Frequently Asked Questions

Stated Income Loans

In stated income mortgage loans, the lender does not check the borrower’s income by looking at their income tax returns, W-2 forms, pay slip, or other records. Instead, borrowers are requested and trusted to state their income.

It can be difficult for new business owners to qualify for a home loan. It can be hard to finance a new home or refinance a current home loan if you don’t have two years of tax returns to show your income to loan specialists.

Generally, when borrowers apply for a mortgage, they are required to demonstrate their income through W-2 forms and pay stubs. However, income verification can be troublesome for a few borrowers. These borrowers consist of individuals who are self-employed or who get a commission-based salary.

In these loans, borrowers are not required to provide documentation of their income to lenders. In other cases, they do not require much documentation.

Keep in mind that most lenders need two years of federal income tax returns. It is important to note that it varies with different lenders.

Borrowers need to apply through USDA specifically to qualify for a mortgage loan with low income. Standard mortgage lenders don’t offer this program. Additionally, it is important to ensure that the borrowers don’t qualify for a standard USDA loan before they apply for a USDA direct loan.

Generally, the higher the FICO score, the better in any situation. Still, FHA loans are the best bet for people with extremely low credit scores. For FHA loans, you’ll have to have a base FICO score of 580 to qualify for the low down payment advantage of 3.50%. Nonetheless, if the borrower’s FICO score is below 580, they aren’t really excluded from FHA loan qualification. However, they will have to put up a higher down payment.

FHA is your best bet if you’re resolved in getting a home loan and you have a bad FICO score. The loan generally approves individuals with FICO credit score of as low as 580. The score varies with each lender. Thus, their requirements also vary. In effect, FICO scores differ.

The main thing a self-employed worker needs to focus on is providing their income to their lender. In general, lenders like to see at least two years accounts or tax returns.

Say a borrower is a part of a two-salary family unit and wants to get a mortgage together with their spouse. In this case, the borrower will have to qualify for a bigger mortgage. On the flipside, say the spouse isn’t on the loan with the borrower. Then, the lender won’t consider your spouse’s income. In effect, you–the borrower–will have to settle for a smaller, cheaper home.

Delineating the tax return is a reliable way to demonstrate where borrower get his/her income. Another method for showing their income in this scenario is a profit and loss statement. Other methods include the following: bank statements, invoices, credit card and check copies, etc.

DU is an abbreviation used for desktop underwriter and desktop underwriting. It is an automated program used by loan originators to qualify a borrower through Fannie Mae guidelines for a conventional loan. The factors for denial or approval are principally based on income, assets, and FICO credit scores.

The proof needed for a mortgage may include: utility bills, proof of benefits received, P60 form from your employer, the last three months’ payslips, passport or driving license, and/or even bank statements of their current account for the last three to six month.

Yes, it is possible to get a mortgage without saving for a deposit first. However, receiving 100% mortgages are now very rare. Doing so can put your own property or savings at risk if you fail to make your repayments on time.

The costs of buying a home is that your down payment can range from 3.50-20% of the purchase price. The closing costs, on the other hand, range from 2-5% of your purchase price.

The price of getting your home inspected can go anywhere from a low estimate of $350 and a high estimate of $550. Finally, the cash reserves on this cost category can be from a 2 to 6 month payment.

A mortgage lender generally requires a minimum of three months bank statement. They like to see that you do not have any unusual activity on your bank statement in the months before you decide to purchase the home.

There can be situations that you can have a bad credit and no down payments. In these kinds of scenarios, loan specialists bring down their FICO credit score and down payment requirements because of the added security. To qualify for an FHA-backed mortgage, the lender requires a FICO score of no less than 580. However, the least score necessities vary by different lenders.

Conventional Loans

Government agencies, including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA) don’t ensure or safeguard conventional mortgage loans. It is regularly settled in its terms and rate.

An unconventional loan is a non-conforming loan or an FHA loan. It is usually obtained through a bank or private lender. People with lower incomes or less than ideal credit usually get FHA loans. These loans have helped millions of homeowners who may not have over the top credit scores and incomes purchase properties.

Conventional loans may also have lower interest rates than VA loans, jumbo loans, and FHA loans. A conventional loan complies with setting up rules for the measure of the loan and the buyer’s financial situation.

FICO score necessities for conventional home loans fluctuate depending on the lender. However, in the most cases, the minimum credit score for a conventional home loan is 620. Few lenders underwrite mortgages with FICO scores as low as 580. Every lender is different, needless to say. Thus, you can expect lenders to ask different scores from you.

There are loans programs intended to help people with a lower credit score to purchase a home. Federal Housing Administration (FHA) loans have a portion of the least FICO credit score necessities at 580 with a 3.5% down payment.

Credit necessities for an FHA loan are generally low. The down payment requirements are as low as 3.5%, and the assets originate from the vendor. You can get a 3.5% down loan with a low FICO score of 580. You can get financing with an even lower score if you have 10% to put down.

First of all you should address your credit. Your credit score is an important factor in the lending process. Start making a monthly budget with debt-to-income ratio of up to 36% or below. Finally, save for the downpayment and contact a lender such as 3CALoan.

Not everyone meets all the requirements for a zero down payment loan. There may be cases in which you may have the capacity to purchase a house with no cash down. The second choice for a no down payment loan is a USDA advance. The United States Department of Agriculture offers an assortment of these loans with low-interest rates.

