Finance, Loan, Debt and Credit.

March 9, 2018

How a Mortgage Rate is Calculated

Filed under: Mortgage — Tags: , , , — admin @ 12:46 pm

One of the most important parts of your mortgage is the mortgage rate – the rate of interest that you’ll pay on the money you borrow to buy your house. Often, ads for mortgage lenders make it sound as if they offer a single mortgage rate to all lenders. If that were the truth, it would be easy to find the right mortgage – just shop around for the lender advertising the lowest interest rate and apply for a mortgage with them. Unfortunately for simplicity, calculating a mortgage rate is far more complex than that. The truth is that the mortgage rate that you’re offered is influenced by many different things. Prime Lending Rate Mortgage lenders generally base their calculations of their mortgage rates on the prime lending rate. That’s not to say that the prime lending rate is the mortgage rate that they’ll offer to customers. Rather, it’s the starting point of their calculations for their mortgage rates. The prime lending rate is the interest rate that most commercial banks charge their most creditworthy customers. It is adjusted up or down, usually in increments of 1/8 or ¼ of a percentage point. It responds to both the availability of money to loan and the demand for loans in the marketplace. Because those things tend to be the same across the board, most of the major banks will be offering the same prime lending rate.First time borrower? If you’re a first time home buyer and your credit is good, banks and lenders will often offer mortgages at a discounted rate – one that is below the prime lending rate – in order to attract your business. First time home buyers who meet certain income guidelines may also qualify for first-time home buyer loans guaranteed by the federal government. One of the conditions of those loans is a very low interest rate, usually several points below the prime lending rate.Your credit rating One of the major factors that affects the mortgage rate a bank or lender will offer you is your credit rating or your credit score. Lenders use your credit score to determine whether or not they’ll lend you money, and how much they’ll charge you in interest for the money that you borrow. The better your credit rating, the lower the mortgage rate you’ll be offered.The type of mortgage Different types of mortgages carry different risks for lenders. The higher the perceived risk to the lender, the more interest they’ll charge you for your mortgage. Adjustable rate mortgages (ARMs) present the lowest risks to the lenders because your mortgage rate can rise if the interest rates rise. Fixed rate mortgages are riskier for lenders. They’re making the gamble that interest rates won’t rise above the mortgage rate that they charge you. Thus, fixed rate mortgages nearly always carry higher interest rates than adjustable rate mortgages. This can be affected by the size of the loan, and how adjustments are calculated. The amount and length of the mortgage It’s a general but not a hard and fast rule that the larger the amount borrowed, the lower the interest rate will be. In addition, the longer the term of your mortgage, the lower the rate will be. These differences can be very slight up front, but they add up over the life of the loan. A difference of an eight of a percent can save you tens of thousands over the course of thirty years.The amount of your down payment In many cases, the amount that you can offer up as down payment will affect your mortgage rate. The reason is simple enough – the more you put down on your house, the more likely it is that you will not default on your mortgage. Zero-down mortgages generally carry mortgage rates that are considerably higher than the prime lending rate. Depending on the lender and the state of the economy in general when you take out a mortgage, a down payment of as little as 5% or as high as 20% may make a difference in the amount of mortgage rate that you’re offered. What about the APR? The Annualized Percentage Rate is the total cost of the loan expressed as an annual percentage rate on the amount borrowed. The APR includes any fees that are paid in addition to the interest rate, so it may differ from the mortgage rate advertised by the lender. In the United States, lenders are required by law to disclose the cost of the loan as a standardized APR in order to make it easier for consumers to compare loans.

Shawn Thomas is a freelance writer who writes about topics pertaining to the mortgage industry such as a Pennsylvania Mortgage

February 9, 2018

Avoid Steep Interest And Penalties From Accumulating With A Delinquent Tax Return Checklist

Filed under: Tax — Tags: , , , , , , , , , , — admin @ 12:46 am

If you’ve been lucky so far that your unfiled delinquent tax returns have avoided the IRS’s attention, your luck is about to run out. The IRS’s increased enforcement means that every unfiled tax return will soon be coming back to your door with as much as 25% penalties, interest plus the prospect of prison on federal felony back tax evasion charges. So if you’ve got a late delinquent tax return, act now on the eight easy steps in this unfiled delinquent tax return checklist and you’ll be able check the IRS off your worry list forever.

