HAL CUTLER
Find Oxnard Real Estate, Port Hueneme Real Estate & Channel Islands Harbor, California Real Estate!
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HAL CUTLER Find Oxnard Real Estate, Port Hueneme Real Estate & Channel Islands Harbor, California Real Estate!
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MORTGAGE LENDERSProviding
mortgage financing for real property, these lenders take on several forms. A
mortgage banker (Chase for example) provides loans generally with its own funds or a mortgage
lender (Countrywide for example) uses investor capital to funds many loans. Mortgage brokers
bring together an outside lender and a borrower. Since each individual borrower
has specific needs, many lenders work with portfolio loans (held by the bank),
government insured loans ("Fannie Mae", "Freddie Mac", FHA, VA) or with other
lending institutions as well as their own. With
years of local experience and working with numerous locally based lenders on a
regular basis, I would be happy to recommend the best to you. Whether you are buying or selling, the key to the sale is financing. Helping you determine monthly payments, down payment options and closing costs, I can direct you in the right direction-NOT ALL LENDERS WORK ALIKE!
QualifyingRemember that lenders want to make loans; so do not pre-judge your ability to borrow. Most importantly, if you are considering a home purchase, do not change your financial condition before consulting with a lending professional. That means do not move money from one account to another, avoid big ticket purchases such as automobiles, try not to change jobs & make your home purchase the priority in your life Working with a lender of choice, I will help you obtain the best possible terms that fit your needs. The lender typically weighs three criteria to determine your ability to borrow: CASH, CREDIT & INCOME. Think of a loan as a three legged tower--two legs can be broken and a lender may still make the loan. For example, a buyer make have little cash for a down payment and problem credit, but good income. Chances are this buyer can obtain a loan, so a mix of these issues will determine your ability to borrow. CASH on hand can even be in the form of a gift or in a savings account or an investment account. However, no down loans have become common place in the last few years. Even with all the controversy these days regarding 100% financing, these loans are still available, although with tougher underwriting criteria. CREDIT as reported and scored by authorized agencies reports how much you owe and to whom, whether you pay late or on time or not at all. Major credit "dings" are charge offs, unpaid collection accounts, bankruptcies, repositions or foreclosures. Even major problems, if far enough in the past or "repaired" may NOT prevent you from obtaining a loan. Credit repair simply means reviewing your credit report, correcting mistakes, settlement of problem accounts and good financial management. If you are not able to obtain a home loan today, many borrowers often repair their credit sufficiently to obtain financing in as little as 6 months. Anyone may obtain their credit report for free once a year. Credit Scoring is widely used by most lenders to quickly determine your credit worthiness. Many factors effect the score such as delinquencies, charge offs, payment history and numerous others factors including how often you apply for credit & how much you use. If you order a credit report, make sure that it does not appear as a credit inquiry from a credit grantor. The inquiry itself may lower your credit score or trigger other inquiries. Be careful when granting authorization for a credit report. I, myself made an inquiry for a home loan recently through an internet ad. That inquiry triggered 18 credit inquiries in 4 days, damaging my credit score and these inquiries stay on your report for two years. The three primary credit reporting agencies are Experian, Trans Union and Equifax, all accessible through the internet. INCOME, reported either by W-2's, tax returns or bank statements shows your ability to service a loan.
LOANSA Thirty-year, fixed-rate conventional loan consists of a mortgage with monthly payments of principal & interest that remain constant throughout the life of the loan. In 2007 conventional conforming fixed-rate loans were available up to $417,000. Low down payment loans were normal and NO down were common place. Now with the loan crisis, things have changed.
Federal lending guidelines for primary
residence loans now allow a new
high for "conforming" rates of $729,750. This so called "Jumbo-Conforming" loan
has many restrictions but the FHA product seems to
offer the most benefits for some borrowers. FHA offers 3-5% down to the new
higher loan limits. 100% gift funds allowed, non occupant co-borrowers, closing
costs can be incorporated into the loan and more liberal debt and credit
underwriting. Keep in mind that most home owners move within 10 years, so examine your loan alternatives with that in mind. Fifteen-year, fixed rate
financing has a larger monthly payment than a 30-year loan, but a lower interest
rate and smaller potential interest cost. As appealing as this loan may appear,
it locks the borrower into higher payments which may become unaffordable at some
future time. Home buyers should always be careful when choosing a loan.