The Federal Housing Administration and most states offer these loans at a federal level. FHA first-time homebuyer loans offer limited fees, reduced interest, low down payment, and the possibility of deferring payments.

First-time homebuyer are those who never owned a home. As per the FHA, you are allowed to be a past property holder and still qualify as a first-time homebuyer. The only caveat is that you must be an owner in a primary residence for no less than three years leading up to your purchase.

A $1,000 tax credit saves you $1,000 in taxes. Then again, tax deductions bring down your taxable income. They are equivalent to the level of your marginal tax bracket.

There is no such thing as a refundable down payment. The only time such an idea would exist is if the intended seller and intended buyer has a written agreement.

If you purchase a property, a down payment is money that you put up front. A deposit becomes part of the down payment. However, the deposit is lost if the sale doesn’t close. Down payments ordinarily, run from 5% to 20% of the original value of the property.

 

Conventional mortgage generally requires a minimum down payment of 5% with 10% required. Borrowers who have a credit score 700 or above and a larger down payment then they can finance more than the conforming loan amount $453,100.

Loan size amount up to $453,100 with as little as 5%  down payment. An alternative to the higher-priced FHA loans, the conventional loan allows for getting rid of the PMI after accumulating 20% equity after a minimum of 24 months.

FHA Loans

An FHA loan is a home loan that is safeguarded by the Federal Housing Administration (FHA). Borrowers can certify for an FHA loan with a down payment as little as 3.50%. Also, they have to have a FICO score of 580 or higher. The borrower’s FICO score can be between 500–579 if a 10% down payment is made.

Category: FHA Loans

The minimum amount of FICO score for FHA loans depend upon the sort of loans the borrower needs. To get a home loan with an down payment as low as 3.5 percent, the borrower needs a FICO score of 580 or higher. Those with FICO score in the vicinity of 500 and 579 must make down payment of no less than 10 percent.

Category: FHA Loans

Lenders giving borrowers FHA loans require a mortgage insurance premium or MIP. The MIP lasts as long as the loan’s life, which can be up to 30 years. MIP for an FHA loan is different than a PMI on a conventional loan. The private insurer provides the latter with a private mortgage insurance. Should you have questions about the MIP on your FHA loan, call 3CALoan today!

Category: FHA Loans

The U.S. Government’s Federal Housing Administration guarantees an FHA mortgage loan. FHA loans are designed for low to moderate income home buyers. The lender allows more leniency in terms of credit score requirements and low down payments.

Category: FHA Loans

Foremost, meet with a lender. If you have a low income, you must address your credit to your lender. After all, your credit score is an important factor in the lending process. Next, it is important to establish a monthly budget. It makes sense to have enough to get a loan. Save some money for the down payment too. Also, lenders will generally allow a DTI of 35%.

Category: FHA Loans

You can ask your realtor about a lease to own agreement. Look into an FHA loan, if you’re interested. You may want to first start off by speaking to a lender. They will ask you about your credit score. Thus, you should have an explanation ready for your bad credit. It is generally a good idea to wait until your credit improves before you apply for a mortgage. After you see improvement, find a co-signer for the mortgage.

Category: FHA Loans

An FHA loan is a government-backed home loan with more adaptable lending requirements than those for conventional mortgages. Along these lines, financing rates for FHA home loans might be to some degree higher. Along with their monthly loan payments, the purchaser may need to pay monthly loan insurance premiums too.

Category: FHA Loans

FHA first-time homebuyer loans offer a low down payment, reduced interest, limited fees, and the possibility of deferring payments. The Federal Housing Administration and most states offer these sorts of loans at a federal level.

Category: FHA Loans

First-time buyers have great advantages in these programs. For example, the interested borrower can get a limit to the fees that a lender may charge them, low down payments, and subsidized interest. Lenders ordinarily expect homebuyers to pay a 20% down payment. This can be restrictive for individuals trying to buy their first home.

Category: FHA Loans

If you’re a first time homebuyer, you need to worry about a down payment. Down payments are the percentage of the home value that you should pay at closing. The more you put down, the lower your home loan instalments will be. There are only a few loans that require you to make a down payment of 10%-20%. Different loans intended for first-time home purchasers, for example, an FHA loans, requires a 3.50% down.

Category: FHA Loans

FHA loans allow borrowers to get a mortgage with only a 3.50% down payment. The underwriting requirements to qualify for an FHA loan are less strict than the requirements for conventional loans.

Category: FHA Loans

The original first-time homebuyer tax credit provided buyers with a tax credit of up to $7,500. The tax break subsequently was expanded, with a new credit limit of $8,000 for first-time homebuyers and $6,500 for homeowners seeking to move into another residence.

Category: FHA Loans

In order to buy a house, you’ll have to figure out what you can afford. If you have a low credit score, focus on strengthening this score. Save money in order to make a down payment and pay for closing costs. Overall, it is good to build a healthy savings account. Next, get pre-approved for a mortgage. Finally, buy a house you like!

Category: FHA Loans

You can get a home equity loan without your spouse as a co-borrower. Nonetheless, you can’t get it without their consent. Your spouse must agree to the loan if the property that you both will live in is used as collateral. It doesn’t matter if your spouse’s name is even on the deed if it’s used as collateral.

