[George]

Mortgage lenders usually consider unpaid collections and write-offs as indications of an adverse credit history that can hinder your approval for a mortgage. Nonetheless, treatment is subject to the terms of the loan being applied for and those of the lender. The following are some of the ways lenders generally handle these matters:

Effect on Loan Approval:

Credit: Collections and charge-offs reduce credit scores, adversely affecting mortgage loan qualification. Lenders use the credit scoring system to establish the risk associated with a borrower and what kind of interest rates the borrower will be offered. In practice, people with low scores end up with a higher rate, or their applications get rejected altogether.

DTI: Lenders consider the debt-to-income ratio (DTI), which measures the proportion of monthly income set aside for servicing debts. High debts, including collections, will also push up the DTI ratio and can reduce the chances of getting a loan.

Conventional Loans:

Collections:

When the outstanding collections amount to a large sum, usually in thousands (from 2000 to 5000 dollars), the lenders may ask for all of them to be paid off.

Small collections, like medical collections, may be left unpaid but will still report negatively on the credit file.

Charge-Offs

A conventional loan does not necessarily require that charge-off accounts be settled. In any case, they appear in credit reports and may become red flags to the borrower.

FHA Loans:

Collections:

HUD, the parent of FHA, also does not insist that any collection accounts be paid as a determiner for the loan application. On the other hand, should your aggregate unpaid collection debt amount be over $2,000, the lender must include it in your DTI ratio, which negatively influences your application.

Under normal circumstances, medical collections will not be calculated as part of the DTI.

Charge-Offs:

HUD guidelines and rules allow charge-offs not to be settled, but they will still be considered when determining an applicant’s creditworthiness.

VA Loans:

Collections:

However, VA guidelines are often lenient regarding collections. Some lenders may insist that collections be settled, particularly if they are new or substantial.

Charge-Offs:

It is often the same as for collections with charge-offs. You do not have to pay these obligations, but their presence may be problematic for a lender.

USDA Loans:

Collections:

Some collections will need to be cleared, particularly those that raise your DTI ratio or are large in amount when applying for USDA loans. However, minor medical collections may be ignored.

Charge-Offs:

Though you are not obligated to pay back charge-offs, they can affect your eligibility, especially if the charges are new or out of date.

Non-QM Loans:

Collections and Charge Offs:

Looser in their policies, non-QM lenders generally do not mind applicants having some historical collections and charge-offs. However, this leniency usually comes with a price, such as higher interest rates and other fees.

Improving Chances of Getting Approved:

Negotiate Settlements: If possible, it’s best to negotiate with the creditor and pay a debt that you owe but to them less than what they expect as a cut for some collections or charge-offs. Have them document the agreement and request lenders to delete the negative item reported once you pay them.

Pay Off Debts: If you settle all debts and clear all collections on your account before applying for a mortgage. Such a move can increase your credit rating and help lessen your DTI ratio.

Establish a Letter of Explanation: If your collections or charge-offs faced by the lender were unavoidable (medical emergency, job loss), write a letter explaining the conditions to the lender.

Final Thoughts:

Stellar collections and charge-offs may concern your mortgage application process but do not necessarily mean you will be disqualified. The lenders will examine the entire context, including your credit score, DTI ratio, and recent payment history. Taking measures to mitigate such problems beforehand can increase the likelihood of acceptance.

If you need in-depth information or have more queries, do not hesitate to reach out!

[George]

What Are Closure Expenses When Purchasing a Home? Definition: Closing costs are the fees and expenses that are to be settled by a borrower when completing a mortgage. Whether it’s looking to purchase the house or to switch the existing mortgage to a new one, there are always closing costs on mortgage loan transactions collaterized by real estate. Such fees pertain to all the processes that need to be done to complete the asset purchase.

What Closing Costs Includes?

Common Closing Costs:

Loan Origination Fees: The Lender will charge a fee to process the loan application.

Appraisal Fees: Appraisal fees and costs involve hiring and paying a Professional to evaluate the property and provide an appraisal report on its worth.

Title Insurance: This makes it difficult for the Lender and the buyer to be subjected to lawsuits seeking to recover the same land.

Attorney Fees: Attorney and legal fees and costs are payments for other services necessary to complete the deal’s closing, which is geographically dependent.

Inspection Fees: Expenses suffered for home, pest, or other inspections.

Prepaid Costs include tax, property insurance, and interest earned since the cash was given.

Recording Fees: Fees paid for processing the new deed by the appropriate County or local authority.

Escrow Fees: Escrow fees are incurred by the escrow agency regarding the transaction documents and money.

Mortgage Insurance Premium (MIP) or Private Mortgage Insurance (PMI): Mandatory if the value ratio is greater than 80% or when an FHA loan is availed.

