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

 

 

 

6 Mistakes to Avoid When Applying for a Mortgage Loan……

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If you are purchasing a new home in Georgia, it’s easy to get caught up in the excitement of purchasing your new house, especially if it’s your first time as a homeowner. That sense of accomplishment, the upgrades to your lifestyle and living arrangements, even landing a great rate on your mortgage, are all part of the ups that come with having a home to call your own.

With all of these things to look forward to, it’s understandable to want to swiftly move through a mortgage application as fast as possible. Many times, though, potential homeowners might not realize some of the little things they inadvertently do in a hurry that can actually slow down the mortgage application process to the detriment of being approved for a home loan.

Before applying for a mortgage, consider some of these common missteps and avoidable oversights that could prolong the application review, and even get you declined by a lender.

Failing to get preapproved:

Unfortunately, one of the most fundamental preparatory steps people fail to take is getting preapproved to check if they even qualify for mortgage financing. When contemplating purchasing a home, a pre-approval is essential to your success. The Pre-approval ensures that you are qualified to purchase, lets you know how much home you can afford, and prepares you for any down payment that may be required. However, not all lenders are created equally, so having a thorough pre-approval by a competent Loan Officer is critical to your success. I would steer clear of larger lending institutions or big banks.

Changing your credit behavior: There’s a misconception that if you pay off all your bills on time, it’s OK to use up a good chunk of your credit. The fact is, using too much credit is bad for your credit score and mortgage approval, since it implies a reliance on borrowing money. That doesn’t look good to the people you want to borrow from.

Indirectly shifting around your credit, like opening or closing a credit card, can also hurt both your FICO score and mortgage application because it skews your credit utilization ratio. The same goes for simply applying for new credit along with your mortgage application.

Blanking out on the “blank pages”: It’s an admirable thing, wanting to save paper and conserve trees and all. But when those empty pages of your mortgage application say “These pages left intentionally blank,” they’re blank for a reason. That doesn’t mean you can skip over them when scanning, faxing or mailing them to a lender, bank or credit union. This simple omission can invalidate your application entirely, or, at the least, hold up the process.

Forgetting to read the fine print: Be careful what you wish for. Overlooking the finer details of a mortgage application could mean getting approved for a mortgage you really don’t want. Being hasty about applying for a subpar mortgage deal is just a waste of time for you and your lender.

The same can be said about verbal agreements. Your word might be your bond, and a lender’s word might be its bond, but nothing is official until it’s in writing. Gone are the days when a handshake and a promise meant a deal was official. Failing to fill out mortgage documentation means there’s no fine print to read and could indicate a scam above anything else.

Lying: There was a time when you could embellish little things like income, employment or credit score on a mortgage application. No biggie, right? Wrong — in these post-financial crisis days, banks, lenders and the law, leave no stone unturned when it comes to anything financial, right down to the errant typo.

Any information you put down on a mortgage application — from 401(k)s to IRAs, to outstanding debts, even bankruptcy filings — can all be verified right down to the decimal point. Don’t put yourself at risk of committing mortgage fraud. And never, ever lie about your taxes.

Leaving out the legwork: Applying for a mortgage is a chance to verify some of those personal details we’ve never been sure of. Don’t know if your credit score is 320 or 780? Check out your credit before taking out a mortgage. Forgotten some of your past employment history or haven’t tallied up the exact amount of your outstanding debt? Dig into your records to get the answers. It’ll not only save you and your loan officer the work, but you’ll have the personal satisfaction of acquainting yourself with your own finances.

If you will be purchasing a new home in the near future, we would like to talk to you now. Call us today for a free Loan Pre-Approval. Its fast, free, and easy! 770-924-1111

Depending where you want to buy a Home, USDA Loans May Save You some Bacon…..

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Selling a home in today’s market can be a challenge in some areas, not because the market is not hot right now, but because first time home buyers are having trouble coming up with the down payment that many loan programs require. But if you live in one of Georgia’s rural markets, a 100% financing USDA loan may be just what the Doctor ordered to sell your home fast!

What makes a USDA Loan so great? There are a couple of things that put USDA loans head and shoulders above ordinary marketplace mortgages. The big one is the fact that you can get 100% financing with an USDA loan. Where ordinary government-backed loans like those from Fannie Mae, Freddie Mac or FHA require down payments, USDA allows buyer to financing 100% of the sales price on the home. USDA Loans have exceptionally low financing rates coupled with extremely low mortgage insurance levels compared to other financing options. What it all boils down to is exceptionally favorable terms on a mortgage bigger than you thought you could get.

