Monday, January 30, 2012

Home Equity Loans: Bad Credit Is Okay If You Can Answer These Four Questions

For those with bad credit, home equity loans represent one way to get money for a variety of purposes from debt consolidation and paying medical bills to financing a wedding, college or home improvement projects.
There are many people that will offer you help in getting the money you need through a home equity or second mortgage loan. However, by learning your answer to these four questions, you will know everything that a borrower with bad credit will need to know. This will get you on the road to cash in the fastest, most efficient way possible.
#1: How Much Equity Do You Have?
The equity of your home is determined based on two factors: your home's value and the current amount that you owe. As long as the money you owe on your current mortgage is less than your home's fair market value, you will be able to get a home equity loan. Therefore, you need to get an appraisal of your home before you move on in the lending process.
#2: What Is Your Credit Score?
FICO scores are calculated based on several factors. The most important of these is your asset to debt ratio. That is, how much do you own and how much do you owe lenders. The other important piece of information is your history of payments on current and former debts. Lenders want to see that you make your payments on time and that you are able to balance the number of bills you have each week with your income.
Your credit score will be somewhere between 300 and 800. The higher your score, the better you are for a lender. Generally, a credit score that is under 600 is considered a bad score, but many lenders will consider a bad credit score anything under 650. Make sure that you know exactly where you stand before you talk to any lenders about a home equity loan. Bad credit can be your fault, but it may be a result of misinformation. Review your complete credit report and discuss any discrepancies that you find with all three credit reporting agencies.
#3: Who Will Lend to You?
Many people automatically go to their personal bank any time that they need a loan. This is a great strategy for those with good credit, but those with bad credit are in a different position. Most traditional lending institutions - banks and credit unions - are not willing to take a risk on you if you have bad credit.
Home equity loans are frequently given to those with bad credit through online lenders, however. Therefore, your best bet is to look on the internet for private lenders who specialize in bad credit loans.
#4: Who Has the Best Deal?
Do not make the mistake of assuming anyone who will lend to you is giving you the best deal possible. Remember, lenders make money on the loans that they extend. In order to make sure that you are not being swindled, get a quote from at least three, or even up to five, different lenders. Do not be afraid to negotiate interest rates and other terms. Remember that as the customer you hold the power. The more lenders you can get willing to help you, the more leverage you will have to get the best deal possible on your home equity loan.
Bad Credit Will Not Stop You
Though there are special circumstances that surround borrowing with bad credit, home equity loans are still available through online lenders. Make sure that you answer these four questions and you will be on your way to getting the money you need.
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Saturday, January 28, 2012

Buying A New House - Preparing for Unexpected Expenses

The purchase of a new house is essentially a large financial investment. As with any major investment, careful planning and budgeting are required. In addition to securing a good mortgage and obtaining any additional loans you may need, you should also prepare for any unexpected expenses which may arise from owning a house.
New homeowners tend to underestimate the true cost of their new house. Mortgage and tax payments aside, a host of expenses can - and often do - crop up unexpectedly. A homeowner who fails to adjust his or her budget to leave room for such sudden money drains can quickly find him or herself falling behind.
Moving In
So you've bought your new house, signed the paperwork, and are ready to move in. Everything's going well - until you start to realize just how much money you are spending. The cost of buying furniture and decorations and paying for delivery can add up very quickly, so be sure to account for it early on. One approach to doing this is to spread your purchases out over several months. This way, you can "cushion" the effect that they have on your budget.
Paying the Bills
Many people forget that life as a homeowner involves paying a slew of bills even beyond mortgage and loan repayments. Utility bills are often a culprit in ruining the budgets of a new homeowner. Former apartment tenants may be especially prone to overlook utility bills, because many apartment complexes cover one or more of these expenses. Even experienced homeowners can fall victim to this pitfall, however, simply due to the fact that different houses have different electricity, heating, and water requirements. For example, a house which is poorly insulated would run up the heating bill much faster than one which is well-insulated. A house with older plumbing may have leaks which affect the water bill.
Because of this, it is often a good idea to ask the previous residents for several months worth of utility bills. This will give you a rough estimate of how much you can expect to pay each month and allow you to prepare accordingly.
Fixing it Up
Houses, both old and new, can develop problems which need to be repaired. Unlike an apartment, where a broken appliance or leaky roof may be the responsibility of the landlord, a homeowner must bear the cost of repairs on his own. Since the very nature of these repairs means that they cannot be predicted, the only thing you can do is allocate a sufficient amount of money to pay for them in case of emergency. A good rule of thumb is to set aside around $100 per month.
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Thursday, January 26, 2012

Mortgage 101

Simply put, a mortgage is a loan secured by real property and paid in installments over a set period of time.