Unfiled Delinquent Tax Return Step 1)  Don’t panic, but head with all deliberate speed to your nearest tax attorney or Certified Tax Resolution Specialist for a tax relief consultation. When you have an unfiled tax return, it weighs on you like a disease. Every late tax return eats at you, year after year, compounding fear until you feel like you’re going to explode. You need to tell your tax attorney or Certified Tax Resolution Specialist how many years your unfiled delinquent tax returns have been ticking like a time bomb and what (if anything) the IRS has written to you about your unfiled tax returns. If your late tax returns go back for a number of years, you could be easily looking at many thousands of dollars in back taxes and up to 25% in penalties and interest. A call to a tax attorney or a Certified Tax Resolution Specialist is a financially shrewd move because the return on investment can be huge, often slashing or even eliminating your back tax debt for some or all of your unfiled delinquent tax returns.

Unfiled Delinquent Tax Return Step 2) Start with the last year you filed taxes. Go back to the last year the IRS got your taxes. You’ll need figures from that return to fill out those unfiled tax returns.

Unfiled Delinquent Tax Return Step 3) Make sure you have all the tax documents the IRS does. Go to your local Social Security office to get copies of all the W-2s, 1099s and other documents for the years you have unfiled tax returns. The IRS may have gotten a document that you didn’t and this could be the source of some of your unfiled income tax return problem. For example, you may have worked with an out of state client and that may have meant you needed to file a tax return in that state. A good tax attorney or Certified Tax Resolution Specialist can help you recreate your late tax return paper trail.

Unfiled Delinquent Tax Return Step 4) Figure out what your original tax liability would have been. Most tax attorneys and Certified Tax Resolution Specialists work with CPAs, Enrolled Agents and other tax professionals who can help you prepare your unfiled tax returns. Since you know for a fact that the IRS will be examining these unfiled delinquent tax returns with a fine toothcomb, now is not the time for amateur hour. These late tax returns will get the IRS’s harshest scrutiny so you shouldn’t submit anything that isn’t 100% bulletproof. To survive this battle, you need the professional help of a good tax preparer, tax attorney or a Certified Tax Resolution Specialist. If you want to take a preliminary stab at creating the unfiled tax returns so your tax attorney or Certified Tax Resolution Specialist doesn’t have to start from scratch, the IRS has downloadable forms and instructions going back to 1980 here:,,id=98339,00.html. You must also get tax forms for your state. (The state tax offices can be found here: Many states have online forms going back only a few years. If you can’t get the forms for your unfiled delinquent tax returns online, you may have luck going to the library (call the reference desk first) to see if they have the IRS forms you need from the previous years. If they don’t have the late tax return forms for the years you need, contact a tax attorney or Certified Tax Resolution Specialist because they are virtually certain to have the unfiled delinquent tax return forms for the years you need.

Unfiled Delinquent Tax Return Step 5) Verify that the IRS and you agree on the unfiled tax returns. Once you have prepared the late tax returns yourself (or had a tax preparer do it), have a tax attorney or Certified Tax Resolution Specialist check your version of the unfiled delinquent tax returns against the IRS’s estimation of your back tax debt. Sometimes the IRS makes simple mistakes on their Substitute For Returns. The IRS may not know if you’ve had kids in the interim, or that your tax situation has changed substantially. A tax attorney or Certified Tax Resolution Specialist will interview you to determine whether the IRS has an accurate picture of your tax status.

Unfiled Delinquent Tax Return Step 6) Send your unfiled tax returns to the IRS the right way. Any late tax return is too important to send electronically. Go to your local IRS office and hand deliver each return. Get a receipt for each unfiled delinquent tax return. If that doesn’t work for you, then send each return separately via certified mail. Just to be safe, send each unfiled tax return separated by a few days. Also note if you are told that your late tax return is in the collections or SFR (Substitute For Return) office. Be sure to get the proper address and sent each unfiled delinquent tax return separately to that address.

