Strategies for that Jumbo Loan

There are strategies on how to get jumbo loans. Jumbo loans, as the term suggests, are those loans within the $417,000 mark with interest rates higher than conventional loans. Nevertheless, strategies on how to get jumbo loans are simple and, quite surprisingly, familiar to borrowers. To have that desired jumbo loan, you need to:

jumbo-loanGet as much cash on the table as possible. Jumbo loans are all about taking risks. If you put more cash into it, chances are better for you to have that jumbo loan in due time. It is also a bonus if you can do something about your lender’s risk exposure.

If you can, employ the services of a mortgage broker. Your broker can make things easy for you. They will find deals whereby you can get that jumbo loan. Otherwise, you run the risk of cutting yourself from the best deals which a broker can do for you.

You need to also factor in higher interest rates. You can only do this by getting enough loan options from your mortgage lender. Secondary markets have higher interest rates than conventional ones.

Scrutinize your application. Try to make your application squeaky-clean. Remember, there are other databases that will reject your application even at the expense of a misspelled word. Check your application every now and then.

Get a good closing of your account. Don’t be too compulsive when it comes to closing costs; try to scour some more lenders and compare interest rates for instance, and you may have less cost and even a lesser interest rate in the end.

Jumbo loans are possible. But only when you have done the necessary assignments of checking and comparing lenders for that hefty amount of loan can you avail them. So try loaning in a jumbo way!

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Documents That Go About Your Mortgage Loan

You might be at a loss on what kind of documents you will need to procure when going for a mortgage loan. At Approved Mortgage, we require our borrowers to submit these documents for them to qualify for a loan, and to see to it that the business done is legitimate.

You are basically asking money from a borrower, so it is normal that with this type of transaction there has to be a corresponding document to go with as proof of the business.

Here are a few examples of documents that might be required:

mortgageIf you are purchasing or refinancing your home, and at the same, earning a salary, all you need to provide is your two-year W-2s, plus one month of pay stubs, including official receipts. If you are self-employed, your past two-year tax returns will be required. Either way, proof of income is essential.

If you are currently renting a home or apartment, you will need to provide rental agreements plus your two most recent years of tax returns.

If you want to speed up the process, also present three months’ bank, stock, and mutual fund account statements. Along with these documents, you need to provide recent copies of your stock brokerage (IRA/401k) accounts, if any.

In case you are requesting a cash-out, your letter of explanation or “Use of Proceeds” is a must. You will also need to provide a copy of the divorce decree, that is, if applicable. And if you are not a US citizen, you will need to present your green card, your H-1, or L-1 visa.

For a Home Equity loan, you will have to provide a copy of your first mortgage note plus the deed of trust, along with those documents presented above.

While each lender will have their own specific documentation requests, these are merely an example of the most commonly requested documents types.

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Old Age and the Veteran Affairs Loans

Older folks generally have a harder time to do the things they love. Their options and actions can be limited, and often become a responsibility shouldered by someone else.  Buying property should not be any more of a struggle than the younger generations. That’s where a Veteran Affairs (VA) Loan can help.

vaIt’s never too late to dream about securing a home, even in old age – our veterans deserve it. They should have special privileges after serving the military for so many years. Having a VA Loan is a perfect benefit for them. VA Loans give special privileges to veterans.

  • They can buy a home without any down payment. This saves them a lot of energy and resources since buying a home can be quite daunting.
  • They can also refinance their existing home up to its 100% value with extraordinary flexibility in terms. In addition, they don’t have to pay Private Mortgage Insurance (PMI).
  • They also don’t have to pay the closing costs.
  • VA loans are easy to get because the government insures them. In so doing, there is less risk involved in the process.
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Details Involving a Property Appraisal

appraisalFor a property appraisal to be successful, it should be detailed and properly documented. An appraisal can at times dictate the outcome of a loan. It is a unique part of the loan process because it aims to assess the requirements that will accompany your loan application.

The following are things you need to do before and during an appraisal.

Know What Adds Value
Try to determine those things that add value to your property and work on improving those items first. If you are making renovations, keep it to a minimum.

Keep a Record of Changes
Document your improvements, and keep receipts of material costs and any labor that is paid to home improvement contractors. These facts may influence your choices in the renovations and appraisal.

Research the Neighborhood
Inform your appraiser about any changes in your community. In that way, they will be able to compare certain parameters in their appraisal, such as value and pricing.

Distinguish Differences Inside the House
Your upstairs is different from your downstairs, and there should be a visual demarcation such as decor or color. This will help your appraiser to delineate their assessment properly.

