Home Values And A Mortgage Refinance Boom

Reduced mortgage rates spike mortgage application volume but, will a potential mortgage refinance boom be reduced by lower home values? Estimates for the fallout of applications submitted to lenders range from 50% to 65%, due in part from low appraised home values.

Homeowners with substantial equity and good credit may be the primary beneficiaries of lower mortgage refinance rates, while many others could find themselves stuck in their current mortgage, unable to refinance because of lower than expected home values.

High expectations of home values are often disappointed by the reality of current appraisals, which determine the value by comparing similar residential properties that have recently sold and closed escrow. When a lender takes an application for a mortgage refinance, the borrower is usually asked for an estimate of their home value, which may be just wishful thinking.

If any of the recent home sales within a neighborhood are from foreclosures or short sales where the banks have substantially cut the prices for a quicker sale, appraisers have no choice but to use those properties as comparable sales to determine the value of a home for a mortgage refinance.

The mortgage industry is taking steps to ensure more reliable home valuations. Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies, have agreed to establish a home appraisal code to help prevent undue influence on appraisers, which has in the past led to artificially high home values, contributing to a record number of foreclosures.

Also, in order to protect against potential loss, FHA has changed their lending guidelines to require that borrowers pay for two separate appraisals on cash out mortgage refinancing over 85% loan to value, using the lesser of the two values to calculate the maximum loan.

Because home values are such an important issue when refinancing a mortgage, lenders should offer to have the local comps checked, as a courtesy to borrowers prior to spending any appraisal money, since the borrower usually pays for the appraisal, just to make sure the value is close to what is needed in order to fund a mortgage refinance.

By: Rick Smith

Written by Rick Smith: Rates and information on home mortgages, additional mortgage refinance information at ditech home loans

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A Guide To Finding And Getting That Perfect Mortgage Online

The soaring popularity of the online marketplace has changed the way mortgage lenders and aspiring homeowners do business. While in the past there was a lot of face to face contact or at least a lot of personal interaction via the telephone, today’s mortgage is often done entirely online and via email. A changing business environment has brought with it a lot of advantages consumers are enjoying, but there are also some pitfalls they need to be aware of. A guide to finding and getting that perfect mortgage online will try to make that process for getting the online loan just a bit easier and safer.

First things first: you need to find out how much house you can afford. There are several free online mortgage calculators that let you play around with the overall loan amount, different interest rates, and also various lengths of time. In most cases these calculators will also reveal if fit into the debt to income ratio that lenders want to see before offering their home loans to consumers.

Next, evaluate your credit. If you have not ordered your credit report in a while, now is a good time to do so. Know what is found in your credit file and correct and mistakes that you find. In some cases potential borrowers were denied loans or advantageous interest rates because of derogatory notations in their credit profiles that did not even need to be there! Correcting any mistakes is quickly and easily done.

At this juncture you know how much you can afford and what your credit looks like. This will influence the lenders you might choose. Essentially there are two kinds of lenders doing business online: the established banks with an online presence that let you submit your application via the Internet, and the web-based that does not have a brick and mortar building and does business exclusively online. There are good and bad ones of both ilk and it is a good idea to check their Better Business Bureau rating before committing to one and putting in an application. As a general rule, established and well known lenders are less likely to cause any problems than the unknown ones.

Be wary of supplying too much information up front. The initial contact with an online lender should be a general fact finding mission where you test the waters to see what the lender can do for you. Social security numbers and such information should not be offered at this juncture, nor should it be demanded by the lender. The goal is to find out which loan products the lender has available and – if all the fact you provide are correct – what the bank can do for you.

When you do choose to go ahead with the application process make every effort to find the best deal that will work for you now and in the future. Using online mortgage brokers is one method of weeding out lenders that have rates which are simply too high. In other cases you will find that the direct competition between lenders online has led to amazing deals you can take advantage of.

Beware the teaser rates that some online mortgage companies use to entice new homebuyers to write up their mortgage with them. Compare and contrast the aspects of various different loan products and know exactly what it is that you are choosing. If a package is considerably cheaper at one lender than at another, peruse the fine print carefully.

The final suggestion for finding that perfect mortgage online is the same that accompanies any big purchase: whatever is agreed to, get it in writing! While the individual broker may promise that she will take one half point off your overall interest rate, ask to have it put in writing into the loan papers. Once signed, notarized, and submitted, they are binding and if the special deal you were offered is not part of the agreement, it simply does not exist.

By: Lender411

Article Directory: http://www.articledashboard.com

Krista Scruggs is an article contributor to Lender 411 . Whether you are looking for fixed mortgage rates, variable adjustable mortgage rates (ARM), jumbo loans,interest only or even specialized mortgages such as bad credit mortgage or reverse mortgages, we will match you with up to 4 qualified lenders with 4 mortgage quotes.

