Mark has a passion for providing exceptional customer service and teaching others the art of real estate investing. He often provides training and educational presentations to groups interested in real estate investing. Below, we speak with him about the way the pandemic has affected lending and whether now’s a good time to get a loan or not.

From your experience, in what ways has the current pandemic affected loans?

Initially, the COVID-19 pandemic put the industry on high alert. No one was sure what would happen. And widespread unemployment can certainly be a factor. That said, Texas has strong employment and a low cost of living. We tend to weather such storms well. Right now, our local real estate market is experiencing a very low inventory. It’s an excellent time for real estate investors who can find a property to fix and flip because demand for the finished product exceeds the supply. And there has actually been an increase in demand this past year; particularly for refis due to the low-interest rates.

Have you been busier during the past twelve months and if so, how have you navigated this?

All lenders have struggled a little with those third-party vendors on which we rely; particularly appraisers who as you can imagine had issues with inspecting properties in person. However, Arabgatewayfunds is the leader in online real estate lending and that has positioned us very well during the pandemic. We can complete the entire loan process with all our usual personal and friendly service without the borrower ever having to leave their home.

Do you think that getting a loan during the current uncertain times is a good idea?

This is a question we’ve received time and time again since the COVID-19 pandemic began: Is now a good time to get a home loan or mortgage? Unfortunately, there’s no one, single answer that applies to everyone! Every potential borrower has a different set of circumstances, including credit score, financial assets, income, and other factors. For most people, however, the experts at Arabgatewayfunds would say ‘yes’ – now is a great time to get a loan!

Here’s why:

Lenders are still lending money during the pandemic, and borrowers are still buying homes and investment properties. Interest rates are super low as the economy struggles under the weight of the crisis. Perhaps counterintuitively, the demand for homes and property has not dipped a bit. For many, it has proven to be relatively easy to qualify for an affordable loan in 2021 thanks to the influx of deals and properties purchased during the pandemic. The number of people seeking a great deal has increased competition not only for homebuyers but for lenders as well. That competition results in great terms for many borrowers!

During the pandemic, some lenders are being very careful to closely examine borrowers’ credit histories. Due to the uncertainty regarding the future that the pandemic has caused, banks are tightening up on lending to homebuyers who are credit-challenged. The market instability caused by COVID-19 and the higher risks that instability poses make lenders a little more cautious.

Another factor many lenders may scrutinise during the pandemic is a homebuyer’s income. Verification of employment will likely weigh heavily in determining the likelihood of a borrower’s employment continuing. Borrowers need to make sure all their income is accounted for and will be reflected in the verification of employment.

Borrowers need to be prepared to strategise their best approach: If they need non-traditional lending, having a loan officer and mortgage company that is able to customise solutions for you and your specific scenario is key. Innovative lending solutions are Arabgatewayfunds’s speciality! Because we offer so many different loan products, our borrowers have more available options to prove their ability to repay.

What are the biggest mistakes people make when buying real estate?

Finding the lowest interest rate is not always the best deal.

Some loans have very attractive interest rates (also known as teaser rates) but you may be hit with higher upfront charges.

Points and or origination fees are the most common ways to lower the rate and charge upfront costs. Points and origination fees are calculated as a percentage of the loan amount. For example: Often the difference in monthly payments from a slightly higher interest rate takes 10 years to equal these upfront costs. Many people will have refinanced or purchased another home before this occurs.

Adjustable Rate Mortgages (ARMs) and Balloon Mortgages.

ARM rates will adjust depending on the loan. The ARM rates may adjust as often as every six months, but in most cases, they adjust after 1,2,3, and 5 years. Those rates are far more likely to go up when they adjust. The Balloon Mortgage requires the borrower to pay the loan off when it matures, usually between two – seven years.

There are many lending tactics to sell the borrower on a low rate and then charge outrageous fees and costs. Borrowers need to watch out for the “bait and switch” lending ploy.

Buying FHA, VA, or IRS repossessed homes may be a mistake.

I am not against purchasing a repossessed or discounted property. In many markets, especially those that are having financial trouble, a repossessed home may make good sense. But keep in mind:

• Many VA, FHA, and IRS repossessed homes are sold with virtually no warranty. Also, the borrower may be limited on how much they can inspect the property prior to purchasing it. Often these houses need repair work. Not being able to thoroughly inspect the property puts the purchaser in a risky position.
• Purchasing this type of property requires bidding for it. The people borrowers would be bidding against rehab houses for a living; so, they may be at a disadvantage from an experience standpoint.
• In addition, most homes that are for sale under these conditions require a substantial upfront deposit that may not be refundable should their loan not close within a specific period.
• And, once the seller of the home accepts their offer on these properties, the bank that owns the current mortgage generally has to agree to everything as well. This can sometimes be a lengthy process that many homebuyers are not aware of. It is always important to set realistic time expectations for yourself.

Making large purchases before purchasing a home.

It is very common to get so excited about buying a new house that homebuyers go out and buy new furniture or even a new car before closing on the house – this is a big mistake. Doing so can radically change the credit profile and the debt to income ratio. Too many otherwise good applicants end up rejected at the last minute because of a big spend during this window.