Unfiled Delinquent Tax Return Step 7) Send in each unfiled tax return with a check for $5. Your interest and penalties for each late tax return compound with every day of non-payment (as much as 25%). Stop that clock as soon as you can by filing those unfiled delinquent tax returns immediately.

Unfiled Delinquent Tax Return Step 8) Have your tax attorney or Certified Tax Resolution Specialist devise an IRS payment game plan. Can you pay your unfiled tax return back tax debt in full? Should you? Should you try for an Offer In Compromise? Should you try to get an IRS payment plan for your late tax return back tax debt? Expert tax help from a tax attorney or Certified Tax Resolution Specialist can help you decide on the game plan that makes the most sense for you. Remember that a good tax attorney or Certified Tax Resolution Specialist can often get you an Offer In Compromise tax settlement that will be pennies on the dollar.

If you follow these steps to solving your unfiled delinquent tax return problem, you can find hope. Working with a tax attorney or Certified Tax Resolution Specialist is the best way you can get many happier tax returns.

Michael Rozbruch is one of the nation’s leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA and the founder of Tax Resolution Services. He helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.

December 14, 2017

Who Must File a Tax Return

Filed under: Tax — Tags: , , , — admin @ 12:47 pm

If you are a US citizen, you must file for income tax return if your income is above certain levels. Other factors such as age and type of income you receive are also taken into consideration. If you are unsure as to whether you are required to file for income tax return, you can find out more information from the official IRS website, or you can consult professional tax service providers. If you wish to avoid getting into any kind of trouble with the IRS, it’s always wise to file, whether you need to or not. There are situations where even if your income level falls below the stipulated level of income, you should still file your tax returns. For example, you may quality for certain income tax refunds. Such refunds will be credited to you only if you file for tax returns. Refundable credits include Earned Income Tax Credit, Additional Child Tax Credit, and Health Coverage Tax Credit. Sometimes, it is difficult or cumbersome to try and determine whether you qualify for the refund credits or not. In this case, you can consider filing for tax returns online. This method of tax filing is commonly known as e-filing. E-filing is an electronic process that any US citizen can use to file for tax returns. Of course, the assumption here is that whoever is e-filing should know how to operate a computer. Anyone who knows how to use the computer to surf the Internet will have no problems submitting file returns using e-filing. You should only e-file with IRS authorized websites. This is to ensure that security measures are implemented. Obviously, security measures are important because e-filing means submitting sensitive information through a public network. Therefore, it is only right to submit personal financial information through an IRS authorized site. E-filing is simple. It can take a little bit of time though. But you can speed up the process by having your numbers at hand. The entire process is guided. When you start submission, read the instructions carefully. There will be fields that are mandatory, and fields that are optional. These will be clearly indicated. As you submit, you may find that there are some pieces of information that you do not have at that moment. Don’t worry about it. You can proceed filling in the rest of the information. You will then be allowed to save the submission, and come back at a later date to fill in the missing information. Also, when you e-file, the system will automatically do the calculations to see whether you qualify for credit refunds. So you don’t have to worry about change of policies. Unless you are retired with no (or very little) income, chances are you must file for tax return. You may even end up with more money in your pocket!

For more information on Filing tax returns and eFile tax returns please visit our website.

November 3, 2017

Benefits of Re-financing

Filed under: Finance — Tags: , , , , , — admin @ 12:46 am

There are a number of benefits which may be associated with re-financing a home. While there are some situations where re-financing is not the right decision, there are a host of benefits which can be gained from re-financing under favorable conditions. Some of these benefits include lower monthly payments, debt consolidation and the ability to utilize the existing equity in the home. Homeowners who are considering re-financing should consider each of these options with their current financial situation to determine whether or not they wish to re-finance their home.

