Downpayment Assistance

Downpayment Assistance
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief how to guide on downpayment assistance.

Potential home buyers often discover that while they’ll have no trouble making their monthly mortgage payments, they nonetheless can’t buy a home because they lack the funds to make the necessary down payment and closing costs. Fortunately, a number of solutions to this problem exist, one of the most common being: down payment assistance programs.

While sellers are forbidden from giving gifts of down payment funds to their potential homebuyers directly, these down payment assistance programs guarantee that funds to financially-challenged potential homebuyers are delivered at closing to cover all or a portion of the down payment and closing costs.

Only certain sellers will participate in these programs, and it can often take a great deal of work, mandatory classes, and extra paperwork to accomplish. The upside is that not only can people afford homes who otherwise couldn’t, but they might even get a lower interest rate on their loan.
First the seller would enroll the home in a relevant program, contributing funds equal to the amount of down payment assistance the buyer is to receive at the time closing, plus a fee of around 0.75% of the purchase price of the home. Then, upon closing, the down payment is then wired from the program to the agent handling the closing, keeping the seller removed from the process of transferring those funds.

Sellers can also help reduce the cost burden on buyers by offering to pay all or portions of the closing costs involved in the sale of the home. They do this by simply giving back to a part of their proceeds to the buyer at the time of closing. There are limits, however, on how much assistance a seller may provide, depending on the kind of loan the buyer is obtaining.

And though down payment assistance may seem undesirable to sellers considering whether or not to accept someone’s offer to buy their home, it could actually be to the seller’s advantage every bit as much as the buyer‘s. This is because a buyer able to afford the closing costs on a home can more easily get away with making a lower offer (and having it accepted), whereas a buyer requiring down payment assistance is more likely to make an offer closer to the seller’s asking price in order to compensate for their need for down payment assistance.

Realtors and lenders both are qualified to aid would-be homebuyers in finding and selecting the right down payment assistance program. Realtors and lenders alike are generally more than glad to explain how an offer to purchase property should be phrased in order to.

Get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a LIVE Loan Officer now.

SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, loans for home improvement, mortgages, refinancing existing loans, reverse mortgages, FHA loans & more

get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak to a LIVE Loan Officer.

Another Humbling Testimonial Proves That Somerset Mortgage Lenders Truly Helps Make Owning a Home a Reality For Borrowers

Another Humbling Testimonial Proves That Somerset Mortgage Lenders Truly Helps Make Owning a Home a Reality For Borrowers
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/

Somerset Mortgage Lenders and Gregg Marcus work hard every day to make the experience of getting your loan as easy and enjoyable as possible. So it's even more rewarding when a satisfied consumer comes forth with a heartfelt letter of recognition, a thank you for a job done right.

Here is a yet another letter on this subject, recently submitted to our offices at 290 Broadhollow Rd in Melville, NY 11747

"To Gregg Marcus,

Hello Gregg,

I just wanted to take this time to write a letter expressing how happy I am to have worked with the Somerset Investors Team. Especially, Nancy Grana, and Catherine Belle. For the past year, my wife and I have struggled with making our mortgage payments. I was very concerned that we might lose our house. And since my mother lives with us and she depends on her disability check, it would have been extra hard for her to find somewhere else to live. And I did not want to fail my family at all.

Although I was a little skeptical with working with any loan investor, I took a chance with Somerset. I didn’t believe that anything would go through due to our credit history. But I really had no choice and after Nancy starting working with me, she demonstrated how committed she was to try to make this work. And she did just that. I was a little upset when I turned over to someone new, but Catherine Belle filled in just fine. She worked with me to finish the job. Both were very concerned about their customer.

I think that the Somerset staff has proved that even in this struggling economy, there is still hope for those of us that are hard working people to make it through. But without the encouragement, not many will be able to follow through. I want to thank Nancy Grana and Catherine Belle for their diligence to see this through. My mind and heart are more at ease than before. I can’t thank them enough for what they have done. I will be sure to refer Somerset to anyone that I speak with.

God Bless

Best regards,
Marcus"

We would like to thank Marcus as well for allowing us to serve as their loan partner - helping all their dreams get closer to becoming reality!

Get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a LIVE Loan Officer now.

SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak to a LIVE Loan Officer.

Find The Right Home Loan Program

Find The Right Home Loan Program
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief how to guide on finding the right home loan program.

Whether it’s to purchase a new home or refinance your current home, there are an assortment of loan programs you have to chose from, based on a combination of your objectives and your eligibility.

Conventional Loans: Conforming Loans and Jumbo Loans

The conventional loan is the most common kind of loan, available to most people who have at least 3% of the requested loan amount available to pay as a down payment. The two most common types of conventional loan are conforming loans and jumbo loans.

Conforming loans are a type of conventional loan that are secured by Freddie Mac (FHLMC), Fannie Mae (FNMA) and other GSEs, or Government Sponsored Entities. These GSEs do not directly lend the money to borrowers but rather work with various lenders country-wide to provide loans that meet the average homebuyer’s needs. These entities also buy mortgage loans from lenders in order to re-package them as securities available for sale to investors on the secondary market.

For loan amounts that are higher than the loan limits set each year by the GSEs, private investors offer jumbo loans. The trade-off of going to a private investor to borrow a larger amount of money is that the interest rate on such loans is also usually higher.

Special Circumstances: Loans for First-Time Homebuyers, Low-Income Households, and People with Poor Credit

Government entities from a local to a federal level and private entities alike have worked to develop loan programs that make home ownership a reality for many people considered under-qualified for traditional mortgages. These include loans for first-time homebuyers and people with a low-to-moderate income that are insured by the Department of Housing and Urban Development (HUD) via the Federal Housing Administration (FHA).

HUD and the FHA do not make loans directly, rather they insure loans, meaning that the lender still gets paid back even if you default on the home loan. Often, FHA insured loans are available with down payments lower than 3% of the total loan amount. There is a limit to how high of a loan the FHA will insure, but the limit is at least high enough to allow people in qualifying circumstances to buy reasonably.

Get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a LIVE Loan Officer now.

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more get a free rate quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak to a LIVE Loan Officer.

A Testimonial and A Thank You

A Testimonial and A Thank You
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com

Somerset Mortgage Lenders and Gregg Marcus work hard every day to make the experience of getting your loan as easy and enjoyable as possible. So it's even more rewarding when a satisfied consumer comes forth with a heartfelt letter of recognition, a thank you for a job done right.

Here is one such letter, recently submitted to our offices at 290 Broadhollow Rd in Melville, NY 11747

"From:
Mark & Anna
Dayton, Texas

June 15, 2009
To: Somerset Mortgage Lenders

Dear Somerset:
Although this may be an overlooked task, we feel that we must bring to your attention the exceptional service that we received from you and the entire Somerset Mortgage Lenders organization.

We are, of course, very delighted to have had the pleasure of working with you during the loan acquisition. Your professional and courteous attitude, expert knowledge, and patience in handling our specific issues were very important to our complete customer satisfaction.

In the past, I felt that loan service providers were not sensitive to our needs and provided the quickest and most convenient solution to my problems from their perspective. But not in this case. You and the entire Somerset Mortgage Lenders organization handled our issues as if they were their own, and we are completely satisfied.

We again thank you for the exceptional and professional service and look forward to patronizing your organization. Please forward this letter to the entire organization as we appreciate their hard work, professionalism and understanding in completing this transaction.

Sincerely,
Mark & Anna"

We would like to thank Mark & Anna as well for allowing us to serve as their loan partner - helping their dreams get closer to becoming reality!

Get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak with a LIVE Loan Officer now.

SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak to a LIVE Loan Officer.

Understanding Your Credit
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief how to guide to understanding your credit.

Credit is the borrowing of money with the intention of repaying the lender at some later point in time. Examples of credit include: credit cards, home mortgages, student loans, and car loans.
There are 3 primary agencies that compile information on an individual’s credit history and produces a report which lenders use to help determine whether or not to approve a request for credit. These 3 main credit reporting agencies are: Experian, Equifax, and Trans-Union.

A credit report includes an individual’s name, address, social security number, current employer and employment history, and previous credit history. A person’s credit history includes various types of accounts (ie. bank accounts, credit card accounts, student loans), the respective balances remaining, the payment status (ie. whether or not payments were made on time), and any collection information. A person’s credit report contains information on that person’s credit history going back 7-10 years.

