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Articles Tagged "mortgage lending"

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September
5

An Overview of the Mortgage Loan Process

Through the various steps of purchasing a home, the getting qualified for a loan may feel the most overwhelming for first-time homebuyers. The expert agents at Choice Properties understand this and are here to guide you through, which is why we created an overview of the mortgage loan process. From getting an assessment to a loan officer pre-approving you, we want you to enjoy every moment of making your dream home a reality.

Pre-Approval

The first step to obtaining a mortgage loan is go through a meeting with your lender to discuss credit score and credit history with a third party, called a tri-merge credit report. This will give you an estimate of how much money you can borrow based on financial information, such as your employment and income. Mortgage pre-approvals show sellers that you are serious with a home purchase, making you stand out among other interested buyers.

Pre-Qualified

During your research for a mortgage loan you may find pre-approval and pre-qualified, but it's important to know the difference. A pre-qualification holds a lesser meaning and is a simple glance at a borrower's credit and capacity to repay a mortgage. This is usually completed by a loan officer asking the borrower simple questions regarding credit and there is no third party involved. Although this step is good to have with your lender, it usually does not influence a seller or real estate agent.

Final Approval

This is the most excited step of the mortgage loan process! Closing on a loan means the mortgage is official and final disbursements are made. During the final approval, documents are drawn where they are then sent to the title company where the closing takes place. You have a three day window to view the terms of the loan before officially signing. Once the documents have been signed, you are then ready for move into a new home!

 

 

Choice Properties understands your needs and desires when it comes to the home search. We are here to help you define what you want, seek the best property and move forward feeling educated and able to make good decisions throughout the process. You can trust us to help you navigate it with the best real estate agents working for you. Call us to get started on your dream home search today.

July
5

Have You Been Wondering if you Qualify for Refinancing?

If you identify as a homeowner or make monthly payments on your car then you may be aware of the option to refinance your loan. Refinancing your house or car loan simply means to finance your investment again on different loan terms, usually with a lower interest rate. This is a good idea for most homeowners when rates significantly lower than what they currently are. Depending on the loan term, choosing to refinance can save individuals hundreds of dollars per month. However, this loan option is not an to everyone. Have you been wondering if you quality for refinancing? Consider asking yourself these questions to see if you meet the criteria.

Do you have 20% stake in equity?

Lenders seek a high percentage invested into your equity, usually around 20%. To estimate your equity, divide the amount you are wanting to borrow by the value of your home. Take your amount and subtract 100 to find your equity percentage. If your percentage is around or over 20%, this increases your chances of refinancing.

Do you have a good credit score?

Aside from holding 20% equity stake, good credit score is another key factor lenders seek before the approval of the loan. The minimum most lenders require is a score of 600-650, while some lenders seek credit scores of 720 or above. If your credit score is low, focus on changes you can make to gradually increase the number. Your credit score comes from five different factors:

  • Payment history
  • Utilization
  • Length of credit history
  • New credit lines
  • Type of credit you obtain

How much debt do you have?

Lenders study your monthly payments including mortgage, credit cards, and car loans that are relative to your income. Ensuring your payment history is correct with no missed payments will increase your approval of a refinance loan. Lenders seek ratios no higher than 38% when analyzing your debt-to-income.

If you are looking to reduce your monthly mortgage payment, refinancing your home is a great option! Upon going through the process you will be saving cash each month, allowing you to invest in other expenses.





Choice Properties understands your needs and desires when it comes to the home search. We are here to help you define what you want, seek the best property and move forward feeling educated and able to make good decisions throughout the process. You can trust us to help you navigate it with the best real estate agents working for you. Call us to get started on your dream home search today.

March
21

Can I Get A Mortgage for Lakefront Property in Ohio if I Have A Low Credit Score?

As a home buyer, one of the things you may be worried about is your credit score. Maybe you have student loans you're still paying off, or there's a few missed payments in your history. Don't lose hope however. If you have your eye on lakefront property in Ohio, you may still be approved for a mortgage, even if you credit score isn't stellar. We have some insights for you to be able to determine whether you can get a mortgage.

Paying Higher Interest Rates

Interest rates have remained historically low, despite the volatility in the housing market. With a lower credit score, you can't count on getting those low rates. The fact is, that mortgage interest rates vary with the buyer, depending on the risk. In other words, if your credit is damaged, you can still qualify for a loan, just at a higher interest rate. If you have your heart set on buying, then you have to decide whether a higher interest rate is something you will be comfortable with.

FHA Loans

FHA loans were created by the Federal Housing Administration in 1934 to increase home ownership during the Great Depression. They have been utilized by more than 40 million families to purchase or refinance homes. The loans are insured, so lenders have greatly reduced risk. In 2017, FHA loans made up 20% of all new loan originations. These loans are designed to act as 'helper loans' for those buyers who earn enough to pay a mortgage monthly, but don't have long term credit history to show they are low risk candidates. If this is the situation you are in, you could well be approved for an FHA loan, and you might even pay a smaller down payment than if it was a conventional loan.

Show An Improvement In Your Score

Your credit score is not a hard and fast number that will never change. Nor is the same credit score for two different people viewed in the same way. For example, Individual A might have a low score that has not changed in years, or they are missing payments in their most recent history. Individual B is someone with the exact same credit score and hasn't missed a payment in 3 years, plus their credit has steadily gone up. A lender will view Individual B as a much better prospect.

