Why you should consider a Refinance right now…

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Today’s mortgage rates have dropped again, reaching new lows. It’s a terrific time to refinance a home — there’s no doubt about that.

Yet, for whatever reasons, U.S. homeowners are ignoring the opportunity.

There are currently more than $800 billion in outstanding U.S. mortgages with notes rates of five percent or higher. If your mortgage is one of them, compare your current mortgage to mortgage rates today. Even if you’ve been turned down in the past, you may be surprised what you discover.

Not only are mortgage guidelines that “loosest” they’ve been in close to 10 years, a recent report showed that the average refinancing household now saves 30% on average with a refinance. 30% savings means that for every $1,000 you pay to your bank today, you could be paying $700 to your bank tomorrow.

That’s a huge monthly savings. Don’t miss your opportunity.

So let’s discuss….
One of the biggest questions that most individuals that have a mortgage ask is “should I refinance my current loan.” The answer to this question can be complicated at times since there are many factors to consider when and if you pursue a refinance. The days when the simple answer was “if you are saving a point on your current rate, you should refinance” are long gone. Today, with the incredible changes that have hit our housing and financing markets, making the decision about a refinance is based as much on the program and loan type you have as it is the current rate you have verses what is available on the market. In general, a refinance is a good idea when a “tangible benefit” is achieved by the home owner that helps them attain a better financial position in the regards to their current mortgage and housing situation.
At Mortgage Solutions of Georgia, we advise our clients when it is best to take advantage of these situations and even when it is best to keep the current mortgage and forego a refinance. There are many factors that can weigh in on one’s ability to perform a refinance, but probably the most notable and worrisome one that most people consider today is the appraisal. With property values at 20 year lows based on the high foreclosure fallout from the recession of 2008, many people have found themselves with a mortgage balance higher than their current appraised value, or “underwater” which is the term commonly used to describe this scenario. Although this can make a refinance challenging, it does not means it is impossible. There are a number of special programs that can be of assistance to help home owners save money monthly, such as the FHA and VA Streamline programs and even the HARP I and II programs.

Most programs like these are based on the type of current mortgage you may have and consulting an experienced mortgage professional is essential to the process to determine eligibility for the program and expedite the closing process. Income, work history, credit history and credit rating are other major factors that can affect the approval of a refinance loan. Although we cannot help with income and employment, at Mortgage Solutions of Georgia we can help you achieve a more favorable credit rating and history. This is done by using our extensive credit knowledge and working with our tried and true credit program, Lending Hand, which is offered by our credit provider. Lending Hand is not credit repair, but instead credit enhancement based on your current credit profile and the desired credit rating necessary to attain credit approval for your desired loan type. This process can often take long periods of time to accomplish and can involve guidance from our team for months on end, which we are prepared to do. Even though the market has changed and limited the types of loans available from what they were years ago, there still are plenty of refinance options available and the input of mortgage professional is critical in making the correct decision for your financial wellbeing.

Whether you are considering refinancing your primary residence to use your equity to pay down other debts, performing a streamline refinance to take advantage of a lower rate and term, or even considering a reverse mortgage to supplement retire income, Mortgage Solutions of Georgia will be there to guide you to financial security. We understand the mortgage on your home is normally the biggest financial asset, tool, and responsibility you will ever have and we want to guide you to help you make the best decisions based on all of the choices available to you. At Mortgage Solutions of Georgia, we don’t just consider you our clients, we consider you our friends.

Call us today 770.924.1111

What is a USDA Loan?

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Looking to buy a home in Georgia but don’t have a down payment, you may want to look into a USDA loan. A USDA loan, also known as a Rural Development Loan, is a government insured home loan that allows qualified home buyers to purchase a home with NO Money Down. USDA Home Loans offer 100% financing to qualified buyers, and allow for all closing costs to be either paid for by the seller or financed into the loan. USDA offers some the lowest rates of any loan product, and you will always have a fixed interest rate.

Am I Eligible for a USDA Loan?

There are 3 main factors that need to be determined…

Credit Worthiness: When an underwriter reviews your credit history, the major thing they will be looking for is a history of paying your bills in a timely fashion. If you have had blemishes in the past they may be overlooked as long as you have reestablished your credit over the past 12 months. Generally, any open judgments or collections will need to be paid off before you close on your new home but every situation is different so on occasion there can be some flexibility when it comes to smaller collections and medical collections.

USDA Loan Income Restrictions: USDA loans are full doc loans, meaning that you will be required to fully document your income. USDA will generally want to see a two year history of employment or consistent income. Exceptions on the two year requirement can be made for applicants such as students. On a USDA Loan Assets are not required for approval, but can certainly help overcome any possible blemishes on credit.