Category: FHA Loans

It is possible to refinance your home without your spouse. It doesn’t mean your spouse won’t be involved at all. It also doesn’t mean that you can get away with refinancing a home without your spouse knowing. In addition, some states require your spouse’s signature on the loan even if your spouse isn’t the one borrowing.

Category: FHA Loans

Jumbo Loans

A jumbo loan is one way to purchase a high-priced or luxury home. In case you have a lower debt-to-income proportion and a higher credit score, a jumbo loan might be appropriate for you.

Category: Jumbo Loans

A good number of loan specialists offer jumbo home loans currently. It’s true that the requirements are stricter than they used to be. Jumbo home loans are home loans that are more expensive and luxurious than ordinary homes. They exceed the “conforming limit” — the greatest loan amount that Fannie Mae and Freddie Mac will purchase.

Category: Jumbo Loans

The interest rate charged on jumbo home loans is higher than the interest rate on conforming loans. After all, it offers a higher risk to the lender. It can be more costly to refinance a jumbo loan because of the closing costs.

Category: Jumbo Loans

High-balance loans are between $453,100 and $679,650. Conforming loans follow Fannie Mae and Freddie Mac guidelines. They are limited to $424,100 for a single-family home. The loan can be equal to or less than that amount.

Category: Jumbo Loans

Conforming loans differ from jumbo loans. A conforming loan is any loan amount of $453,100 or less. A jumbo loan is any loan higher than $453,100. For the most part, jumbo loans will have marginally higher interest rates than conforming loans.

Category: Jumbo Loans

No, jumbo loans does not require a mortgage insurance. However, lenders do require a smaller down payment. Just last year about 1.9 million of all homebuyers put down less than 20%.

Category: Jumbo Loans

In order to qualify for a jumbo loan, you must make a down payment of at least 20% for a purchase. You must have at least 20% equity in a refinance. The lender requires you to show your income. So, make sure to document that information. It is rarer to get a fixed-rate jumbo loan than an adjustable-rate mortgage.

Category: Jumbo Loans

More often than not, you will not have to pay PMI on jumbo loans. After all, jumbo loans require a higher down payment. PMI is designed for homebuyers making low down payments. In any case, different lenders have different requirements. Thus, it may be possible for a lender to require a PMI in exchange for a lower down payment.

Category: Jumbo Loans

An 80-15-5 loan implies that the borrower got the primary home loan of 80 percent of a home’s purchase price, a piggyback loan for 15 percent, and made a 5-percent down payment. It is possible to have a myriad combination. For instance, it is possible to have a 80-10-10 on a mortgage. In addition, a 80-20 does not include a down payment.

Category: Jumbo Loans

A 30 year jumbo mortgage is repaid for 30 years at a fixed interest rate. For a single-family house the amount $453,100 is the loan limit set by the Fannie Mae and Freddie Mac. However, a jumbo loan exceeds that loan amount.

Category: Jumbo Loans

Manufactured Loans

Manufactured housing is a sort of pre-assembled housing that is generally collected in industrial facilities. It is eventually transported to sites of use.

The structure must be considered real estate. Then, all the protections and guidelines that come with mortgages apply to the property. An FHA loan or a Fannie Mae backed loan is an option for borrowers interested in manufactured homes.

Private lenders make FHA modular and manufactured home loans. The FHA insures against defaults for manufactured home loans. In numerous cases, these loans have lower credit score necessities than conventional loan products.

To qualify for manufactured home loan or an FHA loan, you must make a small down payment. As with any loan, you must demonstrate you have sufficient pay to afford the payments.

Under the Title I program, FHA approves lenders to make loans. If a borrower defaults, FHA insures the lender against a loss. Lenders use their own funds to eligible borrowers to finance the purchase or refinance of manufactured homes.

The Federal Housing Administration (FHA) is a government-backed agency. It provides mortgage assistance to homebuyers using loan-qualifiers than those required by independent mortgage providers. It becomes easier to get financing if your lender and the property are FHA approved.

The structure must be considered real estate. Then, all the protections and guidelines that come with mortgages apply to the property. An FHA loan or a Fannie Mae backed loan is an option for borrowers interested in manufactured homes.

Your mortgage can last from 15-25 years. It can take twenty-five years on a mortgage loan for a multi-section manufactured home and lot. The FHA would like borrowers to know Title I loans are “not Federal Government loans or grants.” Lenders require monthly mortgage installments on these loans.

Permanence distinguishes a modular home from a manufactured home. For instance, modular homes are put on a permanent foundation. Manufactured homes, on the other hand, are built on a steel chassis with wheels attached. This allows the manufactured home to move or get towed.

Since the ‘70s, factories have constructed homes on higher standards. Manufactured homes are cheaper to build and maintain. Hence, they are cheaper to own than site-built homes.

Yes, yes you can move a manufactured home. However, it costs money. The cost depends on the distance of the move. Short distance moves can cost between $1,000–$5,000. Longer trips can cost as much as $15,000 or more. Ultimately, you can determine the cost if you estimate about $5–$10 per mile for your move.

No, manufactured homes don’t last that long. They aren’t built as well as other forms of housing. They are built in a factory environment where building materials are protected from weather damage and vandalism. Thus, they do not last as long as site-built homes.

