Mortgage After a Bankruptcy?

 According to the Federal Housing Administration, "A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA mortgage provided the lender documents that one year of the payout period under the bankruptcy has elapsed and the borrower's payment performance has been satisfactory (i.e., all required payments made on time). In addition, the borrower must receive permission from the court to enter into the mortgage transaction." So, as long as you filed for bankruptcy more than 1 year ago, and within that time you have made all required payments under your bankruptcy settlement, you will likely be eligible for an FHA mortgage.

Additionally, the federal government has a program which may be available for homeowners who are in the middle of a bankruptcy: the Home Affordable Modification Program (or, HAMP). HAMP-modifications to mortgage loans can take place during an active Chapter 13 bankruptcy case, and require that you and your bankruptcy attorney submit a HAMP-modification require to the mortgage lender or servicer.

Traditionally, conventional mortgage lenders will often require a period of 2 years to have passed since the discharge of a bankruptcy, or 4 years since the dismissal of a bankruptcy. However, once that period of time has elapsed, you will likely be able to obtain a mortgage without many roadblocks, assuming that your credit score and any down payment are sufficient – just the same as any prospective borrower.

Although a bankruptcy, whatever the reason, will likely put you on a slower path to home ownership, there is no reason why you cannot recover from a bankruptcy and move forward with your plans to own a home. Today, lenders understand that people can get in over their heads financially, many times for reasons outside of their control. Given a bit of time, and proof that you are on the road to financial recovery, you’ll find that there are many lenders willing to give prospective borrowers with a bankruptcy on their record a mortgage at competitive interest rates

6 Easy Ways to Mess Up a Home Purchase

If you’ve never purchased a home before, you might not know how easy it is to mess up a home purchase.  There are many factors that first time home buyers especially fail to remember when looking for a home for various financial and emotional reasons.  Here are the seven ways you can easily mess up your first home purchase:

Be Emotional.

One of the biggest mistakes first time home buyers make is to get emotional about the house they are purchasing.  The reason why this can be bad is it often leads to home purchases that are out of the buyer’s price range.  Figure out what features you love about that house, and look for those features in another house that’s in your price range.

Buy a Home that Needs Improvements.

Right now, it’s a buyer’s market, meaning there are a plethora of homes that are available.  Don’t get stuck with a home that needs major improvements, because you will be able to find another home that is perfectly suitable.  Repairs will cost you a lot of money, which will lead to you having a decreased savings.

Forego the Home Inspection.

You already saw the home and you think it looks great, so you decide to forego the home inspection so you can move in sooner.  Good decision, right?  Wrong.  You need to have a professional assess the state of the home and tell you whether or not any repairs will be needed now or in the immediate future.

Forget about Maintenance Costs.

Remember to factor in maintenance costs when you are planning your home budget.  You should plan to spend a few thousand dollars every year you own your home on routine maintenance.

Forget about Property Taxes.

Many first time home buyers forget to factor in property taxes, which can be extremely high in certain areas that have a higher cost of living.  Ask your lender what property taxes you’ll owe on your home before you sign any contract.  If you don’t, you could find your savings dwindling quickly.

Spending Too Much Money.

This is a no-brainer.  Don’t spend too much money on your first home.  You need to remember that you’ll most likely be making these payments for 30 years, and you’ll still need to save for other expenses such as college, medical bills, and retirement.  Buy a home within your price range, and you’ll be much happier in the long run.

Top 5 Tips for First-Time Homebuyers

Buying your first home should be an exciting time – but it can also be a stressful time, especially if you are not prepared to purchase a home when you find one that you love and want to put an offer in on. In order to try to make the home buying process as smooth and stress-free as possible, we’ve compiled a list of Top 5 Tips for First-Time Homebuyers:

1.  Determine what you can comfortably afford.

Mortgage lenders will determine how much they are willing to lend to you, based on your income, your assets and liabilities and your credit score. However, they may not take into account monthly expenses you have that don’t report to your credit bureau, such as daycare or private school tuition, and they don’t take into account savings goals you may have each month. Therefore, it’s important for you to figure out how much you are comfortable paying each month, taking into account all of your expenses and any planned savings or retirement goals.

