Using a cash windfall as a down payment on a home

« Getting rid of a troubled home loan
Report shows African-Americans, Latinos are less likely to receive mortgages »

Should you use an inheritance or other cash windfall as a down payment on a home? Obviously, the more money you have for a down payment the better. But is getting a mortgage loan to buy a home the best use of your money at this time?

Do you have a lot of debt?

Owning a home is part of the American dream. But it can be easy to rush into home ownership without really being ready for all the financial responsibilities. For instance, many people apply for mortgage loans even though they have a lot of credit card debt, auto loans, student loans and other bills. Take a careful inventory of your finances and decide whether it makes more sense to use a cash windfall to pay off some of your debt, especially high-interest debt like credit cards.

Do you have emergency savings?

Owning a home means that you’ll be responsible for all maintenance and repair costs. It is not a good idea to purchase a home without having money set aside in savings for routine maintenance and other projects that may come up. It is also important to have money in savings for other emergencies that may occur, such as car repairs, medical expenses or a sudden drop in income. If you have little or no money saved up, you may be better off using your windfall to boost savings.

Do you anticipate a large expense soon?

Are you about to send your kid to college or anticipating some other important event that will cost big bucks? Put together a spending strategy that prioritizes future expenses. As you go through the numbers it may become apparent that this is not the time to get a mortgage to buy a home. You also may find that you need to put together a budget so that you can take care of your financial obligations and still save up for buying a place in the future.

Take time to plan ahead

Avoid rushing into home ownership even if you can qualify for a home mortgage. Too many Americans have made the mistake of getting mortgage loans when they really could not afford them. If you need help knocking out debt and building up a savings, get help from a debt counselor. If you do receive a windfall for a significant amount, a knowledgeable financial adviser can help you figure out the best way to handle it.

Tags: home mortgage, mortgage, mortgage loans

This entry was postedon Friday, February 18th, 2011 at 1:24 pmand is filed under General Mortgage Info.You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

Leave a Reply

Name

Mail (will not be published)

Website

View the Original article

0 comments

Report shows African-Americans, Latinos are less likely to receive mortgages

« Using a cash windfall as a down payment on a home
All-cash deals made up 28 percent of home purchases in 2010 »

African-Americans and Latinos are less likely to receive mortgage loans as the housing crisis has deepened, according to a recent report from ComplianceTech, a provider of technology and mortgage data analysis for government agencies, nonprofits and financial institutions. The analysis of data from 2004 to 2009 shows that there are disparities in the availability of mortgage credit to African-Americans and Latinos. Members of these groups have more difficulty financing a home regardless of whether they are new home buyers or homeowners looking to refinance.

The sub-prime mortgage crisis

The analysis also debunks the erroneous notion that mortgage lending to minorities was at the root of the sub-prime mortgage crisis. Data in the report show that whites actually received the highest number and dollar volume of sub-prime mortgage loans, and are likely to have more mortgage loans in foreclosure. Whites received 4.1 million sub-prime mortgages between 2004 and 2009, Latinos 1.3 million, African-Americans 1.2 million and Asians 179,000.

The report states:

As the foreclosure crisis threatens the financial stability and mobility of families across the country, it will be particularly devastating to African American and Latino families, who already lag behind their white counterparts in terms of income, wealth and educational attainment. Furthermore, the indirect losses in wealth that result from foreclosures as a result of depreciation to nearby properties will disproportionately impact communities of color.Fewer prime mortgages

African-Americans and Latinos have lower origination rates and higher costs when they are approved for mortgages. Between 2004 and 2009 the market share of prime rate mortgage loans for African-Americans fell 62.67 percent and 61.62 percent for Latinos. The market share of prime rate mortgages grew 12.54 percent for whites and 19.6 percent for Asians.

All racial groups experienced a decline in the volume of prime mortgage loans. African-American prime loan volume plunged to $19.5 billion in 2008 from $82 billion in 2004. Latino prime mortgage loan volume fell to $40.2 billion in 2009 from $171 billion in 2004. Prime mortgage loan volume for whites fell to $876 billion in 2009 from $1.2 trillion in 2004, while Asians saw loan volume decline to $90.6 billion in 2009 from $121 billion in 2004. However, white and Asian borrowers saw increases in prime loan volume between 2008 and 2009, while African-Americans and Latinos experienced declines.