A credit report will also identify how often, when, and by whom an inquiry was made into the individual’s credit. This is valuable information to lenders as it shows them how frequently a person is applying for additional credit. And a credit report will identify any legal actions taken against an individual for the purposes of reclaiming money owed.

In instances where a person’s credit history is lacking, lenders may take other proof of credit into account, such as rental payment receipts and utility bills. It is difficult to obtain credit without proof of some sort of existing credit history, however short or small.

When a consumer applies for a loan or other form of credit, the lender will contact one of these credit bureaus to review the applicant’s credit report. Although most of the information collected by each of the agencies is the same, slight differences may exist in an individual’s credit report from each agency. In addition, errors will often exist on credit reports.

Different lenders will pull different agency’s credit reports on their applicants, making it essential for every consumer to make sure all 3 of their credit reports are accurate. Fortunately, every American is entitled to receive one free copy of their own credit report per year from each credit reporting agency. But even if you’ve already received your free credit report from each agency for a given year, you can still purchase an additional copy at any point in time you like for a small fee.

Get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak with a LIVE Loan Officer now.

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak to a LIVE Loan Officer.

How Mortgage Insurance Works

How Mortgage Insurance Works
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of how mortgage insurance works.

Typically, when the down payment on the purchase of a home is lower than 20% of the value of the property, mortgage insurance is required. Mortgage insurance comes in 2 forms: private mortgage insurance (PMI) and lenders mortgage insurance (LMI). Both are policies that protect lenders from the possibility of borrowers defaulting on loans. The lender purchases the mortgage insurance policy and passes the premiums down as a fee added to the borrower’s monthly mortgage payments.

A mortgagee (or borrower) must qualify for mortgage insurance by meeting certain conditions that have been set forth by Fannie Mae (the Federal National Mortgage Association). Such conditions include qualifications of the borrower, type of property borrowed against, size of the mortgage.

A mortgage that’s insured by having met the required conditions is then eligible to be resold in the mortgage-backed securities market, allowing lenders to sell older mortgages and thereby originate (or make) more new loans than they otherwise might be able to.

Fortunately for buyers, the costs of getting mortgage insurance can be folded into the monthly mortgage payments via a process known as capitalization. Premiums capitalized this way then provide a further tax deduction in any jurisdictions that permit mortgage payments to be tax deductible.

As many borrowers are unable to afford a 20% down payment and thus required to pay mortgage insurance, a financing technique was developed to aid them in still being able to afford buying a home. This technique involves a first mortgage (or primary mortgage) that covers 80% of the purchase price, and a second mortgage for another 10% of the purchase price, leaving the borrower to come up with a down payment of only 10% of the purchase price. This financing technique is familiarly called: 80-10-10.

In the case of 80-10-10 financing, the interest rate on the 10% second mortgage is higher than that of the first, but the requirement for paying regular mortgage insurance premiums is eliminated. This makes the 80-10-10 financing technique a more affordable alternative despite the higher interest rate on the second mortgage, and allows borrowers to pay down the mortgage debt faster.

Get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a Loan Officer now.

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

Somerset Makes Refinancing More Appealing with Their Popular MaxxCash Program

Somerset Makes Refinancing More Appealing with Their Popular MaxxCash Program
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/

Somerset Mortgage Lenders continues to keep industry pundits in awe as they introduce their unique MaxxCash Program aimed at helping each and every homeowner take advantage of current low interest rates and the financial benefits of maximum cash out. For instance, if you’re planning to make long anticipated home improvements, getting the payments together for college tuition, or even contemplating a second home in Florida, this program is for you. Because of their broad knowledge in all areas, Somerset is offering this new program to those in need of cash that have not only worked diligently to improve their credit scores but also to those many homeowners who are feeling the devastating effect of escalating debt of all kinds. Under the MaxxCash Program, all are being offered up to 100% of a home’s value as an incentive to refinance while their home prices are still high and before they stabilize or drop any lower.

With increased penalty charges and the recent doubling of minimum payment requirements for credit cards, more and more conscientious homeowners are feeling the control of their finances rapidly slipping away. Their usually reliable home equity line of credit has also taken on a steadily rising rate and begun to dry up. Now every homeowner is in a frantic search for some sort of quick financial relief.

