How Lenders View Retirement Income

If you or someone you know is retired or retiring soon and planning on buying a “forever” home, there are some things to know as it relates to qualifying income. For most, retiring means living on less and essentially downsizing financially. The regular 1st and 15th paycheck is in the rear view mirror and now…

Investment Properties and Vacancy Factors

Lenders can use rental income to help someone qualify for a new mortgage. But there are some guidelines that must be followed. One of the initial surprises for first time real estate investors is the income from the future purchase can’t be used to help qualify. Even if it can be verified there is rental…

Conventional, Subprime and Private Loans Defined

In today’s home loan world, there are three primary types of mortgages. They are conventional, subprime and private and all three are extremely important and needed in the world of real estate finance. Conventional loans are those that are made by mortgage lenders where the lender assumes all the risk of making the loan. Should…

How Consumers Achieve High Credit Scores

Ever wonder how people achieve high credit scores? 750? 790? 800+? It’s not fantasy but there are those who are both dedicated to building a pristine credit file or simply pay their bills on time and their scores gradually rise. But getting these high numbers is no accident. There’s a method to all this and…

Understanding Seasonal Income

Seasonal income is income that comes during a specific time of the year and not paid every month. Such income can be used to help qualify for a mortgage but only under very specific guidelines. Seasonal income might be income earned over the holidays or summer work when taking on a second job. Seasonal income…

Finding Down Payment Money

One of the biggest challenges, if not the biggest challenge, is coming up with the money for a down payment on a home. Even if someone is taking advantage of the new conventional 3.0 percent down program or the FHA mortgage, most every loan requires some sort of a down payment. While 3.0 percent doesn’t…

How to Finance Home Improvements

Thinking of doing a somewhat major remodel? Perhaps adding another room? Maybe a kitchen do-over has been floating around in your head. If you’re thinking of making some changes to your home, you need to decide how you’re going to pay for them. Of course, your checking or savings account is probably the first option…

Coming to Terms

Homebuyers, especially first time homebuyers, might at first be a bit overwhelmed at the amount of choices that must be made when deciding on how to finance the purchase. Once the loan program has been selected, the next is going to be the interest rate. Lenders offer several different rates for the same loan program.…

How to Handle Loan Conditions

A loan application goes through several stages before a final approval is eventually issued. As the loan application is documented with items from the applicant as well as third parties, soon the loan file gets to a stage where the lender underwrites the loan. The underwriter is the individual within the mortgage company that makes…

VA Closing Costs: Seller Paid or Buyer Paid?

For those who are eligible for a VA home loan, it’s really quite the program. It’s one of the few home loans that do not require a down payment, probably its biggest feature. But in addition to no down payment, there is no monthly mortgage insurance payment. This increases buying power. Other loan programs with…

How Construct-to-Perm Mortgages Work

When building a new home from the ground up, there are two primary choices borrowers have. A construction loan and a construct-to-perm loan. Both are fine choices but they take different paths toward final completion of the new home. With a standard construction loan, the applicants consult with a local architect and builder. After the…

Approval Guidelines for 1099 Employees

Lending guidelines today ask lenders to verify and provide proof of income. This is necessary in order to calculate affordability and to prequalify someone for a certain amount. Lenders can send out a Verification of Employment form to the applicant’s employer. The completed form will provide the lender how much the employee makes each month…

Financing Your First Rental? Expect These Five Things

Investors are increasingly placing residential real estate into their portfolios. With the combination of interest rates being so low for so long, it makes financing more affordable. Couple that with higher rents and you can see why real estate is a solid long term option. If you’re getting ready to get your financial toes wet…

The USDA Guarantee Fee Explained

The term “loan guarantee” for those not affiliated with the mortgage industry really does sound like someone is guaranteed a mortgage, regardless of income, employment or credit. But that’s really not how the guarantee is applied. There are three government-backed mortgages in the industry and they are the VA, FHA and USDA loan programs. Each…