Tidy Up
Keep the property clean. Even small mess can devalue the overall property. You are trying to impress the appraiser. A property in disarray is so much more difficult to appraise toward it’s actual value.

Let Them Do Their Job Alone
Give your appraiser some space when they are conducting the appraisal of your property. The appraiser might ask questions along the way, but let them do the work without you as a shadow.

Appraisals can sometimes take days, but what’s important is the detailed, documented, and time-conscious process.

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Bills, Balances and Bad Debt

 

credit scoreAn important thing to remember when going for a mortgage loan is to maintain a good credit score. Credit scoring is part and parcel of every mortgage loan. At times, it has the capacity to dictate the outcome a loan, because it serves as an entry pass for the approval of your mortgage loan. By having a good credit score, you will find that approval of your mortgage application is as easy as dreaming your about new house.

But what are the things you need to consider with your credit score? Let’s discuss some related topics so you can understand the basics of how credit scoring is done.

Always keep a close watch of your credit card balances. The trick is this, the smaller the percentage of debt to available credit you have, the better it is for your credit score. It matter less what the available credit in an account is, than what percentage amount of that total credit is debt. This corespondents mostly to only your revolving credit in relation to how much you are using. However a zero balance is also unfavorable. Creditors want to see that you are using your available credit wisely. Best strategy to show responsible credit management on your part is to maintain a balance under 50% of your available credit, but not zero.

Avoid creating unnecessary balances. This will weaken your credit score in the process. Try to control your expenses. Wild fluctuations in balance and payments are an indicator to creditors that your responsibility towards your credit is volatile.

Highlight your history of having good debt. This will increase your chances of securing that loan. If it’s possible, leave those bad debts behind and concentrate on debts that showcase your paying power. Remember, creditors need to make money on your borrowing, so they look for your ability to manage your debt without showing yourself to be a high risk. Good borrowing and repayment history shows you to be a favorable borrower.

Pay your bills on time. If you are already doing this, good for you! Continue to do so. Credit scores put emphasis on how well you handle your debt. So if you have secured that loan, make sure to attend to your payments afterwards.Too much debt, and late payments show you are a higher risk as a borrower.

Never underestimate your credit score. The approval of your mortgage loan depends on it.

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Addendums for a Mortgage Loan

mortgage-interest-rates-riseApplying for a mortgage loan has many turns. You need to provide a lot of documents as well as deal with a lot of people in the process. Perhaps the most important thing to consider is getting a good credit score to increase your chances of being accepted for a loan. But there are other items also that you need to consider. These may not be as prominent as attending to your credit score, but they can influence your mortgage loan application all the way to its approval. These are only reminders when going over a loan, but they are important parts of a larger mechanism and that is the approval of a loan.

What are your loan options?
If you can pay at least 20% of your down payment, that would be a start. If not, you can go with FHA-backed loans. The important thing is that you know your financial status. Otherwise, you might be availing of such loans without any success.

Try to make a large down payment.
This will increase your chance of an immediate loan release. You credit score will look good alongside a hefty amount of down payment. Who knows? You might even be given a discount or get your interest rates down by paying a huge down payment.

Consider the fees.
This includes the interest rates. You can negotiate along the way for you to have a more favorable amortization in the long run. Always check the fees so you can plan better the total payments.

 Wait for a good deal.
Patience is a virtue. And that also applies with going after a mortgage loan. It is good if you can bid your time while pursuing your mortgage loan. There are mortgage companies that offer favorable interest rates as the loan progresses.

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Misconceptions About USDA Loans

Broadview-Mortgage-Mortgage-Loan-e1383517967943A US Department of Agriculture (USDA) loan is a special mortgage loan program offered by Approved Mortgage. USDA caters to those who are purchasing a new home or refinancing their homes that are not part of a metropolitan area.

A mortgage loan program is suitable for first time home buyers, with 100% financing, no down payment requirements and no repayment penalties. USDA also has low rates which can be quite helpful to borrowers. But despite its extended program, there still exists certain misconceptions about USDA. Examining it further, USDA’s program benefits a significant part of the populace.

Exclusively for Farmers
Although it has its bearing with the Department of Agriculture, USDA is not an exclusive for farmers. As long as you meet the minimum credit guidelines, you are eligible for USDA.

They Offer Less
Contrary to misconceptions that FHAs or conventional loans are better than USDA, the latter nevertheless offers better terms compared to FHAs.

They Are Not Flexible
It is also not true that USDA is inflexible. This mortgage loan program can be used to purchase a new house or for refinancing purposes with a lower rate in return.

For Rural Areas Only
Are USDAs for rural areas only? Not so since USDAs are available in areas most people would not consider rural. People living in communities just outside a metropolis can avail of the said loan anytime.