Is There A Closing Cost On Both The Purchasing And Refinancing Of The Mortgage Loan?

For Sure. Closing costs are incurred in home purchases and refilling the titles with mortgage loans. Even though some of the fees might differ (for example, there is no real estate agent commission in a refinance transaction), several costs, such as appraisal, title insurance, and Lender fees, are unchanged.

Who Shall Carry The Closing Fee?

Buyer: In many cases, the buyer bears most of the closing charges when purchasing the property.

Seller: In some cases, the seller might be willing to pay some percentage of the closing costs, usually in the form of seller concessions.

Lender: Some lenders, however, may offset all or part of these closing costs and related fees from the borrowers, sometimes in exchange for higher rates. This is called lender credit.

Is it true that mortgage lenders differ in the extent of borrowing fees?

No: Closing costs come from lenders with different relaxations. There are types of Nabors with different rates for processing, underwriting, and originating funding where those funds may be utilized. Additionally, specific costs for other outlays, such as assessors, inspectors, and title service comparators, may be charged by their sponsorships and the location of their operations.

How can one avoid charges when purchasing a home?

Negotiate Seller Concessions: Under the agreed terms of the property sale, buyers can demand that the seller cover some of the closing costs. This is the standard practice in states where the market favors buyers, and sellers appear more ready to negotiate so that the deal can be concluded.

Use Lender Credits: Closing costs are deducted from lenders, and the borrower amends the interest rate upward. This means you will not have to incur closing costs in the initial stage, but you will pay more on a monthly basis for dealing with that expense over the life of the loan.

No-Closing-Cost Mortgage: There are no-closing-cost mortgages whereby some lenders do not charge closing costs over time. Thus, it would be either included in the loan amount or there would be a no-cost loan, but the Lender pays those among the closing costs and charges a high point or interest rate.

What Are Seller Concessions And Lender Credits?

Seller Concessions: This is where the seller agrees to shoulder part of the buyer’s closing cost. The exact figure is usually subject to negotiation during the purchase transaction. However, there are limits. For instance, on FHA loans, seller concessions are not more than 6% of the purchase price.

Lender Credits: Also referred to as Lender’s credits, this term refers to the financing institution’s commission to its members aimed at settling the closing costs. In exchange, the client pays a higher interest rate than the payable rate. Similar in nature to lenders’ credits are those where the purchaser aims to reduce the net cash disbursements during the closing.

How Much Are Closing Costs?

Average Cost: Closing costs typically range between 2% and 5% of the property’s purchase price. A good example is the closing costs of a $300,000 home, which are likely between $6000 and $15000.

Breakdown: The exact figure will depend on your address, the Lender, and the specificities of the lending agreement. It does not hurt to get an early Loan Estimate from your Lender so that you have an idea of what the closing costs could be.

Final Thoughts:

Whether purchasing a home or refinancing, it is important to comprehend all the closing costs. While these could sometimes be very heavy on the wallet, options such as seller’s concession, lenders’ credit, and no-cost closing loans help lessen or manage these expenses. The Loan Estimate and Closing Disclosure that are provided should be inspected to observe the pertinent costs.

If you have other queries or require an explanation, do not hesitate to get in touch!

[George]

Indeed, several banks and other lenders may also grant second mortgages, Home equity Line of Credit (HELOC), or any other type of loan for a combined loan-to-value (CLTV) ratio of 90 percent for borrowers earning more than $70,000 yearly and having a credit score above 700. Here are some of the alternatives worth your attention:

Loyalty Programs:

Lenders in the Conventional category:

Gustan Cho Associates:

HELOC Options: At Gustan Cho Associates, a dba of AXEN Mortgage, the maximum CLTV for HELOCs can be as high as 85-90%. AXEN Mortgage HELOC program is subject to a review of the borrower’s credit risk and the home’s appraisal.

Second Mortgages: Gustan Cho Associates (https://www.gustancho.com/) also undertakes second mortgages through AXEN Mortgage. The terms may vary, and it’s better to check with the loan officer about what’s offered.

GCA Mortgage Group:

HELOC Options: GCA Mortgage Group’s home equity lines of credit feature relatively flexible CLTV averages. Obtaining a claim to equity of up to 90% is also possible. GCA Mortgage Group (https://gcamortgage.com/), powered by Gustan Cho Associates, has a network of 250 wholesale investors and financial institutions where loan officers can shop for the best rates and terms on first mortgages, second mortgages, and HELOCs.

Cash-Out Refinances: They do not provide second mortgages, but cash-out refinances that could serve as second mortgage alternatives.

National Mortgage Brokers and Lenders:

Preferred Mortgage Rates (PMR):

Second Mortgages and HELOCs: Known for their very low or competitive rates, Preferred Mortgage Rates https://www.preferredmortgagerates.com, PMR, offer surprisingly high CLTV ratios, often as high as 90%. Membership is a condition generally limited to military service members and their families.