Lower Monthly Payments

For many homeowners the possibility of lower monthly payments is a very appealing benefit of re-financing. Many homeowners live paycheck to paycheck and for these homeowners finding an opportunity to increase their savings can be a monumental feat. Homeowners who are able to negotiate lower interest rates when they re-finance their home will likely see the benefit of lower monthly mortgage payments resulting from the decision to re-finance.

Each month homeowners submit a mortgage payment. This payment is typically used to repay a portion of the interest as well as a portion of the principle on the loan. Homeowners who are able to refinance their loan at a lower interest rate may see a decrease in the amount they are paying in both interest and principle. This may be due to the lower interest rate as well as the lower remaining balance. When a home is re-financed, a second mortgage is taken out to repay the first mortgage. If the existing mortgage was already a few years old, it is likely the homeowner already had some equity and had paid off some of the previous principle balance. This enables the homeowner to take out a smaller mortgage when they re-finance their home because they are repaying a smaller debt than the original purchase price of the home.

Debt Consolidation

Some homeowners begin to investigate re-financing for the purpose of debt consolidation. This is especially true for homeowners who have high interest debts such as credit card debts. A debt consolidation loan enables the homeowner to use the existing equity in their home as collateral to secure a low interest loan which is large enough to repay the existing balance on the home as well as a number of other debts such as credit card debt, car loans, student loans or any other debts the homeowner may have.

When re-financing is done of the purpose of debt consolidation there is not always an overall increase in savings. Those who are seeking to consolidate their debts are often struggling with their monthly payments and are seeking an option which makes it easier for the homeowner to manage their monthly bills.

Additionally, debt consolidation can also simplify the process of paying monthly bills. Homeowners who are apprehensive about participating in monthly bill pay programs may be overwhelmed by the amount of bills they have to pay each month. Even if the value of these bills is not worrisome just the act of writing several checks each month and ensuring they are sent, on time, to the correct location can be overwhelming. For this reason, many homeowners often re-finance their mortgage to minimize the amount of payments they are making each month.

Using the Existing Equity in the Home

Another popular reason for re-financing is to use the existing equity in the home. Homeowners who have a considerable amount of equity in their home may find they are able to cash out some of this equity for other purposes. This may include making improvements to the home, starting a business, taking a dream vacation or pursuing a higher degree of education. The homeowner is not limited in how they can use the equity in their home and may re-finance a home equity line of credit which can be used for any purpose imaginable. A home equity line of credit is different from a loan because the funds are not disbursed all at once. Rather the funds are made available to the homeowner and the homeowner can withdraw these finds at anytime during the draw period.

October 29, 2017

Re-Financing to Consolidate Debt

Some homeowners opt to re-finance to consolidate their existing debts. With this type of option, the homeowner can consolidate higher interest debts such as credit card debts under a lower interest home loan. The interest rates associated with home loans are traditionally lower than the rates associated with credit cards by a considerable amount. Deciding whether or not to re-finance for the purpose of debt consolidation can be a rather tricky issue. There are a number of complex factors which enter into the equation including the amount of existing debt, the difference in interest rates as well as the difference in loan terms and the current financial situation of the homeowner.

This article will attempt to make this issue less complex by providing a function definition for debt consolidation and providing answer to two key questions homeowners should ask themselves before re-financing. These questions include whether the homeowner will pay more in the long run by consolidating their debt and will the homeowners financial situation improve if they re-finance.

What is Debt Consolidation?

The term debt consolidation can be somewhat confusing because the term itself is somewhat deceptive. When a homeowner re-finances his home for the purpose of debt consolidation, he is not actually consolidating the debt in the true sense of the word. By definition to consolidate means to unite or to combine into one system. However, this is not what actually happens when debts are consolidated. The existing debts are actually repaid by the debt consolidation loan. Although the total amount of debt remains constant the individual debts are repaid by the new loan.

