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Getting to the Heart of Home Financing

Locating the best loan for you involves comparing loans such as conventional, jumbo, FHA / VA, weighing mortgage benefits among fixed-rate, adjustable-rate, interest only and combo (piggyback) loans, evaluating FICO scores, getting preapproved, making sense of the GFE & HUD-1, finishing with underwriting and final loan approval.

At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.

Why Sellers Demand Proof of Funds From a Buyer
An explanation of proof of funds. Why a seller's agent or seller will request proof of funds from a home buyer. Types of proof of funds.

What Are Recurring and Non-Recurring Closing Costs?
Explanation of a home buyer's recurring and non-recurring closing costs. Description of recurring and non-recurring closing costs.

FHA Repair Requirements and Repair Guidelines for FHA Loans
Types of repairs that FHA will require to be fixed before closing, and list of repairs that FHA does not require to be fixed. Repairs that FHA appraisers note when appraising a property for an FHA loan.

Buying Subject to an Existing Loan
Buying a home subject to existing financing. The difference between a loan assumption and buying subject to an existing loan. Why buying subject to can be risky for a home buyer.

Will the Home Valuation Code of Conduct Affect the Appraisal of My Home?
How appraisals are handled on homes after the Home Valuation Code of Conduct (HVCC) went into effect on May 1, 2009. Why appraisals may be low. Why conventional and FHA appraisers handle the appraisal process differently because of HVCC.

How to Do a Mortgage Loan Assumption
Reasons to consider a loan assumption instead of applying for a new loan to buy a home. Why loan assumptions were not widely used for 20 years, and types of real estate markets in which loan assumptions can make a great deal of financial sense for a buyer.

3 Things to Know About Mortgage Refinancing
Mortgage refinancing is popular among serial mortgage refinancers, but it's not always a good time to consider mortgage refinancing. Here's what you need to know about mortgage refinancing.

When is Your First Mortgage Payment Due?
How to figure out when your first mortgage payment is due. Mortgage payments pay first to interest, then to principal.

Beware When Buying a Flipper Home
Before buying a flipper home, find out the history of that flipper because you may get turned down for a mortgage. Why lenders reject loans on flipper homes from qualified borrowers.

How to Get an Energy Efficient Mortgage
Types of energy efficient mortgages. Description of improvements that qualify for an energy efficient mortgage. Steps to obtain an energy efficient mortgage.

Top 3 Mistakes Home Buyers Make When Obtaining Loan Approval
Top 3 mistakes home buyers make when obtaining loan approval and preapproval letters. How buyers sabotage offers by submitting the wrong loan approval letters.

HOPE for Homeowners Refinance Through FHA
The HOPE for Homeowners program allows an FHA refinance for upside-down home owners, touted as relief from foreclosure or short sales, providing home owners qualify for the FHA program. The question is who is funding FHA refinances?

The Nehemiah Program and FHA Loans
Practical facts about Nehemiah. Using the Nehemiah program gives the buyer a down payment and closing costs -- up to 6% of the sales price -- when used in conjunction with an FHA loan. While Nehemiah marries perfectly with FHA, other types of loans are also permissible under Nehemiah.

How Are Mortgage Rates Determined?
Explanation of how Federal Reserve rate cuts affect mortgage rates. How mortgage rates are determined and why they fluctuate. What a fed rate cut means to a mortgage customer.

Mortgage Fraud - How to Avoid Mortgage Fraud
Types of mortgage fraud. How do borrowers commit loan fraud? Mortgage loan fraud pitfalls and penalties.

How Do We Get a Second Mortgage?
Explanation of a second mortgage and why home owners might take out a second mortgage. Reasons a lender will grant you a second mortgage.

Lease Options and Lease Purchase Sales
Difference between lease options and lease purchase sales. Benefits and drawbacks for lease options. Why lease options can be bad for a home buyer.

Mortgage Loan Types
Mortgage loan types. Differences among conventional, FHA and VA mortgage loan types. Interest-Only Mortgages, Adjustable-Rate Mortgage Types, Fixed-Rate Mortgages, Combo / Piggyback Loans, HELOC, home equity, reverse mortgages and bridge loans.

Stopping Trigger Leads - Don't Become a Trigger Lead
Stopping trigger leads. How mortgage loan applications result in trigger leads. Preventing credit bureaus from exploiting your credit through trigger lead phone calls and direct mail solicitation.

Fixed Rate Mortgages - Benefits of Fixed Rate Mortgages
Fixed rate mortgages and the reasons behind obtaining mortgage loans that do not adjust. About points, costs of the loan, establishing impound accounts for taxes and insurance and how prepayment penalties can cost a borrower extra.

