On May 7th, 2012 in Mortgage 101 by Jeremy Warren
When going through the qualification and underwriting process, calculating and verifying your income is one of the most important things a lender will look at before fully approving your loan. Having sufficient income to qualify for the loan is the backbone for insuring that you will be able to make the payments on the new loan.
Lenders use the term debt-to-income ratio (DTI) to determine if your income is within program guidelines when compared to your current monthly debt and the proposed new monthly mortgage payment, which includes principal, interest, property taxes, and insurance (PITI).
There are two different types of ratios that your lender will look at when going through the underwriting process to determine if your income meets the guidelines for the type of loan you are trying to acquire.
1. Housing or Front End Ratio
• This is calculated by dividing the proposed PITI by the gross monthly income for all borrowers on the mortgage
• The ratio should fall between 28% and 31% for most loan programs
2. Total Debt or Back End Ratio
• This is calculated by dividing the proposed PITI and all monthly consumer debts reported on the credit report by the gross monthly income for all borrowers on the mortgage
• Most loan programs require that the ratio fall at or below 45%
Written by: Jeremy Warren
Murfreesboro, Tennessee - (615) 907-2646
On April 4th, 2012 in General Information, Mortgage 101 by Sherry Carney
Sell or Refinance….HARP*4* REALTORS
As a Real Estate Agent, you can be certain you’ll receive calls from panicked homeowners who want to sell their home because they owe too much, or falsely believe it is better to rent than to experience their home’s value decline in a soft market. Fearing the worst, some homeowners want to just get out from under their mortgage…right now!
For homeowners that owe more than the value of their home, selling may not be an option right now. Guaranty Trust is offering the HARP2 refinance program. As a Realtor, you may be in the first position to recognize and recommend this solution to your clients. The HARP product allows a homeowner to refinance into a better rate, and at higher loan to value than any current conventional or government loan does now.
Right now, you may be asking, “what does that do for me?” Well, it is all about the care and feeding of our clients….good advice goes a long way to protect that relationship for future business. There are some guidelines to qualify…here’s the primary list;
Written by: Sherry Carney
Mt. Juliet, Tennessee
On April 3rd, 2012 in General Information, Mortgage 101 by Sherry Carney
I’m asked this question all the time. “How much can I shorten my mortgage by making bi-weekly payments?” (Not to be confused with bi-monthly payments, as the savings are not the same.).
Bi-Weekly payments by definition means you are paying ½ of your payment every TWO weeks, so you’re paying part of your principal early, AND you’re making two extra payments a year, which can reduce your 30 year term by years. Bi-weekly payments can also take your principal balance down faster, even if you don’t plan to stay in your home for 30 years.
See for yourself with this quick calculator I found…Just plug in your numbers and see how much you can save! ...
Written by: Sherry Carney
Mt. Juliet, Tennessee
On March 21st, 2012 in General Information, Mortgage 101 by Sherry Carney
Imagine, getting into a home for $100 down! Yes, its true, there are some HUD foreclosed properties where a buyer can purchase a home for just $100 down! Before you rush to make a bid on one, there are some stipulations to that program you’ll want to be aware of:
1. This $100 down program is for HUD “Insurable” properties only, not the UNinsured properties that are sometimes available thru HUD. ‘Insurable’ properties are usually in satisfactory condition or can be made that way, with repairs that total less than $5,000.
2. You must be the occupying owner for this product. Investors are not eligible.
3. Your bid must be for the full asking price and your Realtor must state the bid is for the $100 down program. This means you may have to pay out of pocket at closing for upfront mortgage insurance and some closing costs. But in most cases you will not have to purchase, an appraisal, termite inspection, or even a home inspection. HUD usually has these items already completed.
4. Your purchase loan must be….
Written by: Sherry Carney
Mt. Juliet, Tennessee
On March 16th, 2012 in General Information, Mortgage 101 by Kaye Clark
A few ideas for rebuilding your credit scores:
There are several misconceptions on building credit floating around in the mortgage industry. Below are a few ideas that may be effective in building up a credit score in as quick a manner as possible to help obtain a mortgage with having a better credit score.
1. Personal Loan and CD: Open up a Certificate of Deposit of a small amount – let’s say $500 and then ask for a personal loan of $250 (half of the CD amount) Tell the bank you are trying to build up your credit. The trick is – do not spend the money – use the money to pay back the loan – say within a two – three month period. Then you will have a positive credit line on your account that you paid off within a short time period…..
