Equity is simply the value of the home minus any outstanding mortgages against the property. For example, if a home’s current appraised value is $100,000 and the existing mortgage balance is $70,000, this means that the home owner has $30,000 or 30% equity in the home. Since many home equity loans are for amounts up [...]
A smaller down payment is certainly a variable to consider when securing a home loan. The first consideration is to make sure the loan qualifies with the down payment amount used in the mortgage calculator. As long as the lower down payment still qualifies the borrower for a loan the next consideration is the cost [...]
PMI, private mortgage insurance or simply mortgage insurance, is normally required on conforming loans with less than a 20% down payment. PMI was typically paid with annual premium added to the loan at the closing and monthly payments included with the principal, interest, taxes and homeowners insurance. The market for PMI slowly gravitated towards a [...]
Borrowed funds that are not borrowed against some form of existing equity or savings of the borrower are unacceptable sources. Cash advances, loans from family members or personal loans would all be disallowed as sources for the down payment. Cash on hand which is sometimes referred to as mattress money is also a problem. If [...]
After running the mortgage qualification calculator you should be able to identify which of the payments in the calculator are not related to the monthly mortgage payment. Look at these debts to see which ones may be the easiest to be reduced. The easiest payment reduction process would be to payoff one of the debts, [...]
As you may have already concluded, there is no free lunch in the mortgage industry. No closing costs loans are a feature offered by lenders where the loan will have a higher rate than a comparable loan in which the borrower pays the closing costs. The benefit is less money is used to close the [...]
Loan locks are generally an option, not a requirement unless the loan transaction is ready to be completed. Loan locks are a form of rate guarantee by the mortgage lender. If the loan is not locked the interest rate on that loan can change with market interest rates anytime up until the loan closing. In [...]
Mortgage lending guidelines allow borrowing against a borrowers existing assets as acceptable funds for a down payment. A loan from your 401K is acceptable as is a home equity loan on one property to extract equity for a down payment on another or even a title loan against a car can be used as funds [...]
Down payments will be determined by the loan type and loan amount. The down payment generally has a minimum amount, for example a standard conforming loan requires a 5% down payment. Any amount over that is considered a strong factor for the borrowers as is reflects a strong propensity to save. FHA loans are often [...]
There are certain factors in the loan approval process that are hard to rise above, then there are factors that can be over come by compensating positive factors. Poor credit is generally an issue that is hard to overcome. However, FHA loans are available for borrowers who have less than perfect credit but otherwise meet [...]