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Joe Metzler

HARP 2 refinance program in MN and WI

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HARP 2.0 refinance program details in MN and WI.

St Paul, MN: The much anticipated revised HARP Refinance Program (HARP 2) is now in effect, making it much easier for underwater home owner to refinance their mortgage into today’s low mortgage rates.

The two biggest guideline changes to the HARP 2 program include the POSSIBILITY of unlimited Loan-to-Value and the POSSIBILITY to refinance even if you have Private Mortgage Insurance (PMI). This opens up financing opportunities for seriously upside home owners who have kept up with their current mortgage obligations.

There is a LOT of misinformation out there... The reality is NO LENDER ANYWHERE can promise you a HARP 2 refinance approval WITHOUT having a full application and submitting that application through either Fannie Mae or Freddie Macs automated underwriting computers (AUS).

 

Who owns my mortgage loan?

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Who owns my loan?

Minneapolis, MN: Until recently, no one really needed to know, and no one really cared who ultimately owns their mortgage loan. Home owners receive their monthly statements, and make their monthly payments, to their mortgage company (or mortgage servicer).

With numerous program available to assist homeowners, including HARP 2, the Home Affordable Refinance Program, which require the loan be owned by Fannie Mae or Freddie Mac, it is very important to know who, and if they own your mortgage loan.

There are usually a few people involved in your loan process:

  • The Originator: The company who did the original loan. This could be a bank, broker, or direct mortgage company
  • The Servicer: The company now providing the statements and accepting the payments is only providing the service of billing, statements, customer service, etc. This company could also have been your originator.
  • The Investor:  This is usually not the company that provided the funds originally to make the loan, but a company that may hold your loan permanently, or sell it off to someone else, like Fannie Mae and Freddie Mac. Many times this company also becomes your loan servicer.
  • Actual Owner / End Owner: This could be a bank, mortgage company, or some kind of investor group. For a large number of homeowners, this is Fannie Mae or Freddie Mac.
Who owns my mortgage loan? – Click to find out

 Click here for a HARP 2.0 Lender in MN and WI

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The YourGage? Pick any mortgage amortization loan term you like

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Who said you have to pick a standard mortgage loan term?

Design your own mortgage loan. Pick any term loan amortization period you want – from 6 to 30 years.

A big internet lender likes to call this “The YOURgage“, and claims it is “only available from them!”  They go as far as to make it sound like they “invented” it. Well, that is far from the truth. Actually, it is a little know loan option available from a large number of MN mortgage lenders.

Mostly used for refinancing, but it can also be used to purchase a home.  Let’s say you have a 30-year mortgage with just 18-years left. You’d probably like to refinance to today’s super low mortgage rates, but you don’t want to go backwards to a new 30-year loan, or even a 20-year loan.

So how does it work? Simple. Just tell us how many years you want for your home mortgage, and that is what you get!

Does it cost more?  What are the interest rates? No, it doesn’t cost more. Rates are calculated based on the closest standard fixed rate term. For example, if you want an 11-year mortgage loan, you get the standard 15-year interest rate. On the 18-year loan, your interest rate will be the same as a 20-year loan.  If you wanted a 22-year loan, you get the same interest rate as a 30-year loan.

Other than that, it is simply a standard home mortgage loan.

Use this online mortgage calculator to determine what YOUR mortgage payments ( YourGage ) would be, then APPLY with a local MN based direct lender.

 

What day of the month is best to schedule a home closing?

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I just read this on a site primarily for Real Estate Agent:

“For the first time home buyer who is low on Cash, I would highly recommend closing at the end of the month.”

WOW…   As a licensed mortgage professional, I completely disagree with this statement from Real Estate Agents!” The days of interest scare, and false illusion of some serious savings has caused many problems for many people over the years.

My advice: CLOSE WHEN IT IS CONVENIENT – Not simply at the end of the month.

On any mortgage loan closing, you start paying interest the day you sign. Many people tell you to close the end of the month because you will save a lot of month in closing costs by doing so. This is misguided advice.

You are NOT paying “additional” closing costs – you are simply paying interest starting the day you purchase the home. Close whatever day makes most sense for YOU!