Somerset knows that by taking advantage of the current low mortgage refinancing rates through their MaxxCash Program, a homeowner would be capable of solving the problems of paying off high credit card balances and home equity credit lines simultaneously to begin once again with a clean slate, all this while preserving their credit standing. Somerset’s role as a direct lender, not a broker, is the perfect climate for this type of refinancing.

Get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a Loan Officer now.

Benefits of Home Ownership

Benefits of Home Ownership
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of the benefits of home ownership.

Home ownership has its benefits, a quite a lot of them, at that. The following are several of the key benefits of home ownership.

Investment Value: Statistics collected by such organizations as the Office of Federal Housing Enterprise Oversight has shown that real estate, though in moves cyclically up and down throughout the years, maintains a consistent trend of appreciating in value over the long run. Homeowners tend to consider their homes their primary investment and a hedge against annual inflation.

Tax Benefits: Tax rates encouraging home ownership make owning a home an excellent tax shelter.

Mortgage Interest Deduction: Take a look at any monthly mortgage statement and you’ll see that the largest portion of your monthly payment applies towards mortgage interest. Provided that the balance on your mortgage is less than the purchase price of your house that mortgage interest you pay is completely tax deductible. According to IRS Publication 530 property taxes on a first home (as well as a vacation home) are also completely deductible from your income taxes.

Capital Gains Exclusion: If you remain in your home for at least 2 out of the previous 5 years, you are eligible to exclude as much as $250,000 (for individuals) and $500,000 (for married couples) of your capital gains profits, without requiring you move up or purchase a replacement home, and without any age restrictions. Every 2 years you’re allowed to exclude these thresholds from your taxes, so you could conceivable sell your home every 24 months and pocket all the profits without being taxed on any of it (certain limitations apply).

Preferential Treatment: Upon the sale of your home, and so long as you’ve owned the home for at least a full year, if you make more than the permissible exclusion in profits, the amount is taken as a capital asset and is given preferential tax treatment.

Equity: Every month, a portion of your monthly mortgage payment is applied towards your loan’s principal balance, thereby reducing your loan obligation.

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

How Much Should I Put Down On My Mortgage?

How Much Should I Put Down On My Mortgage?
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of how much you should expect to put down on your mortgage.

In an ideal scenario, you would buy your home with a 20% down payment, have closing costs that come to around 3-5% of your home’s purchase price, and have enough money remaining in your bank account to cover 2-3 months of housing expenses.

The peace-of-mind this gives lenders usually translates into a nicer deal for you. And as a bonus, you start out owning your home with a sizable amount of equity already in it.

Of course, it’s not all that easy to meet those qualifications, meaning that most home loan scenarios are somewhat less than ideal. First-time homebuyers, for example, may have great difficulty in coming up with that 20% down. That amounts to $40k down on a $150k mortgage or $70k down on $250k.

Fortunately, over the past several years, lenders have started showing an increasing willingness to finance the majority of home’s purchase price - in some cases as much as 97%. That amounts $4,500 down on a $150k mortgage or $7,500 on $250k.

This is because lenders are now able to sell loans with as much as 97% financing to the Federal National Mortgage Association (Fannie Mae) to be bundled as securities sold to investors on the secondary market, thereby taking the risk of making the loan off of themselves.

The allure of down payments as low as 3-5%, however, is deceptive and should be weighed against the “costs”, namely that you would start out owning your home with very little in home equity, and with less than 20% down, your mortgage insurance rates could run quite high.
Though mortgage insurance rates for fixed rate loans given to people with decent credit are generally standard across the board, if you have poor credit or are considering an adjustable rate loan, you may want to consider putting up more of a down payment or risk paying exorbitant insurance rates monthly.

Finally, we come to the popularly-sought “Zero-Down Loan“. City and state organizations have programs benefiting potential homebuyers with low-to-moderate incomes and those looking to buy in urban areas. These programs offer loans that are below-market rates with little-to-no down payment necessary.

The enticing proposition of 100% financing is available!

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783

Mortgage Financing Costs & Fees

Mortgage Financing Costs & Fees
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of mortgage financing costs & fees.