Professional engineers certify whether the foundation meets FHA requirements. According to them, a permanent foundation that is site built is one that is constructed of durable materials. Durable materials include concrete, treated wood, and mortared masonry. In order to be considered permanent, the footing is reinforced with concrete.

No, you cannot sell a mobile home without a title. Selling a mobile home requires traditional documentation such as a property title since a mobile home is usually a chattel. Still, you need various occupancy certifications because mobile homes are also dwellings.

Yes and no. Unlike other forms of housing, manufactured homes don’t appreciate in value. They do however depreciate in market value. They depreciate in the same way automobiles lose value each day. The community in which the house is located has a similarly significant effect on the home’s future value.

Yes, you can rent a mobile home. Renting a mobile home park is extremely affordable. The normal lease in the U.S. ranges from $200-$300 every month. A new home can affect the rental price. The sum of the mortgage and the lot rent can go up from $700-$1000 per month. Used home rental price can be as low as $300-500 per month.

There are property taxes whether you own the property or not. You can either pay property tax or an annual fee to the DMV.

A wood deck can last about 20-25 years in a dry climate. A good-quality exterior and/or interior paint can have a lifespan of 15 years or more. The rain gutters, exterior wood shutters and the lawn sprinklers are usually built to last about 20 year.

A Lonnie Deal consists of buying a mobile home (MH) in a mobile home park. They rehab the property a little bit to get it in a good condition for people to move in. Finally, the property is resold to a owner occupant looking to buy a mobile home to move into. Ultimately, under a Lonnie Deal, the reseller also finances the purchase of the mobile home.

Yes, mobile homes can be repossessed.It is usually financed with personal property loans. Hence, when borrowers default on personal property loans, loan providers can repossess their homes in the same way cars can be repossessed.

Prefabricated homes are regularly referred to as prefab homes or simply prefabs. They are specialist dwelling sorts of pre-assembled buildings. They are made off-site in advance. Standard sections that can be easily transported and assembled.

VA Loans

Private lenders such as banks, savings and loans, or mortgage companies make VA loans. These loans are made for qualified veterans for personal occupancy. It protects against loss if the owner later fails to repay the loan.

Category: VA Loan

Most members of the military, veterans, reservists and National Guard can qualify for VA loans. Spouses of military members who died while on active duty or as a result of a service-connected disability can also apply. Active-duty members, for the most part, generally qualify after around six months of service.

Category: VA Loan

Most VA moneylenders do utilize FICO credit score benchmarks. Candidates with scores underneath a loan specialist’s benchmark, for the most part, can’t be affirmed for VA financing. The credit score varies from lender to lender. Most VA-approved lenders, including Veterans United Home Loans, look for a FICO credit score of at least 620.

Category: VA Loan

In most places, the FICO Credit Score must be a slightest 620. If you don’t have credit or have credit less than 620, past installment history of a rent, car insurance, and other monthly expenses determine your qualification.

Category: VA Loan

Purchasing a home is a multi-step process. Most VA loans take 40-50 days to close. That is also the standard for the mortgage industry regardless of the type of financing you get.

Category: VA Loan

The normal cost of a 30-year fixed-rate VA loan was 3.97% during October, concurring to Ellie Mae. That’s impressively not as much as the normal 4.25% lenders charged for ordinary home loans and 4.22% for an FHA loan. You won’t have to get mortgage insurance, regardless of how small you put down.

Category: VA Loan

As long as the max entitlement is not exceeded, you can have 2 VA home loans at the same time.

Category: VA Loan

Other Programs

Generally, when borrowers apply for a mortgage, they are required to demonstrate their income through W-2 forms and pay stubs. However, income verification can be troublesome for a few borrowers. These borrowers consist of individuals who are self-employed or who get a commission-based salary.

A USDA home loan is a zero down payment mortgage for suburban homebuyers and qualified rural. The United States Department of Agriculture created the USDA Rural Development Guaranteed Housing Loan Program. The USDA loan program issued USDA loans.

Category: Other Programs

You can qualify for a second mortgage by delineating your income and credit score. In addition, the more equity you have available, the higher are your chances to qualify for a second mortgage.

Category: Other Programs

The great news is that bad credit doesn’t mean you can’t get a loan. You can always find someone who is willing to lend you money. Sometimes you’ll have to pay a higher interest to borrow on a second mortgage if you already have a bad credit. 3CALoan can help you look for a great rate fitting your particular needs.

Category: Other Programs

A HELOC is ordinarily an adjusted-rate mortgage loan. The interest you pay is tax deductible. Most HELOCs are second home loans. While you have already paid off your first mortgage, your home secures a line of credit that you can use.

Category: Other Programs

Taxpayers can deduct the interest paid on first and second home loan to $1,000,000 in mortgage debt. Any interest paid on first or second mortgages over this sum isn’t tax deductible.

Category: Other Programs

Standard home equity loans have considerably low closing costs. You can get these loans if you earn over six figures. As long as you have the equity, standard home equity loans are better for more modest amounts. However, they are second liens. Thus, their rates will be higher than what you would pay on cash-out refinance.

Category: Other Programs

Yes, there are tax benefits to owning a second home. The house is considered a personal residence. Thus, you can deduct mortgage interest and property taxes under the standard second-home rules.

