Christian 2nd Home Loans
The underwriting process for Christian 2nd home loans is somewhat different than for traditional first mortgages. Especially in the current economic climate, lenders are scrutinizing loan applications closely before making an approval decision. Prospective buyers are well advised to educate themselves on the application process and to get their personal economic house in tip-top shape before they begin shopping for a second property. In the past several months, many people have found themselves unable to make mortgage payments and are either walking away from their homes or undergoing the emotionally wrenching pain of foreclosure. The majority of these homeowners had adjustable rate mortgages that started out at a low, affordable rate of interest. But as the rate adjusted upward, the monthly payment became an unaffordable burden. Economists can argue over the finer points of whether these homeowners should ever have been approved for mortgages. The sad reality is that many people who were approved for loans are now facing real heartache. Though it doesn't get as much attention, the second-home market is going through a similar upheaval. When people can't pay their 2nd home loans, they are even quicker to let the house go back to the bank than those who are defaulting on the mortgage for a primary residence. After all, the person who defaults on a second home mortgage still has his primary residence.
The silver lining in this cloud of mortgage woes is that a large inventory of houses is now on the market in many areas of the country. Even popular tourist destinations such as California and Florida have a tremendous number of houses for sell in some areas. It is truly a buyer's market and there are deals to be had for those who are willing to spend the time seeking them out and who already have financing in place. Prospective applicants for 2nd home loans should begin by preparing a personal financial statement that includes such information as income, expenses, and net worth. The applicant is well-advised to obtain a copy of her credit report and score from at least one, if not all three, of the major credit bureaus, Equifax, Experian, and TransUnion. The reports should be reviewed for accuracy and any errors need to be dealt with immediately. Lenders will be ordering these reports as part of the underwriting process and unresolved errors can delay approval. Knowing one's score is also helpful. The prospective buyer can research different mortgage products online and see if the credit score is high enough to qualify for more favorable interest rates and terms. If not, the individual may want to investigate positive steps that can be taken to improve the score before actually applying for 2nd home loans.
Once the prospective applicant has compiled and updated her financial information, she may want to search for a reputable lender. When it comes to 2nd home loans, the lender will want to know if the property will be used as a vacation home or as investment property. Financing for a vacation home will almost always have a more favorable interest rate than that for investment properties. In addition, the interest on a vacation home is often tax deductible. Mortgages for investment properties, for example, a house that the buyer intends to rent to others, will usually have a higher interest rate, the interest will probably not be tax deductible, and it will be more difficult to qualify for the loan. Lenders have a difficult time selling investment mortgages on the secondary market so they often prefer not to underwrite such loans in the first place. Some people may be tempted to lie on the application about the purposes for the second home so that they can get the lower interest rate. However, to lie on a mortgage application is a federal offense. Besides that, lying is just plain wrong. One of the psalmists writes: "Blessed is that man that maketh the LORD his trust, and respecteth not the proud, nor such as turn aside to lies" (Psalm 40:4).
As mentioned above, people who are facing financial difficulties are more likely to default on 2nd home loans than on their primary mortgages. Lenders are well aware of this economic reality which is why the qualifications for a second home mortgage are stricter than those for a primary residence. Not only will the interest rate be higher than for a primary mortgage, but the prospective buyers can expect that the origination fee will be at least one-fourth to one-half point higher on a mortgage loan for a vacation property than a primary residence. (A point is equal to one percent of the mortgage.) Not too long ago, homebuyers could purchase a primary residence with little or no money down. With the tightening of guidelines as a result of the current mortgage crisis, this is practically impossible anymore. Lenders who expect a down payment from their primary mortgage clients are definitely going to expect down payments from those applying for 2nd home loans. The prospective buyer may need a substantial amount of cash before buying a second property.
