28
Apr
By support
Home Mortgage Tips

The HARP Refinance Program Has Been Extended into 2016: Here’s How You Can Take Advantage

The HARP Refinance Program Has Been Extended into 2016: Here's How You Can Take AdvantageWith the Home Affordable Refinancing Program recently being extended until the last day of December, 2016, many homeowners who have found their assets in a challenging situation have been given a second chance to apply and receive an affordable mortgage.

By taking advantage of the HARP program, eligible borrowers can refinance to the current mortgage rates on their homes while avoiding paying for private mortgage insurance or putting down the principal.

A Quick Primer On The HARP Refinancing Program

With the economy in a strong downturn in 2008, the value of millions of American homes plunged and the owners found themselves owning property with negative equity.

The Home Affordable Refinancing Program was created by the government to assist people whose home values were lower than the outstanding balance on their mortgages. Previously it would have been impossible to refinance for a better interest rate on the current value of the home, so HARP was designed to help any of these borrowers stay above water.

Who Is Eligible For HARP Refinancing?

There is a certain set of criteria that needs to be met in order to qualify for the HARP refinancing program, but two major points stand out: The mortgage must have been granted earlier than May 31, 2009 and it must have been granted by either Fannie Mae or Freddie Mac.

It is important to point out that many banks do not back their own mortgages and work as a servicer, a middle-man to collect the mortgage that is actually backed by Fannie Mae or Freddie Mac. Many borrowers believe they do not qualify without double checking with their lender to see if the mortgage was granted by Fannie Mae or Freddie Mac, so it is imperative to contact the lender or check online to see who granted the mortgage.

There are also several disqualifiers that should be known. With certain exceptions, many borrowers who have previously refinanced their home under the HARP program are ineligible. The other major factor is that homes must have a loan-to-value ratio of 80% or higher.

What Is The Next Step For Eligible Borrowers?

The next step for anybody eligible for the HARP refinancing program is to check the current rates and see if refinancing would be beneficial. Your local mortgage professional will have experience with the HARP application process and will be able to confirm today’s rates to see if applying is the right move.

26
Apr
By support
Home Mortgage Tips

You Ask, We Answer: 5 Ways That You Can Proactively Build and Improve Your Credit Score

You Ask, We Answer: 5 Ways That You Can Proactively Build and Improve Your Credit ScoreIf you’re planning to buy a house or take out a business loan in the near future, you’ll want to work hard to boost your credit score well ahead of time in order to improve your likelihood of getting the loan you need. A great credit score can also make you more desirable to employers and help you to negotiate lower car insurance rates.

But what can you do in order to build your credit score over time? What are the best strategies for boosting that score as high as possible? Here’s what you need to know.

Dispute Errors On Your Credit Report

According to the FTC, 25% of Americans have significant errors on their credit report. Whether it’s a fully paid debt erroneously reported as still owing or even another consumer’s debt listed on your credit report, these errors can be costly. That’s why you’ll want to regularly review your report for inaccuracies.

If you find any inaccuracies, you can dispute them and have them removed from your credit report – which will increase your score.

Negotiate Your Debts Owing With Creditors

If you owe money to creditors and are past due on the balance, chances are they’ve reported the debt to the credit reporting agencies – and it’s on your credit report. The fastest way to have the debt removed from your credit report is to negotiate with your creditors for its removal. Get your lender to agree in writing that they’ll report the account as “paid as agreed” if you pay the balance.

Keep Your Credit Utilization Ratio Low

Credit utilization refers to the percentage of available credit you use at any given time. So if you have $1,000 in credit available to you and you use $500, that’s a utilization ratio of 50%.

Generally speaking, it’s best to keep your utilization ratio below 30%. If you’re constantly using a high amount of credit, lenders will assume you’re not a responsible borrower.

Pay What You Owe On Time

Paying your bills on time is one of the best ways to build your credit score. Your payment history accounts for 35% of your credit score, so if you pay your bills on time and in full every month, your credit score will increase.

Make More Than One Payment Every Month

Using a large amount of credit at any given time doesn’t look good on a credit report. By making multiple payments every month, you’ll lower the amount owing that gets reported to the credit bureau and increase your score.

Building a credit score is a lifelong skill, which is why you’ll want to learn it early. Contact your local trusted mortgage professional to learn more about credit scores and mortgage finances.

19
Apr
By support
Home Mortgage Tips

Understanding the CFPB’s New Mortgage Rules and How They Might Affect You

Understanding the CFPB's New Mortgage Rules and How They Might Affect YouIf you’re getting a mortgage, you’ll want to ensure you’re well versed in all of the government regulations surrounding mortgages and how they affect you. One government agency that dictates a number of the rules surrounding mortgages is the Consumer Financial Protection Bureau. The CFPB has several regulations that lenders need to follow, some of which have only recently come into effect.

So how do the CFPB’s new mortgage rules affect you? Here’s what you need to know.

Know Before You Owe: Mortgages Just Got Easier To Understand

The CFPB’s new Know Before You Owe mortgage disclosure rule has rolled four previous forms into two. You’ll now receive your Loan Estimate and Closing Disclosure documents when you are about to close on a mortgage, making it easier to understand what exactly is in your mortgage. The new law also requires lenders to give you three business days to review your Closing Disclosure and pose questions before you sign the closing paperwork.

These forms are also standardized across the country – they are now shorter and written in simpler language, and all lenders are required to use the same forms. The forms must clearly state what your closing costs will be and what your monthly payment will be throughout the term of the loan.

More Power For Borrowers Who Are Behind On Payments

For decades, the mortgage system worked like this: If you run into trouble with your mortgage and find yourself behind on payments, your lender can foreclose on your home. But now, new rules state that lenders must take certain steps before they start the foreclosure process. Lenders must reach out to borrowers who are struggling and provide them with the opportunity to make a payment or work out an alternative arrangement.

The lender doesn’t have to give the borrower options that aren’t available, but if there is a non-foreclosure option on the table, the lender is now legally obligated to pursue it.

Mortgage Providers Will Need To Be More Transparent

The new rules also make the mortgage system much more transparent.

Under the new law, your lender is legally obligated to give you a mortgage statement with all of the information about your monthly payment in one place. If you run into trouble with payments, your lender is obligated to assign an employee to track your documents, answer your questions, and guide you through your options. There will be no more surprise foreclosures, no more administrative red tape, and no more debt traps.

Getting a mortgage is a complicated endeavor, and the new rules that have come into effect are designed to simplify the process. Contact a mortgage professional near you today to learn more about how mortgages work.