qualifying for a mortgage

Why Are Appraisals Important?

                When you get qualified for a mortgage, you get approved for your unique situation: your income, your debt, and your credit. Also, lenders check that the property is a good fit for you, which is done through an appraisal. Who Does the Appraisal? When an appraisal is done, an unknown, third-party, qualified professional is brought in to examine the property. The buyer and lender do not have the ability to choose the appraiser. This person will go to the property and look at the amenities of the property, and then compare that to all the properties that have sold in the area to determine a fair market value for your home. Is the Appraised Value Acceptable? A lender will look at the appraised value of the home, and compare that value to your contract price, whether you have bought the home or…

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Who Can Qualify for a VA Loan?

                        VA loans, or loans through the Veteran’s Administration, are special loan programs for veterans that require qualification. If you are looking at VA loans, you have probably heard of some of the great benefits: you can buy a home with no money down, you do not need monthly mortgage insurance (rather, there is just need a one-time funding fee built into the loan), and you get a competitive interest rate with low closing costs. It is probably one of the best loans out there and was designed for those who have served our country. Do You Qualify? If you have been in the Armed Forces, such as the Army, Navy, Air Force, Coast Guard, Marines, National Guard, or their reserves, you could be eligible. The VA loan program is inclusive of both active duty and qualified veterans. If…

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What Questions Should You Ask Your Lender When Applying for a Loan?

                  When shopping for renovation loans and FHA 203k renovation loans, what questions should you ask your lender to be sure they are qualified and ensure a smooth process? Renovation loans are popular because they are flexible: you can take a property in need of a lot of work, and turn it into a good-as-new home, or find a home needing minor updates and make it the way you want. Checking Lender Experience While many lenders say they do renovation loans, it is important to find out how many they’ve actually done. One of the most important things to determine is the amount of experience your lender has with renovation loans. Renovation loans are different than traditional mortgages. Not only does the borrower need to be approved, but contractors doing the renovations need to be involved as well. Everything that needs to…

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Making Income Changes While in the Process of Obtaining a Mortgage

                  What happens if you have to change jobs while you are in the middle of getting a mortgage? Lenders typically recommend that you do not make major changes if you are in the middle of trying to get a mortgage, because lenders look for continuity, and will have to re-verify information if major changes are made. However, many folks do not have a choice: sometimes a new opportunity comes up, or are forced to change jobs. The good news is that lenders can work with you, and use the new information (income, salary, etc.) from your new position for your qualifying. This process can be started with just an offer letter, so the terms (salary, start date, etc.) are known to get the process started. Typically, at least one pay stub will be required before closing to show that you have…

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What Mortgage Programs Are Available to Veterans?

If you’re a veteran or a disabled veteran, what special programs for buying a home are available to you? If you served your country, you can take advantage of the Veterans Administration Loan Program that allows you to get 0% down on a home loan. In addition, there are other benefits with a VA loan, which will be described below. Funding Fee When setting up a Veterans Administration loan, a funding fee is attached to the mortgage. VA loans do not require mortgage insurance, as with typical mortgages when you put less than 20% down. However, there is a one-time funding fee that is added back into the mortgage. The amount of the funding fee depends on whether you were active duty, or served in the National Guard. However, if you are a considered a disabled veteran, this funding fee is waived and can save you money up front. Real…

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Learn About the Illinois Assist Program

                  For first time home buyers, there is a great new program called the Illinois Assist Program. This program is great news for first-time buyers and is a grant that does not have to be paid back, which gives money back at closing towards your down payment and closing costs. If you qualify, you can get up to 5% of the loan amount back, which can be a huge amount. Qualifications for the Illinois Assist Program There are some strings attached – it is not available everywhere in Illinois, but is in a number of areas in the Chicago area: including Cook County, Kendall County, and a number of cities such as Naperville, Schaumburg, and Aurora. There are income caps for the buyer, but they are still relatively high so there is room for you to buy, and there is a cap…

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How Can a 203k Renovation Loan Save You Money?

                  If you’re looking into buying a home in the Chicago area, a 203k renovation loan can end up helping you save money. If you’re looking to buy with an FHA 203k loan, it will allow you to buy a home, and add in some improvements at the same time. While it costs a bit more to buy with a 203k loan than a traditional mortgage, you can still save a lot of money if you know what you’re doing. When a Renovation Loan is Appropriate It comes down to your plans for the home after you buy. Many folks think that a renovation loan is only for buying a run-down property or a foreclosure, and homes that haven’t been cared for very well. However, there are many homes in good condition that are simply out of style, such as homes occupied…

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Down Payment: Where Are The Funds Coming From?

                  One of the issues we see arise during the loan process happen while verifying down payment.  Down payment funds may come from several sources, and all of them have their own unique documentation requirements.  If the underwriter is unable to easily see where the money came from it can cause a huge headache for everybody, including you. Luckily, there are things you can do to help ensure that this part of the process is as smooth as possible.  When reviewing the bank/investment account from which the Down Payment will be coming from, the underwriter is looking over the most current 60 days in the transaction history.  Any deposits into the account, besides payroll direct deposits, will need to be explained. This makes the easiest way to avoid frustration is to have your down payment funds already in a separate account with…

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Renovation Loans: Pre-Approval Process

  Today we will talk about getting pre-approved, or pre-qualified for a renovation loan. Whether you’re consciously deciding whether to buy a home that needs renovation, it makes sense to select a lender that specializes in renovation loans. Buyers often will find a home that is in the right location and looks great but needs some work, or may not be approved without doing some work to the home. In other cases, buyers will often get a home appraisal that reveals work needs to be done to the home, and they will not be approved unless that work is done. Catch 22 Sometimes buyers are not aware of work needing to be done to a home until an appraisal is done, in which case they may need extra cash for repairs and will not be approved for their loan without doing some work being done to the home. If buyers do…

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Chicago Video Home Buyers Guide – How We Look at Income When Qualifying For a Mortgage

Which mortgage is best for me – Chicago Video Series In this installment of the Chicago Video Home Buyers Guide, we talk about income qualifying, and how your income is looked at when you apply for a mortgage. This is one of the major factors of qualifying for a loan, and for how much of a mortgage you can afford. Part of this Chicago Video Home Buyers Guide- How do we look at your income when qualifying for a mortgage? comes down to income stability, or how likely is your income to continue and how reliably can we predict what you will earn in the future. The other part of this is affordability, or how you can fit the new mortgage into your budget. For this we look at ratios, or comparisons of how much of your gross income will be taken up by the mortgage, and how much of…

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