Golf Product

Archive for November, 2008

Nice Credit Scores Now Have Fees

Although mortgage interest rates have dropped like an anchor, getting approved for a home loan is still not an easy task.

Rates dropped substantially when the Government took over Fannie Mae and Freddie Mac a week ago. Mainly prospective purchasers who have a credit score of 740 or higher – along with a 20% down payment – can qualify for low rates around 5.80%. During the real estate fest just a few years back, applicants who had credit scores of 620 could secure financing at the low rates. Even a 580 score would get them an attractive interest rate.

In a strategy to make credit more available to home buyers, the Treasury dept will purchase mortgage-backed securities from Fannie and Freddie since they are the major source for lending institutions. However, credit scores will play a major role in who gets approved or not. A person’s credit rating can range from 300 to 850, with 300 being very low and 850 being the best. Only those people with the highest credit scores are getting the best mortgage rates and terms.
In addition, Fannie and Freddie have raised their fees for borrowers who have low credit scores. If your score is low, your fee will be larger. If your score is above 700, you will still be charged a fee which is very different from the boom times. Borrowers need to adjust and not think they are getting bamboozled by mortgage brokers or lenders. This is what has happened due to the housing prices declining in certain parts of the country.

Investors in mortgage-based securities are justifiably requiring that they be paid extra for any extra risk when a prospective borrower is involved in the transaction. The fees can range from .25% to people with credit scores of 720 to 1.5% for borrowers who have scores of 630. This fee is paid upfront to the investors and sometime can add 1% to the actual principal balance. So, you will need to go with the flow for a while.

Even the FHA is or will be increasing their premium for insurance in the near future due to taking on more risk. FHA mortgages have some very attractive features such as low down payments from 3%, allowing relatives or unrelated borrowers to help you qualify for a mortgage and the loan is govt. insured. To understand all the new nuances in mortgages it is recommended you speak with a licensed loan officer or apply online, get some rate offers, and don’t forget to examine the terms with an expert. If you feel unsure about the rate or fees, always get a second opinion.

Frank Collins is an avid investor in real estate and contributor to Jumbo Home Mortgage and
a site to Find Low Mortgage Rates and trusted lenders in your area.

Nice Credit Scores Now Have Fees / Author: Frank

Frank is a avid traveler, exotic car enthusiast and tennis fan.
http://www.insidefastlane.com

Use Other Credit Accounts for Approval

In the early to middle part of the 1990’s, the mortgage industry had the power to accurately and effectively evaluate a borrower’s ability to repay.

Numerous tests were done by the 3 major credit institutions, Fannie Mae, Freddie Mac and Ginnie Mae’s, that trusted the approval process in conjunction with the underwriter’s manual for determining loan approval. Shortly after that, additional systems came about such as automated underwriting (AUS) which further accelerated the process and due to high demand for mortgages by mortgage brokers and lenders. In today’s world, a loan officer only had to enter a prospective borrower’s sensitive information into the engine s automatic analysis, such as their credit score, income, the loan amount, liquid reserves otherwise known as cash assets, and job history and the subject property’s value.

The time it takes can range from 15 minutes to a few hours to finally get an approval depending on the loan program requested or sought by the prospective borrower. If your loan continually gets a denial from the AUS, it is not over by any means. A live person will handle it by manually processing or underwriting the file. In certain circumstances, not everything can be automatic.

Now a call to action occurs and the processor or underwriter tells the loan officer what is necessary to get their loan approved. The borrower may be missing a revolving credit account. Maybe they can use alternative credit such as a utility bill. Maybe the borrower has other accounts that do not show up on the credit report but they have kept a history of those payments to validate their credit worthiness. We are talking about bills such as ongoing medical payments, cell phone, landscaping or contractor bills, and cable bills that have been paid current for two years. These would be considered non-traditional credit accounts but do help when it is manually underwritten.

