Questions to Expect From Mortgage LendersData Provided By Know what to expect before you apply.

Your mortgage lender will want to know a lot about you before approving your loan application, and justifiably so; they and their underwriters want to be assured that you meet their minimum level of creditworthiness before lending you money.
Areas of questioning.

Here are the general areas of questioning you can expect from a lender: 
1. Employment and income 
2. Outstanding debts 
3. Cash reserves and assets 
4. Down payment 
5. Loan purpose 
6. Property use 
7. Property type
 
Employment and income
Where do you work?
How much do you make?
How long have you been at your job?
How is your income derived — steady salary or irregular income? If it’s the latter, you may need to provide more details to obtain a favorable interest rate.
Outstanding debts
What recurring debts do you have?
How much do you pay a month for auto loans?
Credit cards? How much of your monthly pretax income do these debts consume?
Cash reserves and assets
How much money do you have in the bank?
How much will be left after you pay your down payment and closing costs?
Down payment
How much money are you putting down?
Is this your own money?
If not, is it a gift from your parents?
A nonprofit agency grant?
Loan purpose
Is this San Diego ca mortgage for a home buy or refinance?
If it’s a refinance, do you want to take cash out at closing to pay off other debts? If so, how much?
Property use
Do you plan to live in the house?
Is it investment property?
Property type
A condominium?
A duplex?
The following responses tend to work in your favor:
Steady employment (two or more years) with the same employer or in same line of work.
Low debt: no recent major buys (such as automobiles) and a debt-to-income ratio of 36 percent or less.
Loan is for straight home purchase (or rate-and-term refinance).
Property is detached single-family home to be used as primary residence.
Down payment of at least 5 percent of sales price with your own money.
You’ll have at least two months’ worth of mortgage payments in the bank after closing.
These responses tend to work against you:
Self-employed or contract worker.
High debt: credit cards maxed out, total debt-to-income ratio more than 36 percent.
Property is a duplex or condominium, to be used as a vacation home or rental.
No cash left after home buy and closing costs.
Down payment is 3 percent or less of buy price and money is borrowed.
Source: Move.com

This is the time to think carefully about what you want and what you can afford. If your offer is accepted, it becomes a legally binding contract. Make sure you don’t include anything in the offer that you’re not totally comfortable with doing.

Make sure you put everything in writing. Offers usually include items like:

• Proposed purchase price
  Remember, the seller may counter-offer with a higher purchase price – consider that when you decide on your proposed purchase price.
• Concessions
  This includes things you’d like the seller to help pay for, like closing costs.
• Conveyances
  This covers any personal property to be included in the sale, like the washer and dryer or the refrigerator.
• Home inspection contingencies
  Make sure you’re prepared if the home inspection report shows major problems. Know what you will ask the seller to fix prior to buying the home and what you will ask a reduction in price for to account for the cost of repairs that you will do yourself.
• Earnest money
  Earnest money is a deposit you offer to show you’re serious about purchasing the house. Earnest money is usually held in escrow and applied to your closing costs at settlement. If you fail to meet the terms of your contract, you may lose this deposit.
• Acceptance
  This covers how long the seller has to respond to your offer before the offer is no longer binding.
• Mediation and arbitration
  These are legal methods for handling contract disagreements between you and the property seller. These methods are not necessarily beneficial to you, and you do not need to agree to them.

When the Offer Becomes a Contract

Once the seller accepts your offer, the offer becomes a contract. What’s in a contract varies from state to state, depends on the state where the house resides, but some common things you’ll find include:

• Legal description
  This describes the property you are buying in terms of its dimensions relative to a fixed point (like a road) or in relation to a recorded subdivision plat or declaration of condominium. It often includes the street address of the property.
• Selling price and deposit
  This is the price you and the buyer agreed upon, as well as the amount of earnest money you’ll pay when you sign the contract.
• Mortgage contingency
  A contingency protects you by stating that the sale depends on a lender approving you for a specific San Diego Ca mortgage, rate, and term.
• Closing date and location
  The closing date (also called the settlement) can be several weeks to several months away to meet the seller’s and your needs.
• Conveyances
  Double check these conveyances to make sure that the items are there and are what you and the seller agreed on in the offer.
• Home inspection
  If you’ve made the contract contingent on a home inspection, this will set an inspection date and provide an explanation of what will happen if the inspection identifies any problems.
• Possession date
  This is the date you can move in. It’s usually the closing day or very soon after it.
• Property insurance
  This details the home insurance policy that will cover the property until the closing date. This can be the buyer’s or seller’s policy.
• Property disclosures
  This includes legal notification of any required information concerning the property. For example, it could contain copies of the documents from the homeowners’ association. This section would also outline any problems with the property that must be disclosed.  
• Source Freddie Mac

Be sure you’re serious about buying before you make an offer. If the seller accepts your offer, it becomes a legal contract after a few days.

Details and planning are important. Know what you would like to pay but also think about the most you’re willing to pay and the total pre-approved mortgage loan amount. Be specific, and put everything in writing. Also, having a pre approved mortgage loan will place you ina better negotiting posistion when making a real estate offer.

What are the steps in making an offer?

Negotiating a Sales Price
Before you negotiate a sales price, it’s important to determine if you or the seller has the stronger position. Knowing this will help you plan your negotiation.  A mortgage tip to consider would be to offer full price and have the seller buy down your San Diego Ca mortgage loan rate.  This will allow you to qualify for a higher loan amount amd provide you with lower payments.

The seller may have the stronger position if:

The local real estate market is strong and homes are selling quickly.
They aren’t in a rush to move.
Similar houses have sold for close to or above their asking price.
There are other offers being made on the house at the same time as you.
The buyer may have the stronger position if:

The local real estate market is weak.
The seller needs to move quickly.
The house has been on the market for a long time.
When negotiating, more information is better. Look at your notes from when you looked at the house. If there’s anything that needs to be repaired or replaced, you may want to consider including these costs in the negotiation. If you want certain appliances or fixtures to stay, be sure to include them as well. You may also want to make your offer contingent upon your obtaining financing or the house passing a professional home inspection, especially if it is an older home.

There are several steps to negotiating:

Asking price.
This is the price the sellers have originally listed. In a buyer’s market, you may be able to successfully offer below the asking price. However, in a seller’s market you may want to be prepared to offer more. Before making an offer in a seller’s market, know how much above asking price you are willing, and able, to bid in case the seller gets multiple offers.

Initial purchase offer.
This is your first offer. It may include contingencies (such as a requirement that the home pass a professional inspection or that you receive adequate San Diego Ca mortgage loan financing from your lender.)

Acceptance of offer or counter-offer.
The seller can accept your offer or make a counter-offer of a new price or additional contingencies.

If you’ve made a home inspection part of the contingencies and something serious is found during the inspection, you may want to submit a new counter-offer and discuss the situation with your lender. The process may go back and forth several times before you and the seller reach an offer that is acceptable to you both. Remember that in some instances, your lender may not approve your mortgage if the home has serious deficiencies that could affect its value.

Source Freddie Mac

President Obama’s Mortgage Modification Program – Do You Qualify?
Published by mortgageloanmodification October 15th, 2009 in Finance.
Obama’s $75 Billion Modify Mortgage program can seem like a dream come true for many people who are at risk of losing their biggest investment – their home. But how do you know if you even qualify?

Even if you’ve been turned down by your bank in the past, you can still apply for this mortgage modification program. If you are two or three payments behind, or you foresee financial hardship in the near future, you can apply and get your mortgage payment reduced.

Here are the basic guidelines you need to adhere to in order to qualify for the loan modification plan:

The home that you live in must be your primary residence
Your total mortgage balance must be less than $730,000
Your monthly payment must equal 31% or more of your total monthly income.
Your mortgage must have commenced before January 1, 2009
Check If You Qualify……….!
You will obviously have to provide proof of your income and expenses in order to be considered for Obama’s San Diego Ca Mortgage Loan Modification plan. Make sure you have all your documents, tax receipts, copies of bills, etc. to make your application stronger. This is an extremely important step, as every applicant will be approved on a case-by-case basis.

