Flash Player 10 or Later is Required to View This Content.

Posts Tagged ‘loan’

By: Monique de la Torre

Tight lending guidelines have weighed on the U.S. housing market during its ongoing recovery. Most lending institutions during the past two years raised their credit score requirements to as high as 650, making in nearly impossible for many people to obtain a loan.

Wells Fargo made it a little easier for homebuyers this past year, when the lender lowered its credit score requirements on FHA mortgages.

“Under its new policy, Wells Fargo will accept borrowers with credit scores of 500 to 579 if those borrowers can make a down payment of at least 10%,” said Robert Lentini, a mortgage expert who blogs for the website thetruthaboutmortgage.com. “For borrowers with credit scores of 580 to 599, borrowers must put down 5%. Borrowers with credit scores of 600 or higher can make a 3.5% down payment.”

Quicken Loans, Inc. adapted similar policies— dropping to a minimum 580 FICO score. “There are folks who have steady incomes, and a solid payment history but were temporarily affected by the economy or a life event in some way.

“These challenges can lower their credit score significantly,” said Quicken Loans Inc.’s Chief Economist Bob Walters in a company statement. “We believe that a credit score, on its own, is not the sole arbiter of a person’s credit worthiness. This change will open up credit to a significant group of people and allow them to again have access to purchase or refinance a home.”

Such developments have been welcome news to FHA Commissioner David Stevens, who earlier this year urged lenders to lower their minimum credit score requirements to help the real estate industry as a whole. Stevens said that stringent requirements have constrained home sales by as much as 20% over the past year.

Monique de la Torre can be reached at 573.825.2843. Prudential Vision Properties is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

All offers to purchase must be reduced to writing. Verbal offers to a seller or the selling agent have no credibility and are not binding.

Your sales professional will use standard contract forms approved by the real estate commission for specific use. Your offer should be precise regarding terms, dates, and special requests. Since your sales professional is not licensed to practice law, only factual business details may be added. You may request that your offer be examined by your attorney.

All buyers should sign the initial offer. Your sales professional will take or fax the offer to the listing agent who will present it to the seller. The selling agent may be present at the time the offer is presented. Most times seller/agent location or schedules prevent this.

The listing agent will present the offer to the seller along with written proof of the buyer’s financial qualification. The seller will weigh the merits of the offer and the buyer, assess the bottom line, and make a decision. The seller can accept the contract ‘as is,’ reject the contract, or make a counter offer.

If the offer is accepted, all sellers should sign the contract and an effective contract date is set. If the contract is rejected, no further action is required except informing the selling agent.

If the offer is countered, the seller will change the terms that are unacceptable, initial all changes, and sign the contract. The countered contract is then delivered either in person or via fax to the selling agent for presentation to the buyer. The buyer can accept, reject, or make another counter offer. The offer does not become a binding contract until all parties have signed and all changes have been initialed by all parties.

For more information, call Prudential Vision Properties at 573-449-6200 to speak with a real estate expert without any obligation or cost. You can also email your questions to info@PrudentialVision.com (email responses usually come back within the hour)

Learn more about making the initial offer.

First Stop – Get Pre-Approved

The excitement of buying can kindle urgency to set up your Home Tour. When you view homes the American Dream gets closer to reality. However, instead of jumping in to view homes first, the smart first step in the process should be arranging your financing. This focuses you on a price range of homes that matches your personal finances, instead of looking at properties beyond your means. It can be very disappointing to have to step back to a lower price range to obtain a mortgage.

Fluctuations in interest rates may influence the size of home you can qualify for. When rates are low you can qualify for more house than when the rates are high. Various loan programs can influence the amount you can borrow, the rate that you will pay, and the cash required. These factors will influence your purchase. When you make these decisions before you look at properties, you reduce the stress that accompanies financing uncertainty.

There is another important reason to qualify first. A seller will not negotiate in earnest if you cannot prove that you can obtain a mortgage. When you present an offer to a seller, you will provide written proof from a lender that you have been examined and qualify for a loan.

If you find the right property, you should make an offer right away. A delay while you arrange your financing might allow another buyer to buy the property. If multiple buyers make offers at the same time, it will be the buyer with the best terms who is fully qualified that will win.

Learn more about qualifying for your mortgage.

For more information, call Prudential Vision Properties at 573-449-6200 to speak with a real estate expert. You can also email your questions to info@PrudentialVision.com (email responses usually come back within the hour)

The first step in the home buying process is getting qualified for a loan. This will help you focus on the amount of mortgage you may obtain and the price range of homes to consider. Since sellers will be reluctant to take their property off the market for buyers who may not qualify, they will require written proof of financial qualification to negotiate with you.

There are two kinds of written proof of mortgage qualification. The first is a pre-qualification letter. This document provided by a lender tells an interested party that the buyer has provided the lender with certain financial details. A lender will agree to make a loan based on a later verification of these details. In this case, the lender will not investigate a buyer’s credit or verify the buyer’s income or debts prior to issuing a pre-approval letter.

Oftentimes the wording in pre-qualification letters states that based on information provided by the buyer, the buyer will qualify for a certain loan amount. The lender will take the buyer’s word for information such as income and assets. The lender does not pull a credit report. This is the weaker of the two letters because a buyer may report income, assets, debts, or credit inaccurately, and might not get the loan.

The second written proof is a pre-approval letter. This is the stronger letter of the two because the lender has placed you through a loan approval process. The lender will pull a formal credit report from one or several credit bureaus to check your credit and debt information. The lender will verify your income usually through a copy of recent pay stubs or a copy of the buyer’s W2. This type of approval takes longer because of verification of the buyer’s finances, but it provides greater likelihood of loan funding.

Vickie Wallace can be reached at 573-823-3878. Prudential Vision Properties is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.

Learn more about your credit history.

First Stop – Get Pre-Approved

The excitement of buying can kindle urgency to set up your Home Tour. When you view homes the American Dream gets closer to reality. However, instead of jumping in to view homes first, the smart first step in the process should be arranging your financing. This focuses you on a price range of homes that matches your personal finances, instead of looking at properties beyond your means. It can be very disappointing to have to step back to a lower price range to obtain a mortgage.

Fluctuations in interest rates may influence the size of home you can qualify for. When rates are low you can qualify for more house than when the rates are high. Various loan programs can influence the amount you can borrow, the rate that you will pay, and the cash required. These factors will influence your purchase. When you make these decisions before you look at properties, you reduce the stress that accompanies financing uncertainty.

There is another important reason to qualify first. A seller will not negotiate in earnest if you cannot prove that you can obtain a mortgage. When you present an offer to a seller, you will provide written proof from a lender that you have been examined and qualify for a loan.

If you find the right property, you should make an offer right away. A delay while you arrange your financing might allow another buyer to buy the property. If multiple buyers make offers at the same time, it will be the buyer with the best terms who is fully qualified that will win.

Learn more about qualifying for your mortgage or Search ALL of Columbia’s Homes

Jody Calvin can be reached at 573-881-8771. Prudential Vision Properties is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.