Price declines and low interest rates continue to motivate buyers to enter the most affordable housing market in 28 years. But, at the same time, only 1 in 10 of today's homeowners say they have delayed selling due to those same market conditions. In the past year, the National Association of Realtor's Housing Affordability Index has increased 29% overall and 19% for first-time home buyers---the highest levels during the Index's 28 year history.
The survey also found that most Americans aren't aware of how affordable homes are becoming in today's fast-changing housing market. More than 3/4's of consumers think a median-income family can afford less than half of the homes for sale in their area. In reality, however, a family earning a median income of $53,182 can afford to buy nearly 75% of the current homes for sale. For 14.6 percent of first-time home buyers, the government's $8,000 tax credit provides the impetus to shop for a home this year.
Courtesy of Sherri Buttler, Sun American Mortgage Company sherri.buttler@SunAmerican.com
Showing posts with label credit report. Show all posts
Showing posts with label credit report. Show all posts
Monday, October 5, 2009
Wednesday, September 30, 2009
MORTGAGE IS DENIED? HERE'S WHAT TO DO
Talk about raining on your parade! You find your home, make an offer & then learn that your loan application as been turned down. What to do now?
You may be able to turn a "NO" into a "YES" by taking the right steps:
Low appraisal-Try negotiating with the Seller or consider making a larger down payment should you have the money.
Not enough up front Cash-Lender determines that you don't have enough money to cover the downpayment + closing costs. Ask the Seller to assume some of the closing costs or consider a non-repayable gift of funds from a relative. Your lender will instruct you how to document this gift.
Insufficient Income-Due to governments "Making Homes Affordable" program, lenders are using a 31/38 rule when calculating allowable loan limits. Monthly PITI (principal, interest, taxes & insurance) should not be more than 31% of your gross monthly income. Your total debt (car loans, credit cards etc.) plus the PITI should not exceed 38% of your gross monthly income. If your credit record is good & you've been carrying an equivalent housing payment, try to convince the lender to ease this guideline. If you or your spouse are expecting a salary increase, tell the lender who can then verify the forthcoming income increase.
Unsatisfactory credit (FICO) score--Lenders are looking for defaults, bankruptcies as well as late or missed monthly payments. The lender needs to know the full picture if these issues are due to an illness, job layoff, marital problems or other short-term situations. If you've regained financial stability for at least a year, the lender may reconsider. If you have an up-and-down credit history, the only solution is to reestablish prompt payment practices. There are also a few good lenders that will assist you in "cleaning up" your credit report and therefore increasing your FICO score. Please contact me and I can refer you to these lenders which do not charge for this service...they just want to handle your loan when it comes time to buy.
You may be able to turn a "NO" into a "YES" by taking the right steps:
Low appraisal-Try negotiating with the Seller or consider making a larger down payment should you have the money.
Not enough up front Cash-Lender determines that you don't have enough money to cover the downpayment + closing costs. Ask the Seller to assume some of the closing costs or consider a non-repayable gift of funds from a relative. Your lender will instruct you how to document this gift.
Insufficient Income-Due to governments "Making Homes Affordable" program, lenders are using a 31/38 rule when calculating allowable loan limits. Monthly PITI (principal, interest, taxes & insurance) should not be more than 31% of your gross monthly income. Your total debt (car loans, credit cards etc.) plus the PITI should not exceed 38% of your gross monthly income. If your credit record is good & you've been carrying an equivalent housing payment, try to convince the lender to ease this guideline. If you or your spouse are expecting a salary increase, tell the lender who can then verify the forthcoming income increase.
Unsatisfactory credit (FICO) score--Lenders are looking for defaults, bankruptcies as well as late or missed monthly payments. The lender needs to know the full picture if these issues are due to an illness, job layoff, marital problems or other short-term situations. If you've regained financial stability for at least a year, the lender may reconsider. If you have an up-and-down credit history, the only solution is to reestablish prompt payment practices. There are also a few good lenders that will assist you in "cleaning up" your credit report and therefore increasing your FICO score. Please contact me and I can refer you to these lenders which do not charge for this service...they just want to handle your loan when it comes time to buy.
Monday, September 14, 2009
DON'T MAKE MAJOR CREDIT PURCHASES DURING LOAN QUALIFICATION
Home buyers---don't go on a spending spree using credit if you are qualifying to purchase a home. Your loan pre-approval is subject to a final evaluation of your credit report just a fewdays prior to closing. Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility ie. $300 car payment could mean that you qualify for $30,000 less in a mortgage. Even if you have sizable savings, don't make any large purchases until after closing. The last thing you want to happen is to have your loan declined and lose your new home.
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