mortgage approval: Shopping Mortgage Rates
- 04/28/23 07:04 PM
Nobel Prize recipient, Richard Thaler, in his research into seemingly irrational economic behaviors, "found that consumers generally search too little, get confused while evaluating complex alternatives, and are slow to switch from past choices, even if it costs them." "Why are consumers leaving money on the table?" Based on this behavior, a borrower securing a mortgage might depend on their existing banking relationship or a single referral from a friend or agent rather than shopping multiple lenders. When shopping for a lower mortgage rate, consider that not all lenders share the same business practices. Some may lure unsuspecting borrowers to a rate, … (3 comments)
mortgage approval: A New Opportunity for Homebuyers
- 04/11/22 07:30 PM
You may not have heard of anyone assuming an existing mortgage for over thirty years and didn't know they were even possible any longer. The reason is simple, it didn't make financial sense but now that interest rates are increasing, it may be an opportunity for some homebuyers. Conventional loans added clauses to mortgages back in the early 80's that gave the noteholder the right to raise the interest rate if a loan was assumed, as well as require the new buyer to qualify for the loan. This essentially ended the practice of assuming conventional mortgages. Then, in the late 80's, FHA … (1 comments)
mortgage approval: I Wish I Knew Then...
- 01/25/22 07:34 PM
We have all heard this expression that implies that had a person known earlier in life what they know now, they would have done things differently. The subject possibilities are endless While no one has a crystal ball to see into the future, it may be possible to learn from people who have experienced similar situations. In the late sixties, mortgage rates hit 8.5% but before the decade had finished, the rates had come down to 7% where they stayed for some time. Homeowners who purchased at the higher rate, could buy a larger, more expensive home for the same payment if they could … (4 comments)
mortgage approval: Credit Score and the Mortgage
- 06/21/21 04:04 PM
Credit plays a huge role in getting a mortgage because it is a variable that helps the lender determine the likelihood that the loan will be repaid on a timely basis. Credit bureaus evaluate people's credit worthiness using a FICO score. The higher the score the better the borrower's credit. The mortgage rate charged to a borrower depends on their credit score. There is an inverse relationship between credit score and interest rate changed. The higher the score the lower the rate and the lower the score, the higher the rate. Two separate buyers with the same income, purchasing the same price home may both be approved … (0 comments)
mortgage approval: What's the Difference in Pre-Qualification and Pre-Approval?
- 11/12/19 06:37 PM
What's the Difference in Pre-Qualification and Pre-Approval?11/13/2019 Before looking for a home, you need to know how much you can afford. While you may have a number in your head, the lender has the final say. Securing a pre-approval from a lender helps make the home buying process easier and helps to avoid delays. Many buyers confuse the terms pre-qualification and pre-approval. They mean two different things. In simple terms, a pre-qualification is an estimate of what you can afford. A pre-approval is a conditional approval based on the proof you provide. The pre-qualification is a preliminary step some borrowers … (0 comments)
mortgage approval: Bi-Weekly is a Weak Choice
- 08/05/19 08:13 PM
Making additional principal contributions to your mortgage will save interest, build equity and shorten the term on a fixed-rate mortgage. The concept is sound but bi-weekly may not be the best way to do it. One strategy is to make a payment every two weeks throughout the year in the amount of half of your required principal and interest payment. Twenty-six half payments would equal thirteen full payments which would be one extra full payment per year applied to the principal. The practical problem with this approach is that lenders may not accept partial payments throughout the year. This means that you'd have … (0 comments)
mortgage approval: Will Points Make a Difference
- 03/14/19 04:52 PM
Will Points Make a Difference Lenders typically quote mortgages at a market rate but can offer a lower interest rate loan if the borrower is willing to pay points up-front which is considered pre-paid interest. These points are generally tax deductible for the year paid when the borrower pays them in connection with buying, building or improving their principal residence. A point is one-percent of the mortgage amount. A lender will quote a lower-rate mortgage with a certain number of points. There is not a standard amount; it is an individual company policy. A simple comparison of the two alternatives based on the borrower's … (0 comments)
mortgage approval: Another Type of Financing Concession
- 12/17/18 07:39 PM
Another Type of Financing Concession Price, condition and terms are factors that any owner must consider when marketing their home. Price is usually the easiest to adjust to compensate for shortcomings in location or condition of the home. Improving the condition of the property is more time consuming but updates to kitchens, baths and other things can appeal to a buyer. One of the most overlooked marketing factors are terms which are also referred to as financing concessions. Paying part or all a buyer's closing costs is the most common financing concession. By doing so, the buyer doesn't need as much cash to get … (2 comments)
mortgage approval: Waiting Period After Distressed Sale
- 04/17/18 06:06 PM
"How long do we have to wait to qualify for another mortgage" is the question concerning people who've had a foreclosure, short sale or bankruptcy. The loan types for the new loan will differ in amounts of time to heal credit scores based on the event. The following chart is meant to be a general guide for how long a person might have to wait. During this waiting period, it's important that the person be current on all payments and maintains a history of good credit. A recommended lender can give you specific information regarding your individual situation and can make suggestions that … (1 comments)
mortgage approval: Indecision is Not a Decision
- 10/22/17 06:50 PM
There could be some legitimate reasons for not buying a home but indecision is not one of them. Indecision is rooted in not having enough information to move forward to own a home or continue renting. If you keep renting, at the end of the year, you have had a place to live and a pile of receipts that helped the landlord pay for his house. Deciding to buy a home will give you a place to live that is yours and all the things that come with that. When you consider principal reduction, appreciation and tax savings, your monthly cost of housing … (3 comments)
mortgage approval: Good Info - Good Decisions
- 05/22/17 05:53 PM
While low inventory is certainly challenging buyers, not having a clear understanding of mortgage financing is also causing issues. By having good information, they are able to make better decisions as well as compete favorably. Most buyers don’t realize how the mortgage rate is determined for a borrower. While annual income is important, a good credit score, low debt-to-income ratio, loan-to-value ratio and ability to repay the loan are vital concerns. A variety of myths seem to permeate the market such as rates are set and released once a day; FHA loans are for first-time buyers only; pre-qualification commits the lender; lender fees … (5 comments)
mortgage approval: It Isn't Final Until It's Funded
- 12/04/16 02:23 PM
Mortgage approval isn’t final until it’s funded. Things can change prior to the loan being closed that can affect a pre-approval such as changes in the borrowers’ financial situation or possibly, factors beyond their control like interest rate changes. Good advice to buyers is to do nothing that can affect your credit report until the loan closes. Opening new credit cards, taking on new debt for a car or furniture or changing jobs could affect the lender’s decision if they believe you may no longer be able to repay the loan. The benefits of buyer’s pre-approval are definitive: it saves time, money and … (3 comments)
Nobel Prize recipient, Richard Thaler, in his research into seemingly irrational economic behaviors, "found that consumers generally search too little, get confused while evaluating complex alternatives, and are slow to switch from past choices, even if it costs them." "Why are consumers leaving money on the table?"
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