Can't Get Pre-Approved for a Mortgage? Here Are Three Tips to Try to Get a Mortgage Approval

Few people in the world can afford to pay the entire cost of a new home upfront, which is why banks and other financial institutions offer home loans. Also known as mortgages, those loans let you make monthly payments to pay off the money you borrow and the interest charged on that loan. If you can't get approved for a mortgage, try using a few easy tips.

Improve Your Credit Score

When you apply for a home loan, the lender looks at your credit history and credit score first. Your credit history contains a long list of all the money you borrowed in the past, but it also shows your total debts, medical bills and if you had a foreclosure or a bankruptcy. Your credit score is a three digit number based on your ratio of debt to credit, any defaults on your account and any issues you had in the past.

If a lender denies you for a mortgage, get your credit score up before you apply again. Even something as simple as paying off more of your debt can increase your score by a few points. Eliminating bad debts and removing any mistakes from your credit report can also help.

Apply with a Cosigner

Applying for a loan with a cosigner is another option for those with poor credit. The lender will put more weight on the credit score of your cosigner than the lender does on your own credit report. You want to find someone with a close connection to you and someone who has a good credit score.

Your cosigner agrees to pay back the loan if you default on that loan. The loan will also appear on your cosigner's credit report, which means you need to find someone willing to take a chance on you.

Look for Cheaper Homes

After applying for a loan, the lender looks at your credit history, your income and other factors to determine how much money you can borrow. Applying for a more expensive home might result in a rejection. The lender can determine that you cannot afford to purchase that home, but applying for a home that costs less might help you get the loan you need.

It's possible for you to obtain a mortgage that helps you pay for the home of your dreams. Applying with a cosigner, improving your credit and looking at cheaper homes might help you get that loan.

Mortgage Terms 101: Understanding 'Cash-Out Refinancing' and How to Determine if It's Worth It

With interest rates remaining near historic lows for the past several years, many of your friends and neighbors may have already told you that they have refinanced their home mortgages once or even a couple of times. A cash-out refinance can provide you with several important benefits, but it is not the best option for all homeowners. By learning more about what a cash-out refinance is and what the pros and cons of this type of refinance loan are, you can make a decision that is best for your current and future plans.

What Is a Cash-Out Refinance?

When you refinance your home mortgage, you can select a rate and term refinance which does not pull equity out of your home, or you can select a cash-out refinance to access some of the equity in your property. You can research your property value and your outstanding principal balance to determine how much equity you have available. Keep in mind that most lenders will not allow you to access all of the equity, and you can obtain more information about the loan amount you may qualify for by speaking with a mortgage professional.

The Benefits of a Cash-Out Refinance

If you decide to apply for a cash-out refinance loan, you may be able to walk away from the closing table with tens of thousands of dollars or more. This is money that you may use for any purpose, including home improvements, paying off high interest rate credit cards, sending the kids to college and more. In addition, you may enjoy other benefits from refinancing, such as lowering your interest rate and mortgage payment and adjusting your loan term to meet long-term goals.

When a Cash-Out Refinance May Not Be Advisable

A cash-out refinance loan can be beneficial, but there are instances when it is not the best solution. The loan will adjust principal reduction, the loan payoff date, the interest charges and other factors. The adjustment of these factors may make your new loan less advantageous for you in some cases, so you should carefully consider the full impact of refinancing before you decide to move forward.

From learning more about the benefits of refinancing to finding a competitive rate for your new mortgage, there are many factors to consider. You can speak with a mortgage professional today to inquire about the cash-out refinance loan terms that you may qualify for and to explore the options in greater detail. If you are thinking about applying for a cash-out home loan, contact a lending representative today.

Five Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every Time

Homeowners who are struggling to make their monthly mortgage payments can make it easier on themselves by cutting costs in other areas. Learning how to budget effectively will likely enable homeowners to pay their mortgage payments on-time, every time. Here are five of the best budget tips:

Conserve Energy

It is advisable to be mindful of energy use in order to keep utility bills down to a minimum. Lights, televisions and other devices requiring electrical power are best to leave off in unoccupied rooms. It is also a good idea to make sure that windows and doors are properly sealed so that energy is not wasted.

Stay Committed to Couponing

All too often, coupons that arrive in newspapers or through emails are quickly discarded. Collecting coupons from various sources can give homeowners the chance to save big on groceries, entertainment and other everyday purchases. Some of the savviest consumers have been known to spend practically nothing on their purchases by simply staying committed to the art of couponing.