For those with the financial means to do so, the current housing market is a great time to find bargains. Prospective buyers can improve their chances of being approved for 2nd home loans by reviewing and updating personal financial information and being informed about the underwriting procedures. Excellent credit scores, a solid financial statement, and a good sized down payment will give the lender the needed confidence to approve the loan. And with that good news, the prospective buyer can become a bargain shopper. Let the search for that getaway vacation home or income-producing rental property begin!
Christian Non Conforming Mortgage LoanA non conforming mortgage loan is one that does not conform to Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) guidelines because the amount is too high or because FNMA/FHLMC underwriting or other criteria are not met. An example of this is jumbo mortgages. They are also referred to as sub-prime or BCD. Those who have a financial situation that is complicated or unusual and don't qualify for conventional lending may find that a non conforming mortgage loan is the preferred option. People who can't verify their income or don't want to disclose financial information, for whatever reason, can apply for this special type of lending.
Conventional lending is fairly safe for the bank and the consumer because the amounts are reasonable and can be paid back. However, non conforming mortgage loans are much riskier for the lender not only because of the larger amounts of money lended, but because the borrower shares far less information. With less risk, there are better interest rates; therefore, with a non conforming mortgage loan, the interest rates may be much higher, as the lenders see the chance of foreclosure to be more likely. Borrowers have to be smart and decide what is more important: privacy or saving money on interest. This may require a financial consultant and some prayer. "Consider and hear me, O LORD my God..." (Psalm 13:3).
There are a large variety of lenders and types of unconventional lending. Those who are self employed and rely on tips, or can't verify their income can apply for a Stated Income loan. People who live off their assets or are under going a major change in life such as a divorce or career change might look to the No Ratio non conforming mortgage loan. However, there are other choices with a large variety of requirements, making the search for non conforming mortgage loans a bit more work than conventional ones. One bank may allow 10% down while another may finance the entire cost at a higher rate.
Lender comparisons are critical when dealing with any type of lending. Homebuyers can find non conforming mortgage loans and lenders both locally and online. They should start with their own bank by getting a quote. The homebuyer can then compare this rate to the quotes online and at other local lenders. Quote comparison websites can be quick and helpful, allowing consumers to fill out one web form for dozens of quotes from various lenders. With quotes in hand, borrowers can make a wiser decision about non conforming mortgage loans.
Online mortgage lending provides the potential borrower with information about potential lenders and their rates, so that making an intelligent decision is easier. Most brokers online will provide the names of at least four lenders to people looking for companies to work with. Interest rates and other expenses can be compared so that the buyer can choose which is best suited to his needs. On line mortgage lending doesn't do away with the various requirements for a new or refinance loan. Appraisals, inspections and title searches are still necessary. Some of the companies providing these services will include those closing costs in the loan package, but most will require the borrower to cover those costs.
There are a variety of loans offered besides new loans. If a borrower already has this type of financing, but wants to refinance with a lower interest rate, that can be done through on line mortgage lending companies. They can also assist with obtaining a second mortgage, or equity loan for debt consolidation or home improvement. A loan up to the amount of equity the borrower has in his current financing is available for paying off credit card and other debts. On line mortgage lending can help with the room that needs to be added, or remodeling that needs to be done on a home. A person can even use the equity funds to buy a car. Whatever the need for using that money invested in a mortgage, online mortgage lending is there to speed up the process. All the forms can be filled out online, which is speedier than having to mail them back and forth. Anything that needs to be notarized in the closing papers of an on line mortgage, that will be up to the borrower to take care of that detail. Matthew 6:25 encourages people by saying "Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?"
One thing a potential Christian customer should remember is that if he sells the property before the loan is paid off, the money to pay back the loan will come out of the proceeds of the sale. Furthermore, if there is a forfeit of the loan, there is the risk of losing one's home or business through foreclosure. Online mortgage lending institutions can help a person figure out the best personal plan. There may be some difficulty in selling the property, in that buyers often shy away from anything that has a lien on it. If the borrower pays attention, on line mortgage lending can be a good experience.