how can i find realtor or mortgage lender that works with FHA loans? i plan pay of my debt in 1 month and I would like to find a new home by November or December? I just wanna make sure im moving in the right direction?

An owner builder construction loan, just like any construction loan, will not have any mortgage insurance payments while you build. So, why is it then that mortgage insurance companies are having a huge impact on your ability as an owner builder to secure your loan? The answer lies within the banks’ rules for converting you to permanent financing once the home is built.

Even though an owner builder loan has no mortgage insurance to worry about during the construction phase, the lender has to have a plan for when you are done building your home. They need to know that there is a way to secure financing once the home is built. Otherwise, the construction lender will be stuck holding the mortgage and unable to free up enough capital to lend to other owner builders. In fact, the best owner builder construction loan programs are designed to convert automatically from construction to permanent financing without making the borrower go through two rounds of closing costs.

Therefore, construction lenders have to take the permanent loan into consideration when qualifying a borrower for the construction phase. And, thus, the mortgage insurance guidelines that apply to permanent financing will greatly affect the construction loan, whether it’s for an owner builder or for someone who has hired a general contractor.

So, what are the recent mortgage insurance guidelines that are reeking havoc on banks’ ability to provide loans? Let’s start with the basics. Mortgage insurance companies provide a safety net to banks in the events that the borrower does not make payments on time - or at all. Therefore, banks do not like to lend money without having mortgage insurance in place.

In the past, an owner builder lender, just like other banks, could easily purchase mortgage insurance for its loans. The mortgage insurance companies had very lenient guidelines on what was required to get a mortgage insurance commitment. However, with all of the foreclosures that have been dumped on the market and all of the people having trouble making their mortgage payments on time nowadays, these mortgage insurance companies have come up with some stricter guidelines to protect their investment in the loan.

For example, let’s say you are an owner builder who wants to build his own house for his family to live in. Even though there is no mortgage insurance during construction, the owner builder lender will want to have a permanent loan lined up for you so that you can move into your new home once construction is complete. Even if a bank is willing to lend money based on their set of guidelines, they still need to acquire the mortgage insurance commitment for the loan. If the mortgage insurance company has stricter guidelines than the bank, then the bank will have to default to the stricter requirements in order to get the mortgage insurance commitment and fund the loan.

Looking back to the example of our owner builder construction loan, the bank might be willing to fund your loan based on the fact that the value of your future home is going to be well above the total cost to build. In other words, when you’re done building as an owner builder, your total loan amount will be less than the appraised market value of the home. For example, the bank might be willing to fund the construction loan based on the fact that your total loan amount will be 90% or less of the future appraised value.

In this way, the owner builder lender can say to the borrower that no cash is needed out of pocket. Indeed, the lender is willing to treat the future equity in your home as a replacement for a down payment. But, if the mortgage insurance companies refuse to provide mortgage insurance without seeing some cash into the deal from the borrower, then the lender is forced to tighten their requirements to meet the mortgage insurance company’s guidelines.

Owner builder construction loans have certainly fallen victim to these tightening guidelines, making it difficult for them to provide financing without a down payment. So, what’s the solution? Really, there are only two basic ways to work around this. One way is to simply require the owner builder to bring cash to closing for the construction loan. The second way is to try to lend without mortgage insurance.

The only way to avoid mortgage insurance with most lenders is to have a loan that is less than 80% of the appraised market value of the home. In the lending world, this typically requires a 20% down payment. But, owner builder construction offers a unique way to achieve this without putting 20% cash into the project.

Instead, the owner builder can create 20% in sweat equity while they build their home, saving money by eliminating the general contractor and doing some of the labor themselves. Therefore, when an owner builder finishes construction on his new home, it is not unreasonable that there will be 20% or more in instant equity built into the home.

If owner builder construction loans can finance the construction based on an approved budget that shows that the permanent loan will be no more than 80% of the finished appraised value, then these owner builder lenders do not have to get a commitment for mortgage insurance. If there is no need for mortgage insurance, then the lender can fund owner builder loans without having to adhere to any extra requirements from the mortgage insurance company.

Because owner builder construction loans typically have their own minimum construction budget requirements, it may be tough for a borrower to get a budget approved at the 80% level. In some cases, the owner builder will still have to bring some minimal amount of cash to closing to make up the difference. But, even in these cases, it is a far cry from the larger requirements from the mortgage insurance companies. This is something every owner builder can be grateful for.

Most lenders require hard money loans to be in a city based area. I have found a gold mine property worth twice as much as asking price. Our credit score is in the 500’s.

Student Loan consolidation can be the best friend of any student who has just completed their course and graduated from their college or university. Most students who just come out of their college and universities find it very hard to maintain their monthly expenses as they have a bigger burden to repay their student loans taken out during their academic years and for those students who had relied on these loans heavily, consolidation can be an even better option.