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What Is A Bad Credit Home Equity Line Of Credit ?

A bad credit score can make it increasingly difficult for a homeowner to successfully apply for and get a home equity line of credit. A low score is usually an indication of not being able to pay all your bills on time, being in default on current or old loans, or to much outstanding debt which shows potential lenders a bad debt to income ratio.

So just what is a credit score you may ask? It is a value that is obtained through a variety of calculations based on your current financial situation that returns a score between 300 to 850. It was created by the Fair Isaac Corporation to help lenders determine the interest rate that will be charged to homeowners applying for home equity loans.

If you have a low credit score you will pay a higher interest rate. If your credit score is above 700 you have a much better chance of obtaining a line of credit with a competitive interest rate. Lenders will also use your credit score to determine whether or not you are a good candidate for a loan in the first place. This score can also be used to determine how much credit they will extend to you.

There are three different credit agencies in the United States, Experian, TransUnion, and Equifax. They are the primary agencies responsible for calculating credit score with each of them scoring a little bit different. If you have low credit you can ask for a free copy of your credit report from all three agencies. This will allow you to see what the problems are and what you can do about it.

Raising your credit score to receive more favorable terms on a home equity line of credit can be done with a little time and patience. Once you have your credit report the first thing you need to look for are false claims of money you owe. If you can prove that you have mistakes on your report you can start to raise your score.

Another way to boost your credit score is to be caught up on all your current payments and pay down as much debt as you can. The more unencumbered credit you have the higher your score. This does not mean to get more credit but to take care of the credit you do have. A score of 640 or less is a sign of bad credit to most lenders and will require you to take action to correct the problem.

Surveys show that nearly 80% of all credit reports contain mistakes of some sort. This is why it is important to check your credit report from all three agencies at least once a year. Doing so can save you thousands of dollars in interest.

Getting a bad credit home equity line of credit is possible, but the interest rate and terms of repayment will not be favorable to you. It is much better to try and raise your credit score before applying for any type of loan for the simple fact that you want to keep as much money in your pocket instead of your lenders.

By: Andrew Bicknell

To learn more about home equity loans and lines of credit please visit the website Home Equity Loans by Clicking Here.


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How To Get Bad Credit Home Equity Loans In Illinois

If your credit score is not as high as you would like it to be there are options available to you if you need to tap into the equity of your home. There are many lenders in Illinois who offer bad credit home equity loans to those who need them, but it needs to be understood that this type of loan should be used as an avenue to restore ones financial good standing.

If you have bad credit then chances are you are already on shaky financial ground. A home equity loan can be used to stabilize your financial situation if you understand that you are not paying off debt with this type of loan, you are simply moving it to a place with better terms.

The idea is simple, take all those outstanding credit card balances, car loans, or any other bills that need to be paid off and consolidate them into one loan with a lower interest rate and monthly payment. Not only will this make you debt burden easier to deal with it will also help build that credit score back up.

You will basically have two options when it comes to a bad credit home loan; the cash out mortgage refinance or a home equity loan. You will be using the equity built up into your home to secure either of these loans which will give you the money you need to transfer your debt from many creditors to your new loan.

One of the easiest ways to find these types of loans is online. There are numerous online services that allow you to compare home equity loans and their terms. This gives you the best chance to find a lender that fits your current financial needs. Here are some tips to keep in mind while filling out the online applications forms.

1. A good online loan site will have articles that will help you educate your self about these types of loans. Learn as much as you can because the terms of a bad credit home loan will be different from a regular loan.

2. Be sure to fill out the applications that ask for detailed information about your financial situation. The more information you are able to give the more detailed your final quotes will be.

3. Be sure to find a loan that rolls all the fees into the final balance. This includes closing costs, application fees, appraisal fees, and any other costs that come with the loan.

4. Keep copies of all paper work and records of phone and email contact you have with your loan officer. It's also a good idea to stay in contact to make sure that the process is moving forward.

5. Once you receive your loan check pay off all your other debts immediately and cancel those accounts. You do not want to add to the debt you have already moved once. Stay current on your payments to your equity loan and before long your credit score will begin to go up.

Bad credit home equity loans are easy to find in Illinois with many lenders more then willing to loan you money. Be sure to thoroughly research your current financial situation and how such a loan may help you get control of your finances. It is important to remember that this type of loan is a tool that works well if used right. It will not fix all your financial problems but it can get you headed in the right direction.

By: Andrew Bicknell

To learn more about a bad credit home equity loans and lines of credit please visit the website Home Equity Loans by Clicking Here.

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