Interested homeowners are encouraged by the U.S. Treasury Department to apply for Obama’s Home Loan Modification Plan and lenders are expecting a surge of applicants. There is no cost to apply, but it is advisable to take some time and learn everything you can about the process and what you can do to increase your chances of being accepted.

One way to increase your chances of being approved is to download The Complete Mortgage Loan Modification Guide from making home affordable government website.  You will be guided step by step on what you need to do to apply, how to fill out the necessary forms, calculate your debt ratio and putting everything together in a professional looking package that you can take to your lender. This is your chance to get back on the path to financial independence.

To see if you qualify and learn how to apply for Obamas Mortgage Refinance Plan you can go to http://www.loanmodificationca.net

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Source Pcql.com

Fixed vs Adjustable Rates

A typical fixed rate example has a fifteen or thirty year term and a fixed rate. This is a popular choice for a San Diego Ca Mortgage option because the consumer knows that his interest rate will not change during the life of the loan. The fifteen-year term is a comfortable timeframe for many customers as well, although a thirty year term can also be the better choice for some. Many San Diego homeowners are more attracted to an adjustable rate San Diego mortgage loan. This option can actually cost less in the long run. However, it is a bit of a gamble. If interest rates increase, so does your home mortgage loan rate. If you can afford it if rates increase, and weigh the possibility of higher rates, then to refinance home loans with an adjustable rate can save money. And if the rates are in your favor, this option can really help with your monthly expenses over the course of time.

Costs To refinance your home mortgage loan

Remember, there are charges for a San Diego Ca mortgage home loan refinance. At times the costs outweigh the benefits. However, in many cases the homeowner can save a significant amount of money throughout the term of the loan. When consumers refinance home loans, they are not simply reducing your payments or changing your interest rates. This process consists of paying off the original loan in full. The refinanced loan is completely new in spite of the fact that you have been making payments for the same property. Since the mortgage loan is brand new according to the lender, it is subject to the same fees, points and other fees you paid for your initial mortgage loan agreement.

There is another significant fee that many homeowners do not consider when they try to get a San Diego home mortgage refinancing loan. Pre-payment penalties can be pretty costly, and you should not get a loan that includes them. You can check with your lender and with the regulations in your state to see if the pre-payment penalties apply to your specific loan or not.

The process of finding the right home mortgage refinancing package does require some preparation and homework. However, you can find a great deal that will pay off over time.

Source sportyhealth.com

The governmenst main objective is to assit borrowers of Freddie Mac guaranteed, insured home loans, to keep their homes affordable and reduce foreclosures by keeping payments affordable. Under Freddie Mac’s Home Affordable Refinance program, known as the Relief Refinance Mortgage, the program may be used to reduce the borrower’s loan interest rate, shorten the loan term repayment period or replace an adjustable-rate mortgage, interest-only mortgage or balloon/reset mortgage with a fixed-rate loan.

How to qualify for the new refinance program, first the borrower must have an existing mortgage that is owned or guaranteed by Freddie Mac. To find out whether Freddie Mac owns or guarantees your loan, call (800) 373-3343, call your San Diego loan mortgage servicer, San Diego Mortgage Broker or search for your loan on Freddie Mac’s Web site at Freddiemac.org.

You should contact your original lender or loan servicer to apply for this program.

The property may be a vacation/second home if the existing San Diego Ca mortgage was originated as a second-home loan or the borrower now occupies the home as a principal residence.

The new Freddie Mac Refinance mortgage can be a 15-, 20- or 30-year, fixed-rate loan or an adjustable-rate mortgage  with an initial term of five, seven or 10 years. The loan must be fully amortizing (i.e., not an interest-only or payment-option loan).

If you have an existing fixed-rate mortgage loan, than the lender can not refinance with an ” ARM”  Adjustable Rate Mortgage.

The loan, may be a so-called “super-conforming” loan limit within the applicable loan limit for the area.