The following is an overview of the fees and other costs associated with getting a home mortgage
Down payment: Your down payment is the money you pay out of pocket towards the total purchase price of your home. When borrowing money to buy a home, you can expect to pay a percentage of the purchase price with your own money, rather than the lender‘s. Different mortgages and loan packages require you make different down payments (i.e. 5% or 20%).

Monthly payment: The money you pay each month in mortgage payment can be applied to your loan in a number of ways. The payment is usually divided amongst loan principal (the remaining balance on the actual amount borrowed) and interest. However, a wise choice (and sometimes a loan requirement) would be to pay an additional amount each month to go into an escrow account to pay for taxes and insurance.

Mortgage insurance: In the case of mortgages for less than 20% of the purchase price of the home, a borrower is usually required to pay some sort of mortgage insurance. Insured home loans enable people to buy homes with smaller down payments than would otherwise be required. The cost of mortgage insurance varies greatly, generally depending on both the down payment amount and the type of loan chosen.

The Veterans Administration (VA) and the Federal Housing Administration (FHA) are two federal government institutions that insure different types of home loans. Borrowers can also turn to sundry private organizations to acquire mortgage insurance.

Closing costs: At the time of closing - when you officially, legally take title of the home - certain costs are due, many of which you will be responsible for paying. In general, you can plan to pay an extra 5% on top of your purchase price towards closing costs. Whenever you apply for a loan, the lender is required by law to provide you with an estimate of the closing costs associated with that loan. Items on that estimate may include, *Origination fees - the loans processing costs of processing your loan (such as: appraisal and property) *Title insurance - often an optional but highly recommended expense that insures you against problems with the title (i.e. property liens) undisclosed to you prior to the time of purchase.

SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

The Underwriting Process

The Underwriting Process
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips and tricks meant to make getting your loan as easy as possible. To this end, they have put together this brief explanation of the underwriting process

In terms of real estate, the underwriter is the representative of a lender who reviews a home buyer’s loan application and associated documentation. It is in the underwriting process that the determination is made whether to approve or deny a request for a loan.

In the underwriting process, the underwriter analyzes and evaluates:

Your ability to pay back the loan - by looking at your current income and obligations.
Your willingness to pay back the loan - by looking your credit.
The collateral you’re offering for the loan - by looking at the appraised value of the property in question in relationship to the size of the loan requested, or what is known as the Loan-to-Value ratio.

The underwriter examines your loan application to answer relevant questions such as:
Your source of income and its consistency and reliability.
The adequacy of your income to cover the costs of your new mortgage.
The overall amount of long-term debt you have already.

A key factor in determining whether or not to approve your loan application is your credit history. It is well worth every loan applicant’s while to review their own credit first, prior to applying for a loan. By checking your own credit before the underwriter ever sees it, you have the opportunity to identify and fix any errors and make reparations on old unpaid debts if at all possible, thereby improving your credit rating and the likelihood of being approved for the loan.

When a borrower doesn’t have an extensive enough credit history for an underwriter to make an informed decision about the borrower’s creditworthiness, underwriters will often accept other payment records for consideration, such as utility bills and rental payment receipts.
Whether an applicant has a provable and adequately lengthy credit history or not, an underwriter may require the applicant also produce a complete paper trail of recent banking account activity (ie. checking and savings). This may include deposit and withdrawal receipts, monthly statements, cancelled checks, etc.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

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How to Prequalify for a Home Loan

How to Prequalify for a Home Loanby Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips and tricks meant to make getting your loan as easy as possible. To this end, they have put together this brief explanation of the steps you must take to be prequalified for a loan.

To be pre-qualified for a loan means that a lender has done a preliminary review of your basic information and, without confirming any of it for validity nor checking to see if there’s any significant information you’ve withheld that could further affect your creditworthiness, has determined that, based on their standards, you would qualify for a loan up to a specific dollar amount should you apply with them.

Being pre-qualified does not mean that you are pre-approved. Pre-approval is a commitment to approve you for that loan, should all the information you’ve provided be accurate and complete, whereas pre-qualification just means that, according to their standards, you look to qualify for said loan amount.