Category: Other Programs

To qualify for a SBA loan, you’ll need an excellent business credit score as well as good personal credit. Like most loans, this depends on the individual lender. It also depends on business factors such as one’s revenue, cash flow and time in business.

Category: Other Programs

Anyone from a local or state building authority to your lender can administer a down payment assistance program. An authority give a set sum of money to you if you qualify. Then, you can utilize the money to cover your down payment or closing cost.

Category: Other Programs

Down payment assistance programs are plentiful and cover a plethora of homebuyers. You don’t even have to be from a low-income household to qualify.

Category: Other Programs

In order to qualify for a down payment assistance, you must meet certain income, credit and debit requirements. Lenders also check your profession and if you are a first-time home buyer.

Category: Other Programs

You are required to pay just 50% of the remaining credit balance. If your spouse is deceased, their half is no longer owed.

Category: Other Programs

A down payment reduces the amount of money you have to borrow for your mortgage. Lenders require you to make a down payment of 5-20% of the original purchasing price. Cash upfront reduces the money you have to borrow. In other words, you’ll have to pay a lower monthly payment.

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One late payment can significantly affect your FICO score especially high credit scores. According to the FICO data, a 30-day delinquency can shoot your score down 90-110 points if you have a 780 FICO score. This example applies to a consumer who has never missed a payment on paying their FICO scores.

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Borrowers can use any equity they have in their home as security against another loan which is allowed by the second charge mortgage. It indicates you will have two mortgages on your home. Equity is the percentage of your property owned outright by you, which is the value of the home minus any mortgage owed on it.

Category: Other Programs

If you have a FICO credit score of 725 or 750, you can qualify for a conventional loan on a second home. However, it also depends on your lender. If you are trying to limit your down payment to 20% your monthly debt-to-income ratio needs to be strong.

Category: Other Programs

Overall, lenders under second mortgages take more risk than your lenders on your first loan. Whenever you borrow, you are essentially paying interest. Second mortgage rates are often slightly higher than your first loan’s rate. However, they are usually lower than your credit card interest rates.

Category: Other Programs

Bad credit doesn’t mean that you can’t get a loan. There is always someone who is willing to give you the loan. If you are borrowing a second mortgage with bad credit you just need to pay higher interest. 3CALoan will find a good lender who will help you get the best rate you qualify for in your particular circumstances.

Category: Other Programs

Second mortgages are known as No Equity Home Loans. They allow you to borrow up to 125% of the equity in your home. So say your home is worth $200,000. You already owe $200,000 on the first mortgage. Hence, you can still borrow up to $50,000.

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For a second mortgage, you double your responsibilities. After all, it adds to your monthly bills. You have to be realistic about your budget. You need to find out what your FICO credit score is. From there you can determine the kind of second mortgage you are interested in. Determine how much equity you have in your home. Finally, get your home appraised.

Category: Other Programs

Yes, you can take out two mortgages at once. However, for that, you should have enough income to carry two mortgage payments at once. You still must check if you meet the debt-to-income ratios required by the lender. Your credit score and job status also need to be strong.

Category: Other Programs

Home equity loans are second liens that are good for more modest amounts. However, their rates are higher than what you would pay on a cash-out refinance. Overall, their closing costs are significantly lower.

Category: Other Programs

Amount of available equity you have in your home plays an important role if you’re talking about a home equity line of credit. Your home equity is the difference between your current mortgage balance and the appraised value of your home.

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Home equity is the difference between your current mortgage balance and the property value. For example, Jack and Cathy own a house that’s currently worth $150,000. Their first mortgage balance is $63,500 and they have a home line of credit with a balance of $15,000.

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The highest combined home loan amount you’ll get for your home is around 90% of your house’s value. For example, if your house is worth 200 thousand dollars, 160 thousand dollars would be your first mortgage, and your second mortgage could be 20 thousand dollars.

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Credit union loans ordinarily come with low fees and rates. This implies a lower overall cost of borrowing. Hence, it might be easier to get approved for a loan at a credit union.

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Yes, it is possible to combine the mortgages from two properties into one mortgage. The only thing you have to worry about is having sufficient equity to support the balance of two mortgages on a single property. The new loan would be considered a cash-out refinance with stricter lending guidelines. It is also likely to have a higher interest rate.

Category: Other Programs

Yes, there is a way you can take out a home equity loan to purchase another home. The value is monetized through a home equity loan, home equity line of credit, or a cash-out refinance. You would pretty much take out a new loan with a higher balance that pays off your existing mortgage. You would then use the existing balance to purchase another home.

Category: Other Programs

APR stands for the annual percentage rate. It is primarily the cost to you of borrowing money expressed as a percentage rate. Generally, APR effects not only the mortgage broker fees but also any points, interest rate, and other charges that the borrower needs to pay to get the loan.  

Category: Other Programs

On an annual basis, only 0.5% to 1% of the entire loan amount is charged by private mortgage insurance. For example, say you take a loan of $200,000. You could be paying as much as $2,000 a year or $166.66 per month, assuming there’s a 1% PMI fee.

Category: Other Programs

If you have at least 20% equity in the home, then you can avoid the private mortgage insurance. When you have paid down the mortgage balance to 80% of the home’s original appraised value, then you can ask the lender to cancel mortgage insurance.

