Check Your Credit Before Buying Your First Home

Like most first time home-buyers, you don't have the money to pay the full price in cash for your purchase. So you'll need to depend on a mortgage to finance the deal. Lenders look at the price of the house, down payment, and monthly dues to partially qualify you for a loan. However, they also look at your credit report and credit score to determine your payment rate and terms.

While you can't get your score without paying for it, you can look at your credit report, so you know what the lender is examining. The report reveals your financial obligations, your payments to merchants and institutions, and whether you pay on time or not. You're entitled to one report every year from each of the three major credit agencies, which are Equifax, Experian and Trans Union. You can get each document for free from AnnualCreditReport.com, without any obligation or without having to sign up for financial services.

Check out your listings as soon as you download them. Make sure everything is correct, especially the merchant name, account number, amount owed, monthly payments, transaction history, and your record of payments. Find any discrepancies? Then let the merchant and reporting agency know as soon as possible. They're legally obligated to address any issues, however, that may take several weeks for the fix, so you want to start looking at your report many months before you apply for a mortgage.

Red flags for lenders include foreclosures, bankruptcies, or late payments. You can't do too much about these issues if they are accurate, but you can develop explanations of why they exist. For example, perhaps you lost your job and missed a few payments during that time.

If you're interested in obtaining a mortgage or want to find out more about the financing involved, please contactus. We will put your first and be your partner through the process.

How Prequalification Helps with Buying Your First Home

You've spent many months visiting models at new housing developments, visiting open houses, and arranging appointments to see existing properties for sale. You and your spouse have finally found the house of your dreams. It's in a perfect location, has enough square footage and bedrooms for your family, and boasts a host of excellent features like a gourmet kitchen and spa tubs. You apply for a mortgage to buy your first home and are denied. The lender says your down payment and income do not put you anywhere close to affording what you want.

You could have spared yourself the embarrassment and wasted time by undergoing prequalification before buying your first home. Going home-shopping without this prerequisite, as you've discovered, is like taking a long taxi ride and realizing you left your wallet at home. The process essentially looks at your income and expenses to determine how much home you can afford.

After you have been prequalified, you can use this knowledge to look for properties that are within your price range. Once you make an offer, the lender then examines your finances in detail before issuing you the mortgage. After prequalification, this examination is often just a formality because the lender already knows the state of your finances in advance.

To make the process go more quickly and efficiently, do what you can to clean up your finances before you apply. Pay off as many bills as possible to reduce your outstanding balances. You'll be able to afford more house if you have fewer monthly obligations.

Why don't you contactus today to find out more about obtaining a mortgage or getting prequalified?

Mortgage restructure might be in your future

The housing market crash of 2008 devastated millions of families, many of which are still in battle. Job loss, foreclosure, short sale, bankruptcy, among other financial crises left mortgagees under the dust, behind on billing statements and in a search for a more promising monetary life.

Fortunately, the government recognized this problem last August. During a speech in Phoenix, President Barack Obama said, “We should give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they’ve worked hard to repair their credit.”



The “Back to Work - Extenuating Circumstances” lending program does just that — across the United States, the mortgage restructure offers a second chance by allowing families to apply for a new mortgage only 12 months after losing their home.

The Federal Housing Administration’s Mortgagee Letter 2013-26 states, “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

Those in the program do not face premiums nor additional fees at closing. In fact, the program is designed for families afraid of complex loan processes and those who have been turned down by other banks. Lenders are making it easy for those with negative credit histories.

To apply, borrowers must first have a home mortgage lender that offers the Back to Work program. Secondly, the family must be demonstrating a full recovery from at least one type of financial crisis, including prior foreclosure, prior short sale, bankruptcy, deed-in-lieu, loan modification or forbearance agreement.

Borrowers must agree to attend at least one hour of one-on-one housing counseling, required by the FHA. Mortgagee Letter 2013-26 states, “Housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget.”

Still struggling and searching for a shorter waiting period? Looking for a more promising mortgage restructure? A home mortgage lender offering the “Back to Work” program is waiting to help.