What is an Interest Only Mortgage
Definition of interest-only mortgage. Common types of interest-only mortgage options. The cost to obtain an interest-only mortgage. Why interest-only loan features are advantageous for many borrowers and exposing myths associated with risk.

How a Land Contract Works
Seller financing via a land contract, which is sometimes called an Installment Sale Land Contract or contract for deed. The benefits and drawbacks to using land contracts to buy or sell a home. The differences between wrap-around and straight land contracts.

Buyer's Closing Costs
Definition of closing costs, including recurring and non-recurring (prepaid) fees. Addresses seller credits to buyer for closing costs and explanation of lender's requirements for such credits.

Mortgage Tips for a Falling Market
When the real estate market slows down and prices fall, lending policies change. Here's how to get the best mortgage deal when the market is depressed.

How to Figure Mortgage Interest
How to figure mortgage interest on your home loan. Simple calculations to figure out the interest you pay on your mortgage. Determining the unpaid principal balance on your amortized loan.

Bridge Loans - What are Bridge Loans?
Bridge loans and how they work. Why a home buyer might consider a bridge loan when buying a new home and selling an old home. Bridge loans are temporary financing for bridging the gap between the sales price of a home and the new mortgage.

Refinance Home Mortgage Loans
Tips to consider before doing a mortgage loan refinance. How to recoup mortgage loan refinance costs, comparing rolling costs into the loan and scrutinizing amortization periods to accelerate loan payoffs. The drawbacks to refinancing that a lender won't tell you.

Beneficiary Demands for Paying off a Mortgage Loan
Explanation of beneficiary demand statements from mortgage lenders. How beneficiary demands are different from beneficiary statements. Figuring loan payoffs to the date lenders receive the funds, including reconveyance and recording fees.

Owner Financing in Real Estate
Owner financing, using seller financing to buy a home. Types of owner financing and creative financing instruments. How to negotiate owner-financed real estate sales.

How to Deal With a Low Appraisal
Both sellers and buyers can get blindsided by low appraisals. If an appraisal comes in low, here are available options. A low appraisal doesn't mean the transaction will blow up. You can still close and salvage the deal.

How to Get an FHA Streamline-K Loan for Fixers
How to get an FHA Streamline-K loan when buying a light fixer. Benefits to a Streamline K loan over a 203K FHA loan. How to apply for a Streamline K loan to fix up a house you are buying and roll the costs into your mortgage.

Loan Locks - When is the Best Time to Lock a Loan?
Loan locks, when is the best time to lock a loan? Should buyers / borrowers lock loan rates? What does it cost to lock a loan? What happens if you don't lock a loan? Is there risk involved?

Impound Account Shortages - How to Handle Impound Account Shortages
Are impound accounts beneficial to home buyers? What is an impound account? Is it the same thing as an escrow account? What happens when taxes and insurances go up? How do you handle impound account shortages?

Using Land Contracts on Homes For Sale
How to sell your home on a land contract. Tips for putting your home up for sale on a land contract; negotiating land contract terms, protecting seller's rights under a land contract and making your land contract saleable on the secondary market.

Comparing Combos to a Loan with Private Mortgage Insurance (PMI)
The 2007 tax bill makes mortgage insurance premiums tax deductible, but the rules to qualify are restrictive. How do interest rates compare to those of a combo or piggyback loan? Which is better for a borrower: two loans or one loan with mortgage insurance?

Understanding Option ARM Loans
Definition of Option ARMs as used for mortgage financing. Features of Option ARM loans: terms, start rates, indexed rates, payment options, loan recasting and negative amortization.

How Reverse Mortgages Work
How reverse mortgages work. The benefits of a reverse mortgage. Qualifications for a reverse mortgage. A reverse mortgage calculator. Explanation of how reverse mortgages are funded and which lenders originate those loans.

Fast Equity Cash-Outs
Junior loans and encumbrances secured to real property such as home equity loans, home equity lines of credit (HELOC) and bridge loans. The differences among the loans, advantages and drawbacks to such financing.

Mortgage Loan Adjustments - How to Handle ARM Payment Increases
How to handle the adjustment of higher mortgage payments without taking food off the table. Available options for payment shock. What you need to know about adjustable rate mortgage payment increases and how to save your home from foreclosure.

Mortgage Buydowns - How to Buy Down a Mortgage
How buying down the interest rate gives buyers lower monthly mortgage payments. Buydowns such as 1-2-3 Buydowns or 2-1 Buydowns allow home buyers to qualify for loans that might otherwise be out of their financial reach.