Where You Want Live: In order to qualify for a USDA Loan your home must be located in a designated USDA rural area. It might surprise you just how many areas of the Georgia do qualify for these 100% financing home loans. In fact most the majority of Counties in Georgia are either 100% eligible for USDA loans, or have areas within them that are eligible.

To learn more about USDA Home Loans and how to take advantage of this great program, call the USDA Loan Experts at Mortgage Solutions of Georgia for a free credit consultation.

Waiting to buy a house? It’ll cost you!

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Experts agree: There’s no better time to buy a home than now. Find out why.

When it comes to a lot of things – saying “I’ll sleep on it”, or just waiting it out to ensure you are making the best decision is often prudent, EXCEPT the decision to purchase a home. With interest rates going up and housing prices on the rise, you may think it might not be the best time to purchase a home or even refinance the one you’ve got. But experts disagree.

Read the four major reasons why mortgage experts believe that there is no better time than the present to get that dream house you’ve always wanted.

Reason #1: Interest Rates Won’t Stay this Low Forever

The first reason to look now into buying a home or refinancing is because these rates won’t stay [put] forever. That’s what rates do – they go up.

In fact, the interest rate for a 30-year fixed mortgage is expected to go up to 5 percent by the fourth quarter of this year and 5.3 percent by the end of 2015, according to a recent forecast by the Mortgage Bankers Association (MBA).

Why are rates rising? Well, one huge factor is that the feds will start raising rates about six months after they stop buying mortgage bonds, which is projected to happen sometime in 2015.

Mortgage rates probably won’t start shooting up quickly. But a quarter of a point on an interest rate can mean about $100 more each month for a homeowner’s loan. For a lot of families, that can make a huge difference!

Reason #2: Credit Score Requirements are Lower

Is your credit score lower than you’d like to admit? Well, good news: Credit score requirements for borrowers taking out mortgages are easing as is the Underwriting process.

Here at Mortgage Solutions of Georgia we can Approve your loan with scores as low as 580 for FHA loans, 600 for VA Loans, and 620 for USDA Loans. Both USDA and VA are 100% financing options. FHA does require a small down payment of 3.5%, but considering the great costs you are paying for rent, this loan is still a viable option for many Home Buyers.

 Reason #3: Buying is Still Cheaper than Renting

Buying a house is a significant purchase, but in most parts of the country including Georgia, it’s cheaper than renting. If that seems counterintuitive, let’s look at recent research by Trulia, an online residential real estate site for home buyers, sellers, renters and real estate professionals.

According to Trulia, homeownership compared to renting continues to be the less expensive way to live in all of the 100 largest metro areas researched. The study compared the costs of renting and owning assuming homebuyers get a 4.5 percent mortgage rate on a 30-year fixed term loan with 20 percent down.

So why should people buy a home now? The gap is getting smaller between the two choices because of rising mortgage rates and home prices.

Here at Mortgage Solutions, our clients are often surprised by the fact that they can finance a home for 30 years on a low fixed rate mortgage and their monthly mortgage payments works out to be less expensive than their rent. Let’s assume you spend $1,000 a month in rent for 5 years, that would total $60,000 over the duration of 5 years and what have you got for that money spent other than a place to sleep at night? Now let’s assume that you purchase a home using a USDA Loan and get 100% financing. At the end of 5 years you would owe $92,256 on the home, however assuming your home appreciates only 5% every year for the first 5 years, your $100,000 home would not be worth $127,627.50. Your just increased your Net Worth by $35,371.

Bottom line, when you look at the numbers, renting is a losing proposition nearly 100% of the time.

Reason #4: Home values are still competitive

Are you looking for a bungalow with a white picket fence, a home in the country, or a cabin in the woods? Well, it might be time to buy your dream abode before prices go too high.

The good news is that that the prices of homes have gone up but haven’t skyrocketed, so they’re still within reach of many buyers.

Property values are still very competitive in most markets, but there is a tremendous amount of competition by other buyers. If you are looking at buying a home, be prepared to offer quickly, and get preapproved by a lender which will make things go easier.

Bottom line, here at Mortgage Solutions we believe everybody deserves an opportunity to own a home of their own. Unfortunately, many renters don’t understand the opportunity they have right before them currently. With low financing rates combined with lower housing prices, now is the perfect time to find your home and buy it instead of continuing to rent. However, this window of opportunity is slowing closing for many potential home buyers as mortgage rates and home prices continue to climb. Now is the time, and we are here to help! Call us today for a no obligation, 100% free, credit consultation.

How to Buy a Home After Bankruptcy……….