Non-QM Mortgage Lenders:

HELOC Options: Non-QM Mortgage Lenders (https://www.non-qmmortgagelenders.com) home equity lines of credit are comparable to those that allow equity loans up to ninety percent CLTV to applicable borrowers. They also offer industrial rates and flexible built-up terms.

Online Lenders and Mortgage Companies:

Lenders For Best Rates:

Second Mortgage/HELOC Options: At Lenders For Best Rates, second mortgage and HELOC options are available, with the limit ratio of cltv varying by ninety percent and the best ratio of income to cltv.

Mortgage Lenders For Bad Credit:

HELOCs and Second Mortgages: There are second mortgages and HELOCs written in the mortgage products of Mortgage Lenders For Bad Credit (https://www.mortgagelendersforbadcredit.com/), which are up to 90% CTL, based on solid income and credit.

Regional Mortgage Lenders:

FHA BAD CREDIT LENDERS:

HELOC Options: FHA Bad Credit Lenders (https://www.fhabadcreditlenders.com/) is a regional lender that has emerged in the South. It also offers home equity lines of credit by allowing 90% CLTV to people with strong credit profiles.

Great Content Authority (GCA) FORUMS:

HELOC and Second Mortgage Options: For Great Content Authority or GCA FORUMS (https://www.gcaforums.com/), clients qualified for the program will offer a database of the best mortgage brokers and lenders of first and second mortgages with CLTV up to 90%, subject to credit risk and other financial circumstances.

Tips for Securing a Second Mortgage or HELOC:

Shop Around: Determine Loss Prevention and quote the potential lenders with an option that meets your specifications and is well under your expectations.

Prepare Documentation: Talk to the lender and inform them of the secured documents you will present and the terms for income verification and credit history.

Clutch the Prada: Negotiate the terms with any reservations, especially regarding credit capability and gross pay.

Numerous financial institutions, including banks, credit scoring agencies, and online lenders, allow for 10% down payments in case of second mortgages or 90% CLTV HELOCs if a loan applicant has a credit score of 700 and above and is earning enough income. It is important to note the importance of hunting for the best deal on the market.

For more specific suggestions or help, please do not hesitate to ask!

gustancho.com

GCA Mortgage | Mortgage Experts With No Overlays

Whether you’ve gone through bankruptcy, divorce or you are a first-time homebuyer, Gustan Cho Associates are experts in difficult loans

[George]

The purpose of this post is to analyze down payment assistance programs. It should be noted that these programs can vary widely between lenders and states. For the most current official information on DPA programs from EPM, visit Gustan Cho Associates. Here’s a general idea:

Forgivable DPA Programs—FHA loan programs that are seller-paid and require no down payment from the home buyer. Seller concessions can cover closing costs—borrower-paid transaction at a par rate of 7.75% for the homebuyer.

In this context, “forgivable” means that certain conditions (usually living in the house for some time) must be met. You don’t have to pay back any money received as assistance. Each program has its own rules.

Typical Structure of the DPA Program:

Down payment assistance programs may provide funds through second mortgages or grants for down payments; some may forgive over time, while others must be repaid upon the sale or refinance of the home.

Eligibility for DPA Programs:

• First-time homebuyer status.
• Income limits.
• Credit score requirements.
• Property Location.
• Occupancy requirements (usually must be owner-occupied).
• Completion of homebuyer education courses.

Seven General DPA Scenarios:

Here are some examples of different types of DPAs besides the Equity Prime Mortgage DPA Program:

• Full forgiveness after six months of occupying the property.
• Gradual forgiveness on general other DPA mortgage programs (e.g., 20% forgiven each year over five years).
• Repayment is required if sold within a certain period.
• Interest-free loan repaid at sale or refinance.
• Low-interest loan with monthly payments.
• Matched savings program (e.g., $3 match for every $1 saved).
• Grant program with no repayment required.

Please note: These scenarios are general and may not reflect EPM’s offerings. To receive accurate and current information about Equity Mortgage’s down payment assistance program, including eligibility requirements and terms, please get in touch with Gustan Cho Associates directly at support@gcaforums.com or visit their official website.

Also, keep in mind that DPAs change over time. Funding availability and locations can affect terms. Always check with the lender or program administrator for the most recent details before making any decisions.

• This reply was modified 4 months, 3 weeks ago by  George.

