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Low Credit Scores Limit Access to Columbus Loans

admin — Sun, 17 Oct 2010 00:30:22 +0000

One third of Americans have a credit score of less than 620.

Zillow.com studied 25,000 online home mortgage applications and found that prospective home buyers with credit scores lower than 620 could not get Columbus loans approved, even when they were able to make a down payment of 25% of the purchase price.

Only 47% of Americans have a credit score higher than 720 – which is considered good credit and would qualify you for the lowest interest rates on Columbus loans.

Another interesting finding by this study indicates that for every 20 points drop in your credit score your interest rate goes up by 0.12 %. Over the life of a 30 year mortgage this could cost you tens of thousands of dollars.

So what options do you have to get Columbus loans, if you credit score is below 620?

Try to get an FHA Loan: they still don’t rely exclusively on credit scores and may use alternative “credit” to approve your loan. FHA loans require a much lower down payment and may be your only option, if your credit score is below 620.
Get Seller Financing: this may be the only option for many home buyers that can’t get loans through a bank. Many sellers are very motivated, as they can’t sell their homes as quickly as the want and will consider seller financing. You may get away with a relatively low down payment of 5% or 10% of the purchase price, but you have to be ready to pay full price for the house.

If you are ready to buy a house and can’t get regular bank financing, give us a call. We have a limited number of seller financed properties available and we work with one of the best FHA lenders in Central Ohio.

You can reach Columbus real estate agent Susanne Novak at (614) 975-9650.

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Why Columbus Loans For Fannie Mae Homes Are Better Than FHA

admin — Sat, 25 Sep 2010 18:46:35 +0000

Fannie Mae is one of the biggest sellers of REOs (bank owned homes) in the country.

In order to reduce their inventory of 283 homes for sale in Franklin County OH alone, they offer new incentives, which make Columbus loans on Fannie Mae home purchases even better than FHA loans.

You can find details on the new Fannie Mae incentives in this article:

Fannie Mae Announces New Buyer and Seller Incentives for REOs

Here are 5 advantages of buying a Fannie Mae home:

Columbus loans on Fannie Mae homes require a low down payment (as little as 3%)
Fannie Mae does not charge mortgage insurance on these Columbus loans
Fannie Mae homes are generally in good condition
Owner occupants have a 15 day exclusive period to bid, before investors are allowed to make offers.
They also offer the option of rehab loans

Some of these incentives are only good till the end of this year. This means that you would have to close before December 31, 2010.

We all know how long it takes to get Columbus loans approved these days. So you need to be in contract no later than November 15, 2010, to make sure that you can meet this deadline.

If you need help finding excellent Columbus OH homes for sale you can simply call Susanne Novak at 614-975-9650. She is an excellent Columbus real estate agent who has many years experience selling bank owned and HUD properties.

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Go to here to find great Columbus Houses

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FHA Increases Minimum Credit Score for Loans

admin — Tue, 29 Jun 2010 01:43:39 +0000

At the end of last week we received an email from our favorite loan officer. She told us that FHA changed guidelines for minimum credit scores required to ensure loans. Until now it was still possible to get Columbus loans with credit scores as low as 580. Fifth Third Bank was one of the few Columbus mortgage lenders that approved applications with scores below 620.

Now that has changed. If you have any application in, you can still close with a lower credit score before the end of October, 2009. All new applications fall under the new rule and need to show a 620 FICO score.

What does this mean for you as a prospective home buyer?

If your score falls between 580 and 620, and you planned to buy a house to take advantage of the first time home buyers tax credit as well as the low interest rates, you are out of luck. You won’t have enough time to improve your credit by 20, 30 or 40 points to qualify for a loan before the closing deadline expires. You may have a chance to buy a home with seller financing and still claim the tax credit – I will talk more about this option in another post.

For those of you with solid credit scores, now is the time to make an offer on one of the listed Columbus houses. You should be able to get FHA financing, if you meet the following criteria:

You buy a personal residence as an owner occupant (up to 4 units)
Your mortgage amount is below the FHA limit set for your county ($341,250 for Franklin County OH)
You can come up with the required down payment of 3.5% of the purchase price (if you buy a HUD home you can get away with only $100 downpayment)
You meet the minimum income requirements and can show 2 years of job history or tax returns, if self employed.
Your credit score is above 620 and you didn’t have a bankruptcy for 2 years.
Your new home appraises for or above the purchase price.

There a number of obstacles in the FHA loan approval process. However, an experienced loan officer can get it done in 30 days. Your property has to be in good condition. If it needs repairs you may be able to establish a repair escrow to cover these expenses – this is commonplace with HUD homes.

A good credit score is the key for getting Columbus loans approved by your lender. Take care of your credit score and the harsh lending environment will not effect your ability to get a Columbus home mortgage.

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Go to here to find great Columbus Houses

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From Iraq to a Home on the Lake – No Money Down

admin — Thu, 26 Mar 2009 05:00:59 +0000

A week ago we had another “no money down” closing. The buyer was an Iraq veteran who purchased a 1700 sqft home on a lake right here in Ohio, with almost no cash out of his pockets. Many different Columbus loans are available, but VA loans are simply the best. The Veterans Administration takes care of our soldiers.

Chad was stationed in Iraq until the end of December 2008. He started his home search on the Internet, like 85% of today’s buyers, and contacted Susanne, his realtor, from a Craigslist posting. He and his wife wanted a home outside of the city, possibly with some land. While he was still in Iraq, Chad’s wife and her parents looked at a number of homes. But it was not until he came back, at the end of December, that they made a final decision.