Tags: mortgage, mortgage loans, mortgages, refinance

This entry was postedon Thursday, February 24th, 2011 at 5:59 pmand is filed under Mortgage News.You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

Leave a Reply

Name

Mail (will not be published)

Website

View the Original article

0 comments

All-cash deals made up 28 percent of home purchases in 2010

« Report shows African-Americans, Latinos are less likely to receive mortgages
Should you accelerate mortgage loan payments? »

Having enough money to purchase a home outright might seem like a fantasy, but 28 percent of all homes bought in 2010 were all-cash deals, according to a recent Wall Street Journal article. Areas that had more depressed housing markets had more all-cash purchases.

Among the areas that saw a lot of these purchases is Miami-Fort Lauderdale, were over 50 percent of purchases involved cash buyers. About 42 percent of real estate purchases in Phoenix were all-cash deals.

“The prices were just irresistible,” Richard Stoker, who paid cash for two condos in Miami Beach, Fla., told the Wall Street Journal. “Florida’s been hit pretty hard.”

No mortgage loans

Buyers who pay with cash may receive a discount off the price of a home.They also have the freedom that comes with owning a property free and clear of a mortgage. Often people who are able to purchase a house with cash are investors. According to San Diego-based DataQuick, “All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who don’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.”

While investors are more likely to do all-cash deal, that doesn’t mean that there aren’t buyers out there who can afford to buy a home without a mortgage. The Money Saving Mom blog describes in a series of articles how one couple scrimped and saved to get the money they needed to buy a home in an all-cash deal. Buying a home with cash isn’t for everyone and requires a lot of sacrifices and careful planning. To determine if it is even possible to aim for the goal of buying a house with cash, you may need to work with a financial advisor to put together a plan.

What if you need a mortgage?

If, however, paying cash is too unrealistic of a goal to achieve, you’ll need to plan for getting a home loan if you want to buy a house. Be prepared to provide plenty of documentation about your income and assets when applying for a home mortgage. You also want to have the best credit possible since many mortgage lenders expect you to have a credit score of at least 720 to qualify for the best mortgage rates.

Tags: home loan, home mortgage, mortgage, mortgage lender, mortgage loans, mortgage rates, mortgages

This entry was postedon Friday, March 4th, 2011 at 5:10 pmand is filed under Mortgage News.You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

Leave a Reply

Name

Mail (will not be published)

Website

View the Original article

0 comments

Should you accelerate mortgage loan payments?

« All-cash deals made up 28 percent of home purchases in 2010
Should you get a mortgage if you have bad credit? »

Many Americans have slashed their spending and are doing without in order to pay off debt and lessen the effects of the troubled economy. Paying off mortgage loans early has become more popular, something that many financial experts have traditionally advised against.

Getting free of a mortgage

The argument for accelerating payments on a home mortgage is that you build equity faster and ultimately will own it free and clear of any debt obligation. You will always have the security of knowing that the place is yours as long as you want it to be. Paying off a home mortgage in full also would likely free up a significant chunk of your income, allowing you to have more control and freedom to use it for other purposes.

Using income for other investments

Those who are against accelerating mortgage payments often cite the loss of the mortgage interest tax deduction. They also point out that instead of putting extra cash toward a home loan, the money could be invested in mutual funds or other investments that may earn you more money. Also, during the years when you are accelerating mortgage payments, you may have less income to put toward other things.

Biweekly mortgage payments

Before you starting attacking your mortgage debt for a faster payoff, learn as much as you can about the various methods. Biweekly mortgage loan payments can allow you to pay off a 30-year mortgage about six years ahead of schedule. Instead of making mortgage payments once a month like a lot of borrowers do, you make a payment every two weeks. So instead of making 12 payments a year it works out to 13 payments.

