FHA 203(k) Home Loans for Home Improvement

This is a loan product for homeowners that need money to make improvements on a property they already own or for borrowers looking to buy property in need of improvements also known as a fixer upper. The Federal Housing Administration’s 203(k) loans are for houses that are damaged or are in need of renovation.
If you are purchasing a home, the loan covers the cost of both the property and necessary home improvements. The down payment requirement is currently 3.5 percent of the combined price of the home and repairs with flexibility in qualification requirements
If you own a home that needs help, you can refinance with a 203(k) FHA Home Loan. The loan can cover a vast range of repairs, including room additions, bathroom remodeling, roofing, flooring and air conditioning systems.

Home loan to buy a home

Qualification Requirements:

There are two types of FHA 203(k): standard 203(k) loans for homes that need structural repairs and streamlined 203(k) loans up to $35,000 for homes that need nonstructural repairs. The FHA insures the loans, but the funds come from a mortgage lender.
To qualify for a 203(k), borrowers must plan to live in the home they’re repairing. The following types of residence qualify:

• Houses that need to be demolished and rebuilt are eligible as long as most of the foundation remains.
• Existing building that is at least a year old.
• Single-family, two-family, three-family or four-family dwellings.
• Condos, if they have been approved for FHA loans.
• Mixed-use properties. If you are repairing only the home portion, a mixed residential/commercial property can qualify.
• Homes that must be moved to a new foundation.

Improvement that Qualify

The FHA has specific guidelines about which repairs qualify for 203(k) loans, and the lender will also stipulate what you can do. Eligible improvements include:

• Disability access
• Heating, ventilation and air conditioning
• Plumbing
• Roofing and flooring
• Energy conservation
• Kitchen remodeling
• New appliances
• Room additions
• Decks and patios
• Bathroom remodeling
• Room additions or second-story additions
• New siding
• Painting
• Finishing an attic or basement
• Site grading

Labor costs must be included in the loan, even if the home owner performs their own repairs. The repairs must be started within 30 days and completed within six months.


The FHA 203(k) loan amount includes the purchase price of the home plus the expected price of repairs. The home buyer has to provide a percentage of the loan as a down payment (currently 3.5%).
To apply, the borrower must provide:

• Proof of income
• Proof of assets
• Credit reports will be pulled
• A detailed proposal of the work required on the home, including a cost estimate for each repair, which can include a contingency reserve for cost overages
• A home appraisal, including how much the home will be worth after the improvements are made

An FHA 203(k) loan is especially beneficial for home buyers who cannot afford a finished home and are willing to take on a fixer-upper. If you choose to apply for a 203(k), keep the following in mind:

• Many lenders do not offer 203(k) loans.
• Expect to spend a lot of time on document preparation and bureaucracy.
• FHA 203(k) closing can take 60-90 days.
• Interest rates tend to be high, due to the risk involved to the lender.

Finally, keep in mind that home improvements cannot guarantee an increased value for your home. Be careful not to pour more money into the house than you could recoup in a sale.

California Mortgage Home Loan

California is a state known to have a volatile real estate market. Before the economic downturn, house prices were high in some cases ridiculously high! With the extremely high demand in a seller's market and the ability for buyers to get the mortgages that they wanted pretty easily, the sky was the limit!

Source: Bakersfield Homes

It is a different story post economic downturn, buyers are finding it relatively harder to qualify for a loan (especially as compared to pre economic downturn era!), and it is no longer an absolute seller's market! Although the trend shows that the real estate market is getting better, it has a long way to go to reach the heights that it had been at!

There are tips that can help in successfully obtaining a California Mortgage Home Loan:

• Ability to repay the loan! This is a major criteria that Lenders look at in evaluating the loan application. Typically the Lender will look at:
• your current employment - where you work, how much you earn and whether the employment is stable and long term.
• your history of paying previous loans - they will take special note of late payments and delinquencies and also your FICO score.
• Property. Where is the property located, is it in a known declining market or an appreciating market - they will correlate their risk to the amount of down-payment that you will be making.