Chad found a bank owned, double wide mobile home on Indian Lake, about an hour drive from Columbus. This was not just a trailer, but a very nice and spacious 1700 sqft ranch style home on a large lot overlooking the lake. Best of all, since it was bank owned, it was offered below market value.
After consulting with Susanne, they submitted a winning offer. Within 5 weeks the VA loan was approved. Susanne recommended a property inspection, including well and septic. A smart decision, as VA wanted to see the inspection reports to approve the loan.

When it came to closing, Chad’s VA loan covered the purchase and the VA funding fee. The closing costs were paid by the seller, as negotiated in the purchase contract. He just had to bring a few hundred bucks to cover some extra expenses like flood insurance and the inspections.

After serving our country in Iraq, Chad and his wife moved to their own home on the lake. Thanks to VA, this purchase did not eat up their cash reserves either, so they had money to furnish the home and buy brand-new appliances. Here is what they say about their new home:

“We absolutely love it. It is perfect for us. Thank you for working so hard to find the perfect place for us. You have been amazing throughout this entire process. We will definitely refer all of our friends to you.”

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You Can Buy a New Home without any Down Payment – Complements of USDA

admin — Sat, 21 Mar 2009 05:00:59 +0000

That’s correct! In today’s tough housing market, you can still buy homes with no money out of your pocket. Last week one of our customers purchased a completely new 4 bedroom, 3 bathroom home (similar like the one in this image) directly from a builder and received $500 cash back at closing.

You may wonder “how this is possible?”, if you hear in every newscast that banks are not lending?

This specific Columbus loan was guaranteed by the US Department of Agriculture (USDA), and it’s probably the best no-money down program in the market today. Here is how it works.

It is designed for buyers who want to live in a rural community. Rural in this context does not mean in the “boonies”. Actually, most counties just outside of any metro area qualify. For instance, the home buyers I mentioned above purchased a home in a new subdivision just outside of Columbus, in Licking County. Columbus loans insured by USDA would not be available in Franklin County (that’s the county encompassed by the City of Columbus), but all surrounding counties qualify. This particular home is just 14 miles from downtown Columbus, that’s less than a 30 min drive by car.

There are many benefits of USDA loans, such as:

No down payment required, you can finance up to 100% of the appraised value
No mortgage insurance payment required, unlike FHA loans
No maximum purchase limit
Repairs can be included in the loan amount
Flexible credit guidelines – which means they don’t just go by the credit score

This program is designed for owner occupants. You have to move into the home and can’t use it as a rental. There are income limits for the buyer, as these loans are designed to help low income families purchase a home.

You can find out if you and your future home qualify for USDA financing at this website:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

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Columbus Loans subsidized by a $15,000 Gift from Your Government ?

admin — Fri, 20 Mar 2009 05:00:59 +0000

Read this post before you file your 2008 tax return – it may save you thousands. $7,500 to be exact, or twice that amount, if the proposed stimulus bill will pass next week. I am talking about a tax credit for buyers of Columbus Houses. The government offers first time home buyers a $7,500 tax credit, if they purchase a home between April 2008 and July 2009. All Columbus loans and mortgages qualify for this program, as a matter of fact you don’t even have to get a loan to claim the credit, as long as you buy a home. A tax credit actually reduces your taxes (not your income), which means, if you owe the IRS $10,000, your tax bill gets lowered to $2,500. Real money in your pocket This tax credit can be applied to your 2008 or 2009 tax return. If you buy a house before you file your 2008 tax return, you can still take advantage of these savings, and maybe use the new cash for your down payment or closing costs. In its current version the $7,500 tax credit has to be paid back over 15 years – like zero interest Columbus loans. Unfortunately, you can only use it, if you did not own a home for the last 3 years. The government stimulus bill is set to change this. Here are the highlights: the tax credit will be doubled to $15,000 (or 10% of the purchase price, whichever is less). It will be available for ALL residential buyers, not just first time home owners. And finally, you won’t have to pay it back. I predict that this will get the Columbus housing market going again. There will be a demand for Columbus loans and mortgages. So be prepared and get ready to claim your share of the stimulus.

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Mortgage Interest Rates – How Are They Determined?

admin — Sun, 08 Mar 2009 16:40:04 +0000

Mortgage interest rates are the single-most important factor determining the borrowing power of a potential house buyer. When rates are very low, a borrower can service a large amount of debt with a relatively small payment, and when interest rates are very high, a borrower can service a small amount of debt with a relatively large payment.

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Predatory Lending in the Housing Bubble – Were You a Victim?

admin — Fri, 06 Mar 2009 16:00:05 +0000

The most egregious examples of predatory lending occurred when interest-only loan products where offered to subprime borrowers whose income only qualified them to make the initial minimum payment (assuming the borrower actually had this income). This loan program was commonly known as the two-twenty-eight (2/28). It has a low fixed payment for the first two years, then the interest rate and payment would reset to a much higher value on a fully amortized schedule for the remaining 28 years.

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Home Mortgage Borrowers Are Not That Sophisticated

admin — Wed, 04 Mar 2009 16:32:06 +0000

When lenders develop new loan programs, they assume borrowers are sophisticated enough to understand the product and disciplined enough to use them properly. Both assumptions are bad, and these bad assumptions caused lenders and investors to lose a great deal of money during the Great Housing Bubble.

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Home Interest Tax Savings Are Always Overestimated

admin — Mon, 02 Mar 2009 19:07:05 +0000

When a borrower takes out a home loan, the interest is tax deductible up to a certain amount. For borrowers in the highest marginal tax bracket, the savings can be significant, and this can make a dramatic difference in the true cost of ownership. However, this benefit diminishes over time as the loan is paid off and the interest decreases, unless of course, the borrower has used a toxic interest-only or negative amortization loan.

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