Written by: Kaye Clark
Hendersonville, Tennessee
On January 23rd, 2012 in General Information, Mortgage 101 by Shearer Spears
Special Funds are available in the City Of Murfreesboro by the City of Murfreesboro. The borrower does not have to be first time homebuyer. The grant amount can be up to $14,999 in certain census tracks, including 409,410,411,412,413,414 & 421, and has to be a foreclosed and vacant property. In some cases, this grant can be added to an additional grant of $10,000, which requires the buyer to be a first time homebuyer…
Written by: Shearer Spears
Murfreesboro, Tennessee
On August 25th, 2011 in Mortgage 101 by Aimee MacIlveen
When I meet with borrowers, I am often asked questions about title insurance. Many borrowers don’t understand what title insurance does and why it is required.
Unlike home insurance and car insurance which focus on hazards that haven’t happened yet, title insurance is protection against loss from hazards and defects that happened in the past.
The title insurance company will search land records going back many years. They research transactions in which the property has been transferred from one owner to another. This history is considered to be the chain-of-title. Title companies will search for any defects or weaknesses in the chain of title. These weaknesses may include:
Written by: Aimee MacIlveen
Knoxville, Tennessee
On August 24th, 2011 in Mortgage 101 by Retta Gardner
Now you are probably wondering what USDA has to do with a home loan? Well USDA offers a very special mortgage program that allows 100% FINANCING, NO DOWNPAYMENT OPTIONS. Guaranty Trust is one of the top lenders for Rural Development Home Loans in the Great State of Tennessee!
Program Highlights Include:
• 100% Financing
• Low Monthly Mortgage Insurance Premiums
• Seller Can Pay All Closing Costs
• Great Interest Rates
• Flexible Credit Qualifying (No Credit Scores Accepted)
• 30 Year Fixed Rates
• Generous Income Limits
• First Time Homebuyers Welcome
Written by: Retta Gardner
Murfreesboro, Tennessee
On August 22nd, 2011 in Mortgage 101 by Sherry Carney
You’ve heard it can save you $100s per month in your payment…but you wonder, what are the facts…and would an initial interest only payment work for you?
With an interest-only mortgage loan, you pay only the interest on your mortgage in monthly payments for a fixed term. Usually the term is 5, 7, or 10 years. At the end of that term, you’d either refinance, pay the balance in a lump sum, or start paying off the principal, in which case of course the payments would increase. You won’t build equity in your home loan during the interest only term, unless you make principal payments; But in a strong market your home’s value can be expected to increase…
Written by: Sherry Carney
Mt. Juliet, Tennessee
On August 18th, 2011 in Mortgage 101 by Shearer Spears
I get this question all the time. What can a seller pay towards my closing costs? Here are just some of the ways to figure this. If you are doing a conventional loan and are only putting down 5%, the seller is limited to pay only 3% towards your closing costs, points, prepaid items and title. But, if you are putting down 10% or more, the seller can pay up to 6% towards these same items. FHA will allow the seller to pay up to 6% towards closing costs, points, prepaid items and title regardless of the down payment. A VA loan does not have a maximum amount that the seller can pay towards a buyer’s closing costs. Also, Rural Development does not have a limit on what the seller can pay for the buyer’s closing costs, pre paid items, points and title. If you have questions, please leave a comment, and I will be happy to help!
Written by: Shearer Spears
Murfreesboro, Tennessee
On August 1st, 2011 in Mortgage 101, Mortgage Basics by Patrick Cranmer
For years, everyone that has ever thought about purchasing or refinancing a home has had this question and gone to great lengths to avoid the “monster” called mortgage insurance, or, sometimes referred to as PMI (private mortgage insurance). However, in today’s housing market where we have all experienced declining home values, mortgage insurance has become commonplace and necessary to allow homeowners and potential homeowners to obtain financing for a new home or refinance their existing loan with the very low interest rates that are being currently offered. Mortgage insurance is a default insurance for the lender, and unfortunately, the lender passes this charge on to the homeowner. Standard lending guidelines dictate that a lender’s maximum exposure in any loan cannot be more than 80%. With mortgage insurance placed on the loan, the lender is protected and thus, is willing to lend as much as 100% of the market value or purchase price of the home…
Written by: Patrick Cranmer
Murfreesboro, Tennessee
On July 20th, 2011 in Mortgage 101, Mortgage Basics by Sherry Carney
So you’re ready to take the plunge? The All American Dream of homeownership! Wait! How do you know how much home to look for, if you don’t quite know what you can afford? This is a common concern that reflects you’re using the smart approach in reviewing this investment so that you don’t get over your head in financial obligations.