Getting pre-qualified has several advantages, read the following:

1.) Pre-qualification lets you know how much you can actually afford on a home, which helps tremendously in focusing what could otherwise be an overwhelming house-hunting experience.
2.) Pre-qualification demonstrates to sellers that you are serious buyer who is ready, willing, and able to follow through on an offer.
3.) pre-qualification helps the whole mortgage application process to go through much faster, as a great deal of the information you need to provide is already in the lender’s possession.

Another advantage of pre-qualification is that pre-qualified borrowers can usually lock-in their interest rate, a huge benefit when you consider how much interest rates can rise between the time you start your search for a home, the time you complete your loan application process, and the time you close on the house. There may be a lock-in fee, but if it’s reasonable, it’s usually worth it. Locked-in rates are usually valid for 30-90 days, depending on the lender.

When trying to lock-in an interest rate, ask whether the lender has a "float down" feature. This allows you to lower your interest rate once, if prevailing rates go down during your lock-in period, preventing you from getting stuck with a higher interest rate than if you hadn’t locked it down at all.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

Refinancing an Adjustable Rate Mortgage to a Fixed Rate

Refinancing your adjustable rate mortgage into a fixed rate mortgage is often a wise idea, especially in a climate like today's, when adjustable rates are skyrocketing daily, forcing homeowners nationwide into foreclosure.

There are definitely advantages to getting an adjustable rate mortgage to buy a home, and in fact sometimes it's the only way certain households are even able to get a home mortgage in the first place. But part and parcel of using an adjustable rate mortgage intelligently is planning to protect yourself from unwieldy interest rate hikes in the future. Most people who get an ARM to buy a home should be planning ahead to either refinance into a fixed rate mortgage or sell their home before this eventuality occurs.

There are actually several good reasons for making such a move, not only to get yourself a fixed (and hopefully better) interest rate on your loan. People also refinance ARMs to get cash out for home improvements and other big expenses, and to consolidate debt.

Whatever your reasons, if you're thinking of refinancing that ARM, you're probably thinking clearly, and doing yourself a big favor. But to be sure, read on…

To make sure the timing is right in your refinancing endeavor, be clear on the terms of your existing loan.

1 When and how often will it adjust
2 How much will it adjust
3 Is there a cap (a maximum rate beyond which it will get no higher no matter what the economic circumstances)
4 Is there a prepayment penalty for refinancing and if so, how much
5 You also want to consider how long you're planning to live in your home. If you're thinking of moving within a couple of years, for example, then the closing costs for a refi may not be worth the small savings you'll get in interest rate reduction. (Incidentally, one way to save yourself on these costs up front is to roll them in to your refi - in other words).

As with getting any mortgage, getting a refi involves the same preparation, including calculating the costs involved and knowing your credit before you apply.

The peace of mind that often comes from home ownership can easily be thwarted by fears of rising interest rates. To protect yourself, and reclaim the peace of mind that should be yours, and could be again, consider whether now may be the right time to try to refinance that adjustable rate mortgage into a fixed rate mortgage. A fixed rate is a rate you can rely on, and it may just help you sleep better at night in that home you own.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

How Conventional Loans Work

How Conventional Loans Work
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"

A conventional loan is essentially any type of lender agreement that is not fully protected by the FHA (the Federal Housing Administration) or fully backed by the Veterans Administration furthermore Potential homebuyers who have at least 3% of the purchase price available to make as a down payment, may be eligible for this most popular type of loan program.

Fixed Rate Loans: Several categories of conventional loans exist, the most common and familiar being the fixed rate mortgage. In the cases of fixed rate mortgages, the borrower will lock in an interest rate, and pay down both the principal and interest on the loan at that interest rate every month until the mortgage is paid off. The most typical term of a fixed rate loan is 30 years, though fixed rate mortgages can also be obtained for much shorter terms, the primary difference being in the size of the monthly mortgage payment.

Conforming Loans: Other conventional loans are known as conforming loans. In these cases, an arrangement is made between borrower and lender that comply with the stipulations of two federally run mortgage trading companies (or Government Sponsored Entities - GSEs) Fannie Mae (FNME) and or Freddie Mac (FHLMC).

