are not approved for loan amounts, but more specifically- they are approved for monthly mortgage payments. Let me explain further…
The amount that a borrower gets approved to borrow is extrapolated from their maximum allowable monthly payment.
The key number in a mortgage loan approval is called the “debt to income ratio”. This number is found by dividing the “GROSS MONTHLY QUALIFYING” income by the minimum Continue Reading – How does a Mortgage Pre-approval work?
Why is Mortgage Underwriting So Crazy?
Posted On: January 25th, 2012 by James Posted In: Financial Health • Government Actions • Mortgage Programs • Mortgage Rates • Mortgages • Refinancing
Why is the loan approval process so difficult these days? Well, the answer is complicated. The truth is that the approval and funding process for a conforming, FHA, or VA, government insured mortgage has never been more complex since I’ve been in the business (since 2003). To get to the root of this issue we need to get into the way-back machine and go back to the year 2004.
This is the year of the ascendancy of the sub-prime mortgage industry. These companies realized that there was a HUGE appetite for AAA rated mortgage backed securities. So they began Continue Reading – Why is Mortgage Underwriting So Crazy?
New HARP loan “HARP 2″ + new FHA loan limits 2011
Posted On: November 21st, 2011 by James Posted In: FHA Mortgage • Government Actions • Mortgage Programs • Mortgages • Refinancing
Christmas might be coming early for homeowners in Oregon and Washington! The Obama administration has been putting pressure on banks to come up with ways to extend opportunities to refinance into lower rates in recent months, and it appears that we’re getting some movement on this finally. The original HARP loan (aka: Home Affordable Refinance Program) has been around since early 2009, and allows homeowners to refinance their existing first mortgages into lower rates, EVEN if the value of the securing property has gone down dramatically. The program allows you to borrow 125% of the appraised value of the home, but most major lenders only really allow for 105%. Continue Reading – New HARP loan “HARP 2″ + new FHA loan limits 2011
Is it Possible to Buy Real Estate with Less Than 20% Down?
Posted On: October 28th, 2011 by James Posted In: FHA Mortgage • Financial Health • Government Actions • Mortgage Insurance • Mortgage Programs • Mortgages
A realtor colleague of mine was recently relating his shock to me about how often he is talking to renters who aren’t considering buying real estate because they are under the impression that a purchase requires a 20% down payment. This idea couldn’t be further from the truth, and this message is sadly often relayed on TV from uninformed talking heads and people who are obviously not real estate professionals. I’m here to tell you the truth, dear blog reader! Isn’t that why you read blogs?!
The truth is that just about every borrower in the market could qualify to put less than 20% down if they chose to. The FHA loan is one of the easiest loans to qualify for and it isn’t just for first time home buyers, nor is there an income cap on this program… and it only requires a 3.5% down payment, but I digress… let me break this down for you in internet-friendly bullet point fashion. Continue Reading – Is it Possible to Buy Real Estate with Less Than 20% Down?
Operation Twist = Mortgage Rate Bonanza
Posted On: September 22nd, 2011 by James Posted In: Government Actions • Mortgage Rates • Mortgages • Refinancing
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