The mortgage secures your promise that the money borrowed for your home will be repaid.

A mortgage loan is a loan secured by real property through the use of a document which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan.

Components of a Mortgage:

1. Mortgage Approval:

Qualifying for a mortgage requires meeting a pre-determined set of guidelines established by a lender, which may include credit historyincome, employment and assets.

In addition to personal qualifying factors, a property must also meet certain standards set by lenders before a borrower can obtain a mortgage loan secured by real estate.

2. Mortgage Payments

On a traditional 30 or 15 years fixed rate mortgage program that involves principal and interest, each payment made is divided into two parts (we're not including taxes or homeowners insurance as part of this discussion):

The first part of the mortgage payment, which is commonly referred to as principal, goes to paying down the initial amount borrowed.

The second part is the interest paid for the money borrowed to purchase the property.

The amount paid in interest decreases each month, as the amount paid towards the principal balance increases. This apportioning is referred to as amortization.

Other types of mortgage payments available can include options for paying interest only or a teaser rate.

Either way, it is extremely important to have a solid understanding of the full payment and terms before moving forward with a particular option.

3. Mortgage Programs

Mortgage Programs come in many different types of flavors and colors depending on the down paymentand/or monthly budget a borrower has been approved for.

There are also federally insured mortgages, such as FHA or VA loans, which have more flexible qualifying guidelines.

4. Closing Costs / Fees

The actual cost of obtaining a mortgage mainly depends on whether or not the borrower is paying points for a lower mortgage rate.  In some cases, there are also other loan processing and underwriting fees associated with the work involved in the transaction.

Fortunately, there are several consumer protection policies implemented by the government to help borrowers understand their options during the initial mortgage pre-qualification process. However, please keep in mind that there may be other closing costs not associated with a mortgage or real estate transaction to be aware of. Appraisalpre-paid property taxes, insurance and interest, HOA dues and inspections are a few additional out-of-pocket expenses you should budget for.

5.  Mortgage Rates

While mortgage interest rates may change several times a day, there are a few market factors you can pay attention to which may impact your final payment.

Whether you're shopping for the best rate, or trying to determine the difference between the Note Rate and APR, it definitely helps to understand what questions to ask a mortgage lender about your specific loan scenario.

Solano Mortgage
Mortgage Broker | Direct Lender
866 Alamo Drive
Vacaville, CA 95688


Monday, January 23, 2012

Preparing to Buy Your First Home - Critical Steps Often Overlooked That Could Cost You Thousands

Buying a home is both an exciting and stressful experience. You really want to focus your attention and efforts on finding the perfect property to meet your needs and deciding how you are going to fix it up and decorate it to make it your own. Unfortunately you have to weed through a mound of paperwork and legal protocol before you can pick out paint colors and shop for new furniture. There are a few things you can do to prepare yourself for the home buying experience, making the process smoother and getting you one step closer to focusing on all the fun stuff.
The first thing you need to do is prepare all of your financial documents and arrange them all in one convenient space. There's a good chance that your mortgage broker will ask you for a slew of documents at any moment so it helps to have them handy. Regardless of what bank you go through to get your mortgage loan you will probably need your tax returns from the past 2 years, statements from your savings and checking accounts, your 401k and any other investments and proper documentation of any money you receive as a gift for the purchase of your home.
One important step that often gets overlooked by new homebuyers is checking your credit score. Your credit report is very important in securing your mortgage and interest rate, so you will want to review it to ensure that it doesn't contain any errors. Mistakes are fairly common. In fact, 3 out of 4 credit reports contain errors, and that inaccurate information could be negatively affecting your score. So you must review your credit report prior to filing any paperwork with the bank.
Have all of your contact information handy, including your realtor, mortgage broker, real estate attorney and the village hall in your soon-to-be new hometown. This will allow you to communicate efficiently when anything comes up.
Finally, just try and relax. Unexpected issues are bound to pop up. If you keep all of the necessary info in order and try to remain level-headed throughout the process you should be just fine.
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Saturday, January 21, 2012