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Declaring Chapter 7 or Chapter 13 bankruptcy is often devastating and can turn your home buying plans upside down. Most home loan applicants think that if they have had a Bankruptcy in the past that they can never buy a home in the future and this is simply not the case. In fact, more people have prior Bankruptcies than what you might think. Filing for a Bankruptcy may be a low point in your life, but with proper preparation, patience and financial planning, you might be able to purchase a home sooner than expected. If you have had a Bankruptcy and want to purchase a home, here are the steps you need to take to get yourself in a position to purchase.

Discharge and Organize:
First things first: The bankruptcy must be discharged. If you are still in the process, it will be difficult to get a mortgage lender will speak to you.

Once your bankruptcy is discharged, organize and scrutinize your credit report. If there are debts that have been paid back but still appear on your report, contact the credit agency and have them corrected. While you’re at it, check for other mistakes on your credit report. You are entitled to one free credit report from each of the big three credit rating agencies each year—Equifax, Experian and TransUnion. If there is an error, dispute it online via the particular credit agency’s website.

Use Secured Credit Cards:
The fastest way to start rebuilding your credit score after a bankruptcy is to prove to creditors and other lenders that you can be trusted to pay back the money you owe them. You can do this by opening the right kinds of credit and managing it well.

A great place to start rebuilding your credit is by obtaining a secured credit card. A secured credit card gives you credit limited to the amount you have on deposit with the issuing bank. So, if you have $20 to $500 to place in an account with the issuing bank, then the bank will limit your credit each month to the amount of that deposit.

More Tips to Remember While Building Credit……….
Use only a small portion of your credit. Don’t max out your credit cards and don’t apply for too much credit at one time.
Move slowly and build up your credit with on-time or even early payments. At the end of every month, pay enough on your credit card to drop the balance down to $10.

-Pay all your bills on time and save money.
-Stay at the same job for a good length of time.
-Remove any outstanding tax liens.

Wait at Least Two Years:
Here’s where you will need patience: You should wait at least 24 months after your bankruptcy is discharged to apply for a mortgage. You may be able to get a mortgage sooner but the terms, like interest rates, won’t be as attractive as they would be if you waited two years. Since you might be paying that mortgage interest for up to 30 years, you will save money if you wait long enough after the discharge to get a good interest rate.

Finally Applying For a Mortgage:
After the two-year period, make sure you are fully prepared to apply for a loan. Your lender will want you to meet certain criteria before agreeing to lend you money: A good debt-to-income ratio, stability and time on the job. Money in the bank and no bounced checks help tremendously, of course. Any retirement plans or 401(k) assets makes your credit look good as well.

If you are seeking a home loan in the State of Georgia and would like to talk to a Loan officer about your particular situation, please call us at 770-924-1111

 

 

 

Chick~Fil~A….Business Practices Not Uncommon for Our Small Business

cathyEarly Monday morning the founder and leader of Chick~Fil~A passed, so this blog seems plausible seeing that he built one of the most successful restaurant chains in the United States. Mr. Truett Cathy was a very principled business man who once said, “Nearly every moment of every day we have the opportunity to give something to someone else-our time, our love, our resources. I have always found more joy in giving when I did not expect anything in return.” Mr. Cathy’s desire to put Principles and People ahead of profits is one of the many founding principles that made his business a huge success. As a small business owner, these principles ring true just not for my business, but for any small business. I often times tell my team not look at our clients as “Files,” look at them as “Families.” When a new applicant of ours calls our office to apply for a new home loan, they are counting on our experience and expertise to guide them through the loan process. They put their lives on hold, pack all their belongings into boxes, all based on us saying we can do what we tell them we can do, which in our case, is financing a new home. This is not a responsibility that our Team takes lightly, it often times forces our Team to make sacrifices to their own personal lives in order to help our clients achieve what they are after. From the long working hours, to the stressful deadlines, and all the difficult conversations in between, we do it all for our clients and referral partners, and the greatest satisfaction for us is when a satisfied client successfully closes on their home loan. So if you are purchasing a home in State of Georgia and need a hardworking Team on your side, please do not hesitate to call our office anytime.

5 Things NOT to do Before Applying For a Mortgage

If you are considering purchasing a home in the immediate future these are the top 5 items that could wreck havoc on your loan approval. In other words, do not do the following:

1. Make a major job change. Its one thing to take a major promotion for the company you already for in the same line of work you currently do, and quite another to quit your job and decide to open your own business or become an actor. When considering your loan for approval, mortgage lenders want to see stability in employment as well as income. Because your loan will in part be based off your ability to repay the loan, changing how you get paid, as in going from salary to 100% commission is a real issue for a mortgage lender as this creates uncertainty, and uncertainty can kill your chances of obtaining loan approval.