Let us take a $200,000 loan, 30-year fixed, at 4.00%

  • If you close March 30th, your first payment is 32 days away (May 1). You pay two days of interest at closing ($44.00)
  • If you close April 2nd, your first payment is 58 days away (June 1). Sounds great, but you will pay an additional 28 days of interest at closing ($622.22)

Appears to be some significant savings – but lets do more math. With either closing date, your mortgage (loan only) payment is $954.83.  So if we assume the 60-day window of the “closing month” and when the first payment is due using either method, and calculate what each person will have needed to pay out-of-pocket including their June 1st payment, we get:

  • Option 1:  Pays $44 for two days of interest plus two mortgage payments  = $1953.66
  • Option 2: Pays $622.22 at closing, plus one mortgage payment = $1577.05

Completely opposite of what the Realtor said, you actually just saved $376.61 by closing on the 2nd day of the new month, versus the last day of the last month.

Another aspect – The last week of every month, is extremely busy for both the Closing Agent and your mortgage lender. There is a larger possibility that an error may be made during this time. You may also find the Closing Agent much more relaxed and personable if she doesn’t have 8 other closings scheduled the same day as yours. Anytime between the 4th and 24th of the month are good days to close.

Moving considerations: Let us say you expect to closing on your new home and move out of your current residence the last day of the month. You give notice to your landlord to end your lease and arrange for movers or to rent a truck. Then, your loan closing gets delayed for 5-days. This happens ALL THE TIME, especially with foreclosures and short-sales. You are now homeless! New tenants could be moving into your apartment, and the movers are going to charge you for wasting their time. You could be forced to live in a motel for a couple of days!

A Better Plan: allow for a 5-7 day overlap between closing and moving. In the long run, it is not nearly as expensive and it will sure give you peace of mind.

Moving trucks/movers: Go price out moving trucks. They are significantly cheaper if renting in the middle of the month versus when everyone else is moving at the end of the month.  The “cash strapped” buyer could have easily spent the difference in the cost of a moving truck.

TIPS FOR A SMOOTH HOME LOAN CLOSING – by a guy who has been to thousands.

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Condo Insurance – What you don’t know can cost you a lot of money

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What you MAY NOT know about Condo insurance

Get a FREE Condo Insurance HO6 Policy Quote

Newer lender regulation REQUIRE people owning a condo and even some town homes to get homeowners insurance. This policy is similar to a “renters insurance policy“, but is actually called an HO6 policy.

If you or one of your clients owns a Condo or a Townhouse, there is an important coverage to consider.

It is called “extended protection”.  this coverage protects the owner for any damages that may occur that the owners association will not pay because the master policy for the association has a deductible of $5,ooo or $10,000.

If for example, the owner grills out on the deck and gets too near the vinyl siding and damages it,  the association will make them fix it but will not pay for repairs until the deductible is reached.  So the owner may be on the hook for that 1st  $5,000 or $10,000.

With extended protection,  insurance will pay the damage up to the deductible.  And the coverage is relatively inexpensive.

The death of FHA Loans – Starts April 1, 2012

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The Federal Housing Administration (FHA) is following through with absurd increase in FHA loan mortgage insurance.

When consumers get an FHA loan, they pay UMIP (Up-front mortgage insurance premium), which is added to their loan amount, and a monthly mortgage insurance fee. Starting April 1, FHA will hike its upfront premium by 75 basis points to 175 bp on all single-family loans, including jumbos. The monthly mortgage insurance will remain the same, at 1.15% for loans over 95% loan-to-value.

On a $200,000 loan, borrowers would actually end up making payments on a $202,000 loan. ($200,000 X 1.00%). After April 1st, 2012, the same person will now have a loan of $203,500. ($200,000 X 1.75%).

According to FHA, the fee increases are designed to strengthen FHA’s capital position and “have minimal impact on the market and borrowers,” according to FHA acting commissioner Carol Galante.

These premiums are expected to dramatically slow down new FHA from $218 billion in the current 2012 fiscal year that ends September 30 to $150 billion in FY 2013 as consumers continue to rely more heavily on standard Fannie Mae and Freddie Mac loans, which now have cheaper mortgage insurance.

In a smart move, FHA noted that FHA streamline refinances are exempt from these new premium hikes.

Why you should wait for HARP 2.0

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Why you should wait until April to get a HARP 2.0 Loan

Just a few years ago, consumers with weaker credit getting a conforming mortgage loan (one designed to be sold to Fannie Mae or Freddie Mac) got a great deal.  If you barely qualified with a low 620 credit score, you got the exact same rate as someone with an excellent 800 credit score.