There are many things that a Lender may accept if you come up short on their basic list of criteria, but in order to be prepared and to successfully negotiate the loan it is advised that you work with an experienced loan broker that provides services for California Mortgage Home Loans!



Mortgages for the Self Employed

 

So you have worked hard, because you had a goal: "Be my own boss!" You are finally your own boss and own your own business, you are making money that goes into your own pocket and you are working the hours you want to work - you are finally where you want to be! Now you want to purchase a home, but you are having a hard time finding a mortgage because you are self-employed! This is the story that the majority of self employed people have that are currently looking for a loan to purchase a home or even refinance one that they already own.

 

 

Source: bizjournals

 

 

Why? Two reasons, firstly their tax returns do not reflect their actual take home income! (Isn't one of the benefits of owning your own business that you can write off all eligible business expenses, thereby reducing your taxable income?) and secondly, income varies unlike a paycheck.

 

Before the collapse that led to the economic crunch a few years ago, self employed people could take advantage of Stated Income Stated Assets (SIVA) or No Income No Assets (NINA) loans, but these are very rare to come by at present.

 

So is there hope for self employed people to get a mortgage? Yes but to be frank it is harder to get a mortgage if you are self employed then it would be if you had a regular paycheck. Lenders usually require two years of both business tax returns and individual tax returns, a CPA letter confirming that you have been in business for at least two years and a year to date profit and loss statement.

 

Additionally, self employed borrowers will need to have good FICO scores, be at least 25% owners of the business and have cash reserves of six months. 

 

If you do not have all the above, there still may be hope for you! There are portfolio lenders that will lend based on individual situations, but you need to work with an experienced broker in this niche as these lenders are few and known to brokers specializing in those loan types.

 

Smita Patel of Loan People USA has worked with self employed borrowers for many years, if you are looking for a home loan for self employed please call her at (949) 313-7333. 

 

Morrtgage to buy a home

Bad Credit Mortgage Loans

If you have not so good credit and have been thinking about refinancing your current mortgage or how you can buy a new home, then read on. Although it may have gotten a little more complex to get a loan if you have less then perfect credit - there are loans out there for you! It is however important to work with a mortgage broker who has recent experience with these types of loans - why? because not only have laws changed in this area but there are only a limited number of lenders that currently give these types of loans and an experienced mortgage broker will know where to go to get the best mortgage for you.

Prepare For The Mortgage Application and Approval Process
Lenders are now required to qualify a borrower thoroughly before extending credit, so it is imperative that you as the borrower do your homework before beginning the process. It is a fact that people with a good credit history, clean of bankruptcies, foreclosures, repossessions get offered the best mortgage deals. The difference in mortgage terms, approvals and interest rate is because of the perceived risk of the borrower. Because a person's ability to pay is often established by reviewing one's credit history, the possibility of repayment is deemed low with people who have bad credit.
For both first time homeowners and current ones who look to get a mortgage for their new home, the following tips may help you get a bad credit home mortgage approved.

Bottom line, is it possible to get a mortgage with bad credit? YES OF COURSE! It will just take a little more work, no biggie!!

Getting bad credit mortgages approved requires scrutinized shopping to get the best deal, with the help of a good mortgage broker this is possible. When shopping to get a mortgage with bad credit, acknowledge that you will not get one immediately and when you finally choose to work with a lender, honesty and a willingness to complete the demands of the process are essential ingredients to success. If you give up after the first loan officer turns you away, the mortgage you wanted to get turns its back on you and so does your house. So be ready for disappointment before success!