If USDA loans are so terrific, why aren’t they used all the time? There is of course a catch, and it’s a doozy. The only reason the USDA is in the mortgage business is to encourage growth and sustain populations in rural areas. That means their loans are geographically limited. However in the State of Georgia, there are only 10 Counties that are completely off limits for a USDA loan. USDA zones are typically created based on the last available census data. This means the zoning you’ll be dealing with could be up to ten years out of date. A lot can happen in the real estate market in ten years! Areas that were once isolated and rural can get swept up into rapidly expanding urban areas.

Using an USDA loan to finance your next home purchase is a terrific idea if the property you’re buying is located in a qualifying area. USDA loans are particularly useful for retirees who’d like to settle down in a quiet community as well as First Time Home Buyers who may need easier underwriting standards to qualify. USDA Loans make it possible to get a better mortgage (and a nicer home) than would otherwise be available.

If you have additional questions about USDA loans, feel free to give us a call anytime and we would be happy to answer any questions you might have. Call the USDA Experts at 770-924-1111.

Low or No Down Payment Programs….Should You Bite?

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Does your dream of buying a home seem out of reach? Well, you are not alone. Many aspiring homeowners don’t think it’s realistic to be able to save up for a big down payment. But don’t get discouraged so easily, there are many loan programs out there that will give you 100% financing or you might be able to get a loan with as little as $100 down. Here are 4 options below.

Option #1: FHA $100 Down Program

Like the idea of putting down just one hundred bucks to buy a home? The FHA $100 down program may be just what you are looking for. Although the $100 down program is a little misleading, because you are still required to pay some of your closing costs, typically buyers ending up bring closer to $1000 to the closing table to close out the deal. However, this is still much less expensive than the typically required 3.5% down payment that FHA normally requires. The trick to this loan program is that you have to use an FHA loan to finance the home and you also must purchase a FHA foreclosure to qualify. HUD lists all their foreclosures online at www.hudhomestore.com making it easy to locate these properties, but be prepared to act fast as they typically don’t stay on the market long.

Option #2: FHA Down Payment Assistance Programs.

Buying a home with 20% down may not be realistic, but what if you could knock that number way down? FHA allows government entities and non-profit organizations to issue second mortgages to cover the required 3.5% down payment, and sometimes more. Often times these second mortgages are forgivable after you live in the home for so many years. These programs are often times offered through most counties, and are designed as an incentive to home buyers that want to reside in particular communities.

Option #3: Zero Down VA Home Loan Program

The FHA isn’t the only government loan program offering low down payment programs, if you are a Veteran of the Armed Forces, you may be eligible to take advantage of the VA Loan Program. The VA provides Veterans with one of the best financing options on the market, 100% financing with no down payment. VA loans are made for veterans, active duty military, and their surviving spouses of military members that have died as a result of service. Unlike Conventional loans, they do not require excellent credit scores and provide very flexible underwriting terms.

Option #4: 100% Financing USDA Loan

If you’re not much of a city slicker and instead dream of a home in a rural area, a USDA loan may be good for you. Why? Well, for starters it does not require a down payment and provides home buyers with flexible underwriting terms. The key here though is where the property is located. USDA loans are designed for homes in a rural market for families with low to moderate income households. Most Counties in the State of Georgia have eligible areas for USDA loans; in fact there are only 10 Counties in the entire state that do not have eligible areas. Conversely, more than half the counties in Georgia are 100% eligible for USDA home loan financing.

Bottom-line, if you are in the market to purchase a home, you don’t need a 20% down payment or anywhere close to it. Here at Mortgage Solutions we are USDA, FHA, and VA experts, if you are looking to purchase a home in the future we would love the opportunity to earn your business. Call today for a FREE no obligation mortgage consultation.

770-924-1111

5 Tips Successful First Time Home Buyers Know…..

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Buying your first home can be both exciting and nerve racking at the same time. No matter how many homes you buy in your lifetime, you will always remember the very first home you purchase. Unfortunately, many qualified first time Home Buyers sit on the sidelines as they watch their friends and family members purchase home mystified why they can’t do the same. Here are 5 things all successful Home Buyers know:

-Get a Thorough Pre-Approval.

