Mortgage Lender

How do you find an honest mortgage lender? Start with personal recommendations, and set up some appointments with certified lenders. Call me today and ask about Shawn Tihen at iBeria Bank. I can recommend him with full confidence.

The Grant Hickman Team
314.265.1531

Keeping a financial even keel is essential to purchase a home these days

Pay off your credit cards on time and in full, skip the new car or the new furniture. Banks and mortgage companies want to see financial stability with no big changes.

Anxious to close on the house? Sometimes the waiting period between finding your perfect place and driving up to your new home with keys in hand can be nerve wracking. You’ll want to be seen in the best light possible, so don’t get ahead of yourself.

Most likely you’ll need a mortgage and you want to be financially stable. When you begin your search, get copies of your credit report to make sure it is clean. If you find any errors, fix them.

Making large purchases in anticipation of buying a house, like new furniture, is not a good idea. That can affect your credit rating. The same goes for taking out another loan, buying a car or funding an education. Keep your credit situation as-is for right now.

Any changes to your credit status can make a difference for mortgage approval. Pay all your credit cards before the due date to make sure they are processed on time and don’t increase your credit balance. A mortgage pre-approval doesn’t make it a done deal.

Wait on any large purchases. For instance, no new car, or a new loan, or even new furniture for your home. Keep your credit situation as-is for now. Also, don’t co-sign a loan because that will add credit liability and could very well eliminate your chances of obtaining a mortgage.

Moving large sums of money is not a good idea. Don’t jump the gun and take money from savings to checking in anticipation of closing. Last minute credit and bank checks will generate inquiries about the shift and could slow down the process.

And if you leave the money in the savings account you won’t be tempted to spend it. Funds designated for closing should be left alone in the event of unexpected house-related costs. After all is said and done, you may have a bit left over but spending that won’t affect your closing.

Keep copies of all your paperwork in one place and have it ready in case someone in the process loses a crucial document. By keeping copies, you’ll be able to provide information quickly, getting you that much closer to your new home.

The time leading up to buying a house is all about financial restraint. Right now banks and mortgage companies are taking very close looks at their clients and you want to show you are a good candidate. After the closing, celebrate!

The housing market expected to begin recovery this year

Jobs, continued low interest and a variety of housing choices encourage potential buyers

Positive signs are beginning to indicate an upturn in the real estate market. The Labor Department announced a decline in unemployment filings as layoffs ease and hiring slowly increases. Economists are encouraged that the economy is getting closer to generating job gains, which will boost the housing market as people show more confidence and buy homes. Realtors are looking for a burst of activity in late April, May and June as potential buyers don’t have to buck bad weather to see properties.

In the Midwest home sales jumped almost 10 percent, year-to-year, in February, according to the National Association of Realtors. Nationally, year-to-year sales were up 8 percent. First American CoreLogic and its LoanPerformance Home Price Index Forecast indicates a housing price decline into early spring, but that will stabilize and recover modestly for the remainder of the year.

Even though the federal government will stop purchasing mortgage-backed securities on March 31, as planned, it looks like interest rates will continue to be low, at least for the foreseeable future. Rates on 30-year mortgages have fallen to around 5.05% from 5.28% at the start of this year.

Frank Nothaft, chief economist for mortgage investor Freddie Mac, sees what he calls "a very steady, quarter to quarter growth" pattern ahead. He also expects total housing sales of existing resales and newly constructed sales to be near six million by the end of 2010 and higher in 2011.

Written by Myra Vandersall

When your mortgage application is rejected

Don't be surprised if your friendly lender, the one who invites you to sit down and apply for a mortgage, ushers you politely out the door empty-handed after you've chatted a bit.

The sudden chill isn't personal. The Mortgage Bankers Association, or MBA, in Washington, D.C., estimates that about half of all mortgage applicants are now being turned down. Though refinancing approvals remained static, the acceptance rate on mortgage applications suffered a 10 percentage-point drop, from 63 percent in the first half of 2007 to 53 percent in the first half of last year, according to mortgage data tracked semi-annually by the association. Since then, further tightening of credit standards means at least half of mortgage-seeking consumers can't squeeze through to acceptance, says MBA spokeswoman Carolyn Kemp.

Instead of yielding to shame, anger or any of the usual emotions associated with rejection, today's consumers who are intent on buying or refinancing should adopt a pragmatic stance, since clear-eyed determination may eventually land them a loan.

Here's how:

1. Get a read on the reason
If you've submitted a formal application, federal law dictates that you're entitled to a formal rejection.

