Fannie Mae And Freddie Mac Mortgage Loans – Conforming Loans Provide Low Interest Rates

Loans photoConforming loans provide low interest rates since they are almost guaranteed to be purchased by Fannie Mae or Freddie Mac, which allows more funds to be available for borrowers. However, these corporations have terms, such as maximum loan, that limit how much you can borrow. If you don’t meet their standards,You will need to apply for a non-conventional loan with slightly higher interest rates.

Loan Purchasers

Fannie Mae and Freddie Mac are stockholder owned companies that purchase mortgages, package them into securities, and then resells them to investors. This allows banks and other financing companies to lend to more customers since their capital is not tied up in long-term loans.

Fannie Mae and Freddie Mac have strict requirements for purchasing loans. Basically, they want to lower their risk level so they put a cap on loan amounts, credit score, income level, and down payment.

Conforming Loan Amounts

each year Fannie Mae and Freddie Mac create new guidelines for loan amounts. In 2005, a mortgage limit for a single-family dwelling is $359,650. Limits for multiple family dwelling are extremely higher, roughly an additional $100,000 per family. Maximum loan amounts are also 50% higher in Alaska, Guam, Hawaii, and the Virgin Islands since property prices are higher.

Second mortgages also have their limit. In 2005 the limit was $179,825, but the total mortgaged amount of both loans could not exceed $359,650. As with first mortgages, second mortgages can also be 50% higher in designated areas.

Non-Conforming Loans

There are other loan options if you don’t qualify for a conforming loan. If you need to borrow more than the maximum conforming loan amount, then you will want to apply for a huge loan. Because these types of loans are handled on a smaller scale, their rates are slightly higher than a conforming loan.

If you have poor credit or little down payment, you can use a subprime lender who specialized in lending to B/C type loans. You can expect to pay higher rates with these lenders, but many offer favorable terms. To find the best deal and to avoid scams, you must research your lender. Compare rates and terms until you find a perfect financing package.

Factors Of Mortgage Approval

Mortgage photoWhen applying for a mortgage, the lender you have chosen
will take many factors into account. These factors not only
influence what type of loans you can qualify for but also
what your monthly payments will be and how many years you
will take to pay the loan off completely.

Being familiar with these factors and doing what you can to improve
them all can make a significant difference when you go and
see your lender and begin the process that will get you
your new property.

Some of the basic factors apply for just about any loan but
are especially important if you are trying to get a
mortgage. The big one is, Yes, credit.

How good is your credit? Get copies of all of your credit
reports from the 3 major consumer reporting companies and
check each one for errors.

Many times they have errors that can be corrected in just a
few weeks and that helps boost your score. If you have
credit cards, pay them off as well as any other outstanding
bills.

A nice big down payment will always improve your chances
of being approved. If your credit isn’t completely bad, the bigger the down payment, the more likely you
will get improved.

If your credit is great, you can still put down as much as
possible to lower the monthly payments or decrease the
total loan time.

Above all else, don’t lie to your lender. If you tell them
you are a supervisor of a power plant and they find out you
are a UPS man who has only had the job for 6 months, you
will be totally denied. Be honest and your lender will do
their best to work with you.

 

Do You Have Bad Credit? But Still Need a Mortgage

Credit photoIf you are looking to buy a house or trying to refinance the one you are currently living in, but believe this may not be a possibility for you because you have bad credit, think again.

Just because you have bad credit does not mean you will not be able to get a mortgage. In fact there are several lenders out there across the United States that are known as wholesale lenders that specializes in lending money to people with bad credit.

The names of these wholesale lenders may not ring familiar to you because they are not the usual lending institutions you see on the street corners of your town, otherwise know as banks.

The first thing you will need to do is locate a few of these wholesale lenders and shop around for a deal you believe to be fair. If you do not have success finding these lenders on your own, you may want to consider using a broker and have them shop around for you.

A broker is not a lender. What they do is assess your situation, and then look for a lender or Bank that deals with bad credit.

Brokers have connection to hundreds of banks and lenders across the country and they can usually find one that has a program that may fit your needs.

Using a broker may not be such a bad idea, they are usually very experienced in their field and will not only find a bad credit mortgage lender for you, they will also council and educate you along the way.

Keep in mind, just because your credit may be less than perfect, does not mean that you are at the mercy of the mortgage companies, you are not.

Mortgage companies are very competitive, especially among the wholesale lenders, so be sure to shop around. Don’t limit yourself to contacting only one broker, say no more than four. Allow for each to assess your situation, and base your decision from on the rate and program that they offer you. Good luck and Happy Hunting!