2.  Determine how much you have to use as a down payment, and where that money will come from.

How much will you put down, and where will your down payment be coming from? If a parent or other family member will be gifting you some or all of your down payment, they may be required to sign a form stating that the money they are giving is a gift, and not a loan, so you’ll want to know ahead of time so you can inform your lender and find out what their requirements are for gifted money.

3.  Is your credit ready for a home purchase? Can you work on your credit?

Borrowers with higher credit scores, generally 720 and above, will have the easiest time working with lenders. If your credit score could use a little work, talk to your lender. They may have suggestions on how to clean up your credit, or ways to boost your credit score before you apply for a mortgage loan.

4.  Determine your wants vs. needs in a home.

This one is a fun one. Going into the home buying process with some parameters will make it easier for you, and your real estate agent, to find you your perfect home. Are you only interested in certain neighborhoods? Do you need 2, 3 or more bedrooms? What about lot size, square footage? Determining a few “needs” as well as a few “wants” will narrow the scope of homes you look at to only those that will truly interest you and be the right fit for you and your family.

5.  Look, look, look – and get pre-approved so you are ready to move!

The more homes you see, the more you’ll be able to narrow down exactly what works, and doesn’t work, for you and your family. Don’t be afraid to go to open houses, or to ask to see homes that are for sale. Getting pre-approved for a home loan by a lender is also another quasi-requirement of home buying these days. Many sellers will not accept offers on their homes where the prospective buyer hasn’t already been pre-approved for the mortgage, so it’s in your best interest to know you’ll be approved for a home loan before looking for the home of your dreams

THE FED’S NEW RATE INCREASE – WHAT DOES IT MEAN FOR HOMEBUYERS?

 

This month the federal government, via the Federal Reserve, increased its benchmark interest rate for the first time in nearly a decade. After years of historically low mortgage loan interest rates, what does this rate increase mean for future homebuyers? The good news is that this increase may not mean that you’ll see mortgage loan interest rates go up immediately – and certainly not at rates that correspond directly with the federal increase.

This interest rate hike was widely expected – both in terms of its timing and its amount. As with any market change, there will be some initial volatility as people react to the change and start to prepare for the future. However, because mortgage interest rates have been so low for so long, many people are likely to want to purchase quickly, in order to seal in the lower rates before they have a chance to rise.

John Wake from Real Estate Decoded explains that “the real estate economy is more sensitive to interest rates than most of the economy.” Because of this sensitivity, he explains, the expectations of higher interest rates can have a bigger impact on the real estate market than on other financial sectors.

Many financial experts see more of a tie between mortgage rates and the 10-year Treasury yield, rather than between mortgage rates and the Federal Reserve benchmark rate. Still, it is likely that some prospective homebuyers who were previously on the fence about purchasing may feel the push to go forward and close on a new home.

For the market, this could result in higher average home prices next year compared to last and demand increases, at least in the short term. For most people, their home will be the largest financial purchase they make, and so understandably, people want to shop around for the absolute lower interest rates and best terms that they can find.

No matter what happens to the average mortgage interest rate over the next year, you can take steps today to get yourself ready to qualify for the best mortgage rates available on the market. If you are not sure what your credit score is or what your credit report reflects, take advantage of your yearly right to request one free copy of your credit report. Review it to make sure that there are no errors on your report which could impact your ability to qualify for a mortgage. You can also work on building a down payment, unless you plan to utilize a low or no down payment options, like those available through FHA and VA loan options.

prices next year compared to last and demand increases, at least in the short term. For most people, their home will be the largest financial purchase they make, and so understandably, people want to shop around for the absolute lower interest rates and best terms that they can find.

No matter what happens to the average mortgage interest rate over the next year, you can take steps today to get yourself ready to qualify for the best mortgage rates available on the market. If you are not sure what your credit score is or what your credit report reflects, take advantage of your yearly right to request one free copy of your credit report. Review it to make sure that there are no errors on your report which could impact your ability to qualify for a mortgage. You can also work on building a down payment, unless you plan to utilize a low or no down payment options, like those available through FHA and VA loan options.