Expect an "adverse action" notice, spelling out the reasons for turning you down, which these days is likely to state that the loan amount you're seeking is too large compared to the current appraised value of your home, says Joe Theisen, president of the Wisconsin Mortgage Professionals Association and branch manager of Fairway Independent Mortgage Corp. in Madison, Wis.

If it's not your home's value that's the issue, it may be your personal credentials, such as your creditworthiness, work history or debt load.

When credit is the issue, an adverse-action notice is required, naming the credit reporting agency that provided the data on which the lender based its decision, according to Federal Trade Commission rules. You're also entitled to a free credit report; see the FTC Web site for more information.

Given the odds of acceptance, a lender may not require you to pay a few hundred dollars to submit a formal application, which includes the cost of a professional appraisal on the property. Instead, he may pull a credit score, and tell you what you're likely eligible for, says Marc Savitt, president of the National Association of Mortgage Brokers.

2. Find a fix
Qualifying for a mortgage isn't a black-and-white issue. Rather, different loans at varying rates may be available, depending on how risky a lender thinks a particular mortgage will be. If you don't qualify at 5.5 percent, for instance, you may be able to get the nod for a loan at 6 percent or 6.5 percent.

However, many borrowers, especially those who are refinancing, need a certain rate to reach the monthly payment they want. Not only are rates higher for risky loans, but there are now upfront "point" charges dictated by Fannie Mae and Freddie Mac, the two big mortgage guarantors currently under government control, Savitt says.

To get a good rate, some borrowers may be able to make changes — like lowering the amount of the loan they seek.

When a borrower isn't far from the qualifying mark, he may be able to reapply and be approved relatively quickly. For instance, if you're within reach of a 740 credit score, which is usually required for the best rate, you might pay down a balance on a credit card and hit the target, Theisen says.

3. Seek out other opinions
Not every lending firm adheres strictly to the same playbook, and one lender may approve what another rejects, says Savitt, who recently had a borrower with good credit turned down for a low down payment, government-insured loan, but found another firm giving the green light.

A local "community bank," meaning a smaller, hometown institution, may be more flexible, contends Diane Scriveri, chief lending officer at Bogota Savings Bank in Teaneck, N.J., and vice chair of the affordable housing committee of the New Jersey League of Community Banks.

"Because we're local, we may know home values better. We still use independent appraisals of course, but we may look at comparable (home values) differently because we know what's really happening in different neighborhoods," she says.

Credit unions, which only offer loans to consumers who qualify for credit union membership, may also be more forgiving, says Tony Emerson, president of the Credit Union League of Connecticut.

"It would be foolhardy to suggest that in every case, you can go to a credit union and get a loan," Emerson says.

Still, he says, some credit unions may judge loan eligibility based upon the unique relationship they have with their members. For instance, many credit unions offer membership to employees of specific companies and would know more about a member's job stability, he says.

4. Give it another try
The Mortgage Bankers Association is predicting that 30-year fixed rates will hover near the 5 percent range through 2009. So if predictions hold and interest rates stay relatively low, you should have time to try again if the factors behind your rejection improve.

Fortunately, a rejection shouldn't bring down your credit scores, says Craig Watts, public relations director for Fair Isaac Corp.

Making a formal application and then reapplying more than a month later could lower your score, but only by about 5 points. Most scoring systems allow consumers to make multiple mortgage applications within a 30-day period without any negative impact on their credit score. But mortgage inquiries older than 30 days will count as a single inquiry if they're made within a 14-day or 45-day window, depending on the scoring model used.

(March. 22, 2009, Bankrate.com via MSNBC.com)

Buy a Home in St. Charles Missouri

How much money do I need for a down payment on a house?

There is plenty of news in the media right now regarding the housing market, especially with the financial and bank bailout looming. Although much of this news is accurate, many facts get misinterpreted and falsely reported, leading to rumors and hearsay.

The biggest rumor right now is that you need a 20% down payment to buy a house, which is the furthest thing from the truth! Even with all of the uncertainty in the financial sector today, mortgage lenders are still lending money and in some cases up to 100%.

However; I will add that these lenders have tightened their guidelines and requirements, but as long as you have a 620 credit score; there most likely is a loan available for you.

So how much money do you need for a down payment? This table will give you a quick glance of the loan options that are available today!

LOAN PROGRAM REQUIRED DOWN PAYMENT %
Veterans Administration (VA) 0%
Federal Housing Administration (FHA) 3.5%
Conventional Financing 5%
FHA with MHDC Financing 0%

Keep in mind that the down payment is not the only money that you need to bring to the closing table. There are also closing costs and escrows, which you will establish with your lender for taxes and insurance. But even then, a good real estate agent like Grant can negotiate for the seller to pay for your closing costs and escrow making it possible to get into a house with no money out of your pocket.