Prior to the debt consolidation the homeowner may have been repaying a monthly debt to one or more credit card companies, an auto lender, a student loan lender or any number of other lenders but now the homeowner is repaying one debt to the mortgage lender who provided the debt consolidation loan. This new loan will be subject to the applicable loan terms including interest rates and repayment period. Any terms associated with the individual loans are no longer valid as each of these loans has been repaid in full.

Are You Paying More in the Long Run?

When considering debt consolidation it is important to determine whether lower monthly payments or an overall increase in savings is being sought. This is an important consideration because while debt consolidation can lead to lower monthly payments when a lower interest mortgage is obtained to repay higher interest debts there is not always an overall cost savings. This is because interest rate alone does not determine the amount which will be paid in interest. The amount of debt and the loan term, or length of the loan, figure prominently into the equation as well.

As an example consider a debt with a relatively short loan term of five years and an interest only slightly higher than the rate associated with the debt consolidation loan. In this case, if the term of the debt consolidation loan, is 30 years the repayment of the original loan would be stretched out over the course of 30 years at an interest rate which is only slightly lower than the original rate. In this case it is clear the homeowner might end up paying more in the long run. However, the monthly payments will probably be drastically reduced. This type of decision forces the homeowner to decide whether an overall savings or lower monthly payments is more important.

Does Re-Financing Improve Your Financial Situation?

Homeowners who are considering re-financing for the purpose of debt consolidation should carefully consider whether or not their financial situation will be improved by re-financing. This is important because some homeowners may opt to re-finance because it increases their monthly cash flow even if it does not result in an overall cost savings. There are many mortgage calculators available on the Internet which can be used for purposes such as determining whether or not monthly cash flow will increase. Using these calculators and consulting with industry experts will help the homeowner to make a well informed decision.

September 13, 2017

Low Mortgage Rates in Texas Starts With The Loan Officer

Filed under: Mortgage — Tags: , , , , , , , — admin @ 12:47 pm

For many Texas families looking for a first mortgage, the proposed mortgage rate can often be the one determining factor in whether or not the desired home is affordable. A low mortgage rate in this day and age is no longer a desire, it is a necessity. Low mortgage rates can make it possible for families to realize the dream of home ownership. With the cost of living increasing much faster than the standard rate of pay, a low mortgage rate means financial stability.
Finding a low mortgage rate in Texas starts with the mortgage loan officer. Low mortgage rates aren’t under every mortgage loan officer’s pillow, as some are bringing rates to the table which are nearly twice as high as other mortgage loan officers. What exactly is the difference? The higher the mortgage rate and the more the process costs you, the more business a mortgage loan officer is likely to earn if they are paid strictly on commission. Bad news for you can mean good news for the mortgage loan officer. Mortgage companies that offer their loan officers a fairer determining factor in their salary or commission are more likely to bring better offers to you.
Online loan officers seem like a really good idea. They try to make it simple for you. All you need to do is enter your information and Presto! You have mortgage offers flooding your email inbox, right? Sure, and not exactly. People with perfectly spotless credit may receive mostly fair and even a few low mortgage rates by doing it this way. But for truly low mortgage rates, the personal touch is still a requirement. Even people with nearly perfect credit don’t typically have spotless credit. Something as simple as a disputed charge or a $1 charge from a credit card company that you never knew about can ruin your chances of a low mortgage rate from an online source. Yet when dealing with credit scores, mortgage rates, and financial obligations, there is not real black and white formula which can spit out exactly what is available to you. Being able to talk face to face with mortgage loan officers makes a huge difference. For those who knowingly do not have perfect credit, which is most of us, there really is no other alternative than a real live in the flesh mortgage loan officer.
If your mortgage loan officer is truly searching for the lowest mortgage rate possible, they will gladly explain the process, how they came up with the low interest rate they are offering you, and why they can’t go any lower. Mortgage rates fluctuate nationally, and there are various low mortgage rate options available. Some people want to opt for fixed rates while others are looking for balloon payments. These things can not be adequately discussed with an online mortgage loan officer. Perhaps you believe you know exactly what you are looking for and why. A good and ethical mortgage loan officer can not only bring you a low mortgage rate, but they can help guide you in the process of deciding which type of mortgage is right for you. Often the mortgage loan officers have information that you don’t. Mortgage loan officers can often guide you in the best direction to save you money beyond a low mortgage rate.
Low mortgage rates are an imperative requirement for young families. While online mortgage loan officers find young families a high risk category, not all mortgage loan officers will. Some mortgage loan officers can find deals that simply blow the internet mortgage loan officers clear out of the water. This is exciting stuff when you think about it. Despite the fact that young families are not well established, they can still be an excellent risk for a low mortgage rate. Established families are typically a good risk as well, although some mortgage companies do not give them the credit, so to speak, which they deserve since they were renting properties for the first twenty years or so of marriage. These factors do help determine whether or not you will receive a low mortgage rate. It’s not necessarily fair, but it’s true.
When seeking low mortgage rates and the best mortgage package available for your personal circumstances with an online mortgage loan officer, there is no consideration given to your personal goals and desires for your future. Online mortgage loan officers can only determine a given set of information based on a predetermined formula, and none of it has anything to do with flexibility, probability, dreams, goals, wants, needs, or hopes. The right personal mortgage loan officer is able to sit down with individuals, couple, and families, and look at a larger picture and hear what the clients are hoping to attain for themselves and their families before making recommendations. There is more to a low mortgage rate than just a low mortgage rate.
All of the variable and all of the factors which go into finding the right mortgage package can only be well put together by finding the right mortgage loan officer. The right mortgage loan officer means different things to different people, but low mortgage rate always falls somewhere into the description. Knowing whether or not you are receiving a low mortgage rate depends on your circumstances, your credit rating, your income, your stability, and of course, the present market. You should walk into a mortgage loan officer’s office understanding what you think would be a low mortgage rate, and why. You should also remember that you may not have all of the information available to you to really determine what a low mortgage rate will mean for you.