Wait for better HARP 2.0 Interest Rates

When the mortgage markets collapsed and the housing agencies started hemorrhaging cash, they instituted new fee policies known as Loan Level Pricing Adjustments (LLPA) and Adverse Market Delivery Charges (AMDC) as a means to fix their balance sheets on the backs of homeowners that were still able to obtain loans.

The fees were intended to price loans based on the risk inherent in each loan. LLPA is the more significant of the two fees. It adds fees to a loan based on loan type (purchase, rate and term refinance or a cash out refinance), loan to value, and credit score. To illustrate the impact of the LLPA, a borrower with a 620 credit score will pay a rate nearly 1% higher than a borrower with a 740 credit score.

Because of the inherent risk of HARP refinance, most consumers over 80% loan-to-vale have been hit hard by AMDC and LLPA requirements

HARP 2.0 – Best Change Worth Waiting For

As part of HARP 2.0, AMDC and LLPA rules have been changed, providing consumers who wait a potentially much better interest rate.

  • Reduced fees charged by the agencies on loans with a loan to value in excess of 80%.
  • On loans with amortizations of 20 years or less, the LLPA and AMDC are eliminated.
  • On 25 and 30 year loans, the cap is reduced, which means the borrower with the lower score in the example above saves another .25% in rate.
  • Removal of loan to value cap on fixed rate mortgages (effective March 17th 2012) – no equity, no problem. In fact, negative equity refinances will be allowed.

Eliminating the fees on 15 and 20 year loans is significant. Rates on those loans are already well under 4%, so this should open up HARP refinance opportunities for borrowers that are interested in the rapid principal reduction that comes with shorter amortization mortgages.

Not Until After March

When lenders underwrite loans, the first step is to log into Fannie Mae or Freddie Macs computers to get an underwriting decision. These two agencies have indicated lenders won’t be able to do that until sometime around March 17th. To get the better mortgage rates from HARP lenders, you need to wait!

One caution about the changes to the loan to value cap; sometimes lenders do not adopt changes announced by the agencies word for word. Some overlay their own underwriting guidelines and they are always more conservative. While Fannie and Freddie may state they don’t have a loan to value limit for fixed rate HARP loans, many lenders will have a cap.

The agencies continue to tweak their programs with the goal of improving the performance of the loans in their portfolio. If you haven’t refinanced yet, maybe this change is the one that will benefit you.

The amazing FHA Streamline Refinance Program

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The FHA Streamline Refinance Program

FHA Mortgage Loan Expert in MN and WI
FHA Streamline Mortgage Loan Expert in MN and WI

Minneapolis, MN: If you currently have an FHA mortgage you are eligible for one of the simplest money saving refinances available today. The FHA Streamline Refinance allows existing FHA borrowers to reduce their interest rate without having to jump through a lot of hoops. Basically, if you have made on time payments on your current FHA loan for the past 12 months. You get (almost) an automatic approval for the streamline refinance! How COOL IS THAT?

Most current FHA loans qualify for a no out-of-pocket cost streamline refinance loan that lowers your FHA interest rate and reduces your monthly mortgage payment without increasing the principal amount owed on your first mortgage. The FHA streamline refinance provide a rare opportunity for FHA borrowers to refinance any time the interest rate drop to level saving them more than 5% a month over their existing payment. FHA loan guidelines are changing, so ask your FHA loan expert how this could impact the FHA streamline program.

FHA mortgage rates have fallen to the lowest level since Eisenhower was President!  FHA streamline rates are as low as or even lower than conventional interest rates, so don’t sit back waiting for lower rates.  If you have made your loan payment on time and you already have this government loan, the FHA streamline refinance programs are easy to qualify for.

  1. no appraisal required

  2. lower credit requirements

  3. limited documentation

  4. skip a month of payments

HOME LOST VALUE?

You may have heard of HARP, the Home Affordable Refinance Program. HARP is only available if you have a Fannie Mae or Freddie Mac loan. and it allows you to refinance even if your home is underwater. FHA’s streamline streamline refinance has a  no appraisal option. So if your home has lost value, you can possible still refinance to today’s low mortgage rates too!

FHA streamline loans are highly regarded by FHA customers. FHA mortgage rates have never been more attractive so act now and lock into the lowest streamline rates in years.

With mortgage refinance rates this low it makes sense to reduce your monthly payment if you have any mortgage loan, but especially government insured loans like an FHA loan or a VA Loan.