Finding the Wright Way to Buy a Home

As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.
Get pre-approved. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Choose Wright Mortgage. Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Wright Mortgage is a locally owned and operated mortgage company. We know that each customer has specific needs, so we strive to meet those needs with a wide array of services. Wright Mortgage is fair, transparent, reputable, and a responsible mortgage broker who helps you with the mortgage process.
Do your homework before bidding. Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.

5 Wright Ways To Buy A Home

Looking to buy a home? Here are five essential tips for making the process as smooth as possible.

Get your finances in order.

Call Wright Mortgage! Start by getting a full picture of your credit. Obtain copies of your credit report. Make sure the facts are correct, and fix any problems you find. Next, find a suitable lender and get pre-approved for a loan. This will put you in a better position to make a serious offer when you do find the right house.

Find a house you can afford.

As with engagement rings, there’s a general rule of thumb when it comes to buying a home: two-and-a-half times your annual salary. There are also a number of tools and calculators online that can help you understand how your income, debt, and expenses affect what you can afford. Don’t forget, too, that there are lots of considerations beyond the sticker price, including property taxes, energy costs, etc.

Hire a professional.

While the Internet gives buyers unprecedented access to home listings and resources, many aspects of the buying process require a level of expertise you can’t pick up from surfing the web. That’s why you’re better off using a professional agent than going it alone. If possible, recruit an exclusive buyer agent, who will have your interests at heart and can help you with strategies during the bidding process.

Do your homework.

Before making a bid, do some research to determine the state of the market at large. Is it more favorable for sellers or buyers? Next, look at sales trends of similar homes in the area or neighborhood. Look at prices for the last few months. Come up with an asking price that’s competitive, but also realistic. Otherwise, you may end up ticking off your seller.

Think long term.

Obviously, you shouldn’t buy unless you’re sure you’ll be staying put for at least a few years. Beyond that, you should buy in a neighborhood with good schools. Whether you have children or not, this will have an impact on your new home’s resale value down the line. When it comes to the house itself, you should hire your own home inspector, who can point out potential problems that could require costly repairs in the future.

How Long Does it Take To Get Approved For a Mortgage?

Congratulations, you're about to buy your first home!  The big question remains, though: how long does it take to get approved for a mortgage?  Here are some ways you can determine that:

Shopping For Loans: 14 Days

Before you commit to a mortgage, you are going to need to do a significant amount of research to determine what type of loan you want and ensure you're receiving the best deal possible.  To do this, start by looking at price quotes online for different factors (higher/lower down payment, variable time-length) and determine which is the best option for you.
After you do this, you will want to schedule meetings with several lenders in your area to confirm their lowest available rates.  You are able to pull your credit score several times within a two-week period without having it affect your credit score, so don't worry about that.

Get Pre-Qualified: 3 Days

Once you've decided on a lender, it's time to get pre-qualified!  The lender will look into your financial situation and give you their best estimate of how much of a home you can afford.  This process can take anywhere from one to three days, depending on how much paperwork you have to process.

Get Pre-Approved: 7 Days to 60 Days

Getting a pre-approval is one step further than a pre-qualification, because your lender needs to verify all of the financial information you gave them in order to become pre-qualified.  This process can drastically vary in length depending on if you're self-employed, have other investment properties, have gone through a divorce or filed for bankruptcy, etc.

Loan Approval: 4 Days to 21 Days

Once you have a pre-approval letter, you are now officially allowed to make an offer on a home!  Once you have done this, your lender will need to do an appraisal of the home.  This is done to make sure that you're purchasing the home at market value in order to protect both you and the lender.  The appraisal scheduling process could take up to two weeks, and the approval will follow within a few days.
Once you've been approved, you're in the clear!  As you can see, there are a lot of variable factors that affect how quickly you're approved for a loan.  In order to expedite the process, you'll want to have your files and documents well-organized and ready for the loan approval process.