Steve Kyles is a prominent Mortgage Loan Officer in Houston, Texas and leads a highly skilled team of professionals. Kyles is consistently recognized as one of the Top 10 Mortgage Originators in America. Contact Steve Kyles at 713-623-5109 or

August 25, 2017

FHA mortgage, FHA Loan down to 530 FICO

Filed under: Loan — Tags: , , , , , , , , , — admin @ 12:48 pm

FHA Mortgage Checklist

Prepare for a Smooth Application Process with an FHA Mortgage

Before you start the FHA home loan process, be prepared to provide some information to your FHA loan officer. Have it ready now to save time later.

Address to your place of residence (past two years) Social Security numbers Names and location of your employers (past two years) Gross monthly salary at your current job(s) Pertinent information for all checking and savings accounts Pertinent information for all open loans Complete information for other real estate you own Approximate value of all personal property Current check stubs and your W-2 forms (past two years) Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

In addition, you will need to pay for a credit report and FHA appraisal of the property

Down payment of most FHA approved loans is 3.5% down.

FHA Closing Costs


Allowable Charges that Borrowers Need to Understand

While FHA defines which closing costs are allowable as charges to the FHA mortgage applicant, the specific costs and amounts that are deemed reasonable and customary are determined by each local FHA office. All other costs are generally not allowed and are usually paid by the seller when buying a new Florida home, or paid by the lender when refinancing your existing FHA loan.

Lender’s origination fee Deposit verification fees Attorney’s fees The appraisal fee and any inspection fees Lender’s origination fee Cost of title insurance and title examination Document preparation (by a third party) Property survey Credit reports (actual costs) Transfer stamps, recording fees, and taxes Test and certification fees Home inspection fees up to $200

Allowed in an FHA refinance loan are wire transfer fees, courier fees, reconveyance fees, and fees to pay off bills.