Reasons Home Buyers Love FHA Loans
FHA loans never went away but had once dropped in favor with home buyers. Find out why FHA loans are popular for first-time home buyers and the benefits to obtaining such a loan today.

How to Order Free Credit Reports & Get FICO Scores
There is only one place to order your free credit report online. Don't be mislead by companies charging you a fee for this service.

The Advantages of Loan Preapproval
Why should a first-time home buyer get preapproved for a loan? Here are reasons why it's to a homebuyer's advantage to get preapproved for a home loan over being pre-qualified.

Preapproval, Prequalifed or What?
To be preapproved or prequalified or have received a loan commitment all have a different definition and will affect your real estate transaction significantly. Here's what you need to know to understand the process.

Back-end & Front-end Debt Ratios
Explains how to compute your ratios to figure out if you will qualify to obtain a conventional, VA or FHA loan. Lenders use simple formulas to arrive at front-end and back-end ratios, which you can do yourself after reading this.

Facts about Adjustable Rate Mortgages
There are so many variables to an adjustable-rate mortgage. Learn what lies beyond the initial interest rate such as first adjustment maximum rates, cap rates, margins, indexes and how often a loan can adjust.

VA Loans
What is a VA loan? Who qualifies to obtain a VA loan? What is a certificate of eligibility and how does a veteran obtain such a document? What are the pros and cons of a VA loan?

Your FICO Score
Find out how your FICO score is calculated and read simple explanations of the scoring ranges. The score you are assigned will determine your interest rate eligibility, with lower interest rates available to those with higher FICO scores.

How to Fix Your Credit
Learn how to repair bad credit or fix mistakes on your credit report. You might actually improve your credit score within 30 days if you follow this advice.

Loan Appraisals
Few lenders will make you a real estate loan without an appraisal. Even Donald Trump gets appraisals. Because real estate loans are secured to real property, the lender will want to assess the value of its security, and here's what you need to know about the process.

Mortgages & Trust Deeds
Do you have a mortgage or a trust deed? Do you know the differences between the two? One of these instruments gives a third party the power to foreclose in the event of default.

What is a Hard Money Loan?
All about hard money loans and specific types of hard money loans. Differences between a purchase money loan and a hard money loan.

How to Get a Condo Loan
Rule for a condo loan. Not every condo is eligible for financing. The types of loans available for a condo vary. How to get a condo loan.

How to Find a Bad Credit Mortgage
How a bad credit mortgage can help poor credit risks re-establish credit after a bankruptcy, foreclosure, short sale or other financial crisis. How to find a bad credit mortgage, and types of bad credit mortgages to avoid.

What is a Conventional Loan?
Conventional loans and how conventional loans fit into the real estate marketplace today. What is a conventional loan? How are conventional loans different from government-sponsored entity loans such as VA or FHA?

Top 5 Problems With Financing a Short Sale
Financing a short sale is a little bit different than financing a regular home. Top 5 problems inherent with short sale financing. Tips for financing a short sale and closing before the approval letter expires.

What is Mortgage Insurance?
The basics of private mortgage insurance. Why does a borrower need private mortgage insurance? What do these companies insure when you take out insurance on your mortgage and how much does it cost?

Why Seller Credits to the Buyer on a HUD Are Not Always a Credit
Why are seller-paid closing costs shown as a credit to the buyer on the HUD? Reasons why seller credits on the HUD are not necessarily a credit to the buyer.

Should I Wait for Interest Rates to Go Down if Sales Prices are Going Up?
Which is more important when buying a house -- interest rates or sales prices? Should I wait for interest rates to go down if sales prices are going up?

How Long Should I Wait for Interest Rates to Drop?
How long should you wait for interest rates to drop? How to negotiate the lowest interest rate possible when you're buying a home.

How Do REO and Short Sale Banks Demand a Preapproval Letter From Borrowers?
When the seller is a bank, can the seller demand that the buyer get a preapproval letter from that bank? How REO lenders and short sale banks can make some borrowers get a preapproval letter from them as a condition to buy the home. About preapproval letters for bank-owned homes and short sales.

What is Wrong With the Home Affordable Refinance Program - HARP?
Overview of the Home Affordable Refinance Program, HARP. Why it might not be a good idea to refinance an underwater mortgage through the Home Affordable Refinance Program. Little known quirks about the Home Affordable Refinance Program.

What is a Mortgage?
What is a mortgage? Definition of mortgage and explanation of different types of financing instruments as they pertain to real estate transactions.

What is the National Mortgage Settlement?
What is the National Mortgage Settlement and how does it apply to you? Will your bank forgive your mortgage debt through a principal mortgage reduction program? Details of $25 billion settlement. Top 5 banks affected by National Mortgage Settlement and dollar share.

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