The property may be an investment property if the existing San Diego Ca mortgage was originated as an investment property or the borrower now occupies the home as a principal residence.
 
If the original loan is covered by mortgage insurance, the insurer must agree to transfer the insurance to the new loan.

The new loan cannot be used to make a payment on or pay off a second loan.

Lenders are encouraged to use Freddie Mac’s automated valuation model, or AVM, to estimate the property’s current market value. Borrowers should ask whether a new appraisal will be required.

The borrower may be able to finance transaction costs of up to $2,500.
Borrowers whose monthly payment increases 20 percent or more must provide income and employment documentation and have an acceptable credit score and debt-to-income ratio to demonstrate they can afford the new higher payment.

If your loan does not meet these qualifications and you can not qualify for a typical refinance program,  You may want to consider modifying your home loan with a home loan mortgage modification.  This will allow you to lower your monthly mortgage payments, lower your current interest rate on youir San Diego California mortgage, or possibly reduce the principal balane of your home loan mortgage.

More information can be obtained at the Freddie Mae web site or at the Home affordable modification webs site.

Discrimination in San Diego Ca mortgage lending is prohibited by the federal Fair Housing Act and HUD’s Office of Fair Housing and Equal Opportunity actively enforces those provisions of the law. The Fair Housing Act makes it unlawful to engage in the following practices based on race, color, national origin, religion, sex, familial status or handicap (disability):

Refuse to make a San Diego mortgage loan
Refuse to provide information regarding loans
Impose different terms or conditions on a loan, such as different interest rates, points, or fees
Discriminate in appraising property
Refuse to purchase a mortgage loan or set different terms or conditions for purchasing a loan
Filing a Complaint

If you have experienced any one of the above actions, you may be the victim of discrimination. Recognizing the signs of lending discrimination is the first step in filing a complaint. HUD investigates your complaints at no cost to you. If you believe you have experienced lending discrimination, visit our housing discrimination complaint website to learn more about the complaint process.
HUD Fair Lending Studies

Pre-application inquiries about mortgage lending financing options represent a critical phase in the homebuying process. If potential homebuyers cannot obtain full and fair access to information about mortgage financing, they may give up on their pursuit of homeownership, their housing search may be restricted, or they may be unable to negotiate the most favorable loan terms. HUD has conducted a number of studies to determine whether minority homebuyers receive the same treatment and information as whites during the mortgage lending process. Read more on San Diego Ca mortgage lending discrimination studies .

Subprime Lending

Sub prime loans play a significant role in today’s mortgage lending market, making home ownership possible for many families who have blemished credit histories or who otherwise fail to qualify for prime, conventional loans. A recent HUD analysis, based on HMDA and related data, shows that the number of home purchase sub prime applications increased from 327,644 in 1997 to 783,921 in 2000.

While the sub prime mortgage market serves a legitimate role, these loans tend to cost more and sometimes have less advantageous terms than prime market loans. Additionally, sub prime lenders are largely unregulated by the federal government. Data shows blacks are much more likely than whites to get a sub prime loan, and many of the borrowers who take out these loans could qualify for loans with better rates and terms. As such, many have expressed fair lending concerns about the subprime market. Read more on Subprime Lending .

Predatory Lending

Some lenders, often referred to as predatory lenders, saddle borrowers with loans that come with outrageous terms and conditions, often through deception. Elderly women and minorities frequently report that they have been targeted, or preyed upon, by these lenders. The typical predatory loan is: (1) in excess of those available to similarly situated borrowers from other lenders elsewhere in the lending market, (2) not justified by the creditworthiness of the borrower or the risk of loss, and (3) secured by the borrower’s home. HUD is working hard to fight against predatory lending .

Minority Homeownership

HUD is committed to increasing homeownership opportunities for all Americans. HUD is engaged in a special effort to boost the minority homeownership rate since the rate for black and Hispanic Americans lags behind that of others. Read more about HUD’s efforts to Increase Minority Homeownership .

These rules should be refered to if you feel that you may have been treated unfairly in the Real estate mortgage loan process.

Source Hud . Gov