Watch Credit Card Usage

Having a credit card often creates a false sense of financial security. Many card holders are tempted to charge their credit cards up to their limits only to be burdened with high interest rates and inflated minimum payments. Credit cards are best to use only in times of emergencies.

Consider Alternative Transportation Methods

Fuel costs, auto repairs and other expenses associated with driving a vehicle on a frequent basis can make it much harder for homeowners to stay on top of their mortgage payments. People who have access to adequate public transportation may be able to significantly reduce their commute costs. Car sharing services give people the opportunity to use a car on an as-needed basis and often prove to be a smarter alternative to owning a vehicle.

Keep Expense Records

It can also be easier to set money aside for mortgage payments if expenses are carefully monitored with a detailed eye. It is best to closely scrutinize receipts, bank statements and other financial documents for any discrepancies. Keeping track of expenses on a spreadsheet so that all financial information is clearly displayed may be another practical idea.

Smart budgeting practices can help homeowners save the extra money they need to pay their monthly mortgage payments before each due date passes. Contact a local mortgage professional to learn more clever ways to manage money while trying to pay on a mortgage.

What's Ahead For Mortgage Rates This Week - Aug 11, 2014

Last week's housing related news was minimal, but a Federal Reserve survey of senior loan officers revealed that although credit standards for commercial and industrial loans as well as credit cards are easing, current mortgage credit standards are more stringent than in 2005. This could be a contributing factor to slowing housing market gains while other sectors of the economy are recovering at a faster pace.

Qualified Mortgage Rules Impact Non-Conforming Mortgages

The Senior Loan Officers survey also noted that qualified mortgage rules have slowed approval of prime jumbo mortgages and non-traditional home loans. This suggests that applicants falling outside of stringent qualified mortgage rules can expect challenges when buying or refinancing their homes.

In other housing news, Freddie Mac's Primary Mortgage Market Survey reported that last week's mortgage rates were mixed. Mortgage rates for a 30-year fixed rate mortgage averaged 4.14 percent with discount points of 0.70 percent against last week's reading of 4.12 percent with discount points of 0.60 percent. 15-year mortgage rates averaged 3.27 percent with discount points of 0.60 percent. This was an increase of four basis points, although discount points fell from 0.70 percent to 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was 2.98 percent, a drop of two basis points, with discount points unchanged at 0.50 percent.

Fewer Jobless Claims, Service-Related Business Growth Exceeds Expectations 

The weekly Jobless Claims report brought a lower than expected reading of 289,000 new claims as compared to predictions of 305,000 new jobless claims. In other economic news, the Institute for Service Management (ISM) reported that its non-manufacturing index rose from June's reading of 56.00 percent to 58.70 percent in July. Analysts had forecasted July's reading at 56.50 percent. July's reading represented the highest growth rate for service-related businesses since 2005.

According to the Department of Commerce, June factory orders rose by 1.10 percent over May's reading of -0.60 percent against an expected reading of 0.60 percent. As business expands and factory orders increase, it's likely that jobs and hiring will also grow. Steady employment is a compelling factor for most home buyers and positive reports in labor and industrial sectors could boost housing markets as more buyers increase demand for homes.

What's Ahead

Next week's economic reports include retail sales, retail sales excluding automotive, industrial production and the weekly reports on mortgage rates and new jobless claims. While there isn't much housing news expected next week, readings in other economic sectors can suggest potential trends in housing markets

Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms With

Buying a home is one of the most exciting times that an individual will undertake in life. However, a property purchase is not without its challenges, and these can cause frustration. In this article we'll share five potential setbacks that home buyers will need to understand and come to terms with to make a successful purchase.

Homeowner's Insurance is Necessary

Most lenders will require insurance before financing is approved. To fulfill these requirements, the policy should be for at least one year and proof that the policy has been paid for must be presented. Purchasing the policy is something that must be done before closing can take place, so if you're sure that this is the home for you, don't delay.

Some Sellers Are Firm, No Matter What

In an ideal situation, the buyer and the seller come to a mutual agreement very easily. However, in most cases negotiation of some type is likely to be a part of the process. As with most negotiations, to reach success both sides will need to compromise.