Category: Other Programs

There aren’t necessarily any benefits of a mortgage insurance for you. Overall, it only benefits the lender. If your down payment is 20%, then there is no need to pay mortgage insurance. Ultimately, it reduces the amount a lender loses in case the borrower don’t repay their mortgage.

Category: Other Programs

Under a USDA loan, the lender can only fund an owner-occupied primary residences. One must be a U.S. citizen or have a permanent residency in the country. This loan also includes a monthly payment consisting of principal, interest, taxes, and at times insurance.

Category: Other Programs

There are no loan limits as with VA or FHA loans which is set by USDA. The USDA bases the maximum loan amount on the ability of a borrower to qualify.

Category: Other Programs

Fannie Mae and Freddie Mac provide banks and other financial institutions with fresh money to make new loans. These two companies pretty much purchase the mortgages.

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Subprime mortgage loans are offered to prospective buyers with impaired credit records. A higher interest rate is charged to compensate the lender for accepting the greater risk in lending to such borrowers. Subprime mortgage is often called adjustable rate mortgage.

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Subprime loans are made for a buyer who doesn’t have a credit history. They offer less favorable terms for the borrower than a prime loan. Subprime loans generally charge more than the prime mortgage as they carry more risk to lenders.

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Depending on the situation, if the interest rate rises then in fixed loan the interest rate will stay the same. The variable loan, on the other hand, will increase. Thus, in this situation, it is better to have fixed loan. If the interest rate falls, then the fixed loan’s interest rate stays the same. The rate for the variable loan decreases however. In that situation, it is better to have a variable loan.

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The advantages of a fixed-rate loan are that the borrower won’t be affected by a sudden increase in interest rates. Furthermore, fixed rate mortgages are easier to understand. They vary little from lender to lender.

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Under equitable mortgages, the lender is allowed to take all the original documents of the borrower’s property. Thus, in case of nonpayment, the lender can sell it, foreclose the property, or appoint a receiver.

Category: Other Programs

DU is an issuance of an approval or close. It funds a loan. It is used under Fannie Mae. LP is used for Freddie Mac loans while submitting a file for underwriting. It allows credit issues with compensating factors or a higher DTI.

Category: Other Programs

Loans with no income, no jobs, and no assets appropriately spell out NINJA loans. NINJA loans ignore the verification process. The verification process requires the borrower to show a stable stream of income or sufficient collateral.

Portfolio loans are pretty much what they sound like. A lender who loans money to a borrower and keeps the debt on their portfolio to earn consistent interest on the loan is a portfolio loan. Furthermore, it’s not sold to other lenders.

NINA stands for no income, no asset. It is a term used to depict one of the document types lenders allow when they underwrite a mortgage. Under such conditions, the loan in question refers to a NINA loan.

It might be easier to get approval for a loan from a credit union. These loans come with low rates and fees. In other words, you’ll only have to worry about a lower overall cost of borrowing. At the end of the day, loans from credit unions are the most competitive loans available.

Category: Other Programs

Stated income loans are synonymous to liar loans. Due to SISA or NINA, it opens doors for abuse if a borrower, mortgage broker, or loan officer overstate their income or assets. It helps them qualify the borrower for a larger mortgage.

A shared appreciation mortgage is different from other mortgages. When the property increases in value or appreciates, the lender agrees to accept some or all payments in the form of a share.

A wrap mortgage enables a borrower who is paying off an existing mortgage to obtain more financing from a second lender or even a seller. The new lender provides the borrower with a larger new loan. This usually consists of a higher interest rate.

GPM stands for a graduated mortgage loan. In this type of loan, the borrower has low initial monthly payments. The payments gradually increase over the mortgage’s life, however.

A pledged account mortgage is a type of a mortgage loan. The mortgage loan is supplemented through funds drawn from a savings account, the interest income, or pledged as an additional collateral.

Debt consolidation is a debt refinancing of sorts. The borrower gets a new loan to pay out a number of small loans, credit cards, personal loans or any other bill that they are currently making payments on. This, in turn, brings all these payments together into one combined bill that is paid off with a loan.

Yes, it may be a good decision for someone who is hopelessly drowning in debt. The homebuyer knows that he or she can’t negotiate any lower interest rates with his or her credit card companies for using this loan. It may be a great idea so you can be debt-free by paying it all off through a single loan.

Category: Other Programs

A “piggyback” second home loan is a home equity loan (HELOC) or home value line of credit (HELOC). The borrower gets this loan while they have their main home loan. A piggyback mortgage allows a borrower with a low down payment savings to borrow even more money. It helps them qualify for a main mortgage without having to worry about paying for a private mortgage insurance.

The two most well known GSEs are the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac.

A stand-alone second home loan is an extra loan taken out against your house when you already have a first home loan.

A lender provides a transaction comprising of two different loans for the same borrower. The first loan finances the construction of a new home. After constructing, a second loan repays the same loan. This eventually turns out to be the permanent mortgage on the home.

A bridge loan is a short-term financing tool that helps purchasers to “bridge” the gap between old and new mortgages. It allows them to tap the equity in their current residence as a down payment. Essentially they are owning two properties in tandem. They are merely awaiting for the sale of their existing home to close.

Mortgages on commercial properties rather than residential real estate secure commercial mortgage-backed securities (CMBS). A CMBS provides liquidity to real estate investors and commercial lenders.