Financial Lenders – Offering Sustainable Lending Products

The dream of home-ownership and the ability to provide a safe and loving place for a family is a common hope for many. Reaching that dream can be a challenging and confusing journey. Navigating financial adversity and endless requirements for obtaining a loan can be a very frustrating process, which is why many reach out to lending firms for guidance.

It is important to find the right lending company to suit your needs. Most firms determine home mortgage loan eligibility based on credit scores, so if you have a less than perfect financial history, you will need to be mindful to reach out to a lending firm that considers more than a 3-digit credit score when determining whether or not to extend you a loan.

There are a few companies that give weight to an individual’s history, unique circumstance, and drive to overcome adversity and get back on their feet. These firms consider things like; what caused your financial trouble in the first place, are you successfully paying your bills now, and have you begun to re-establish financial stability. They pledge to be your lending partner and recommend a home mortgage loan that is right for you now and for the long term in order to set your up for success.

For first time buyers, this is an especially important relationship. Finding the right home mortgage lender who will guide you to a loan that makes sense for your situation increases the chances that you will be able to maintain your loan and build a secure future for your family.

These types of lenders truly can help you turn your dreams into reality.  

Lenders make a big difference when buying a home

When you think of buying a new home for yourself, there are mixed feelings of happiness and stress. Happiness because we know that a home is where families live and grow together, a place where bonds develop and love blossoms. The stress is about the complexities of home mortgage loans. Home-ownership is a serious commitment that lasts for many years. It is important that we manage our monthly installments in a way that we are able to make regular payments without any defaults.

On the one hand, buying a home is a symbol of security, and on the other it is associated with a sense of responsibility. At this instance, we need the assistance of a reliable lending company who can provide us with the understanding of loan procedures and payment details.

There are a few factors that must be considered carefully when you decide to buy a home:

• Added financial responsibility: Apart from the monthly loan installments, there are other expenses such as utilities, maintenance, taxes and insurance which are inevitable with the purchase of a home.

• Risk possibility: There is always a risk factor associated with such a significant purchase. Although the value of a property increases over time, there are chances that it may go down.

 • Lesser flexibility: As a renter, it is possible to shift to a new place at a short notice. However, it is very complicated to sell a home and move to a new one.

There are some lenders who earn the trust of their borrowers through their dedicated and caring approach. They act as a partner throughout the process and enable borrowers to make a planned decision by giving them information about the different loan options available. The experts invest time to figure out the requirements of the borrowers and provide them with the best solutions.

When we purchase a home, it is quite an accomplishment. It is part of the American dream. When we get assistance from a trustworthy lending company, buying a home becomes a much more manageable experience.

There is a Silver Lining Even after a Foreclosure

Buying a home is the most fulfilling experience; however, losing it is equally as devastating. It is a terrible feeling and we often take a lot of time to come to terms with such a situation. There are many reasons that lead to foreclosure. The more common ones are as follows:

• Unforeseen incidents
• Job loss
• Inability to refinance
The impact of a foreclosure is often overbearing. Besides the emotional implications, there is an immediate need to find a place to stay. Foreclosure is also accompanied with an unfavorable effect on the credit rating of a homeowner. It is a personal financial disaster and the individual must take time to cope with it.

However, once the finances are back on track and the borrower intends to buy a house again, the situation may not be in his favor.

Need to repair the credit history Borrowers have to reestablish a good record and it takes a long time to build up an ideal credit history. In normal circumstances, one must wait several years after a foreclosure to buy another house. However, there are some professional lenders who are empathetic enough to understand the definite reasons that led to the foreclosure. If the reasons depict the right intent of a homeowner, they can actually help him/her out to secure a second chance and buy a home.

For example, after the 2008 economic crisis, many people were rendered homeless due to job losses. This was a situation where these jobless people could not afford to make their regular home mortgage loan payments. However, they could not be held responsible for the crisis. In such circumstances, any conventional lending company would not consider the facts behind a homeowner’s inability to make timely payments. Instead, they would outright reject his loan application for the purchase of a new house.