VA STREAMLINE REFINANCE

An “Interest Rate Reduction Refinance Loan” (IRRRL) or VA Streamline Refinance allows Veterans to refinance their current mortgage interest rate to a lower rate than they are currently paying. This program is only available to veterans who are refinancing their original VA mortgage in which they utilized their original eligibility. 

VA Streamline Loan Guidelines:

  1. There is no cash out on an IRRRL loan
  2. The VA charges a 1/2 percent funding fee to guarantee the IRRRL Loan
  3. The VA loan being refinanced must be current and have a perfect pay history for the last 12 months
  4. No assumptions are allows
  5. Second mortgages can not be included and must be subordinated

Like the FHA streamline refinance, the VA streamline loan can be done with “no out of pocket money” by including all closing costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.

Stupid Appraisers?

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FHA guidelines state that a house has to meet MPR (minimum property standards) for existing houses, and MPS (minimum property requirements) for new construction. FHA is very concerned with the three S’s: Safety, Security, and Soundness.

When a Realtor was asked what the three FHA S’s were, he replied, “Stupid, more stupid, and seriously stupid FHA appraisers,” which I thought was pretty funny, however, a little off the mark. The three FHA S’s have to do with the following:

Click here to READ the FULL STORY

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New Mortgage Statement to eliminate confusion?

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Classify this under Government solution without a problem.

Under the 2010 Frank – Dodd Financial Reform Act came a lot of mandated changes that won’t fix anything, but created a lot of extra paperwork and bottlenecks for the housing and mortgage industry. One of those items was the creation of the Consumer Financial Protection Bureau.

I just read that the CFPB is out to make reading your monthly mortgage statement easier!  Was this really a problem? I’ve had plenty of mortgage loans from all sorts of different servicers, and I’ve never been confused.

According to many consumer protection group, confusing monthly statements has been a huge contributor to the current housing mess.  Huh??  I’m not fan of the large banks, but is this really a problem the government should be mandating?

The CFPB is apparently required under the 2010 law to put new mortgage servicing rules in place to help consumers. The law has specific requirements for mortgage statements, including a phone number and email address for the customer to get information about the loan, as well as information about housing counselors.

The newly created Consumer Financial Protection Bureau has finally developed a proposed new one page “standardized” monthly mortgage statement supposedly designed to provide clear information about your loan.

The prototype released Monday included a breakdown of how much of the monthly payment went to principal, interest and escrow. The form also detailed the outstanding principal, maturity date, prepayment penalty and, for adjustable-rate mortgages, the time when the interest rate could change.

Many servicers already provide such information on monthly statements, but there are no industrywide standards.  Initial reaction from servicers to the agency’s proposal was positive.

You can see a working draft of the standardized statement on its website, www.ConsumerFinance.gov, and give  input before a version of the form formally is proposed this summer.

WE EMPLOY PEOPLE TO DO THIS?  This is what is wrong with this country!

What do yo think?

 

 

$25 Billion Mortgage Settlement for lender abuses?

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FEDERAL GOVERNMENT AND STATE ATTORNEYS GENERAL REACH $25 BILLION AGREEMENT WITH FIVE LARGEST MORTGAGE SERVICERS TO ADDRESS MORTGAGE LOAN SERVICING AND FORECLOSURE ABUSES

$25 billion agreement provides homeowner relief & new protections, stops abuses

WASHINGTON–U.S. Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced on 02/09/12 that the federal government and 49 state attorneys general have reached a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future…

To read this press release in its entirety, look below:

The Real Story behind the story

Foreclosure abuses? This is a complete overstep of the government, a very bad precedent, and a major reason why this country is going down hill fast.

Whatever the reason, I’m sorry you lost your home to foreclosure.  I really am. But the bottom line is simply this.  You signed a promissory note. You promised to pay back the home loan. Period.  It didn’t say you promised to pay back unless...   Unless, you lost a job, unless the house lost value, etc. Nowhere in the documents did it say the bank was required to write down your mortgage balance, nor agree to any sort of loan modification.  The bank is a business.  They took a financial risk giving you a loan because of your promise to pay it back.

The abuse?  First a little background. When a lender forecloses on someone, they have to meet certain protection guidelines, including things as timely notice of impending action, etc. Ultimately, an officer of the company must sign off on the final foreclosure action, certifying the company has followed all required guidelines.

With the overwhelming new rush of foreclosures, the banks couldn’t keep up. So did they make a error. Yes. The banks did make a mistake. No doubt about it.  But what they simply did is rubber stamp the foreclosure certification, and used people other than an officer of the company to sign the document.