[George]

Besides government-backed loans and conventional loans, there are non-QM loans. Non-QM loans are alternative mortgage loans that non-traditional income is allowed. There are dozens types of non-QM loans. For flexible or lenient mortgage financing, consider these options:

1. Non-QM (Non-Qualified Mortgage) Lenders: They offer flexible underwriting for those with unique income situations, like self-employed borrowers.
2. Credit Unions: Often more flexible with terms and credit requirements.
3. Private Lenders/Hard Money Lenders: Provide financing based on the property’s value rather than your credit score.
4. FHA Loans: Government-backed loans with lenient credit requirements.

Consulting with a mortgage broker can help you find the best fit for your situation. The following are the types of non-QM loan programs in today’s market. In today’s marketplace, various Non-QM loan programs cater to residential, business, and commercial needs. Here are the key types:

Residential Non-QM Loans:

1. P and L Statement Only Loans
2. No-Doc Loans
3. 1099-Income Only Mortgage Loans
4. Bank Statement Loans: For self-employed borrowers using bank deposits as income.
5. Asset-Based Loans: Qualify based on liquid assets.
6. Interest-Only Loans: Lower monthly payments with interest-only periods.
7. Jumbo Loans: For high-value properties without strict QM limits.
8. DSCR Loans: Debt Service Coverage Ratio loans for investment properties.

Business/Commercial Non-QM Loans:

1. 100% Unsecured Business Funding Loans
2. Stated Income Loans: Less documentation, focusing on property value and borrower experience.
3. Bridge Loans: Short-term financing for property acquisition or renovation.
4. Hard Money Loans: High-interest loans based on collateral rather than credit.
5. Fix-and-Flip Loans: Short-term loans for property renovation and resale.
6. Commercial Real Estate Loans: For properties like office buildings, retail spaces, or multifamily units with flexible terms.

These Non-QM programs provide flexible options for borrowers who don’t meet traditional lending criteria.

[George]

Homebuyers who buy a house under a land contract, or seller financing, have a limited time to get qualified and approved for a traditional mortgage loan. During the time they hold seller financing, the homeowner should prepare to get approved for a traditiional loan. Traditional loans are FHA, VA, USDA, Conventional, or non-QM loans. The people who purchase the home under land contract should work with an experience loan officer to get qualified for a traditional mortgage loan. When refinancing a home on a land contract, you’ll need to convert the land contract into a traditional mortgage. Key steps include:

1. Title Search: Ensure the title is clear.
2. Appraisal: Determine the current market value of the property.
3. Proof of Payment History: Show consistent payments made under the land contract.
4. Financial Documentation: Provide income, assets, and credit documentation as required by the lender.

Consult with a lender experienced in refinancing land contracts to guide you through the process. Normally, steps in getting prepared for a traditional mortgage loan should be not to be late with any payments, get three to five secured credit cards, get two credit rebuilder account, and see if a family member with great credit and low credit card balance can add them as authorized user. It should be no longer than a year to prepare a person eligible for a traditional loan as long as they have qualified verified income.

[George]

Homebuyers and homeowners can be eligible for a purchase loan or refinance mortgage loans during an active Chapter 13 Bankruptcy repayment plan after one year of filing Chapter 13 Bankruptcy. Borrowers can qualify FHA and VA loans after they have made 12 timely payments on their Chapter 13 Bankruptcy but with Trustee Approval. To get a bankruptcy trustee’s approval for a mortgage during a Chapter 13 Bankruptcy, follow these steps:

1. Consult with Your Attorney: Discuss your mortgage plan with your bankruptcy attorney.
2. Prepare a Motion: Your attorney will draft a motion to request court approval for incurring new debt.
3. Provide Justification: Explain why the mortgage is necessary and how you’ll afford it.
4. Submit to Trustee: The motion is submitted to the bankruptcy trustee for review.
5. Court Approval: If the trustee agrees, the court will issue a written approval.

This process ensures the mortgage aligns with your repayment plan. Homeowners with equity in their homes can do a cash-out refinance during Chapter 13 Bankruptcy repayment and buy out their Chapter 13 Bankruptcy early. Again, you need Trustee Approval.

[George]

A credit supplement is used by mortgage lenders during the mortgage loan process to verify or update specific information on a borrower’s credit report. Credit supplements is used to update and verify information such as account balances, payment history, or dispute resolutions. Mortgage lenders may require a credit supplement if there are discrepancies, recent changes, or incomplete information that needs to be clarified before proceeding with the loan. The goal is to ensure the most accurate and current credit data is used for underwriting, which is critical for final loan approval and interest rate determination.

[George]

Corrupt police are a problem because they destroy trust in the justice system. To deal with this, there needs to be tighter recruitment, better training, and more accountability. What you have said makes me think that we should reform how we hire cops by looking at their education levels and whether they have enough integrity for such an important position. These allegations against Oklahoma City Police Chief Carl Stout must be taken seriously to protect people’s rights and serve justice.

If anything else worries you, it would be best if you reported it to the relevant authorities or oversight committees.