What Are Some Great Benefits Of FHA Loans? - Find Out Here

FHA house loans are probably the preferred house loan accessible. FHA represents Federal Housing Administration and is a United States government bureau. All of these FHA residential financial products are financial loans that happen to be financed by using a federally certified mortgage lender, but are covered by the Federal Housing Administration. Even though an FHA residential loan is simpler to receive than a normal mortgage loan there are specific requirements you should satisfy.
FHA loans are likely to have a lot of various strengths over conventional financial loans, such as smaller down payments and also you will find far more relaxed credit- qualifying standards. A Federal Housing Administration bank loan was established from the federal government to increase homeownership throughout America. The FHA may help buyers to acquire a mortgage loan with small as well as no down payment. The Federal Housing Administration will not provide the money to the customer, but guarantees the particular mortgage to decrease the danger for the financial institution.
FHA home lending options are quite well known since they will permit someone to finance your home purchase with having substantially less compared to classic twenty percent down. You are able to have as minimal as 3.5 percent. This truly makes it possible for many men and women to become homeowners.
FHA household loans have been initially designed for 1st time residence purchasers. On the other hand consumers who are not 1st time house customers may possibly qualify for an FHA house mortgage; however FHA won't enable anyone to possess more than 1 FHA- insured loan simultaneously.
Conceivably among the biggest primary advantages of FHA financial loans is the fact that little to no cash down is required regarding mortgage acceptance. FHA financial loans are also generally extended to men and women with much less than regular or even bad credit rating histories; making Federal Housing Administration dwelling loans much more obtainable compared to several other kinds of mortgage financial products.
Generally, these loans are the hottest as the Federal Housing Administration bank loan requirements are so straightforward to satisfy. They are particularly created for the typical American that is really planning to purchase a house. They do not need to have great deal of capital down and also you don't have to have totally perfect credit ratings to be able to meet the criteria.
Some great benefits of FHA's flexibility far outweigh any shortcomings. Lately there were some misunderstandings from the housing sector concerning FHA lending options and a large amount of apprehension amongst a number of real estate brokers who feel that Federal Housing Administration is really a tougher financial loan to get approved. Many people had come to feel that Federal Housing Administration was too strict with appraisals with respect for the condition with the properties. There was some real truth to this statement in that quite a few years back FHA was far more restrictive on appraisals, nevertheless that has since eased significantly. Today, FHA appraisals are not any a lot more restrictive compared to that of the conventional appraisal.
A Federal Housing Administration mortgage enables the seller to spend as much as 6% of the closing charge and prepaid items. One more good advantage of these financial loans is even somebody who has experienced personal bankruptcy or has quite a lot of other home mortgages will likely be sanctioned for these kinds of a mortgage loans. Yet another fantastic benefit of these kinds of mortgages is they are absolutely assumable.
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Wednesday, January 18, 2012

More Space in Atlanta-HGTV

A young couple looks for the space they need for themselves and their dog. This video is part of House Hunters show hosted by Narration Only .