There are some lenders who take note of actual facts behind foreclosure. They help borrowers to become proud homeowners again; they provide all of the necessary assistance that can help borrowers secure a new home through easy procedures. These lenders serve as support pillars to help borrowers sail through their financial crisis and gift themselves the priciest possession – a home.

Checklist For Borrowers Re-Entering The Market After Foreclosure

“Where we love is home - home that our feet may leave, but not our hearts.”- Oliver Wendell Holmes

More than a roof, more than a shelter, more than a structure on a plot of land; our homes are built with love and commitment. A home is a place where we learn the most, love the most and it’s a place where we can be ourselves. During financial instability, people struggle to secure their most important asset, their home. Due to unforeseen circumstances, sometimes people have to sacrifice the security of their homes, and when that happens it becomes difficult to recoup and come to terms with life. The emotional distress during foreclosure and the process of shifting from your own home to a rented apartment is painful.

When luck and circumstances are not in our favor, we must make critical decisions. Sometimes this means that homeowners have to step out of a home that promises love, security and togetherness. Apart from the distress and the pain, there are serious repercussions that come from home loss. Damage to one’s credit score is imminent and distressing. For this reason, the previous homeowner will have to wait two to three years before re-entering the market to buy a home again.

When people approach lenders to buy a home for the second time, several factors are taken into consideration. Those who are planning to re-enter the market after foreclosure should consider the following before approaching a lender for a home mortgage loan:

·         Job stability: People who fell into foreclosure due to job loss have to prove their job stability before re-entering the market. Lenders look for job stability before granting a suitable home mortgage loan.

·         Saving attempt: After a foreclosure, it is important to rebuild savings to prove financial stability and the ability to make monthly payments on time.

·         Attempt to improve credit score: It is a difficult and time consuming process. A foreclosure can drop a credit score by about 150 points. On-time bill payments and keeping credit card balances below the maximum level help to regain the lost score.

·         A valid reason for foreclosure: If a foreclosure occurred due to a justifying circumstance such as job loss or unexpected medical bills, then the waiting period for a new home mortgage loan can be reduced.

Most importantly, it is important to explain to lenders the exact reason for foreclosure. Accordingly, lenders suggest an affordable home mortgage loan. Lenders try to balance affordability and equity to offer a sustainable program that is beneficial in the future. Lenders work as partners and suggest loans that can be transformed into performing assets. 

Source Via: www.1stalliancelending.com

Homeownership – Fulfillment of a Dream

After spending five years pursuing my career, working hard and saving my money, I felt it might be time to take that first big step into homeownership. The idea of buying my first home was overwhelming and a bit intimidating, not understanding the process and all that entailed, but still my excitement about having my very own place and my interest in building equity for my future was winning out. 

This was going to be, what felt like, a true transition into adulthood for me. I felt that finding the right lender to guide me through the process was very important. I really needed a lender, who I could count on to educate and prepare me for all that was entailed in getting approved for a mortgage as well as help me make sure I was getting the right loan for me. As a first time buyer, I had little equity and knew I needed something sustainable that I could manage and maintain for the long term. This was not a small step in my life and I wanted to do everything right.

Significance of Home for First Time Buyers: 

For first time buyers, a home offers shelter, security and much more than that. Here are a few benefits of home ownership for new buyers:

• Emotional satisfaction: Home ownership offers emotional satisfaction. It ensures security, pride and fulfillment.
• Stability: When we rent a home, there is an element of uncertainty, whereas owning a home provides financial as well as emotional stability.
• Build equity: With monthly mortgage payments, homeowners build equity in their homes.
• Tax benefits: Homeowners get to avail tax benefits.

There are some lenders who offer customized solutions, taking several aspects into consideration. Job histories, salary, credit score, payment record and other aspects are taken into account before offering a home mortgage loan, and the whole picture is considered. Personalized service helps ensure you are getting the correcy and sustainable loan that fits your situation.

Source Via: www.1stalliancelending.com