They Are Harder To Get
Also, USDA mortgages are said to be harder to get than conventional loans. This is not the case most of the time. USDAs are much easier to get because they are guaranteed by the government.

These are many more misconceptions about USDA. Nevertheless, this is a unique mortgage loan program offered exclusively by Approved Mortgage. Never mind if you’re outside the metropolitan area. As long as you can comply with its minimal requirements, then you are on your way to your new home.

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The Documents That Go With Mortgage Loans

mortgage-companyAny mortgage company that is serious about providing loans to borrowers have specific minimum requirements for the transaction, most of which are federally mandated.

First off, a mortgage company usually requires you to submit W-2 statements, preferably from the recent past two years. They will also need you to submit pay stubs from the last thirty days. Your bank accounts, if any, is also in need. You have to secure your recent bank statement (three months at least), as well as your recent business dealings such as your Mutual Fund Accounts.

You will also be required to do a lot of photocopying, particularly with any stock or certificates of deposits as part of the requirement. And copies of your purchase and sale agreement are also part of the deal.

If you are renting, you should be able to stipulate in your requirement from at least 12 months cancelled rent checks, including the name of the landlord and address.

If in case you are a divorcee, an executive divorce decree should also be included.

If it’s a refinance, secure the copy of the deed and your recent tax bill.

You are also encouraged to produce a letter of explanation for any credit problems.

You are also required to bring in your personal tax returns, preferably from the past 2 years plus all schedules. And if you are self-employed via a corporation, you need to submit also at least 2 years of the said returns, along with its statements and balance sheets.

These are just a few of the many requirements that a mortgage company will require you to present when applying for a mortgage. Requirements may vary, depending on the need of the borrower, but most requirements follow federal regulation, and are not negotiable and cannot be substituted for similar document types.

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Methods to Property Appraisal

appraisalAn appraisal is part and parcel of every loan application. It is the process of determining the valuation of the rights to ownership. The job of every appraiser is to define the rights of a particular appraisal.

An appraiser interprets the market value of a property in order to arrive at an value estimate.  Appraisals involve a lot of research and data-gathering before an appraiser gives a final opinion.

At Approved Mortgage, there are three types or approaches that appraisers use when dealing with property evaluation. These approaches are Cost Approach, Comparison Approach, and Income Approach.

Cost Approach deals with costs in the event of replacing existing improvements in relation to the date of its appraisal. Physical deterioration as well as functional or economic obsolescence are considerations.

Comparison Approach, on the other hand, uses bench-marking techniques. The appraiser tries to determine similarities and differences from size to quality to location of the said property. By doing so, he/she will be able to determine the value of the property.

Income Approach deals with matters pertaining to rental properties that most of the time has little use to single family dwellings as far as valuation is concerned. This type of appraisal is based on the net income that the property produces.

At times it takes days to conduct a property appraisal, especially when doing a comparative approach. This is because it takes careful observation and analysis to completely analyze or interpret a data from other sources. And there is little room for any appraiser to commit mistakes. If he/she does, that would be both disadvantageous to lenders and borrowers alike. A loan application is not complete without doing an appraisal. This will determine the limits of a borrower as far as his/her loan goes. It takes a precise appraisal for any loan to be released.

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Reasons Why We Refinance

RefinancingA refinance is basically to finance again with a new loan, but with lower interest rates. Let us take a closer look at the benefits of a refinancing scheme.

Lower Monthly Payments
This is almost always the reason why borrowers choose to refinance their homes. When there is decrease in the total payment and interest rate, it is advisable that you go for a refinance, especially if you plan on living in your house for several years. Borrowers are encouraged to calculate what they call a “break-even point” in doing refinancing, to see if refinancing makes sense in the first place. Borrowers may also want to adjust the rates when doing refinancing just in case they plan for a permanent residency, and also want to determine their monthly rates.

Adjusting the Rates
Adjustable Rate Mortgage (ARM) refinancing scheme enables borrowers to adjust or switch over the rates attached to the mortgage. Refinancing gives you a lot of options, and what could be more helpful than lowering the rates of that said mortgage.

Eliminating the Private Mortgage Insurance (PMI)
Lowering or going zero on your payment options will allow you to buy homes with less 20%.  But this transaction usually requires a mortgage insurance. This scheme is designed to shield lenders from loan defaults. But you can always cancel your PMI with a mortgage refinance loan.

Cash out options
This is usually done with your home’s equity. Since houses increase in value over time, they become incomes in the process. The value attached to it could be put to good use. Cash-out transactions on mortgage refinance can be also as tax deductible in certain situations.

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