Monday, January 16, 2012

Home Buying Wisdom - 10 Things You Must Do Before Buying a Home

Buying a home is often the largest personal finance transaction a person makes in his or her life. So it's critical that you make the right preparations and do the proper research. Regardless of unique situations and special circumstances, there are ten things you must do before buying a home.
1. Study the home buying process.
This will allow you to make better decisions and act confidently. Home buying lingo is a big part of this, so be sure to read through a few home-buying glossaries before you get into the thick of things.
2. Obtain your credit report.
Get a copy of your credit report and review it for errors. You can get copies from all three credit bureaus at once by visiting Mortgage lenders will review your credit with a fine-toothed comb, so you should do the same ... before they review it.
3. Fix credit errors quickly.
If you find an error on your credit report, go to the company's website where the report came from (TransUnion, Equifax or Experian) to contest it. It can take time to clean up an erroneous credit report, so get started as soon as you spot the error.
4. Check your debt-to-income ratio.
Mortgage lenders like to see a borrower's debt at (or below) 20% of net monthly income. If your debt exceeds 20% of your net monthly income, try to pay it down for applying for a mortgage loan. You'll have an easier qualification process and will likely qualify for a better rate.
5. Determine your budget.
Use an online mortgage calculator to get an idea of how much you can afford to pay each month, and what that equates to in terms of a home price. This will give you a budget to work from, which will help you weed out the homes that are beyond your comfort zone.
6. Start saving your cash.
This is one of the best things you can do before starting the home buying process, for a couple of reasons. First of all, mortgage lenders like to see that you have some cash reserves on hand. Secondly, you'll need cash reserves for any unexpected fees or costs that might arise (which is common).
7. Get pre-approved for a loan.
During pre-approval, a mortgage lender will review your credit, finances, debt, etc. and conditionally qualify you for a certain amount of mortgage. Sellers will take you more seriously if you have a pre-approval letter, and the process also helps identify any problems with your credit or other qualifying factors.
8. Avoid new lines of credit.
Try to keep your financial situation as "stable" and favorable as possible. It's a good idea to pay down some debt (see item #4 above) and to save up some cash. But the worst thing you can do is take out a new loan / line of credit. At best, this could make the qualification process take longer. At worst, it could tip the debt scales into the "greater than 20%" zone, which will make it harder to get a loan.
9. Validate the asking price.
It's called an "asking price" for a good reason. No asking price is set in stone, and everything in real estate negotiable. So don't accept an asking price as being reasonable until you validate it through careful research. Compare the home / price to recent sales in the area. Your real estate agent can provide a comparative market analysis (CMA) to help you with this step.
10. Get a home inspection.
It is never -- I repeat, never -- wise to skip the home inspection. A house is a sizable investment, and the last thing you want is to find a bunch of things wrong with it after you've taken ownership. Home inspections are very affordable, and you cannot put a price on the peace of mind you'll have as a result of your inspection.
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Saturday, January 14, 2012

Factors to Consider When Buying Investment Property

Investments can be a great way to get ahead, and more and more people are jumping into the market of buying investment property. However, this decision should not be taken lightly. If certain tricks of the trade are ignored, you might find yourself deeper in debt than before. There is a lot to gain from buying property to either flip or hold and rent. That said, first time investors should consider buying for the long term, as this is generally more of a sure thing than a short term flip strategy.
First and foremost, take a look at the numbers. You want to make sure that the monthly rental income will cover all of the property expenses such as property taxes, insurance, financing, repairs and maintenance, and everything else. When you analyze the numbers, remember to be conservative with any estimates you make, and always bake in a 10% vacancy rate. If the property appears to be cash flow positive on a monthly basis, you can continue on with the due diligence process.
The second thing to consider when buying property is the location. Location is everything, and the general rule of thumb is to buy rental properties in the best neighborhoods you can afford. The neighborhood will determine the type of tenant you can expect, as well as the amount of rent that can be charged. Another aspect of the neighborhood relates to fixer uppers, and the degree to which you make the necessary improvements. Avoid improving a property so much that it is far better than the surrounding homes on the block. Keep the home comfortable and user friendly. People will choose the neighborhood for a reason, so make sure the home is fixed up to fit in.
Another tip is when looking at potential houses to buy, look at the property for what it could be, instead of what it is. Spot the potential of the property and keep the renovations at a reasonable level. Make sure that the vision is reasonable for the labor that is needed to be done, and the price of the needed materials. Remember that hiring professionals to do the labor can help to assure things are done correctly the first time -saving money for things that may need to be fixed later. Hiring professionals shouldn't be taken lightly, either. Make sure all references are checked out to ensure that all your contractors have the experience and qualifications to do the job appropriately and in full compliance with municipal codes.
Once all the hard work is done and the home is ready for a tenant, make sure that a screening process is used. Run a credit check, call old landlords and references, and verify income and employment. After all the sweat and money that was poured into the property, it's only natural to want to keep it from being destroyed by deadbeats.
The bottom line is that buying a property requires a fair amount of due diligence. Do the homework that goes with being a great property investor, and also read up on landlord and tenant rights. It's one of the most important steps in protecting the investment. Study eviction processes, and understand all the laws to help keep the profits flowing for the long haul.
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Sunday, January 8, 2012

Friday, January 6, 2012

First Time Homebuyers News You Can Use is a series of consumer-oriented videos designed to offer viewers information on a specific topic related to buying or selling a home. 