Fannie Mae and Freddie Mac do not directly approve or deny loans. They buy and sell home mortgages, working with lenders to make home ownership easier for people to attain. Lenders like to sign up borrowers with conforming loan, because they can then sell these loans to Fannie May or Freddie Mac in order to more quickly receive the funds coming to them, and use those funds to make other investments. Fannie Mae and Freddie Mac, in turn, then repackage these loans to sell to investors as securities.

The current guidelines for a conventional Fannie Mae loan set a maximum purchase price for a single-family home at slightly above $415,000 (though residents of Alaska, Hawaii, or Guam may be able to qualify for an even larger loan).

The interest rate as well as the short- and long-term pricing on a conforming loan is determined primarily by the type of loan applied for. Also taken into consideration will be the amount of funds you already have to contribute to closing costs, your credit rating, credit score, and credit history, your employment history, and the type and location of the home in question.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

How Much Mortgage Can I Afford?

How Much Mortgage Can I Afford?
by Somerset Mortgage Lenders

To establish how much mortgage you can realistically afford, you can use one of two main formulas - called “Qualifying Ratios”. Qualifying ratios examine a person’s income and expenses in order to estimate how much money can reasonably be spent on monthly mortgage payments.
Buying the Home: Down Payment and Closing Costs This is the first and most obvious factor most people consider in buying a home. How much of a down payment can I afford? And how much can I spend on closing costs?

The down payment is usually between 3% and 20% with most conventional loans preferring down payments within the 10-20% range. Low-to-moderate income households, however, can find programs enabling them to purchase homes with as little as 3-5% down.

Closing costs are fees for various items that must be handled through your lawyer in order for the deal to legally go through. These include: origination fees, title insurance, attorney fees, recording and transfer fees, and pre-pays.

Keeping the Home: Monthly Housing Expenses Taken into account when determining monthly housing expenses are, Mortgage principal, Mortgage interest; Taxes ; Insurance. This is commonly written as “PITI” for “Principal, Interest, Taxes, Insurance”

In the case of conventional loans, your monthly housing expenses should fall below 26-28% of your gross monthly income. For FHA mortgages, the qualifying ratio is 29%. If you carry any long term debt (that‘s expenses extending 11 months into the future or more), then the ratios change slightly. Conventional loans allow maximum monthly housing expenses and long-term debt combined of 33-36% of gross monthly income.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

How to Apply for a Mortgage

How to Apply for a Mortgage
by Somerset Mortgage Lenders

Once you select a lender and a mortgage suitable to your needs and abilities, it’s time to officially apply for that mortgage. Submitting an application for a mortgage can seem intimidating at first, but it need not be difficult.

Before sitting down to fill out a mortgage application, be sure you have the following information handy:

1 Your income, past and present
2 A list of your assets
3 A tally of your regular expenses and existing financial obligations
4 An accounting of your employment history

Mortgage applicants will also need to provide the following records or documents:

1 The past two year’s W-2s
2 Pay stubs for the month leading up to submitting the application
3 Statements from all the applicant’s bank accounts - checking, savings, retirement, investments
4 Proof of current outstanding debts that show both the current balance and minimum monthly payment on each (i.e. credit cards, car loans, student loans, other home mortgages, child support, alimony, etc.)

If you are self-employed or you own a quarter share or more in a business, you will also be asked to provide copies of your federal income tax returns.

The preceding is not the only information a lender may require of you, but it is a partial listing of the information that any and all lenders will most assuredly require.

After you’ve submitted your application, the lender will order a property appraisal (paid for by you), and will have your credit checked. Oftentimes, a potential borrower might choose to have the property appraised independently before submitting an application, just to make sure that the property value merits the offer made. Potential borrowers may also check their own credit first before applying for a mortgage so that they may take the initiative to fix or correct any negative items remaining on their credit report before the potential lender takes a look at it.

The 3 major credit reporting agencies - Experian, Equifax, and TransUnion - Now allow all consumers to receive a free copy of each of their credit reports once per year.