If the borrower has extra money, he/she may make additional principal payments
and reduce the term of a 30 year loan without being locked into higher payments.
An adjustable rate mortgage (ARM) is a form of financing which typically has an initial "start" rate lasting six months or a year, and then rates which change on a regular schedule. The initial "start" rate is beneficial to borrowers, which may not other wise, qualify for a loan. Because the interest rate changes, monthly payments can also rise or fall. The interest rate changes are based on an index such as the average price of Treasury bills over six months or a year, the 11th District Cost of Funds Index or the LIBOR rate (the London Interbank Offer Rate) and the Margin. The margin is best described as the lenders profit. Most ARMs have annual and lifetime interest caps and monthly payment caps.
Some ARM mortgages allow lenders to collect
"negative amortization," an expression which means the interest cost
is greater than the minimum monthly payment, so the borrower may make smaller
payments, but the size of the loan balance increases. If the borrower pays more
than the minimum interest payment in order to reduce the balance of the loan, the
effect is to reduce the minimum monthly payment rather than reduce the term as
in pre-paying a fixed rate loan. Self employed or commission sales people whose
income varies from year to year may often prefer this type of loan. Finally, some ARM loans are tied to the "prime rate", especially home equity loans. The "prime" is the rate banks charge their most credit worthy customers. It is tied to the Federal Reserve cost of funds rate. The "FED" has begun lowering this rate in recent months after raising it for the past couple of years, so ARM loans tied to the prime rate have seen a real growth in interest rates. A jumbo loan is,
essentially, a 30-year mortgage but with a loan amount above the conventional
conforming loan limit of $417,000 for a single-family home.
Because a larger
loan amount is outstanding, lenders have more risk and so interest rates are
somewhat higher than for conforming financing. A variety of other loans, convertible or interest only fixed, due in 3, 5, or 7 years offer a combination of rates and terms. As an example, if a borrower only plans to keep a home for five years, knowing that his job will change, he may prefer a loan with a lower rate for the first five years, although the loan is amortized for a full 30 years. Typically these loans then convert to a new rate calculation which may require refinancing. Stated Income Loans are common with self-employed or commission sales people whose income varies. Rather than provide W-2 or tax returns, such a loan may only require an application with no proof of income. Such a loan, used wisely can be beneficial, but recently some of these loans have failed and adversely affected the "sub-prime" loan market, causing higher rates and more restrictive lending practices. When obtaining financing, even though a lender may be willing to loan you more, consider what payment you and your family are comfortable making each month. Loans have a nominal interest rate and an annual
percentage rate (APR). The APR is important because it includes not
only the interest rate, but also such costs as points (loan discount fees), per
diem interest, mortgage insurance and other expenses. Get the Facts Directly from the Source
United States VA Home Loan Program Federal Housing Administration (FHA) For a
personal evaluation with an area specialist, contact:
Laurie Perr 805-585-2329 at Chase Home Finance*
2151
Alessandro Drive Ventura 805-585-2320 Viola Tovias 805-411-4615 at Countrywide Home Loans* 1708 S. Victoria Ave., #B, Ventura 805-650-6566
Brian Minkow 805-496-6357 at Washington Mutual Home Loan Center*
3960 E. Thousand Oaks Blvd., Westlake Village 805.496.0090 *Countrywide, Washington Mutual & Chase are among the nation's largest lenders and offer a variety of programs.
Darryl Colvin 800-809-8361 at Downey Savings**
**Downey Savings is a portfolio lender. They use their own
money to lend and do an excellent job for people who are self-employed or whose income
fluctuates such as commission sale people that may not qualify for conforming
loans.
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