Review your credit records. Knowing that you have bad credit is just the starting point. There has to be reasons why you ended up having a bad score. Recall the times when your credit was impacted and remember to be honest. A bad credit history is sometimes influenced by the environment, emergencies, and situations outside of your control. Be truthful with yourself, the causes and negative occurrences. Disclose everything. With the new laws that are required to be followed by Lenders, it is important to disclose everything anf hide nothing! Gone are the days when you could disclose half the information hoping that the Lender will turn a blind eye to the other half!
Mortgage lenders will often consider the reason why a borrowers credit was ruined. This means that although the credit indicators are not favorable, they still resort to other approval criteria and will take the explanation into consideration. Reviewing your credit records thoroughly allows you to work on the correction of errors in your reports which may help fix your credit score situation. Also a review may bring to light any errors which when cleared could improve your score, so this really is an important first step in the process to obtaining a mortgage.

Financial Stability. Exude a demeanor of being able to repay the loan throughout the application process. Prove this by disclosing your job details and how much income is coming in to the household. Be Honest. Outline your money management plan detailing how your mortgage repayment amount will be paid while paying for your other bills in a timely manner. A stable income is essential in making a lender consider your mortgage for approval because it reassures the lender that repayment terms can be met. Remember the less risky a borrower that you show a lender you are, the better the loan terms that you will get!
When self-employed, the constant influx of money will need to be documented and proven to ease the loan approval process. In financial terms, you want your Debt to Income Ratio to show strongly - the proportion of your income in relation to your other debts.
Lenders know that self-employed people take advantage of the fact that they own a business and thus write off as much as possible to reduce their taxable income, however they need to see written proof that you are making the amount you disclose, so be ready with information showing your income.
Additionally, debt consolidation loans should be considered to reduce your high interest debt and improve how your finances look on paper. Home equity lines can be considered or simply consolidation lenders depending on your need will suffice. Paying off high interest credit card debts and replacing them with a longer term smaller monthly bill consolidating loan improves your financial outlook. By doing so you lower your total debt cost and at the same time, the interest rate does not get the bulk of your earnings.
It is important to be educated on the ratios that Lenders use so that you as a potential borrower can figure out whether you can qualify. Again, an experienced broker will help you with this.

Learn your options. There are two types of mortgages: the Fixed Rate Mortgage and the Adjustable Rate Mortgage (ARM).
The Fixed Rate Mortgage is the traditional mortgage type that banks and other lenders provide where repayment is done on the principal and the interest of the loan at a fixed rate from the day you sign.
Adjustable Rate Mortgage is another type of loan arrangement where you are the interest rate is adjustable, or will change with time based on the prime rate. The structure of your mortgage loan can vary so be clear what is being offered by your broker.
Both types of mortgages offer their advantages. ARM loans tend to be cheaper with a lower interest rate than can be had with a fixed rate mortgage, but over time locking in a low interest can save you thousands with a fixed rate mortgage. Consider which one offers the most benefits for your current needs and expected ownership period. A lot of online resources are available detailing the benefits and negatives of choosing a fixed or adjustable rate mortgage.

Bad Credit Mortgage Loans are available - working with the right mortgage broker and being prepared will definitely put you on the path to success! We would love to work with you find the right loan for you, please call us at (949) 313-7333. We at Loan People USA look forward to speaking with you!

First Time Buyer Mortgages

Buying your first home is an exciting process but can also be intimidating, especially if you will be obtaining a mortgage. The real estate will probably be one of your biggest investments to date, having some guidance and assistance during the mortgage approval process can really help. So who do you go to? usually it would be to an independent mortgage professional or mortgage broker, who will guide you through the mortgage approval process so that you will be educated and comfortable at every step. They will also help in getting the best mortgage for your situation.

There are many types of Home Loans available to suit different situations. A Mortgage Broker is knowledgeable in these types and can help with making the right choice and to get the best mortgage. Things that may affect the mortgage decision would be such things as:

• Closing Costs
• Variable v Fixed Rates
• Income Sources etc.

First Time Buyer Mortgages are available to get you on the road to home ownership, let us at Loan People USA help you make the right choice for your situation! Call us at (949) 313-7333 - we would love to help you get the best mortgage to suit your needs!

Property with No Mortgage

 

My Dream....

To own my home by age 30 with no Mortgage !

It is possible! With the right money management techniques owning a property with no mortgage is possible!