FHA Debt to Income Ratios

Comparing Your Debt to Your Income

In order to prevent Florida homebuyers from getting into a home they cannot afford, FHA guidelines have been set in place requiring mortgage applicants and/or their spouse to qualify according to set debt to income ratios. These FHA ratios are used to calculate whether or not the potential mortgage applicant is in a financial position that would allow them to meet the demands that are often included in owning a Florida home. The two ratios are as follows:

1) MORTGAGE PAYMENT EXPENSE TO EFFECTIVE INCOME Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners’ dues, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 31%. See the following example:


Total amount of new house payment:


Borrower’s gross monthly income (including spouse, if married):


Divide total house payment by gross monthly income:


Debt to income ratio:



2) TOTAL FIXED PAYMENT TO EFFECTIVE INCOME. Add up the total mortgage payment (principal and interest, escrow deposits for taxes, hazard insurance, mortgage insurance premium, homeowners’ dues, etc.) and all recurring monthly revolving and installment debt (car loans, personal loans, student loans, credit cards, etc.). Then, take that amount and divide it by the gross monthly income. The maximum ratio to qualify is 41%. See the following example:


Total amount of new house payment:



Total amount of monthly recurring debt:



Total amount of monthly debt:


Borrower’s gross monthly income (including spouse, if married):


Divide total monthly debt by gross monthly income:


Debt to income ratio:



Please note that the above indicators do not exclusively determine whether or not a candidate will qualify for an FHA loan. Other factors will be considered, including credit history and job stability.


FHA Credit Guidelines

What FHA Lenders Want to See When They Review Your Credit


Two lines of credit are necessary to apply for an FHA loan. However, in the event a borrower does not have sufficient credit on their credit report the FHA will allow substitute forms.


FHA mortgage lenders will consider approving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee’s written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability.


At least two years must have elapsed since the discharge date of the borrower and / or spouse’s Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.


During an underwriter analysis of borrower credit, the overall pattern of credit behavior is being reviewed rather than isolated cases of slow payments. If a good payment pattern has been maintained, regardless of a specific period of financial difficulty preceded it, the borrower may escape disqualification.


FHA insured mortgages are generally not available to borrowers whose property was foreclosed on or given a deed-in-lieu of foreclosure within the previous three years. However, if the foreclosure of the borrower’s main residence was the result of extenuating circumstances, an exception may be granted if they have since established good credit. This does not include the inability to sell a home when transferring from one area to another.


A collection is minor in nature usually does not need to be paid off as a condition for loan approval. It is stated as such in FHA guidelines. Any judgments will have to be paid in full prior to closing. Borrowers who are delinquent on any federal debt, such as tax liens, student loans, etc., are not eligible.


August 4, 2017

Cash-out Refinance Loans are Really Such a Good Deal?

Getting extra money when refinancing your home loan can be really tempting because it is a very cheap source of financing. But, is it really such a good deal? Does that money come for free or are there additional costs to consider? In fact, how much does refinancing really cost?

There are many variables to analyze in order to decide whether refinancing your home loan is to your advantage or not. The new loan terms are not the only things you need to consider. The previous loan’s terms will also have to be taken into account when deciding if refinancing your mortgage loan is a smart thing to do.

What Determines Whether A Refinance Loan Is Onerous Or Not?

Regarding the new loan, the terms you need to analyze are the following: interest rate charged, loan repayment program, resulting loan installments, administrative fees, closing costs, additional fees and costs. Though these are the main factors that will determine your choice, you need to read both loan contracts thoroughly as there may be additional terms written in fine print that may turn the loan more onerous too.

When it comes to the previous loan, you should also compare interest rates, repayment program and resulting loan installments, fees and costs. But you should pay special attention to prepayment penalty clauses. These clauses are meant to discourage you from refinancing your home loan by charging a fee if you want to prepay your current loan. If your home loan has this clause on it, you will need to ponder its amount too in order to decide whether you will save money by refinancing.

Interest Rate Comparatives

The main thing you need to compare is the interest rate charged for the money. This will determine whether your loan payments will drop (if the repayment program stays unaltered) and how much money you will save by refinancing. By requesting a cash out refinance loan you will get the finance you need but if the interest rate charged for your refinance loan is higher than your previous mortgage and your outstanding debt is still too high, you need to consider if it would not be cheaper to keep your current loan and request a home equity loan instead of refinancing.