Written by: Sherry Carney
Mt. Juliet, Tennessee
On July 13th, 2011 in Mortgage 101, Mortgage Basics by Jeremy Warren
When applying for a new home loan, your loan officer will need to verify your assets, and more specifically, your liquid assets. The lender needs to verify assets to make sure you have enough money to cover the cash required at closing which includes down payment, closing costs, and prepaid items; as well as the total reserves required for underwriting approval.
Types of Allowable Assets:
• Checking and Savings Accounts
• Earnest Money
• Stocks
• Bonds
• Investments
• IRA/401(k)/retirement accounts
• Gift Funds
• Selling non-liquid assets
Guidelines for loan programs that require asset verification require that the lender source and/or season the assets. Sourcing assets means that you can verify for the lender where all of the funds came from. Seasoning assets means that the lender can verify that they have been in the account for at least two months….
Written by: Jeremy Warren
Murfreesboro, Tennessee - (615) 907-2646
On July 12th, 2011 in Mortgage 101, Mortgage Basics by Aimee MacIlveen
Why is the APR on my Truth-in-Lending disclosure higher than the note rate?
The difference between the annual percentage rate (APR) and the note rate is very confusing especially for first time home buyers. Actually, even seasoned buyers have difficulty understanding the difference between the two numbers.
The interest rate is the rate a lender charges a borrower for use of money for a specific length of time. The interest rate, loan amount, and loan term determine your monthly payment. The APR does not affect your monthly payment….
Written by: Aimee MacIlveen
Knoxville, Tennessee
On July 7th, 2011 in Mortgage 101, Mortgage Basics by Shearer Spears
The Mortgage Industry has changed over the last several years regarding various loan program down payment requirements.
There are 4 basic loan programs. Each has its own unique down payment requirement.
They are as follows:
VA is a 100% loan for Veterans and do not have a down payment.
Rural Development is a 100% loan to qualified buyers.
FHA requires a 3.5% down payment.
Conventional requires a 5% down payment.
Many borrowers worry about not having the funds to purchase a home. Don’t give up on your dream home without knowing all of the down payment assistance options available to you whether you are a first time homebuyer or buying your fifth home!
Written by: Shearer Spears
Murfreesboro, Tennessee
On June 29th, 2011 in General Information, Mortgage 101, Mortgage Basics by Patrick Cranmer
Did you know that the most important factor in choosing the right loan is NOT always the interest rate ??
Many customers that I speak to concentrate heavily on getting the lowest interest rate possible in the market today, and completely ignore what they are actually paying to get that rate. We all want the lowest rate possible, but you must always factor in the closing costs you are having to pay or finance in the loan to tell if this lower rate is the best option for you.
2 most important questions to ask yourself:...
Written by: Patrick Cranmer
Murfreesboro, Tennessee
On June 20th, 2011 in Mortgage 101, Mortgage Basics by Lori Clark
Hi, I’m Lori Clark, the Branch Manger and a Sr. Loan Officer with Guaranty Trust Co. Since this is my first blog post, I think a good place to start is to address first time homebuyers. I get calls every day from buyers with questions about the mortgage process or even looking for a local realtor. Don’t feel overwhelmed by all of the scary stories others may have shared about their mortgage process- your loan options are unique to you! I can assure you that when you work with someone that is knowledgeable about the programs that are available to first time homebuyers you will have a smooth closing!
Written by: Lori Clark
Murfreesboro, Tennessee
On June 16th, 2011 in Mortgage 101, Mortgage Basics by Sherry Carney
Congratulations!….You’ve decided you’re ready to buy a home, and you’ve heard horror stories about CREDIT- nightmares that you’d rather avoid. Well, the first step to being at peace with your credit is to understand it.
Written by: Sherry Carney
Mt. Juliet, Tennessee
On June 14th, 2011 in Mortgage 101, Mortgage Basics by Jeremy Warren
What is a Mortgage?
There are many different definitions for a mortgage. But to put it in simple terms, a mortgage is a loan that is secured by a property or house and paid in installments over a set period of time. The mortgage is your promise to the lender that the money borrowed will be repaid.
What are the Components of a Mortgage?...
Written by: Jeremy Warren
Murfreesboro, Tennessee - (615) 907-2646
©2012 Guaranty Trust. All Rights Reserved.