2. Disputing Credit Accounts. Most of what you read online about improving ones credit score revolves around pulling your own credit report and then disputing inaccurate information, and if it online then this must be correct information right? Wrong! When you apply for a mortgage loan your loan application gets ran through an automated underwriting engine which evaluates everything about your loan, including your credit. The issue with disputing accounts is that when your loan file is run through the automated underwriting system if an account is in dispute, the underwriting engine ignores the account and it is not accounted for. This gives the mortgage lender inaccurate findings, and voids the loan approval. Bottom-line, do not dispute anything on your credit report before applying for a mortgage loan.

3. Applying for Credit During the loan process: This is a real issue as undisclosed debt can be the difference between obtaining a loan and not obtaining a loan. When an undisclosed debt is uncovered during the underwriting process, the lender must confirm the amount borrowed and the corresponding monthly payment. This new monthly payment could impact your debt ratio which could be the difference between a loan approval and a loan denial.

4. Transferring large sums of money or making large undocumented deposits. Its important to know that any type of non-payroll related deposit into an applicants banking account needs to be sourced and properly documented. Depositing cash into your checking account, especially large amounts of it can be a very serious issue because cash is not documentable and if the mortgage lender cannot document where the cash came from, them it will not be able to be used for the transaction. Also transferring money from account to account can be troublesome as well. If you are in the habit of transferring money from one account to another, please make it easier on you and the mortgage lender and try to refrain from doing that 2 months before applying for a mortgage loan.

5. Closing Credit Card Account. Closing a credit card account have a very negative impact on your credit score. Whole some consumers presume that it is a good thing to close unused credit accounts, it will inadvertently raise your debt to credit ratio, also know as the credit utilization ratio.

So when considering applying for a home loan, you must be careful not jeopardize your loan approval by doing any of the following and always remember a lender wants to see consistence and stability. If you are looking to purchase a home in the near future and would like to speak to us pertaining to this future purchase, please do not hesitate to call our office.

What the Government Shutdown means for your New Home Loan.

Not even 8 hours into the Government shutdown we are already fielding numerous phone calls from our clients and referral partners concerning the Government shutdown. Rightfully so, many home buyers are nervous about what kind of delay this is going to cause with their mortgage financing. The main problem we are facing right now is that when an individual applies for a mortgage loan, the lender is going to verify their tax returns with the IRS. The lender does this for one of two reasons, first they want to verify that the buyer is in fact filing a tax return, but secondly they do this as a fraud prevention technique to help them legitimize the other income documents in the loan file. Problem is, the division of the IRS which handles this request is now closed for the foreseeable future until this shutdown issue is resolved. The other issue at hand is for home buyers utilizing USDA for financing. Although HUD and the Dept. of Veteran Affairs are still open, USDA employees are not working, therefore cannot issue conditional commitments. As the insuring body of these types of loans, USDA loans will be on hold until the shutdown issue is resolved.

Bottom-line, this government shutdown is going to cause a delay in mortgage financing on most all mortgage loans. What we are advising our clients now is that we have no control over the gridlock in Washington so we should just control what we can control, which would be making as much progress on your mortgage loan as we can until the issues are resolved.

What Is Mortgage Insurance?

A lot of Home Buyers ask me what is Mortgage Insurance, aka MI, and how does it help me? Lets first start this conversation by defining what exactly Mortgage Insurance is. Mortgage Insurance is its simplest terms is kind of like a Life Insurance policy for the lender. MI is insurance that protects the lender against non-payment from the applicant. When a home buyer obtains a home loan that has MI, the lender has assurances and protections against non payment from the applicant. So for example, if you finance 100k and all of a sudden you wake up one morning and decide that you are just going to stop making mortgage payments, then the lender will have to come in and foreclose on your home. However, because the lender has this MI policy in force, the lender won’t have to eat all 100k of your mortgage loan. Instead they will file a claim of default to the MI company and in return the MI company will pay off between 40-60% of the outstanding loan balance for the lender.

A common misconception about MI is that it does not benefit the home buyer at all, but this is not exactly true. Because the lender has the additional insurance policy in place, they in return are able to make loans with lower down payments and lower interest rates. MI rates will vary according to loan program, FHA has the highest levels of MI that is required of all loan products. Conventional loans look at MI as being risk based, so the higher the credit score and the larger the down payment, the less risk is associated with the loan and the lower the MI is going to be.

At the end of the day, paying MI is not always a bad thing, and may be required based off your credit worthiness. If you have any additional questions about MI, please contact our office directly.