Terms And Conditions

There are other loan terms and conditions you need to consider too. For starters, if the loan repayment program is longer and the interest rate stays unaltered you may save money towards inflation but in any case, you will at least benefit from lower and more affordable monthly payments.

Administrative fees are a common way lenders have to compensate for low interest rates. They offer promotional rates in order to attract clients and later, you find out that you have to pay thousands of dollars on administrative fees that if pondered altogether with the loan could raise the rate a point or two.

The same goes to closing costs which usually include legal fees, costs of paperwork, etc. Make sure to get a list of the items that the concept “closing costs” include before signing anything as you may find a surprise like abusive legal fees or hundreds of dollars of paperwork as if they were printing in papyrus.

Melissa Kellett is an expert loan consultant who has worked for twenty years in the financial industry and helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and many other types of loans and financial products. If you want to learn more about Home Equity Loans and Loans for Home Owners you can visit her site

July 19, 2017

6 Factors to Know if a Borrower is Qualified for a FHA Secure Refinance Loan

Filed under: Loan — Tags: , , , , , , , , , — admin @ 12:47 pm

The FHA Secure Refinance program was created in an effort to provide greater help for people who weren’t able to obtain FHA-approved loans. As mortgage provider, it’s your job to let homeowner clients know when they’re better off with a FHA Secure loan.

Current Non-FHA Loans

Clients with current adjustable rate loans that hadn’t been provided by an FHA-approved mortgage lender can apply for FHA Secure refinancing. The best way to approach such clients is to draw out their life stories first. Listen to what they’ve gone through just by taking out a non-FHA loan.

Now, highlight to them the various benefits they can enjoy if they take out a FHA-approved mortgage. Let them know that while they may have made a mistake in the past, FHA Secure Refinance gives them the chance to rectify the mistake.

Delinquent Non-FHA Loans

Don’t have clients dismiss their prospects just because they’re delinquent on their payments. Even if they’re not able to pay off their current loan in time, the FHA Secure Refinance program isn’t ready to turn their backs on them yet and neither are you!

Dependable Income

Of course, having a current non-FHA loan, whether of good standing or not, isn’t the only qualification that the FHA Secure Refinance program will be concerned with. Your client must also have a dependable source of income. The FHA isn’t fussy as to what kind of income it is. It may be from full or part-time work. It may come from regular payments from a trust fund, retirement pension, alimony, or some other source. What’s important is that your client will be able to prove its consistency.

Ability to Pay

Naturally, having a reliable source of income isn’t always synonymous to being able to pay off your debts and many are quick to prove this true. You must also ascertain that your client’s source of income is adequate to cover not just the costs of living but his monthly mortgage payment as well. If he’s not qualified to do so then he may not be qualified for a FHA Secure refinance loan.

In this instance, you’ll need to have a heart to heart talk with your client. You might even have to work with them closely and help them determine the actual total of their monthly expenses. You have to determine whether they’re truly unable to afford their mortgages or they’re just guilty of financial mismanagement.

The important thing to remember is not to give up on your client until you’ve exhausted all your options or you’ve realized that another option may be better for him.

Reason for Delinquent Payments

Earlier on, we’ve established that delinquent borrowers won’t be dismissed right away. That’s true. What could get their applications for a FHA Secure refinance loan, however, is if they’re unable to prove that their delinquency is due to higher interest rates or mortgage payments. Again, you might have to work with your client closely to determine whether this is truly the case or not.

More Options for Qualified FHA Secure Refinance Loan Applicants

Now that you’ve guided your client all the way to the finish line, your final job is to ascertain that he makes the right choices till the end. Let him know, for instance, that he has the option to take out a fixed or adjustable refinance loan. When you take care of your clients with a FHA Secure Refinance loan, they’ll take care of you as well with their continued loyalty.

Scott Tucker tells you more on his free audio CD, free e-book, free faxed report, & free telephone seminar, all available for the asking, at

Older Posts »

Powered by WordPress