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…

USDA Loans- Rural Financing Made Simple

It might seem odd at first that the United States Department of Agriculture offers a home loan program, but it does. Originally introduced in 1935 and named the Resettlement Administration, this program was designed to populate rural areas and help consumers buy and finance homes during the throes of the Great Depression. Today, the USDA…

VA Loans and Closing Costs

VA loans were part of the original Servicemen’s Readjustment Act of 1944, more commonly referred to as the G.I. Bill. In this act were various entitlements provided soldiers returning from WWII designed to help them more easily assimilate back into civilian life. Funds for college and job training was available as well as the new…

Hard Money Isn’t Always for the Credit Impaired

Hard money, or private money in some circles, are loans issued that fall outside the norms of conventional or traditional financing. With traditional loans, they’re underwritten to predetermined standards with guidelines involving loan amounts, credit scores and income sources to name a few. When approving a loan in this manner the loan is then eligible…

What to Expect When Applying for a Jumbo Loan

A jumbo loan is one where the loan amount exceeds current conforming loan limits. Conforming loans are those that conform to standards issued by Fannie Mae and Freddie Mac. One of the many requirements for a conforming loan is the loan limit which is currently $484,350 in most parts of the country. In higher cost…

Requirement Differences Between Conforming and Jumbo Loans

You already know the primary difference between a conforming and a jumbo loan- it’s the maximum loan amount. In most parts of the country the conforming loan limit for 2019 is $484,350. Anything beyond that is referred to as a jumbo loan. Conforming loans are so-called because they conform to standards issued by mortgage giants…

Why Are Rates Still So Low?

The Unemployment Rate is released on the first business Friday of each month. And that rate has been holding rather steady. Initial jobless claim data, those that are filing for unemployment compensation, is released each Thursday. The report released just this past Thursday showed that unemployment claims hit a 50-year low. These claims dropped by…

What is a VA Guaranteed Loan?

Sounds like a pretty good deal, right? Getting a home loan that’s guaranteed? And a VA loan no less that doesn’t need a down payment? The term does sound attractive but it doesn’t mean exactly what is sounds like. For those that are VA loan eligible, it sounds as if the veteran is going to…

What is a Portfolio Loan?

Unless you’re in the mortgage business you probably don’t know what a portfolio loan actually is. But in reality, portfolio lending has been around for decades, much longer than conventional loans that are approved using Fannie Mae or Freddie Mac guidelines. In the “olden” days, banks would have their own internal mortgage approval guidelines. There…

How Much Money Do You Need to Buy a Home?

Okay, more specifically, how much money do you need to qualify for a mortgage? There are different factors involved because there are so many different types of loans available. Even the very same loan program might require more or less cash to close depending upon someone’s personal situation. But this is indeed a very legitimate…

3 Ways to Reduce Your Closing Costs

Most loans today require some amount of a down payment. But they all require closing costs. There are lender fees, common ones are loan processing and underwriting fees, and there are non-lender fees. Non-lender fees include items such as an attorney fee or title insurance premiums. It’s the non-lender fees that can really add up…