The government, after receiving a lot of pressure from consumer groups, and people desperate to save their home, ended up forcing the banks to this $25 BILLION agreement. The agreement will PAY, YES PAY people who were foreclosed on $2000. Many of those still in their home will have their balance written down by an average of $20,000.

Really? Should maybe the banks get their hand slapped.  Sure.  But to the tune of $25 Billion?  Of course not.  The underlying issue shouldn’t be that banks had someone not authorized sign a document, it should be the fact that people (on average) were over two years behind on the payments, and we are now rewarding them.

Bad precedent…  really bad!

 

——————- Full Press Release ——————-

 

Read more

New FEE (hidden tax) makes mortgage loans costs more

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In December 2011, Congress reached a last-minute deal to fund the payroll tax cut extension. The payroll tax extension will provide a 2% tax reduction for individuals making up to $106,800 – so the tax extension will be very helpful for many Americans who are struggling during these tough economic times. But like so many things in our tangled economy, there’s a flip side. In this case, the tax cut deal has a rippling effect that will impact the mortgage world.

Read the full story:

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NO Closing Costs Loans COST Money

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I constantly receive requests for a No Cost loan. Sadly there is no such thing.

All loans have closing costs associated with putting the loan together.

Just like you, participants in the mortgage loan process don’t work for free. The Appraiser, Title Officer, Title Insurance, County Recording Fees, Minnesota Mortgage Registration Tax, as well as your lender all need to get paid as part of the process.

Each of these parties charge fees for their service in processing and funding your loan. The Lender’s responsibility is to explain to you what the services and costs are, and to give you an estimate of the total costs when you apply for a loan. This estimate comes in the form of a document titled Good Faith Estimate of Closing Costs. It is only an estimate, but it should be very close to your actual costs. Lenders are not allowed to pad, or add onto the costs charged by these other parties, but rather simply pass on what they charge. The vast majority of closing costs go to third parties, not your actual lender.

The real question is: How do I get a loan so I don’t have to pay for these required services? The simple answer is you can’t. What you can do is determine how they get paid.

Purchasing or refinancing, it basically works the same way. All of the costs associated with transaction are paid in one of four ways: By you in cash, by the Seller (in a purchase), by rolling it into the new loan amount (refinance), by the Lender, or a combination thereof.  The most common way in a refinance is by rolling the closing costs into the new loan amount.

Now you may be saying “Wooh-Hooh, let the lender pay”, but you need to know how the lender can do this, and why it may not always be such a smart move.

To have the lender pay your closing costs, you agree to accept an interest rate that is higher than what is considered a “Market Rate.” In doing this, the lender receives more cash than just the face amount of the mortgage loan when they sell it to an investor on the secondary market. This excess cash is what the lender uses to pay some or all of your closing costs. This means that over the life of the loan, you will be paying more interest to the lender than you otherwise could have.

Does this strategy make sense for you? Maybe. It depends on several factors. How much higher is the mortgage rate and what is the monthly cost to you in increased payment? How big or small is the loan? How long do you plan to stay in this loan? Do I have the cash to pay the costs out of pocket?

This is where it becomes important to work with a Licensed Mortgage Originator and not a bank employee. As I have said many times, A Mortgage Banker / Broker is required to be Trained, Tested and Licensed in all aspects of Mortgage Origination. A bank employee is usually just registered, not tested, not licensed, and not required to be educated, tested, or licensed.

A NO COST loan is not automatically good or bad.

A local licensed Loan Officer will do the math with you, and take the time to show you the pros and cons of each method of paying closing costs so you can choose the best option in your particular situation.

Top two myths about Real Estate Agents

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With millions of web sites to look at for home for sale listing, it is becoming more and more common for people to feel they don’t need the help of a licensed Real Estate Agent.

More specifically, people seem to ONLY be calling listing agents for the properties you want to see. The thought behind this I suppose is “I can get a better deal if I don’t involve another agent and contact the listing agent directly.”

While the listing agent loves you only calling them, here is why is is usually a costly mistake for home buyers.

Myth # 1- I will get a better deal if I call the listing agent directly.

That listing agent is contractually bound to do what is in the best interest of the seller, and that means getting the highest dollar amount for the sale of the home. NEVER disclose your top dollar or financial ability to get a bigger mortgage loan to them because by law they have to go back to the seller with this information.

