How to Get Money to Purchase AND Renovate Your Home

The Federal Housing Administration is encouraging use of its little-known 203(k) loan program.

The 203(k) lets an owner-occupant borrow money for both the purchase and renovation in one loan, and put down only 3.5 percent.

The program requires the use of credentialed contractors and can include cosmetic improvements as well as major renovations like replacing plumbing or electrical. Completing the application process requires patience, says Nancy Hammock, an associate with RE/MAX Properties in Western Springs, Ill.

Lease Purchase Tips

As a Buyer, if you are not approved for a mortgage either due to credit or low savings, you can still purchase a home with a lease-purchase agreement.  Usually, the terms of the deal include a lease and an option to buy with part of the rent going toward the downpayment. The forced savings helps buyers amass enough to buy the house in the specified timeframe, usually three to five years.

Here are some tips if you are contemplating using a lease-purchase option:

1. Don’t be afraid to ask the seller if the owner would accept a lease-purchase agreement. Sellers might find it attractive once they understand it will generate regular rental income.

5 Tips for Saving on Your Mortgage Loan

Purchasing a home does not have to empty out your bank account, especially if you know the following ways to save, save, save!  Here are some things that buyers should know as they go through the mortgage loan application process:

Ask for the “Good Faith Estimate” early.  This is the document that reveals just how much your loan is going to cost you.  It won’t be released until it is officially “complete” and all the questions are answered so push yourself to find answers right away to all the lender’s questions.

Are You Able to Refinance? Find Out

With rates being the lowest they have been in nearly half a century, customers are anxious to refinance. Here are three things that might prevent them from being able to do so.

Negative Equity.
If you bought your home a few years ago and didn’t put any money down, chances are your loan is now “underwater”. If your loan is underwater, you owe more on the home than it is worth. If you owe $400,000 and the home is worth $300,000 you will be hard pressed to find a bank that will allow you to refinance.

U.S. to Offer Incentives to Modify Seconds

The Obama administration is announcing incentives today for mortgages servicers to modify home equity loans and other second mortgages.

Servicers must agree to modify second mortgages when the first mortgage has been modified. They must extend the term of the second mortgage and match the rate of the first mortgage. Then the government will share the cost with the servicer of cutting the rate to 1 percent for amortizing loans and 2 percent for interest-only loans.

Under the program, the government will pay mortgage servicers $500 upfront and $250 a year for three years for the modifications. Borrowers will receive payments of up to $250 a year for five years if they stay current on the modified loan.

Guard Against Mortgage Fraud

Mortgage Fraud is on the rise, with seniors and first-time home buyers most at risk.  Here are the red flags to watch for. 

READY TO BUY? REOs Expected to Flood Market

Mortgage lenders are likely to put their growing supply of repossessed homes up for sale in the months to come.

According to the Mortgage Bankers Association, 10 percent of home loans was either delinquent or in the foreclosure process at the end of September. Plus, Fannie Mae and Freddie Mac saw repossessions grow nearly 25 percent to 15,196 homes from the second quarter to the third quarter of 2008.

Lenders may have to reduce the principal balance on loans to do more than slow down the foreclosure process for many borrowers.

Source: Inman News, Matt Carter (01/26/09)

4 Tips to Getting a Real Estate Loan

These days one of the biggest impediments to closing a real estate sale can be the buyer’s ability to get a mortgage.

Here are some tips for anyone who hopes to land a home loan:

1) Turn to the government. The biggest source of real estate loans these days is the Federal Housing Administration (FHA) and the Veterans Administration (VA). These programs accept borrowers with lower credit scores and allow them to put down as little as 3.5 percent of the purchase price.

2) Document, document, document. Borrowers will need bank statements, brokerage statements, W-2 forms and tax returns for real estate purchases.

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