There are all types of nuances that can change a loan denial into an approval. These alternative methods are not necessarily bad or what has caused a housing crisis. That is more so on the shoulders of the borrowers and small percentage of loan consultants, typically unlicensed, who do whatever it takes to close a loan. In any case let’s say
The loan officer tells his client what they need to get approved and “presto” you are approved. It is not only the loan officer and underwriter, many department heads sign off these deals.

The reason most typical see that a file presented to us for manual underwriting is for possible errors reported on the borrower’s credit report like a collection, judgments, etc. These errors may not even be theirs especially so if they have a common name like “John Smith”. Credit collecting agencies go after the culprit anyway they can even if it is mistakenly put on a different John Smith’s history. Unfortunately, you must prove that it is in fact not yours and the burden is also placed on the collection agency so people everywhere do not have to deal with unscrupulous companies. All in all, as you can see there are valid methods to get you into a home Perhaps, the methods in the mid-1990’s were best when alternative credit is not a consideration.

Frank Collins is an avid investor in real estate and contributor to FHA Jumbo Loans and
and Finding Low Rate Mortgages in your area.

Use Other Credit Accounts for Approval / Author: Frank

Frank is a avid traveler, exotic car enthusiast and tennis fan.
http://www.insidefastlane.com

Virtual Home Staging: Innovation or Misrepresentation?

Many of today’s top real estate agents understand the power that the internet has when it comes to bringing together buyers and available inventory. With recent estimates being that over 80% of home buyers starting their search for properties online, it’s imperative that real estate agents take advantage of the latest trends in technology.

One of the trends that has emerged recently has been to showcase homes online using virtual staging techniques rather than traditional in-house staging. Using a computer program, virtual home stagers are able to take a picture of a home and alter it any way they like. This can involve everything from changing wall colors to moving around furniture.

Fans of this technique say that virtual staging is far more cost-effective than traditional home staging, which can be expensive and time consuming for sellers. With a few clicks of a mouse, a room can be transformed from dingy to delectable.

Properties that benefit the most from this technology are the vacant homes that have no furnishings or personal touches. Empty houses can prove difficult to promote via photographs. All that buyers see in the pictures are four white and carpeting. It’s very difficult for potential buyers to visualize themselves living in the property because it appears so cold and uninviting.

In addition, many empty houses look alike when photographed. Architectural features can get overwhelmed by the lack of personality in the room, and buyers can’t see the home’s true potential.

With virtual staging however, you can easily add elegant furniture and area rugs in order to personalize the space. Buyers will see a home that is welcoming and homey, which is exactly what they’re looking for.

Opponents say that virtual home staging is deceptive and unethical. A buyer sees a perfectly staged and decorated home on the internet, but when they see the property in person, they’re disappointed. It is then up to the real estate agent to explain that the listing showed only a computer-generated version of the home–essentially showing the home’s potential rather than its present reality.

But if virtual staging is seen as deceptive, is it really any more misleading than traditional staging techniques? When you hire a home staging professional, they come to your home and either rearrange your items to make the property more appealing, or else they bring in their own furniture–props if you will–to make the space look its best.

Another part of the debate is where do you draw the line? If it’s okay to change the window treatments to something nicer, is it all right to erase wall cracks and other flaws? What if you want to add virtual furniture to a room? If the furniture you select isn’t to scale with the true dimensions of the house, you could make the rooms appear to have more space than they actually do.

It’s important for agents who decide to use this technology to be very aware of how they use it and what their intentions are. If adding faux furniture to an empty room can get buyers to view the property in person, then that’s fine. When you start to alter the image of the house itself in order to make it look like something it’s not, that’s when you’re crossing the ethical line.

For great information on the Atlanta Georgia real estate market and for incredible Atlanta MLS search listings, visit RealSourceBrokers.com.

Virtual Home Staging: Innovation or Misrepresentation?  / Ask About This Article 15th September 2008Author: Joshua Keen