In closing, it is very important to evaluate your financial situation when trying to buy a house, but as you can see there is no requirement for putting 20% down to make that dream happen. Talk to a good lender to figure out your best option!

30 Year Fixed 5.125% with 0 points and only $399 in lender fees
MHDC (CAL) FHA 30 Year Fixed 6.46% with 0 points
FHA 30 Year Fixed 5.00% with 0 points and only $399 in lender fees

Potential Home Buyers, 2009 is The Time!

Get off the sidelines if you are thinking about buying a home. Contrary to implications in the news, now is one of the best times to be a home buyer. No one knows how long this once in a generation, or perhaps once in a lifetime, window of opportunity will be open but there are several things working in the home buyers favor right now.

First, home prices in most markets have declined in the past year; therefore, you can get much more home for your dollar. The drop in values has been more modest in the Midwest compared to the rest of the country, so if we assume only a 10% drop in value; someone looking at a $300,000 home a year ago might be able to purchase the home today for only 270,000.

Secondly, mortgage rates on 30 year fixed loans for both government and conventional loans are at or near all time lows. Rates a year ago were around 6% and today they are around 5%, so assuming a loan amount of $150,000; monthly savings compared to a year ago would be around $100 a month!!

Lastly, if you need help with down payment money; the Missouri Housing Development Commission (MHDC) just made it easier for first time homebuyers who are eligible for the $7,500 Housing Tax Credit from the Federal Government.

The $7,500 Housing Tax Credit is currently given to those first time homebuyers on their tax return the year after they buy; so someone buying in 2009 would not receive that money until 2010. This unfortunately doesn’t help that first time homebuyer who needs down payment assistance.

MHDC has set up a program so that this same homebuyer can borrow those funds today and then pay it back when they get the Housing Tax Credit later on. One key thing, this Housing Tax Credit is only available until the end of June, 2009; so get out there and start looking for that new home!!!

30 Year Fixed 5.00% with 0 points and only $399 in lender fees
MHDC (CAL) FHA 30 Year Fixed 6.50% with 0 points
FHA 30 Year Fixed 5.00% with 0 points and only $399 in lender fees

How are interest rates determined?

Interest rates are affected by a number of factors. The Federal Reserve, which is charged with maintaining the stability of the nation's financial system, raises or lowers short-term interest rates in an effort to maintain that stability. The Fed regularly takes these actions in response to economic ups and downs that the country goes through on a fairly routine basis.

Short-term rates are raised in what are called expansions -- good times -- to keep the economy from building too fast and risking inflation. The Fed will lower short-term rates when the economy is contracting -- slowing down.

So what have rates been doing? The Federal Reserve raised short-term rates 17 times between June, 2004 and June 2, 2006, and they have remained at that point since then.

Long-term rates, like Mortgage Rates, aren't affected as quickly by economic conditions as are short-term rates, but there is a trickle down factor and they reflect the impact eventually.
Unlike short-term rates, Mortgage Rates typically change daily and as a rule of thumb, bad news in the economy brings on lower rates, and good news makes rates climb.

Do you know your debt-to-income ratio?

Commonly referred to as DTI, your debt-to-income ratio tells lenders what % of your income you have available for a house payment after fulfilling your other recurring obligations each month.
Recurring debt includes credit card payments, child support payments, car payments and other obligations that will not be paid off within 10 months (for conventional loans).
Lenders prefer that this number is not more than 36%, but depending on the strength of your loan application your number might be higher or lower.
To calculate the DTI ratio, take your total gross annual income and divide it by 12 to get your gross monthly income. Then add up all of your recurring debts including your house payment. Then divide your gross monthly income by this number and you will have your DTI ratio.
If your ratio is higher than 36%, then it may mean you are stretching your income too far. In addition, too much revolving debt can drive down your credit scores.

Do you know your housing ratio?

This is very beneficial information to have when deciding how much to spend on a new house or determining whether to refinance. This is also one of the many factors that lenders review when deciding whether or not to lend you money.

Your housing ratio simply measures the amount of your income that you spend on a house payment(s). To calculate the housing ratio, take your total gross annual income and divide it by 12 to get your gross monthly income. Then divide that number by your total house payment. Make sure you include taxes, insurance and any 2nd mortgage payments.

Fannie Mae recommends that you don’t spend more than 28% of your gross monthly income on a house payment. Again, this is a rule of thumb and there are many other factors that a lender takes into consideration including how much you spend on other debt per month and your credit scores before determining whether you are qualified for a loan.

But in general it is a good ideal to not go much higher than 28%. Studies have shown the higher the housing ratio is; the harder it can be for people to make their payments on time.