Remember…your goal is to pay as little as possible, while the seller’s agent’s goal is to get as much as possible for the seller. No matter what a Real Estate agent claims, this is a clear conflict of interest.

Myth # 2- I can find more homes for sale by calling more than one agent, or looking at multiple web sites.

The days of each real estate office having big books of only their companies listing are long gone. It is mutually beneficial for all Real Estate Agents to have all properties in the same database (call the MLS – or Multiple Listing Service)

All Real Estate Agents in the same area therefore pull the same list of homes available  for sale from the same multiple listing service database. Local agent sites typically interface with the local MLS site a minimum of once per day. If a new house for sale gets added today, EVERYONE local should have it listed tomorrow.

If you saw a home on Zillow, or some other national site, but that particular home didn’t come up in the local agent’s site, remember sites like Zillow & Trulia are NOT updated as often as the local MLS database real estate agents can pull from are. If it is not on the local MLS…  chances are the house that you saw has already been sold or is already under contract.

More importantly, the opposite is more often true. You find a home on a local real estate web site but NOT on the national sites. This is because some local companies do NOT report to the national systems. In my area (Minneapolis / St Paul, MN), the biggest player in the market (Edina Realty) recently stated they will no longer let their listing be show on the big national sites.  This means if you are looking at home for sale here, but on a national site versus a local site, you a NOT seeing over 20% of this areas listing!

The bottom line is the smart move for home buyers, and especially first time home buyers in MN and WI, is to use the services of a good, licensed local real estate agent in any home purchase transaction, and save yourself a lot of time by only looking at one LOCAL REALTOR web site.

Can you qualify for a mortgage with bad credit?

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Can you qualify for a home mortgage loan with bad credit?

FACT: The mortgage and credit crisis which exploded onto the scene in 2007 has eliminated bad credit and bruised credit mortgage loans. Lenders simply don’t offer bad credit sub-prime home loans anymore.

What’s Your Credit Score?
Every lending facility uses guidelines to determine your credit worthiness. Upon reviewing your application, you’re given a credit grade and a determination regarding your loan’s approval or denial. Lenders DO NOT give loans to those with bruised credit anymore. If you are denied by a one lender, contacting 10 more probably won’t help. Click here for some general criteria used within the lending industry to determine credit.

What credit score do I need for a home loan?
Generally speaking, in today’s mortgage world, if your middle credit score is below 640, it is very unlikely that you will qualify for home loan financing no matter what anyone tells you or you see elsewhere on the internet. With a score below this level, you really should save yourself the hassle. Stop attempting to find mortgage loans, and work on improving your scores instead.

Review your credit score?
If you are not sure what your credit score is, you should officially find out. Apply for the mortgage loan, and let the mortgage lender review your exact situation. DON’T ASSUME YOU CAN’T QUALIFY!

CREDIT PROBLEMS & ANSWERS

Late Payments
If your credit has multiple RECENT 30, 60, or 90 plus day late payments, you probably won’t qualify. Especially if those late payments occurred LESS THAN than two years ago. Lenders want a clean recent payment history. Check HERE for some general criteria used within the lending industry when you have late payments.

Credit score graphCollections, Judgements, Tax Liens
If your credit history indicates unpaid collection accounts, most “A” grade loan lenders will require these amounts to be paid off before the loan is funded. FHA typically will ignore them if they are under $500, and more than 2 years old. Medical collection “usually” are ignored. Judgments’ (you got taken to court & lost), are almost always REQUIRED to be paid off before approval.

Bankruptcy & Foreclosures

  • If your bankruptcy is more than two year old, you can usually be approved for an FHA loan with as little as 3.5% down.
  • If your foreclosure was recorded is OVER least three old, you may qualify for an FHA loan with as little as 3.5% down payment.
  • If your bankruptcy is older that 4 years, and you have good re-established credit, you may now qualify for an standard conforming loan.

    • High Debt Ratios
    If your income-to-debt ratios are too high, you can either reduce your personal debt (i.e., pay down your debt), obtain a debt consolidation loan, pay down your debt with funds from the sale of personal assets (boat, camper, etc.), select a lower interest rate ARM loan, or add a co-mortgagor. 

    Is a debt consolidation loan for you?
    If you have any late payments on your record, part of the reason may be because of high credit card debt. If you qualify, you can pay off all of your high-interest credit cards into a low debt reduction refinance loan which may be tax deductible (unlike credit cards, which are NOT tax deductible).