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783

Reasons to Refinance Now

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

Reasons to Refinance Now
by Somerset Mortgage Lenders

To refinance is to pay off an existing mortgage with funds obtained from a new mortgage loan. There are numerous great reasons to refinance your mortgage, among them the following:

Lower Interest Rates: A prime time for many people to choose

Fix That Rate: If you currently have an adjustable rate mortgage, you may seriously want to consider refinancing to a fixed rate mortgage. Adjustable rate mortgages are far riskier to the borrow than fixed rate mortgages. The payments are unstable with a tendency to increase dramatically over time, making budgeting your monthly housing payments increasingly difficult.

Build Equity Faster: Buy refinancing to a loan with a shorter loan term, you pay off your loan faster and therefore build up equity in your home faster, equity that you can then use to make improvements to your home, pay for a big purchase or an emergency, or obtain additional credit. Borrowing against home equity through a refinance mortgage usually comes with a lower interest rate than other forms of credit, such as consumer loans and credit cards.

Own Your Home Free-and-Clear: It’s a phrase every homeowner covets, when they can finally be done paying off the money they borrowed to buy their home and own it outright. Refinancing is an excellent way to own your home free-and-clear sooner than you ever could have otherwise. One way to accomplish this is by reducing the loan term, or the amount of time you have to pay off the loan. A shorter loan term generally involves larger payments, but if you can afford to make them, it could be a wise and rewarding decision to refinance your current mortgage to one with a shorter loan term.

Get Cash in Hand: If you already have equity built up in your home, then you can refinance for a larger amount than you currently owe and take that additional amount out in cash. This is also known as a cash-out refinance.

Consolidate Debt: As home mortgages generally carry far lower interest rates than other forms of debt (ie. credit cards, car loans, or student loans), many people choose to refinance their home loans

get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783

Factors That Affect Your Interest Rate

SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more

Factors That Affect Your Interest Rate
by Somerset Mortgage Lenders

Numerous factors come into play when determining the interest rate you’ll pay on a home loan.

Downpayment
The higher the percentage of the purchase price that you can afford to make as a down payment, the lower the interest rate you’re looking at. Paying 15% or 20% down can save you thousands of dollars over the life of the loan over paying 10% down. Pay a little more now or a lot more later - the choice is yours.

Closing Costs
Along those same lines, the more of your closing costs you’re willing to pay for, the lower the interest rate you’re given. The lender must pay numerous fees to close a loan, and the less of these fees you’re willing to pay instead of them, the more they’re going to demand of you in interest.

Loan Term
The monthly payments on a shorter term loan are generally higher than those of longer term loans, however one of the best ways to save money overall on the costs of buying a home is to strive for as short a loan term as possible. If you can afford the higher monthly payments on a 20-year loan, for example, you’ll save thousands of dollars in interest in the long run over the same loan with a 30-year term.

Your Personal Qualifications
Your credit rating and income level are enormous factors considered in determining the interest rate offered to you on a home loan. The more you can prove that you earn and the better your credit (and higher your credit score), the lower the interest rate you can get.

The Federal Government
Because of loan limits that have been established by Freddie Mac and Fannie Mae at each year’s start, your loan amount itself could affect your interest rate. If the loan amount you’re seeking exceeds the current conforming limits established on home loans this year, then your interest rate could increase.

get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783

How Reverse Mortgages Work

Reverse mortgages were created in order to help ease the financial burden on aging seniors. A reverse mortgage is a type of financial instrument that permits home owners over the age of 62 to gain access to the money they have accumulated as home equity.

How a reverse mortgage works is that the lender makes payments to the borrower, rather than the other way around. The amount paid out is based on a percent of the equity remaining in the home (that’s the full property value minus the amount still owed).

Seniors can use money from a reverse mortgage to fund:
* retirement;
* medical costs;
* a new car;
* home repairs;
* renovations;
* estate planning;
* a grandchild’s education;
* travel and leisure;

In order to get a reverse mortgage your current mortgage does not need to be completely paid off. The amount you can receive in a reverse mortgage is based on the equity in your home. As a mandatory part of the reverse mortgage process, however, your existing mortgages will be paid off. Some people simply use a reverse mortgage to get out of having to pay monthly mortgage payments, the money they receive just being a bonus.

When you receive a reverse mortgage, your home remains in your name, and your retain total control of the property. It is also still your responsibility to maintain the house and property and pay all taxes and insurance as usual. No reverse mortgage lender can take your home away from you so long as you keep that home as your primary residence.