Private loans normally have huge interest rates compared to that of federal loans and given the fact that a private loan repayment is hanging over your head when you are about to complete your graduation can be much more worrisome. Though a student can consolidate their private loan through a federal loan but that is somewhat impossible to get for the majority of students. However reducing the amount of monthly loan repayments can be a huge relief if the student acts accordingly to get the loan amount reduced or repayments period gets increased significantly by the lender company.

Apply for Student Debt Consolidation Loan

A cosigner is required with a private loan, though a student might not require a cosigner to consolidate their private student debt consolidation but having a cosigner can reduce the interest rate significantly to a lower rate and might even end up having a zero interest rate if the credit rating of the cosigner is above average. A lot of companies provide services of cosigner release benefits which mean that if a student is able to make the payments on time as estimated in the contract then the cosigner will be completely released from the debt.

With increase in consolidation methods, many companies are providing automatic private loan consolidation offers with their private student loans. For an example some companies are providing borrowers with interest only payments which mean that the amount of money paid as interest can get lowered and the actual loan can be consolidated. This allows the borrowers to save huge amounts of money over a longer period of time. Moreover many companies simply increase the repayment period by ten years or so which significantly lowers the amount of money to be repaid each month. However in most cases a borrower of a student loan is not penalized in case he or she is not able to repay the loan in time if it has been processed through a student debt consolidation plan.

Private student debt consolidation loans can be really worrisome for students who are about to graduate from their college and university. Moreover with the transitional phase of changing their career it can be more troublesome to any new graduates as they don’t get enough guidance on how to choose a new career. With tuition fees rising each year and more and more debt incurred during their college, private loans can be a huge burden on any new graduate student. A student loan consolidation plan can provide great relief for such student as it reduces the time of their repayment and allows the student to think more on their career goal.

Recently a potential client in Sacramento asked me if there were any advantages to avoiding a foreclosure by using a short sale and requesting their lender to forgive a portion of their mortgage debt. 

Although some credit professionals have a different opinion, most that I have talked with agree a short sale is less damaging to the homeowner’s credit.  I have been told a short sale blemish on your credit report will stay about 4-years while a foreclosure will remain a credit burden for 7-years.  If you are going to need a new car or even purchase a home in the foreseeable future this could be a determining factor in getting the loan and, if you do, the interest you will pay.

In my opinion, maybe as important as your credit record, is the personal pride and self-respect that can be maintained by avoiding a foreclosure by using a short sale.  Selling your home with a short sale strategy is no different than any other home sale.  You select the Realtor (you should make sure they have solid short sale experience and have a proven process), you make the marketing decision including price, reductions and other decisions and you negotiate with the buyer, finalizing the contract subject to lender approval of the short sale.    In other words it looks very much like any other house sale. 

Because of lender negotiations, the process of closing a short sale may take longer than a normal sales transaction but when the lenders agree, the seller moves out and the new buyer moves in.  In a foreclosures sale, the homeowner is evicted; the home may sit for weeks or even months vacant with no maintenance or upkeep.  Dead plants and brown lawns are the common calling cards for lender owned property.  Eventually a Realtor is hired by the lender and the home is most likely marketed as “Lender Owned” or “Foreclosure.”   This can and often is a humiliating experience for the homeowner

A homeowner who is experiencing financial difficulties, not able to continue to make mortgage payments and owes more on the home than it is worth is a good candidate for using a short sale to avoid foreclosure.  Using a short sale strategy to avoid a foreclosure can be better for your credit report and allow you to exit from a painful experience with your pride and dignity intact.

If you are a home owner and can’t continue to make your mortgage payments and your home value has dropped below what you owe, give me a call or talk to a Realtor with successful experience in negotiating with lenders.  You can reach me by email at julie@jalone.com or call me at 916 276-6883.

Say for someone appying for one? Meaning they don’t already have one. Thank you

Millions, yes MILLIONS, of homeowners in the US are facing foreclosure.

Is there anything they can do to save themselves and their homes? Well, the advice they will get from counselors is to contact the lender and ask for an adjustment in the terms or length of the mortgage loan.

Lenders have always had departments called “Loss Mitigation”. Those departments were staffed with people whose jobs were to help borrowers work their way out of their financial troubles. Often a work-out could be good for both the financially troubled homeowner and the lending institution.

What happens when those loss mitigation departments are hit with millions of foreclosures? They grind to a halt. There are just too many people asking for help. Way too many. But there are also other factors that some into play.

The expensive of renegotiating adjustable-rate loans, concerns about bank failures and investor lawsuits have put the brakes on many lender’s ability to give borrowers much help.