Say you’re looking to purchase heavy machinery/equipment or a small business commercial real estate loan. The SBA 504 loan is your best bet. On the other hand, if purchasing a business or getting working capital is the goal, the SBA 7A loan is the better tool.

Commercial lending is a process enabling a business entity to activate and subsequently obtain a finance stream. It helps companies fund short-term expenditures or pay for capital equipment. In most instances, hard collaterals back commercial loans through loan deliveries.

In marketing and sales, marketing collateral is considered the collection of media used to support the sales of a product or service.

A commercial and industrial loan (C&I loan) loans to a business rather than an individual consumer. The business requesting the loan owns the collateral. In effect, collaterals secure short-term loans that have an interest rate based on the LIBOR rate or prime rate.

A gap mortgage is a temporary loan. Generally, it is used during the final period of loans taken out to develop a property and the start of the permanent mortgage loan. A gap mortgage covers the transition period between the sale of a previous home and the purchase of a new home.

A CMBS Loan is also known as Conduit Loan. First-position mortgage on a commercial property secures this type of commercial real estate loan. Essentially, Conduit lenders, commercial banks, investment banks, or syndicates of banks package and sell these loans.

A hybrid mortgage, as its name suggests, combines the features of both adjusted-rate mortgage and fixed-rate mortgage. It starts off like a fixed-rate mortgage. It has a stable interest rate for up to ten years. After that period, the rate converts to an ARM. In other words, the rates are adjusted every year for the remaining life of the loan.

A hope loan prevents qualified homeowners from defaulting on their loans. Thus, it helps them avert foreclosure. The loan partly consists of federal loan guarantees and credit enhancements that helps people avoid defaulting.

Portfolio loans are serviced through a lender that issues the money. They are packaged together with other loans and sold in the secondary market.

If you have two mortgages against your house, then the second mortgage which you have taken is known as stand alone second mortgage.

When you wish to remodel your home, you would take a construction, renovation, or a home improvement loan. It entails refinancing with a mortgage that reflects the house’s estimated value post-remodel. Majority of the time, these mortgages cover 80-85% of the home’s remodeling value.

Loans used to finance the purchase of more than one piece of real property are known as blanket loans. These loans are popular among the developers and builders who purchase a large piece of land. They then subdivide them to create individual houses to be gradually sold one at a time.

In this loan, the borrower takes a loan for the movable personal property from the lender. The chattel mortgage loan is also abbreviated as CM, which is the legal term for a type of loan contract used in some states.

The real estate as a whole includes the personal property and furniture in the purchase price of the house. This whole real estate package is what makes up a package mortgage loan. The borrower can’t sell there any personal property without the approval of the lender. In other words, it is used as a collateral.

Under this loan, a borrower can increase the amount of loan at a later time. Open-end mortgages allow borrowers to borrow more money from the lender in case certain conditions have been met.

Non-conforming loans are for a residential mortgages that don’t conform to the loan purchasing rules of Fannie Mae and Freddie Mac.

A residential mortgage loan is a loan that a person receives to buy a house in which they live. A lien on the property protects the lender against a possible default. The interest on the residential mortgage that the borrower accrues is tax deductible majority of the time.

The United States Department of Agriculture is abbreviated as USDA.

The interest rate at which a bank lends to the borrower is known as a prime loan. Generally, the borrower has to have a good credit score as is true with any loan.

Making loans to people who have difficulty in maintaining the repayment schedule is known as subprime loan. It also known as a non-prime, near-prime, and second chance lending.

Definitions

Real property secures hard money loans. Hard money loans are specific types of asset-based loan financing. Private investors or companies usually issue these loans.

Category: Definitions

Private investors or companies issue hard money loans. This type of loan is a specific type of asset-based loan financing. Real property secures the funds the borrower receives.

Category: Definitions

PMI stands for Private Mortgage Insurance.

Category: Definitions

Down payment and closing cost assistance grant, up to 5% of the loan amount. You never have to worry about repaying the grant amount you get. Also, the program isn’t limited to first-time homebuyers.

Category: Definitions

Loans which have low or soft interest rate are known as soft money loans. They are akin to hard money loans. Borrowers interested in soft money loans enjoy the ease in obtaining the loan.

Category: Definitions

If a borrower pays down payment less than 20% in FHA loans, then the borrower is required to get an insurance policy which is known as Mortgage Insurance Premium or MIP. FHA loans require an upfront fee at the time of closing. An annual MIP is calculated every year and paid in twelve installments.

Category: Definitions

Loans with no income, no jobs, and no assets appropriately spell out NINJA loans. NINJA loans ignore the verification process. The verification process requires the borrower to show a stable stream of income or sufficient collateral.

Portfolio loans are pretty much what they sound like. A lender who loans money to a borrower and keeps the debt on their portfolio to earn consistent interest on the loan is a portfolio loan. Furthermore, it’s not sold to other lenders.

NINA stands for no income, no asset. It is a term used to depict one of the document types lenders allow when they underwrite a mortgage. Under such conditions, the loan in question refers to a NINA loan.

Stated income loans are synonymous to liar loans. Due to SISA or NINA, it opens doors for abuse if a borrower, mortgage broker, or loan officer overstate their income or assets. It helps them qualify the borrower for a larger mortgage.

A shared appreciation mortgage is different from other mortgages. When the property increases in value or appreciates, the lender agrees to accept some or all payments in the form of a share.