When you make the decision that you are going to purchase your first home, the first item you should check off the list is obtaining a solid loan pre-approval. Many unsuspecting first time home buyers start with their big box lender where they bank, and this unfortunately can be a fatal mistake. Big banks are often times very conservative, making it more difficult for you to be approved for a home loan and don’t really care too much to offer you good customer service as we have heard on the news over and over again. When seeking pre-approval, you need to work with a Loan Officer who you can easily get on the phone and freely communicate with. The Loan Officer needs to be a great listener so that he/she can better understand your personal financial situation and then custom tailor a mortgage that is specific to you. A thorough Pre-Approval means running your credit, reviewing some income documents, and discussing potential credit issues if any, and more importantly how to work around them. You should talk to 2-3 Loan Officers before deciding on who you would like to work with. And remember, you don’t have to like what the Loan Officer tells you, what’s most important is that you feel confident he/she can close your loan.

 

-Work With a Great Realtor.

Just as all Loan Officers are not created equally the same logic applies for Realtors. It seems now a day everyone has someone in their family who is a Realtor, and although the pressure may be great to use your brothers’ girlfriends’ step-mom, it may not be in your best interest. You want to work with a Realtor who does the profession full time, who closes a lot of transactions on an annual basis, and who are flexible enough to work when you are available. A full time Realtor has their finger on the pulse of the local market; they can help you steer clear of potential pitfalls in a home that you may not notice. A great Realtor can tell you what is a good deal and what is not, help you prepare a sales contract, and handle any inspections that are required. A great Realtor will also be able to show you several homes on the market than what you could do on your own. Trusting sites like Zillow or Trulia will quickly lead you down the path of disappointment as most of these homes are already most likely under contract by Home Buyers working with a Realtor.

 

-Time is of the Essence!

As a first time Home Buyer you have to understand the market we are in. We are in a market with limited inventory (homes listed for sale) and lots of qualified Buyers looking for homes. When a new property comes on the market, is in good condition, and is priced well, it doesn’t stay on the market very long. To be a successful Home Buyer you have to always be looking at homes coming on the market and be prepared to make an offer on it. Time is of the essence also applies to the loan process. Submitting the exact documentation your Loan Officer asks you for in a timely manner is imperative to a successful closing.

 

-Avoid Fixer Uppers and Short Sales.

Understand that most home loans that First Time Home Buyers obtain are government backed loan. VA, FHA, and USDA would be the most common loans. All of these loans are backed by the federal government and minimum property standards that must be met. A home that requires a full renovation most likely is not going to be compatible with your financing. And although there are specialty mortgage products on the market that allow for renovations on a home, generally speaking these mortgage products should not be attempted by a First Time Home Buyer. The most common repair items we see in Georgia would be rotten wood around doors and windows, flaking paint, missing railing around decks or handrails down stairs, mold issues, or termite damage. If the appraiser notices any of these issues, most likely they will have to be repaired prior to closing.

 

-Don’t Sweat the Small Stuff.

Often times I see First Time Home Buyers get worked up over negotiating a sales price down by a thousand or two. Don’t sweat the small stuff! That thousand or two literally might costs you $5 to $10 per month, but worse yet, can cost you the house altogether. This goes for inspections as well. As a First Time Home Buyer it is always recommended that you obtain a Home Inspection, but rest assured this will be a 40 page plus report of absolutely everything wrong with your house. And although you certainly want to address big ticket items, negotiating over an outlet in the dining room that is faulty, that is most likely a $5 repair, won’t get you to the closing table any faster.

 

If you are looking to be Pre-Approved to purchase your first home, we would love to have the opportunity to earn your business. Call today for a FREE, no obligation loan Pre-Approval. 770-924-1111

 

4 Important Factors That Affect USDA Loan Eligibility….

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The USDA loan is one of the very best financing options for Home Buyers who are purchasing a home in a rural community. Also known as the Section 502 loan, the USDA Rural Development Guaranteed Housing Loan program is a type of home loan insured by the US Department of Agriculture that is designed to make home financing in small, rural communities more affordable. USDA loans have several great benefits, including 100% financing, a very low fixed interest rate, and very low mortgage insurance levels compared to an FHA loan. However, compared to other types of government-insured loans, USDA underwriting standards can be quite particular when it comes to loan approval.

