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Your Home Loan Guide to Getting Approved

November 22, 2019 / / 0 Comments

Purchasing a home, especially as a first time buyer, has proven to be a long and difficult process. It’s stressful, a pain and a real headache to go through. In this article, we discuss what it takes to get a home loan approval and how to meet the minimum requirements to qualify. Let us help you with these simple tips!

Improve Your Score 

A good way to start the approval process is to improve your credit score. It’s important to make your score as high as possible before applying, scores of 740 or more are suggested; the higher the better. Once you feel it’s acceptable, you’ll need to grab a copy of your credit report from all three credit reporting agencies: Equifax, Experian and TransUnion. Be sure to check each report thoroughly for errors.

Get Pre-Approved

After getting your credit checked, don’t go shopping for a new home just yet. Another thing you’ll need is a pre-approval letter from a loan officer. During this process, they will check your credit and validate your finances. To get pre-approved, it is important to gather the following documents: W2’s and paycheck stubs, 2 years of tax returns, 2-3 months of bank statements and proof of down payment.

Know Your Type and Budget

There is no “one size fits all” home loan. Depending on your budget, you may qualify for loan programs that offer a variety of advantages. Since buying a home is such a major investment, it’s important to keep in mind your finances and budget costs for all home ownership expenses. Researching the different loans can help you know exactly what you’re getting into. If you’re a first time buyer, it’s beneficial to know the types of loans that are available for you such as a FHA (Federal Housing Administration) loan.

Conclusion

Home loans can be complicated and confusing for many first-time and even veteran home buyers. We can help guide you through this significant financial decision and get you approved for the home loan that works best for you! American Mortgage Resource, Inc. has the solutions you need to ensure that your loan application gets approved and the process runs smoothly.

The Lowdown on Home Equity Loans

October 31, 2019 / / 0 Comments

Do you need some disposable funds? A home equity loan might be right for you. These types of loans allow you to borrow against some of the equity of your home while using the house itself as collateral to repay that loan. If the market value of your home is higher than what you owe, and you have a decent credit score, pulling cash from your property through a home equity line of credit might be a good option for you. The following are a few things to consider before taking out a second mortgage.

Check Your Credit First

Before you go through all the trouble of filing for a home equity loan, make sure your credit score is even eligible in the first place. If your credit is “poor” or “fair” you’ll be charged exorbitant interest for your loan. Likewise, if your debt load is already chewing up a big portion of your income, the bank lender will likely decline your request because you probably won’t be able to afford it.

Know Your Equity

Once you know you’re eligible for a home equity loan or line of credit, you’ll want to start crunching some numbers. You have equity in your home if it’s market value is higher than the balance on your mortgage. The next step is checking to see if you have enough equity in your home to go through the trouble of applying for a loan. The standard amount allowed by banks is 80% of the value of your home, minus the current mortgage amount.

2 Types of Loans

You should think of a home equity loan as a second mortgage. A fixed-rate home equity loan is when you take out the entire amount to intend to borrow then pay back the amount every month. Typically the loan period is anywhere between 5-15 years.

A HELOC, or home equity line of credit, works similarly to a credit card. A HELOC allows you to borrow up to a certain amount over a given period of time. You can choose to pay off the interest on the amount or pay down the principal, whichever is more convenient for you at the time.

Conclusion

 If you need some disposable income, a home equity loan or HELOC might be the right choice for you. If you have a decent credit score and a good amount of equity in your home, contact our team at American Mortgage Resource, Inc., we can help you navigate the loan process from start to finish.

Reverse Mortgages 101

October 29, 2019 / / 0 Comments

The word “mortgage” usually brings to mind years of payments to a financial institution, until the full payment is accomplished. However, not all mortgages operate the same way. Hence, this blogpost welcomes the reader into the world of reverse mortgage.

Has to do with home equity

Also known as home equity conversion loans, reverse mortgages indeed are determined by the value of home equity. Reverse mortgages are available for homeowners 62 and older. To take out a reverse mortgage, a homeowner borrows against his or her home equity—i.e. based on the value of the home. Reverse mortgages are great in that they can allow homeowners to take advantage of a lump sum by borrowing against the equity (which can be a source of immediate income when times are tough or a steady stream of income). Although the homeowner is not required to make monthly mortgage payments, the full repayment is achieved at loan maturity.

A picture of home equity.

When is loan maturity achieved?

Loan maturity can occur when the homeowner sells the title of his or her home or moves out of the home (for example, to move into his or her child’s home). Unless the homeowner repays the mortgage by selling the home—the net amount from which would be used for repaying the mortgage loan—the homeowner’s heir(s) must repay the mortgage. Loan maturity can also occur when the homeowner dies. Creditors have the motivation to not collect monthly payments since the loan balance increases.

An elderly woman dabs.