Oh sure, Washington has issued a call for banks and lending institution to help those facing foreclosure to save their homes. That action makes your government look good in a newspaper article, but the lenders are expected to shoulder the entire loss of millions of mortgage dollars. The FHA refinancing plan requires lenders to reduce the principal amount of each subprime loan by at least 10%. Those are dollars lost to the lender’s stockholders and those investors just won’t stand for it.

The problem begins as soon as a homeowner decides he will loose his/her home if they don’t contact the lender and ask for help. Now who should they talk to? In many case those mortgage loans have been packaged and sold to investors around the world. How do you find someone who has the authority to help? All too often the home is lost before the proper person or servicing agent can be found.

Here’s another stumbling block. If you haven’t missed a few payments don’t bother to try for a loan adjustment. If you are current with your payments, but you know you will soon fall behind, lenders don’t want to talk with you.

Yes, I know that sounds crazy. Wouldn’t you think that it would be a financial benefit to a lender to help a borrower before they started missing payments? After all, there is some profit for the lender in every payment. If they wait until payments are missed then some profit is lost forever.

Banks are between a rock and hard place. The Federal Deposit Insurance Corporation, they insure your bank deposits, requires banks to maintain a certain capitalization or face the possibility of having their doors closed. Many banks have fallen below that minimum and have been ordered to shut down operations.

Dozens of others are close to becoming undercapitalized. They are hanging on by their finger nails. If they begin adjusting and forgiving mortgage loans they will be the next to be shut down.

When a bank is in trouble that means they aren’t producing the profits expected by their shareholders. When those shareholders see banks giving away their money in mortgage adjustments they are apt to threaten lawsuits against the banks. That’s another reason bank are reluctant to participate in the modification of many delinquent mortgage loans.

Finally, if you are advising a financially distressed homeowner who is facing foreclosure, there are a few things you should impress on them before they contact their lender. First, understand that a mortgage servicing agent will not modify existing loan payments unless they are clearly unaffordable.

You have to prove hardship and back up that hardship with documentation. The agent won’t even consider modifying the loan just because the interest rate is about to reset. And you must prove you have enough income to stay current with mortgage payments if they do adjust your loan.

It’s a tough real estate market and there is little indication that it will get better in the foreseeable future.

FHA loan programs can help almost any American homebuyer. With the flexibility inside each program, much more than people think, homebuyers with good credit and a small down payment can go out and buy, fix-up or refinance a home.

How FHA Loan Programs Work

FHA loan programs do not fund loans for home borrowers; instead FHA loan programs provide insurance for home mortgages. The FHA makes sure that home loans are insured up to a particular amount (depending on the loan and related program) so lenders can give better terms on the mortgage being offered. The assurance will save buyers money, allowing

them to purchase a home with little down payment. Borrowers are able to buy more house because, in the eyes of the lender, they are giving a larger down payment.

Different Uses of FHA Loan Programs

FHA loan programs emphasize residential home ownership. The FHA loan program guidelines are created in such a way as to help buyers in getting financing to that all Americans have the ability to qualify for a quality home. FHA loan programs will assist borrowers with the purchase of:

•New and existing homes

•Single family homes

•Manufactured homes

•Townhouses and condos (in approved projects, in which at least 51 percent of the units are owner-occupied)

•2-3 unit investment properties, as long as the buyer occupies one unit

•Farms, if the residence is lived in by the owner on the property

•Homes in need of rehabilitation, in which loans can cover both the purchase and fixing of the home

Homeowners over 62 years old can also tap into the ‘reverse’ FHA loan program, which allows seniors to use the equity in their homes to get money for their retirement living expenses.

FHA loan program guidelines also allow for existing loans to be refinanced and convert loans into the FHA loan programs or to help existing FHA insured loan-holders to secure better terms.

Things about FHA Loan Program Guidelines

There are restrictions and FHA loan program guidelines which must be followed in order to govern eligibility and use of the FHA loan programs. Basic FHA loan program guidelines that borrowers should know include:

•FHA loan program guidelines have limited on the size of loan and those limits vary from state to state and county by county. For information about these limits can be provided by an approved FHA lender.

•FHA loan program guidelines for loan size depend on the cost of housing in an area. Single-family homes can be as high as $290,000 in some areas.

•Loan limits are set by the current FHA loan program guidelines and can vary with the market. Again, check with a lender for more information.

•FHA loan programs also provide for such things as home improvement, refinancing and Energy Efficient Mortgages.

FHA loan program guidelines have been expanded by Congress of late. For some home owners who may not have found FHA programs helpful before may see new advantages in FHA home loans now. For many, the security of the FHA home loan program and a FHA lender are the most beneficial advantages of all.

I’m applying for an SBA loan for startup capital for a small business in NC. I’m reviewing the paperwork, do I need to get a “business license” and/or a fictitious name statement?

Currently being quoted 6.5% and wondering if it will go down. Just (2) weeks ago it was 6.125%, but it was too early for me to lock in at that point.