Basically, there are four main factors that can affect eligibility for a USDA home loan: credit worthiness, income, location, and ownership of additional property.

Credit worthiness

One of the first things an USDA underwriter will look at on applications is a history of paying bills on time. In order to qualify for the loan, applicants will generally need to have an unblemished credit record for at least 12 consecutive months. Although, there are exceptions to this, they are not granted often and certainly need to have a logical explanation.

Income

USDA loans are one of the only types of loans on the market where an applicant can earn too much money and this could potentially disqualify them from the mortgage. USDA loans are only eligible for those applicants whose income falls under a USDA-designated income limit. The limits vary from state to state, and this can be viewed through the USDA website. Also, USDA looks at the total income for all income earners in the household. So even if a spouse is not on a mortgage loan, their income will still be considered against the income limit for USDA. In addition, USDA also requires a two-year history of employment or consistent income, although exceptions can be made particularly for students.

Location

Another key requirement for eligibility for a USDA loan is for the home to be located in a designated USDA rural area. The USDA website features an interactive map that shows all of the places in the Georgia that are eligible for a USDA housing loan. A link to this website has been included below.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp&NavKey=property@11

Additional property

Because it is designed to help those living in rural areas, for families with low to moderate income households, the USDA does not allow buyers to own another property or by another home using the USDA loan. However, the USDA may allow borrowers to keep a second house if it is a mobile home or trailer or if it is not large enough to accommodate the borrower’s family.

If you have more specific questions on the USDA loan program, or would like to see if you qualify for 100% financing, please call our office and we will be glad to help you out. We are Georgia’s USDA experts. 770-924-1111

USDA Underwriting Changes….

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Effective December 1st 2014, there will be some new underwriting guidelines that will take effect for USDA loans in Georgia. One of the biggest changes to the guidelines involves the waiving USDA’s 30% site value requirement. The current guideline states that if the site value of the home exceeds more than 30% of the total appraised value of the home, then the home is not eligible for USDA financing. You commonly might run into this issue in larger tracts of land in rural areas like Colquitt, Tift, or Lowndes Counties. Most commonly, you would see this if you have a small home sitting on say 5 acres of land. This combined with a low sales price and you could run into this issue where the land value is worth 30% more than the overall value of the home. You might also run into this issue where land values are more expensive, such as Thomas and Lowndes Counties. Another example of this could be if you have a lake front home. Property surrounding a lake would naturally be more expensive than land that is not on the lake, making it very easy for the land lot itself to exceed 30% of the total value of the home and land together.

But the good news is that this little guideline is being completely taken out of the mortgage guidelines for USDA loans effective December 1st, 2014!

So if you are seeking a USDA loan in Georgia, call the USDA Experts and apply for 100% financing on your new home today! 770-924-1111

Helpful Tip #3….

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Let’s talk about setting realistic expectations. We often believe clients who are the most un-happy with the buying process is the result of Loan Officers or Realtors not communicating or setting clear expectations. Nothing is more frustrating that not being able to close on time, or worse, having your home or apartment packed up complete with the moving van in the driveway and then finding out you won’t be able to close on the scheduled date. When issues like this arise, it is most likely due to the setting of unrealistic expectations.When you buy a home, there are many parties involved. All perform specific functions during the loan process. Realtors sell, Underwriters underwrite, Appraisers appraise, Attorneys handle the legal documents, Insurance Agents insure, and then you have your trusty Loan Officer keeping it all together. However, issues do arise which can potentially cause a delay in your closing.

That is why communication is of the utmost importance!

As a buyer, you should be working with a Realtor and Loan Officer who are able to work as a team on your behalf and communicate efficiently. If there are delays in the closing at least you know in advance.

As a homebuyer you should never line up moving services or terminate an existing rental agreement unless you have first cleared this with your Loan Officer.

Last but not least, closing at 2 weeks is the exception not the norm. Especially during the peak buying season during spring and summer. Longer closing times should be expected.

At Mortgage Solutions, we pride ourselves in communication. We have developed a video email campaign that keeps all parties up to date with where we are at in the loan process. We work with our partners to solve issues that may arise during the loan process to ensure that we make it to the closing table on time. And if we don’t make it on time, at least all parties know what the issues are that we are working to get resolved. When it comes to financing a home, patience is required, and just keep in mind that you are “asking” the bank to loan you 10’s of thousands of dollars. Be prepared to share your life story with the lender as they will want to ensure that you are a good risk as a buyer. So whether your looking to use your VA entitlement in Valdosta, or obtain a USDA loan in Dallas, or anywhere in between, work with a Team you can trust, call THE Go-To-Guys!