Most mortgage lenders allow biweekly payments, but usually charge a fee to set it up. Skip the fee and set up your own biweekly mortgage payment plan. Check with your mortgage lender to see if you can send half of the payment every two weeks. If the lender won’t allow it, divide the monthly payment by 12 and add that amount to the payment on the principal each month.

Use cash windfalls

Use bonuses and other cash windfalls to pay down mortgage debt. Make sure you don’t need the money for other expenses that are more pressing than paying off a mortgage. For instance, putting lump sums of cash toward credit card debt can wipe out high interest payments, which would give you a better return on your money than paying off low interest mortgage debt.

Tags: accelerate mortgage, home loan, home mortgage, mortgage, mortgage loans

This entry was postedon Sunday, March 13th, 2011 at 12:30 pmand is filed under General Mortgage Info.You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

Leave a Reply

Name

Mail (will not be published)

Website

View the Original article

0 comments

Should you get a mortgage if you have bad credit?

« Should you accelerate mortgage loan payments?

Advertisements promising mortgages for those with bad credit are a dime a dozen. But often, the claims are exaggerated and mortgage loan applicants are turned down because they are seen as too big of a risk. When people are approved for a loan even though they don’t have great credit, they end up paying more because of high interest rates. You may be determined to not let having bad credit keep you from getting a mortgage, but should you really get a loan?

Not-so-ancient history

The reason mortgage lenders review your credit history is to determine what kind of consumer you are. Having bad credit is a sign that something in your past and present has kept you from being financially responsible. Maybe you fell on hard times after a job layoff, divorce or major illness in your family. However you got to where you are, money has been handled in a way that indicates that lending money to you at this time might be a mistake.

Questions for you

Getting a home loan is a major financial decision that can really backfire if not handled properly. Ask yourself the following questions before applying for a mortgage:

Are you really ready to take on the payments for the mortgage loan, taxes and insurance? Tax payments are set by your town based upon a property assessment, but mortgage and insurance payments will be affected by your credit score.Why can’t you wait to buy a home? Are you currently living in a rental and having difficulty keeping up with the monthly payments? Getting a mortgage loan isn’t going to improve that dilemma in most cases. Remember, owning a house means you’ll be responsible for repairs, upgrades, yard work and anything else that comes up.Why should mortgage lenders trust you to repay a loan? Be honest about your financial behavior up to this point. Have you been dishonest with others and yourself when dealing with bill collectors and creditors? Are you constantly making excuses for why you’re late with payments? Do you tell your kids or other family members to lie to bill collectors when they call? These are signs that you probably are not ready to get a home.

Repair credit before mortgage application

The bottom line is that going through the steps to repair credit can prepare you for getting a mortgage loan down the line. If you need help doing this, find a reputable debt counseling agency in your community.

Tags: home loan, mortgage, mortgage lender, mortgage loan, mortgages

This entry was postedon Friday, March 18th, 2011 at 11:12 amand is filed under General Mortgage Info.You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.

Leave a Reply

Name

Mail (will not be published)

Website

View the Original article

0 comments

How To Get A USDA Loan If You Don’t Have Any Credit

Arizona's #1 USDA Rural Development Jan 11
14

How To Get A USDA Loan If You Don’t Have Any Credit Leave a comment » Can you get a Zero Down USDA Loan if you don’t have credit?

View the Original article

0 comments

How To Get A Zero Down USDA Loan Even If Your Spouse Has Bad Credit

More people would be looking at buying a home in Arizona with the Zero Down Payment USDA Loan if they were not held back by their spouses bad credit.  There are lots of reasons why one spouse may have pretty decent credit and the other may have some bad credit dings; especially in our current economy.

These are called Spouse Only Loans and the USDA Loan does allow them.  It looks ONLY at the credit report history of the borrowing spouse and does NOT even look at the credit history for the non-purchasing spouse.  So if YOUR credit qualifies and your spouse has a questionable credit report, you have the option of not including your spouse on the loan.

USDA Administrative Notice 4543 specifically states that the Non-purchasing spouses credit is NOT considered a reason to deny a USDA Loan application.

However Arizona is a community property state, so you must disclose your spouse’s community property debt obligations on the application and you will need to qualify with those debt payments.

Here is how it works

View the Original article

0 comments