A wrap mortgage enables a borrower who is paying off an existing mortgage to obtain more financing from a second lender or even a seller. The new lender provides the borrower with a larger new loan. This usually consists of a higher interest rate.

GPM stands for a graduated mortgage loan. In this type of loan, the borrower has low initial monthly payments. The payments gradually increase over the mortgage’s life, however.

A pledged account mortgage is a type of a mortgage loan. The mortgage loan is supplemented through funds drawn from a savings account, the interest income, or pledged as an additional collateral.

Debt consolidation is a debt refinancing of sorts. The borrower gets a new loan to pay out a number of small loans, credit cards, personal loans or any other bill that they are currently making payments on. This, in turn, brings all these payments together into one combined bill that is paid off with a loan.

A “piggyback” second home loan is a home equity loan (HELOC) or home value line of credit (HELOC). The borrower gets this loan while they have their main home loan. A piggyback mortgage allows a borrower with a low down payment savings to borrow even more money. It helps them qualify for a main mortgage without having to worry about paying for a private mortgage insurance.

The two most well known GSEs are the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac.

A stand-alone second home loan is an extra loan taken out against your house when you already have a first home loan.

A lender provides a transaction comprising of two different loans for the same borrower. The first loan finances the construction of a new home. After constructing, a second loan repays the same loan. This eventually turns out to be the permanent mortgage on the home.

A bridge loan is a short-term financing tool that helps purchasers to “bridge” the gap between old and new mortgages. It allows them to tap the equity in their current residence as a down payment. Essentially they are owning two properties in tandem. They are merely awaiting for the sale of their existing home to close.

Mortgages on commercial properties rather than residential real estate secure commercial mortgage-backed securities (CMBS). A CMBS provides liquidity to real estate investors and commercial lenders.

Say you’re looking to purchase heavy machinery/equipment or a small business commercial real estate loan. The SBA 504 loan is your best bet. On the other hand, if purchasing a business or getting working capital is the goal, the SBA 7A loan is the better tool.

Commercial lending is a process enabling a business entity to activate and subsequently obtain a finance stream. It helps companies fund short-term expenditures or pay for capital equipment. In most instances, hard collaterals back commercial loans through loan deliveries.

In marketing and sales, marketing collateral is considered the collection of media used to support the sales of a product or service.

A commercial and industrial loan (C&I loan) loans to a business rather than an individual consumer. The business requesting the loan owns the collateral. In effect, collaterals secure short-term loans that have an interest rate based on the LIBOR rate or prime rate.

A gap mortgage is a temporary loan. Generally, it is used during the final period of loans taken out to develop a property and the start of the permanent mortgage loan. A gap mortgage covers the transition period between the sale of a previous home and the purchase of a new home.

A CMBS Loan is also known as Conduit Loan. First-position mortgage on a commercial property secures this type of commercial real estate loan. Essentially, Conduit lenders, commercial banks, investment banks, or syndicates of banks package and sell these loans.

A hybrid mortgage, as its name suggests, combines the features of both adjusted-rate mortgage and fixed-rate mortgage. It starts off like a fixed-rate mortgage. It has a stable interest rate for up to ten years. After that period, the rate converts to an ARM. In other words, the rates are adjusted every year for the remaining life of the loan.

A hope loan prevents qualified homeowners from defaulting on their loans. Thus, it helps them avert foreclosure. The loan partly consists of federal loan guarantees and credit enhancements that helps people avoid defaulting.

Portfolio loans are serviced through a lender that issues the money. They are packaged together with other loans and sold in the secondary market.

If you have two mortgages against your house, then the second mortgage which you have taken is known as stand alone second mortgage.

When you wish to remodel your home, you would take a construction, renovation, or a home improvement loan. It entails refinancing with a mortgage that reflects the house’s estimated value post-remodel. Majority of the time, these mortgages cover 80-85% of the home’s remodeling value.

Loans used to finance the purchase of more than one piece of real property are known as blanket loans. These loans are popular among the developers and builders who purchase a large piece of land. They then subdivide them to create individual houses to be gradually sold one at a time.

In this loan, the borrower takes a loan for the movable personal property from the lender. The chattel mortgage loan is also abbreviated as CM, which is the legal term for a type of loan contract used in some states.

The real estate as a whole includes the personal property and furniture in the purchase price of the house. This whole real estate package is what makes up a package mortgage loan. The borrower can’t sell there any personal property without the approval of the lender. In other words, it is used as a collateral.

Under this loan, a borrower can increase the amount of loan at a later time. Open-end mortgages allow borrowers to borrow more money from the lender in case certain conditions have been met.

Non-conforming loans are for a residential mortgages that don’t conform to the loan purchasing rules of Fannie Mae and Freddie Mac.

A residential mortgage loan is a loan that a person receives to buy a house in which they live. A lien on the property protects the lender against a possible default. The interest on the residential mortgage that the borrower accrues is tax deductible majority of the time.

The United States Department of Agriculture is abbreviated as USDA.

The interest rate at which a bank lends to the borrower is known as a prime loan. Generally, the borrower has to have a good credit score as is true with any loan.

Making loans to people who have difficulty in maintaining the repayment schedule is known as subprime loan. It also known as a non-prime, near-prime, and second chance lending.