 

How Do You Pick A Mortgage Broker

Mortgage photoThere are literally hundreds of mortgage brokers out there today. Multiply that by the number that you can find on the web. And you will be sure to spend many long hours in front of your computer scanning through them. So, with all the hits that you will get when you search for ‘mortgage brokers‘ online, How do you pick one that is right for you? And how will you know if it is a good company to work with? Here are some ideas to help you out:

There are literally hundreds of mortgage brokers out there today. Multiply that by the number that you can find on the Internet, and you will be sure to spend many long hours in front of your computer sifting through them. So, with all the hits that you will get when you search for ‘mortgage brokers‘ online, how do you pick one that is right for you? And how will you know if it is a good company to work with? Here are some tips to help you out:

1. When searching, try to narrow down your search as much as possible. If you are looking for a 30-year, fixed rate, second mortgage for example, put that in the search. This will help you to sort out those companies who do not offer the service that you need. You will immediately get results of companies who do these kinds of loans and mortgages, so you can start at a smaller place than getting swamped with millions of hits.

2. When looking through the company’s site, go to the ‘about us’ page first. While you might be tempted to look at their services and such, find out about the company before you fill out any forms or offer up any personal information. Some online companies aren’t allowed to provide mortgages for certain states, or they might not be a real company at all, so you are better to find out about them before you give out personal information to someone.

3. While filling out the form, make sure that you check the box or fill in the line that requests a broker to contact you. This will help you to get a one-on-one, personalized service and allow you to ask questions that aren’t on the form or find out information that wasn’t covered on their site.

4. When talking to the broker, make sure to ask every question that you can think of so you are completely comfortable with the broker and the company. If you feel the least bit apprehensive, you should move on to another company.

Basically, just remember to trust your gut feelings when dealing with a mortgage broker. There are so many out there that are great companies, and it really doesn’t take much to find one, you just need to do a little searching to find one online. So,turn on computer, grab a coke, and start typing away. You’ll be able to come up with a list of companies that you are completely comfortable with and have that new mortgage secured in no time!

Facing a serious Increase in Your Mortgage Payment? It should be the right time to finance

Mortgage photoFacing a serious Increase in Your Mortgage Payment? It should be the time to refinance. Many people face increasing mortgage payments within the months and years ahead owing to modifiable rate mortgages (ARM) that ar starting to adjust. for a few individuals, their average payment will jump the maximum amount as 100 percent — from $600 per month to over $1,200 a month.

Many people face increasing mortgage payments within the months and years ahead owing to modifiable rate mortgages (ARM) that are starting to adjust. for a few individuals, their average payment will jump the maximum amount as 100 percent — from $600 per month to over $1,200 a month. sadly, it will typically be arduous to argue with these uncontrollable jumps in monthly mortgage payments. If you discover yourself during this scenario it should be time to require a heavy check out refinancing your mortgage to confirm that you simply ar able to keep the house you’re in while not having to stress concerning increasing payments.

No doubt, for a few people often those who plan to live in the house they are in for five years or less, adjustable rate mortgages can be beneficial. Payments are often lower up front for the first few years and then adjust later in the life of the loan. Unfortunately, some people decide they want to stay in their house for longer periods of time, or they may be facing a tough market where they just cannot sell their home. For these people, ARM’s become a major financial drain. Refinancing is often the answer that most of these folks need in order to lock in a low interest rate and have manageable monthly payments with no surprises.

Many people who refinance their mortgage often find out that they can lower their monthly payment while at the same time saving thousands of dollars in interest over the life of the loan. If you have a $200,000 house and refinance to shave 1% off your interest rate you could potentially save upwards of $15,000 over the life of the loan. That is a considerable chunk of money that can be put to better use – such as setting up a college education fund for your children or performing a remodel of part of your home.
Of course, the best benefit of refinancing your mortgage is that you can turn your ARM into a usual mortgage with a set interest rate for the life of loan with fixed monthly payments. Of course, nothing stays the same for long, so you may very well find out that in a few years you are refinancing again to take advantage of another drop in interest payments.

There are costs involved in refinancing – typically you will pay for a home inspection, document preparation fees, and other similar costs that parallel those you paid when you first closed on your home. it’s vital that you simply weigh the value of a finance against the overall savings you may get from refinancing. many of us notice that the advantages so much outweigh the prices. Considering that they’re going to be protection in your mortgage payment and, in several cases, lowering your rate of interest, they do not mind paying alittle up front!

Refinancing will help you get your money and your life back in check once facing uncertainty together with your home mortgage payments. it is the great tool to use for home house owners of all backgrounds despite what proportion they could owe on their home.