Lakefront property in Ohio is extremely desirable. If you really want a shot at getting approved for a mortgage for your dream waterfront home, then here are a few extra tips you can use:

  • Make a larger down payment. A bigger down payment reduces the lender's risk, as they have a buffer. A good down payment amount is 20%.
  • Along with a large down payment, it helps if you have cash reserves, which will make the lender feel comfortable that you will be able to take care of unexpected expenses.
  • Show consistent rent history. If you can prove that you've paid your rent on time for the past 12 to 24 months, then that is a point in your favor.

So you see that a low credit score doesn't mean that you will never be approved for the lakefront property in Ohio that you want. It is possible, with just a little more effort on your part.



Our expert agents at Choice Properties can help you find the right plan when improving credit score. Give us a call today!

January
24

Tips for Finding Ohio Property

5 Tips for Finding Ohio Property for Sale

Buying a new property can be a daunting task. The sheer amount of Ohio property for sale is overwhelming, and you may not know where to begin. Our years of experience in real estate in Ohio have taught us the best tips and tricks to find the perfect property for our customers. Using our tips will help you do the same.

Buyer's Best Interests

Naturally, you have your own best interests in mind when you're looking to make a big purchase. Consider here whether the seller's listing agent will also have your best interests in the transaction. Probably not. The dual agent representation scenario is the most common one in Ohio, however you can ask a different realtor to represent you exclusively. A buyer's agent will look out for you, and the seller should have no objection because it won't cost them anything. Beyond negotiating a transaction for you, a buyer's agent can also help you locate and look at properties within your budget, if you haven't been able to find one.

Professional Appraisals

When you apply for a mortgage, the lending institution will ask for a professional appraisal of the home you want to buy. This is to make sure that the agreed upon price is justified according to the current market value of the property. A professional appraiser will look at comparable Ohio property for sale, and arrive at a value. It's a cost that's well worth your while, and using a third party professional appraiser will ensure that you get an unbiased opinion.

Know Your Budget

The mistake a lot of buyers make, is finding a property they love first, and then finding out that it's out of their price range. The smart way is to figure out your budget first, and then look only at properties that fall within it. It is not advisable to buy so close to your target amount, that you become anxious at the thought of any further fees or repairs. There are a couple other approaches you can use, like adjustable rate mortgages to increase your budget and get you into a home you really want, that might be a little bit beyond your price range.

Buying Out Of State

Ohio property for sale is in demand, and you may be a buyer from out of state. In this case you will be concerned about how you will be able to monitor the purchase of a home long distance. You can look up the National Association of Realtors which is a nation-wide network of real estate sales professionals. You'll be able to find a real estate agent in the area where you are looking to purchase. Choice Properties can help you select the perfect home for you in Ohio and assist you to strike a deal when you have made that selection. Working with our agency will give you a real advantage as we have local knowledge.

Commission

It won't cost you more to be represented by a buyer's agent when it comes to commission, because the listing agent will split the sales commission with them. Commission is usually paid by the seller of the home. Only in one circumstance would you, as the buyer, pay commission to your agent, and that is when the house you are purchasing is FSBO, ie for sale by owner. This is where the owner has not listed the property with any selling agents, and would not want to pay the commission. In this case, it would be fair to expect the buyer to pay it, in consideration for the agent finding the home.

 

For more information on finding Ohio property for sale, give us a call today to speak with our award winning realtors!

October
19

 The Basics of Qualifying for a Home Loan

Looking to purchase a new home or refinance requires an understanding of the basics of qualifying for a mortgage. It helps to know some basic steps can help prepare for what is ahead. Learn how to be in a position ahead of time to get the best deal available.

 

Credit

A credit report is required from three major credit bureaus to document payment histories for auto loans, personal loans, credit cards, debt collections or other negatives. Credit scores are considered a predictor of lending risk. The higher a score, the better it looks to a potential mortgage lender. The following factors may also play a role in credit scores:

  • Debt payment history, including late payments can influence credit score

  • Credit card balances of more than 30-50 percent of credit limit can have a negative impact on a credit score

  • Collections can damage your credit score but can be negotiated with the agency

  • Bankruptcies and foreclosures have a general waiting period of around 2-4 years following insolvency prior to qualifying for new mortgage financing

 

Capacity

A mortgage lender wants to know an individual has the financial ability to repay a home loan. W2 income (working for somebody) is considered the most stable source of income which varies little from month to month. Self-employed income is riskier in a lender's eyes as it can vary widely month to month in terms of generating revenue to pay a loan. Some helpful hints include:

  • Document income with W2s, paystubs and tax returns to demonstrate financial stability

  • Self-employed individuals will be required to document income on tax returns and should be prepared to show the documents to potential lenders

  • Debt-to-income ratio is important as it shows what proportion of income goes to debt payoff and risk for lending. Typical DTI should be lower than 45%-50% going to debt.

 

Collateral

The property being purchased will serve as collateral for the mortgage. A lender will look at the value of the property as one of the most important factors. A full appraisal may be required to verify the value and condition of the property.

 

Getting Started

The following are some great next steps to take when looking to take out a mortgage for a property:

  • Check credit and make sure any issues are cleared up ahead of time.

  • Pay off outstanding debt before applying for a loan. The lower the DTI ratio, the easier it is to get desirable financing terms. This can save money in the long run.

  • When refinancing, take care of necessary repairs before having an appraiser come out. This will help the home value.

 

Having a financial portfolio that looks solid, has low debt and high credit scores can greatly increase the chances for getting a mortgage with better financing terms. Understanding how lenders think and preparing the portfolio will help individuals prior to applying for a loan search for a great deal and support a smoother process overall.

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