Caveats

When one only has the facts above, a reverse mortgage could sound too good to be true. However, paying homeowner’s insurance and property taxes are still requirements for a reverse mortgage. (This is why wise financial planning is crucial for avoiding foreclosure.) Moreover, in certain instances, a widow or a widower can lose a home; therefore, reading the fine print is key for benefiting from a reverse mortgage. Another major caveat is that many scammers target the elderly in exchange for a fake reverse mortgage.

An elderly couple talks to a mortgage lender.

Conclusion

So there you have it. Reverse mortgages can be tricky to navigate, which is why you need a professional on your side. To benefit as much as you can from this “home equity conversion loan,” simply enlist the help of American Mortgage Resource, Inc. today.

Types of Government-Insured Mortgages

September 23, 2019 / / 0 Comments

The U.S. government has made it easier for hundreds of thousands of Americans to buy homes through providing various government-insured mortgages. Many citizens have purchased a house with these mortgages when it wouldn’t have been possible with the other conventional home loans. For more information about these special mortgages, continue reading!

FHA Loans

FHA loans are backed by the Federal Housing Administration. These loans make it possible for you to buy a home, even if you don’t have a perfect credit score or aren’t able to provide a large down payment. This is because they have more lax requirements – borrowers must provide a 3.5% down payment (other loans require a down payment of 20% of the purchase price of the home).

These loans are available for anyone trying to purchase or refinance a primary residence, but are mostly popular with first-time homebuyers. They come with mortgage insurance in case the borrower is unable to repay the loan. FHA loans are usually fixed-rate loans with either 15 or 30-year terms, and 1% of what you pay goes towards the mortgage insurance.

VA Loans

VA loans, granted by the U.S. Department of Veterans Affairs, provide flexible, low-interest mortgages for members of the military (both active duty and veterans) and their families. They don’t require a down payment or private mortgage insurance, and they offer leniency with credit scores. You are expected to pay a funding fee that is added onto your monthly payments, or may be paid upfront at closing. These fees serve to offset the program’s cost to taxpayers.

USDA Loans

USDA Loans are given by the U.S. Department of Agriculture. They assist moderate- to low-income borrowers in buying houses in rural areas. To qualify, you must purchase a house in a specified USDA-eligible area and meet other income limits (for example, the amount of debt you have cannot exceed your income by more than 41%). Most of these loans require no down payment and offer discounted interest rates, but you will have to purchase mortgage insurance.

These loans are perfect for those who struggle financially and are looking to purchase a home in a small, rural town. “Rural” doesn’t necessarily mean “countryside farmhouse.” It simply means that the town is under a certain population count – it can even be a suburban community.

Pros and Cons

Pros: Government-insured loans require lower down payments and have lenient credit requirements. They make homeownership accessible to everyone – since they are secured by the government, sellers are more likely to sell homes to lower-income applicants who are seen as a risk. In addition, buying a home allows you to build equity and credit, which helps you strengthen your finances and progress with your other financial goals.

Cons: The mandatory mortgage insurance premiums can be expensive, and cannot be cancelled on most loans. You will also have higher overall borrowing costs. In addition, you will likely need to provide more documentation to prove your eligibility for the loan.

Conclusion

Government-insured loans have helped countless Americans buy houses. However, you need to find a specialized mortgage company that is registered by the government to provide you with these loans. At American Mortgage Resource, Inc., we are able to help you find the home loan options that will help you the most.

How Jumbo Loans Can Benefit You

August 26, 2019 / / 0 Comments

When it comes to Jumbo Loans, these are loans that are over $400,000. These type of loans are similar to traditional mortgages but jumbo loans are quite a bit more difficult to get approved for. It is for that reason that they are for individuals with a higher income range. If this individual or individuals want to look into buying a nicer home, they will naturally need a bit larger of a mortgage loan.

As the name suggests, a jumbo loan will offer the ability, to a qualified borrower, for a sum that is quite a larger sum than is typically allowed. There are many ways that Jumbo Loans can benefit you. Read on and find out a few.

The Basics of Jumbo Loans

Dependent on where you live in the United States, you will fall custom to various different loan restrictions. This is referred to as “conforming loan limit.” What this means is generally the highest amount a borrower can receive on a single mortgage. This amount is usually between $400,000 and $600,000 in most states.

Though this loan may be larger, as you were looking for, it does come with a few tradeoffs. This includes higher mortgage rates due to the higher risk assumed by the lender of your choosing. Not only that, but Jumbo Loans typically require a credit score of 720 or higher.

Jumbo Loans are Versatile

There are many more benefits that come along with Jumbo Loans. There is a lot more flexibility in income qualifications. What we mean by this is that our Jumbo Loans come with no private mortgage insurance attached. The fixed rates offered will often be as low as 4%. While many lenders will offer both 15- and 30-year loans, they will also offer both fixed and adjusted rates. This provides the option down the line to refinance, if needed.