Wednesday, January 4, 2012

Realistic Home Buying Tips for First-Time Home Buyers

The dream of owning a home is still very much the dream for many people. Even so, it is not uncommon for many first-time home buyers to carry expectations that are unrealistic into the buying process. While it can be normal to feel emotional about your first home purchase, it is also critical to ensure that you do not allow your emotions to cloud your better judgment.
It has often been said that you cannot believe everything you hear or read. This is certainly true when it comes to purchasing a home. Many first-time home buyers often fall prey to commonly held, but typically untrue, myths regarding the purchase of a home. Understanding the realities of a home purchase can help you to ensure that you do not allow your heart to rule your better judgment and ensure you do not make a crucial mistake in what will probably be the largest purchase of your lifetime.
Perhaps one of the most common myths that many first-time home buyers fall victim to is believing that their perfect dream home is out there somewhere. This can often lead to months of agonizing searches and ultimately, disappointment. While it would be wonderful to find the perfect home that has everything you want in it, more often than not you will likely find yourself compromising when looking for home. It is typically unrealistic to expect that you will find everything in a home that is on your wish list. It is much better to focus on the items that are must-haves and compromise on features that are not as much of a priority.
When homeowners place their homes on the market to sell they are often advised by realtors that buyers purchase homes based on how the home makes them 'feel.' This is because buyers do typically become caught up in the way the home speaks to them. As a buyer, it is important to be able to separate the way the home makes you feel and the realities of the house. In a competitive market, it is not unusual for sellers to hire home staging professionals to professionally prepare their homes for the specific purpose of invoking certain emotions. It is always important for buyers to remember when touring a prospective home that they are buying the home; not the decor or the furniture. Make a point to imagine your own furniture and belongings in the home and then see how you feel about it.
Another common mistake that many buyers make is believing they should purchase a home they grow into in the future. While this might once have been true when it was standard for families to purchase a home and live there for decades, that old rule no longer stands. Today there could be many reasons why you might want or need to sell your first home and purchase a different home in the future. Circumstances can always change. You might need to relocate to a different part of the country or you might become unemployed. When purchasing your first home, it is imperative that you consider your current needs and not what would be desirable five or ten years into the future. Otherwise you might find yourself investing in a home that you simply are not able to afford today
Along those same lines, do not make the mistake of purchasing the maximum amount of house that you can afford. At the height of the real estate market, it was common for many buyers to purchase the largest and best home they could afford; even if that meant topping out their budget. When the real estate market crashed and loan rates reset, many of these people found themselves trapped in a house that was too big for them and with a mortgage they could no longer afford. In today's economy, this strategy does not make sense financially. The best strategy is to purchase a home based on your current needs and what you are able to comfortably afford.
Finally, when it comes to negotiating the purchase price of your home remember that a successful negotiation is about compromise, not necessarily who 'won.' It is fairly common for buyers to feel remorse once they have settled on a price, especially if their offer was accepted right away, as they might feel they paid too much. Once the deal is done, there is really no point in analyzing it. The best deals ensure that everyone comes out a winner. If your offer was one that was affordable for you and reasonable for the house and the seller was happy with the offer; that was a successful transaction.
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Monday, January 2, 2012

This Month in Real Estate (US) January 2012

Hello and welcome to This Month in Real Estate. I'm JAY PAPASAN.

Our top story: surprising insights into the mind of a buyer. But first, the numbers.



And now, our top story.

According to a national survey of real estate transactions, it takes about twelve weeks for the typical buyer to find their next home.

Since the vast majority of homebuyers start their search online, the weather becomes less of a factor for sellers marketing their house to those buyers.

For more tips on how sellers can make the most of any market, we turn to News You Can Use.


The traditional home buying season starts in the spring. And for good reason.

Families with kids need to be settled in time for the new school year, and houses just plain show better with a lawn of green grass and leaves on the trees.

Sounds good, right? Well, there are some strong arguments in favor of listing your house right now, instead of waiting until spring. Here are just a few ...

• Since it takes almost three months for the average buyer to find a home, houses listed right now are in a better position to market to buyers looking to close in the spring.

• On average, the number of home sales in January drops almost by half from the previous year's peak. When there are fewer houses competing, a house that is priced right and staged well will stand out even more from the competition.

• Lenders, appraisers, home inspectors, movers and other vendors also see a seasonal dip in transactions. This can mean a quicker and easier closing than the busy spring season

For more reasons a winter sale might be for you, talk to your local real estate agent.


That's all for This Month In Real Estate. Thank you for joining us.