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No Cost Mortgage Loans – Fact or Fiction?

Are there really “No Cost” mortgage loans?  While some banks advertise that their loans are no cost to you, actual fixed costs which are roughly $2,000 are “buried” in the higher rate that you’re charged.
Fixed costs are those for the appraisal, lender underwriting fee, and title charges. These are part of EVERY loan regardless of the advertisement or bank.
Very roughly, there’s a 5 to 6 year payback for these No Cost loans. The higher monthly mortgage payment will total these fixed costs in 5 or 6 years.
Why would you want a No Cost loan? If you’re short of cash at the closing,
or if you’re planning on moving in less than 7 years, this loan would make sense.
Otherwise you’re better off with the lower rate especially since rates are trending upwards.

For specific numbers for your own loan, call me at 847-441-4116 or email me at herb@1steaglemortgage.com.

 

 

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Can you buy your dream home with no money down?

Yes, if you’re a veteran of the Armed Services or National Guard. This is the only true “no money down” loan.

I recently closed a $300,000 VA (Veterans Administration) loan.  The total the buyer brought to closing was $274; the 30-year fixed rate was in the 3’s.

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Homeownership Satisfies Family Needs

According to a recent study performed by The Joint Center for Housing Studies at Harvard University, there are five important reasons why owning a home makes Americans feel satisfied.

  • It means having a good place to raise children and provide them with a good education. Even those without children at the time of purchase, may have this in the back of their mind as a major reason for choosing the location of their home.
  • You have a physical structure where you and your family feel safe. It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.
  • It allows you to have more space for your family. Whether your family is expanding, or an older family member is moving in with you, how this fits your needs is a close third on the list.
  • It gives you control over what you do with your living space, like renovations and updates. Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?
  • Owning a home is a good way to build up wealth that can be passed along to your family. Lock in your housing expense now with an investment that will build equity that you can also borrow against in the future.

Whether you are a first-time homebuyer or a move-up buyer who wants to start a new chapter in your life, I can help you find a way to successful and satisfying homeownership.

Call Herb Levin, 1st Eagle Mortgage, @ 847-441-4116

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Mortgage Approval Before You Start Your Home Search

Realtors and home sellers want to know that the buyer is “approved” for a mortgage. There are several levels:

  • First, a brief look at credit and income
  • Next, an automated underwriting system
  • Lastly, a complete underwriting approval that guarantees your status as a ready and willing buyer

1st Eagle Mortgage offers this complete underwriting approval system while you’re looking for a home. We don’t need an address.

This results in the assurance that you’ll get the mortgage once you find a home, and also shortens the time from contract to closing.

Call 1st Eagle Mortgage at 847-441-4116

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Rebuilding Credit After Bankruptcy

  • If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.
  • Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card (be wary of offers of “easy credit” or any card which asks you to call a 900 number-you will be charged for the call). I can recommend several banks.
  • Meet with a credit repair specialist or myself. While they can help you clean up the damage to your credit report, I can advise you on specific ways to rebuild the credit you lost as well.
  • While it does take time, there is definitely life (and credit) after bankruptcy. Some of my lenders will even lend to you within a year or so after a bankruptcy with extenuating circumstances. If you’re in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.

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Vital Strategies For Homeowners In Bankruptcy

Follow these steps while in bankruptcy:

  • Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.
  • Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.
  • Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.
  • Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

 

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Mortgage Restructuring To Avoid Bankruptcy?

Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma which is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results. Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; but, it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option.  An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. I can provide references for you as well, as I work with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

 

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Preparing Your Home for an Appraisal

hands holding home  You’ve sold your home. Or, you are thinking of refinancing your current mortgage.

One of the things that the lender will require is a property appraisal. While the actual appraisal inspection may take only an hour or two, the appraiser must go back to the office, research other homes that have sold in your area, and write a 20 to 30 page report.

Here are some tips to help the appraiser with additional information–and in most instances a faster turn-around time to complete the report.

  • Compile a list of recent improvements. If possible include “before and after” pictures, copies of paid receipts for work completed. If major updates were made, provide a detailed copy of the bid from the contractor.
  • Make sure all areas are accessible, including the attic, basement and crawl spaces. This includes the garage.
  • If the home is part of a homeowner’s association, include a copy of the fees paid, and the name and phone number of the association president or executive director.
  • Straighten up each room. Appraisers are required to photograph each room, and while it may not make a difference to them if the room is messy, there may be an underwriter who is less objective.
  • If there are any unfinished projects, make sure they are completed before the inspection.
  • If there are any easements, encroachments or unusual deed restrictions, you may want to provide a copy of the list.

A little help from you goes a long way to make sure that the appraisal report is complete and accurate.

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How Soon Can You Purchase A Home After A Bankruptcy, Foreclosure, Or Short Sale?

How about 1 day?

In the past if you had a Bankruptcy you would have to wait 2 years with an FHA loan and 4 years with a conventional loan. With a Foreclosure the wait would be at least 3 years (FHA loan) and 7 years with a non-FHA loan. A VA (for military veterans) loan requires a 2 year waiting period.

I can reduce the waiting period to 1 day after completion of a bankruptcy or foreclosure. Call me at 847-441-4116 or send me an email – herb@1steaglemortgage.com – if you or someone you know has had one of these “life events” and wishes to purchase a new home without waiting.

While it’s true that “bad things happen to good people” there is now an alternative to renting.

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FICO Scores – How Many Does A Person Have?

Most consumers think they have only 3 FICO scores – one for each bureau-Equifax, Experian and Transunion.  Actually, a person has dozens of FICO scores.

There are six major types of FICO scores–General, Auto, Mortgage, Credit Card, Installment loan, and Personal Finance.  Different factors are taken into account to generate a score.  For example, an auto FICO score places more importance on the history of any previous auto loan that the consumer had.  A credit card FICO score looks more at a person’s handling of credit card balances and payment history.  Some even look at whether more than the minimum payment is made every month.

The highest FICO scores are personal ones that fall under the General score category.  One of the most frequent questions we get is based on this scenario:  a borrower will go to a loan officer after having pulled their own credit and walk in with a 740 score.  The lender then pulls the credit of the borrower using  the Mortgage program used by banks and mortgage companies, and the score is 680. This is because the FICO scores are based on different criteria.  While it’s a good idea for everyone to order their free credit report every year, it’s not necessary to order (and pay for) the scores that go along with them.  Personal scores aren’t used by any industry for any reason.   They are more of a “warm and fuzzy” number to make a person feel good about scores than anything else.

The bottom line is that a consumer shouldn’t get caught up in all the various FICO scores.  Instead, focus should be on the important things that surround all FICO scores: paying bills on time, not running up a lot of revolving debt, keeping revolving balances below 20% of the high  credit limit, not closing accounts, and only opening new accounts when absolutely necessary.  These action will ensure a good FICO score no matter what model it is being pulled from.

For additional information about credit report and scores, click here

Image result for credit scores

 

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