Probate Properties Have Special Terms

When the original homeowner has died, there are certain considerations to keep in mind that do not typically apply to other types of property. One is the fact that there is a special process that must be completed before the property can be sold, even though the heirs may advertise the property as being for sale ahead of time. Another factor to keep in mind is that a recently probated property may have been uninhabited for some time and will be sold 'as is'.

Loan Offers May Not Be Set in Stone

A common pitfall for many buyers is the assumption that home financing will be approved without issue. Unexpected circumstances may arise that cause a mortgage loan to be denied, which can cause an unprepared buyer numerous issues. Many sellers, in anticipation of such problems, have a contingency requirement.

Expect Caution from Sellers

If a seller treats your offer with caution or trepidation, don't take it personally. Many homeowners have been burned during previous sales, and you have no idea what the seller has been through with potential buyers this time around. If someone is exercising caution, there's likely a good reason for it.

Is a 40-Year Mortgage Worth It? How to Decide Whether or Not This Longer Term is Right for You

There are different timetables for mortgages. The most common types are 15-year and 30-year mortgages. However, a mortgage broker can establish unique timetables for a homeowner, such as a 40-year mortgage.

Friends may recommend going for a long-term timetable, but what do professionals think of a 40-year mortgage? Here is what you may want to consider to see if a 40-year mortgage is appropriate for you.

The Monthly Rates Will Be Low

Compared to a 15-year or a 30-year mortgage, the monthly payments for a 40-year mortgage will be lower. Since the mortgage is spread over 10 years beyond a conventional 30-year mortgage, homeowners will see much lower mortgage payments per month. This can be very attractive for homeowners who need to control their housing costs per month.

Long Term Costs

But, many brokers will tell a homeowner the extra 10 years is not worth it. Because the homeowner will need to pay interest rate charges each month for 10 extra years beyond the typical 30-year mortgage window, the homeowner will end up paying more in interest for a 40-year mortgage. Even with a low, fixed interest rate, homeowners are still extending their home payments by a whole decade, which will add up in the end.

Always Fixed

Under housing laws, a 40-year mortgage must always be a fixed-rate mortgage. This can be attractive for many homeowners since it guarantees that the mortgage payment per month will be the same for the next 40 years. For those on a budget, knowing ahead of time what they owe per month for 40 years can help them prioritize their payments.

Home Of One's Dreams

Since the 40-year mortgage will calculate as a lower monthly payment for an already credit qualified candidate, a broker will be more willing to offer a larger mortgage to the candidate. This means that many people who utilize the 40-year mortgage have a larger pool of homes to choose from. Of course, it is important to find a home within a reasonable budget.

Understanding the ramifications and specific issues with a 40-year mortgage can help a homeowner candidate better decide if it is right for them. Like any housing finance option, there are advantages and disadvantages, so knowing how the 40-year mortgage works is important. This information should enhance the home shopping experience and help the candidate and the broker find the best home under the most appropriate financing option.

Why a Detached Garage Can Drastically Improve Your Resale Price

Before you make a major structural change to your property, it is important to consider how this will affect your resale value. While there are many steps that you can take to improve your property, the addition of a detached garage may be beneficial to you and may drastically improve your resale price when you are ready to sell.

You should always first obtain customized information about how the addition of a detached garage may affect your property's value.

Adding Square Footage to Your Home

As a property owner, you may be well aware that one of the most common ways the value of your property is determined is by the market rate for price per square foot of homes in the area. While factors such as age of the property, condition of the property and amenities in the neighborhood may affect whether your property's price per square foot is above or below market average, the size of the improvements has a direct impact on property value. Adding a detached garage adds square footage to the property, and a real estate agent can help you to determine the true financial gain you may experience through this addition.

Increasing Appeal to Potential Buyers

Properties that are more appealing to potential buyers may sell for a higher price. When you add a detached garage to your property, you may be adding style and function to the property by adding a place to park vehicles and to store items like seasonal items and lawn equipment. You can also create a detached garage with a workshop or another functional area for added appeal.

Transforming Existing Space

Some home additions will add a detached garage to a property because a garage was never constructed on the property, but others will be added because the homeowner wants to transform the existing garage attached to the home into a more functional area. For example, a new home addition, may turn the existing garage into a living room, a bedroom or another functional area. With the addition of a detached garage, the property owner can retain the benefits of having a garage while also improving the functional use of the main area of the home.

The addition of a detached garage can benefit you and your family in a number of ways, and it can also improve the resale value of your home.