Not only that, but Jumbo Loan lenders are attaching attractive offers including private medical insurance, reduced lender fees, and quicker processing of the loan application.

Now that you have a better understanding of what jumbo Loans have to offer you, it is time for you to figure out if this type of loan is right for you. For all of you mortgage loan needs, you can count on our team at American Mortgage Resource, Inc. to provide you with the exceptional service that you deserve.

The Benefits of Refinancing your Current Mortgage

July 30, 2019 / / 0 Comments

You absolutely love your home, but would be happy to see your mortgage rates drop. There are so many things that are on your list of things to pay for, including paying off expensive debts and saving for important events coming up in your life. If you are dissatisfied with your current mortgage terms and fees, it might be worth your while to consider refinancing your mortgage in favor of more desirable rates. In this blog post, we will further define refinancing and the ways it could help you save money on your home.

What is Refinancing?

Homeowners utilize this strategy to achieve their respective financial goals. Typically, people refinance their loans in order to acquire lower interest rates or to alter the terms of the mortgage itself. Refinancing your mortgage can also help you change your variable loan rate to a fixed one, which will provide you with more peace of mind. The initial loan gets paid off by the bank, then another loan can be created with new guidelines. It is recommended that you have a great credit score when attempting to refinance your home because this will ensure you get reduced interest rates. Those with a low credit score might end up with higher rates if they attempt to refinance, so it is important that you are aware of your own score. With time, people’s earnings tend to increase, which allows them to pay their bills more quickly and expand their credit score; this is the time to consider refinancing.

Advantages to Refinancing

The biggest benefit of refinancing your mortgage is achieving lower interest rates on your monthly mortgage payments, which will allow you to put your money toward your other priorities. You will be astounded by the hundreds of dollars you save annually with a refinance. Another reason people decide to use this strategy is because they are looking to secure enough money for a substantial purchase in their life, be it a car or paying off credit card debt. To do this, they refinance with the aim to get equity out of their home. First, an accurate appraisal is required, then the lender determines the percentage of the appraisal that they will loan out. Finally, the amount that was owed on the original mortgage is subtracted so it can be paid off. The homeowner is then left with the remaining balance to pay off their newly refinanced loans.

Are There Risks to Refinancing?

It is important to do thorough research to determine your potential savings prior to making this big decision. If you do choose to refinance your mortgage, there is the possibility that you will need to pay new closing costs. In addition, it is recommended that you hire a lawyer to help make sure you get the best deal possible. Along with inspection fees and application fees, refinancing your home might end up costing more than staying with your current mortgage costs.

Conclusion

Finding a way to lower the interest rates on your mortgage can seem overwhelming, but it can save you a significant amount of money in the long run. A qualified mortgage broker will make the entire process much simpler for you, so you can focus on more pressing things in your life. If you are looking for a home mortgage broker to help you make the best financial decisions for you and your family, you can count on us at American Mortgage Resource. We look forward to serving your financial service needs.

Benefits of Using a Mortgage Broker

July 5, 2019 / / 0 Comments

Shopping for a mortgage can be a frustrating ordeal, but you don’t have to do it alone. The one sure-fire way to reduce the amount of legwork needed to find a better deal for your mortgage is to hire the right mortgage broker. A broker is a sort of matchmaker who wants to connect you to a lender who meets your specific needs. There are several reasons to hire a mortgage broker instead of going straight to the lender yourself. The following blog will offer you a little more insight.

Access to a Multitude of Loan Lenders

When it comes to a mortgage broker, they have access to a large array of different lenders that can help find you the best deal available. The better the broker’s experience, the more opportunity to bring a loan product at an interest rate you can afford.

Expertise to Help You through Anything

A mortgage broker will navigate their clients through any situation. They are here to completely handle the process and smoothly get you over the bumps along the way. If you, as the borrower, have any credit issues, a mortgage broker will know what lender best suits your unique budget.

Timesaver

The best part of working with a mortgage broker is that you only need one application. Without a broker, you would have to complete forms for each individual lender. Not only that, but they can save you even more time by providing formal comparisons of any loans that are recommended,  helping guide you to the information that provides you with cost differences.

Money Saver

The good thing about a mortgage broker is that they are offered loans on a wholesale basis from lenders, providing you with the best rates available. When you work with a reputable broker, they will always disclose the way they are paid and detail the total costs for your loan.

Personalized Service

When you begin searching for the right mortgage broker, you should always expect that they will help smoothen out the process for you. Additionally, they can advise you through the closing process.

When you are searching for the right mortgage broker, you want one with the qualifications and experience to exceed your expectations; that’s where we come in! Here at American Mortgage Resource, Inc., we understand the frustration of working with a broker who will only offer you a subpar service and are here to help.

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May 28, 2019 / / 1 Comment

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