 

Close quickly….Tip #2

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Today we are going to discuss helpful tip #2 for Realtors to get a loan to the closing table faster. Real Estate tip #2 is make sure to be very detailed and thorough on your sales contract. I know that this sounds simple, but often times loans get hung up through underwriting because lines are not complete, we have missing signatures, items are not dated, or we are missing addendums that were supposedly attached to the sales contract. Here are some basic tips that will make sure you are not responsible for causing any delays when writing a sales contract.1. Make sure all the contract is “fully executed.” In other words, ensure all parties have signed in the appropriate places on the sales contract and all amendments/addendums.

2. Make sure all addendums are included. If you have checked on your sales contract that there is a FHA Loan Exhibit, a Legal Description, or a Community Association Disclosure apart of the sales contract, then rest assured your underwriter is going to want to see a copy of it. Make sure to include it in your sales contract when you email it to your Loan Officer.

3. If the subject property is in a PUD, make sure to include a Community Association Disclosure so that your Loan Officer is aware on any HOA Dues or Initiation fees that need to be added to the Settlement Statement.

4. Provide a clear, legible copy of the sales contract. In most cases we realize that these contracts are emailed/faxed to many parties in order to get all the signatures on the sales contract, but just remember we need a clear and legible copy so the underwriter can read every word on the sales contract. If your contract is not clearly legible, email your Loan Officer a clean unsigned copy of the agreement along with the fully executed copy.

5. In the Special Stip’s section on your contract, do not add in an verbiage to that states Buyer will receive personal items from the sale of the property such as, TV’s, patio furniture, couches, etc. This is considered an inducement to purchase and the underwriter will make you remove this from your sales contract.

6. Be careful with e-signatures. Although a lot of Realtors are utilizing e-signatures, just know that underwriters do not like it and its always best to have people sign the sales contract in ink. In fact, USDA does not allow for the use of e-signatures at all, so if you have a property that is USDA eligible, do not use e-signatures.

Bottom line, we all want happy home buyers as satisfied home buyers are more likely to refer us their friends and family members who are also interested in purchasing a home. Nothing is more delighting to a client than closing on time or closing early which what we strive for. If you know of anyone who would like to discuss the possibility of home ownership with us, please have them call us at our office which is 770-924-1111.

Bottom line, we all want happy home buyers as satisfied home buyers are more likely to refer us their friends and family members who are also interested in purchasing a home. Nothing is more delighting to a client than closing on time or closing early which what we strive for. If you know of anyone who would like to discuss the possibility of home ownership with us, please have them call us at our office which is 770-924-1111.

 

Close quickly…Tip #1

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For the next couple of blog postings I am going to be doing a series for potential Home Buyers as well as Realtors in regards to all the ways to help you get to the closing table faster.Today, the topic is Earnest Money. Earnest money is funds that are exchanged between buyer and seller once a contract price has been negotiated. The exchange of funds from the buyer to the seller is to link them together, which commits each party until the closing. The buyer gets credit for this money at the closing table as the Earnest Money will first apply itself towards any part of the closing costs which the seller is not paying. If the seller is paying all the closing costs, then the Earnest Money will apply itself towards the buyers down payment.

However, in order for the Buyer to receive credit for the Earnest Money, we as Loan Officers have to document these funds coming out of the Buyers bank account. Therefore, rule number one is that you as a Buyer should NEVER use cash as your Earnest Money because it is not traceable to an underwriter, and a Realtor should never accept cash as Earnest Money payment. The most common form of providing Earnest Money is by using a personal check. This is fine with an underwriter but if you are wanting to close faster, then a better way to exchange Earnest Money is to have the Buyer obtain a Certified Bank Check. We need to show the Earnest Money funds coming out of the applicants account in order to give them credit for the Earnest Money at closing. If a personal check is given, this check may not be deposited for several days and may take more than a week to clear the applicants account. If a buyer obtains a certified bank check for the Earnest Money, then it comes out of their account the same day they purchase the bank check, speeding the process up!

So if you are looking to close faster, tip #1 is to use a Certified Bank Check for your Earnest Money.