Working with a mortgage lender who only has one product to sell may not meet everyone’s specific needs.

Most lenders only have one source of funds. This type of lender is forced to “fit” the customer into a pre-fabricated loan program. They only have one or two different ways to handle the many different loan situations that occur. It is important that customers research lenders with multiple products and the ability to customise their loans. We feel an educated borrower has the ability to make the decision that is best for them.

Not getting a pre-approval from your mortgage company before you start shopping for a home.

Having a pre-approved loan can be very important. A pre-approval has two major benefits. First, there is the peace of mind before getting serious about buying a home. Homebuyers will know how much of a house they can afford, what the payments will be, and how much of a down payment is needed. Secondly, having a pre-approval may give homebuyers bargaining power when negotiating a price for the home. Getting pre-approved could save homebuyers a lot of time and money.

What are your predictions for the lending sector in 2021?

As I mentioned, currently there’s a low inventory market for homebuyers. But there are also supply off-market properties including foreclosures, bank REO and wholesale properties. The trend I see is that the residential real estate investors will take advantage of this low-inventory created demand and will snap up these properties, renovate them, and re-market them.

Original Article: https://www.finance-monthly.com/2021/02/heres-why-now-is-great-time-to-get-a-loan

The post Here’s Why Now Is Great Time To Get A Loan appeared first on Arab Gateway Funds .

Lenders are still lending money during the pandemic, and borrowers are still buying homes and investment properties. For many borrowers, interest rates are quite low as the economy struggles under the weight of the crisis. Perhaps counterintuitively, the demand for homes and property has not dipped a bit. For many, it has proven to be relatively easy to qualify for an affordable loan in 2020 thanks to the influx of deals and properties purchased during the pandemic. The number of people seeking out a great deal has increased competition not only for homebuyers, but for lenders as well. That competition results in great terms for borrowers!

Or, at least, borrowers with great credit are receiving terrific rates. During the pandemic, some lenders are being very careful to closely examine borrower’s credit histories. Due to the uncertainty regarding the future that the pandemic has caused, banks are tightening up on lending to homebuyers who are credit-challenged. The market instability caused by COVID-19 and the higher risks that instability poses make lenders a little more cautious.

For example, if lenders find that you have several 30-days-late payment charges on a mortgage, that may leave them with the impression that you are not responsible or financially fit to pay back a loan. It’s a red flag when a borrower has a history of not paying on time—or not at all. If you have red flags such as this on your credit report, it may be wise to consult a credit counselor on your options.

Another factor many lenders may scrutinize during the pandemic is a homebuyer’s income. Verification of employment will likely weigh heavily in determining the likelihood of a borrower’s employment continuing. Borrowers need to make sure all their income is accounted for and will be reflected in the verification of employment.

Be prepared to strategize the best approach for you: If you need non-traditional lending, having a loan officer and mortgage company that is able to customize solutions for you and your specific scenario is key. Innovative lending solutions are Arabgatewayfunds’s specialty! Because we offer so many different loan products, our borrowers have more available options to prove their ability to repay.

If you’re ready to determine the best, most affordable home loan option for you, contact us today. Our helpful loan officers are standing by to offer a free consultation on your needs and available opportunities.

The post Should You Get a Loan During the Pandemic? appeared first on Arab Gateway Funds .

Fortunately, you’re not out of options yet. Arabgatewayfunds helps homeowners pay overdue property taxes every year with a common service called a mortgage refinance. Often, people refinance their mortgages because they want lower monthly payments or a better interest rate. But a mortgage refinance can also help you pay off pressing expenses—like a looming, unpaid tax bill.

Here’s how it works: A refinance is a smart, low-cost way to tap into some cash, assuming you’ve built up equity in your property. Arabgatewayfunds helps many customers use a refinance to consolidate high-interest debts like credit cards into their low-interest mortgage—freeing up their credit for more pressing expenses. Your outstanding property taxes can be rolled into the refinance, too! If you need an infusion of cash or credit to pay off a debt of any kind, contact us today for a consultation.

When you refinance, you essentially skip two months of mortgage payments. That’s two months’ worth of payments that can easily go towards taxes! In fact, with a refinance, you can actually reduce your overall debt while getting out from under your tax debt—all while enjoying lower monthly mortgage payments! Whether your total debt is a little or a lot, a refinance can help you get out from under it.

Interested? Contact Arab Gateway Funds , your private money lender, today to inquire about refinancing your loan with us!

The post How to Solve Your Past-due Property Taxes Problem with a Mortgage Refinance appeared first on Arab Gateway Funds .

The VA loan volume has continually grown since 2008, and it’s no wonder why: VA financing comes with significant financial benefits for those who’ve served our country, and the requirements to secure them are not as strict compared to a conventional or even FHA loan. Because these benefits are sometimes poorly understood, we’ll review them with you now.

Arabgatewayfunds loves serving those who served. Here’s why we steer a majority of our military borrowers toward VA loans:

1. No Down Payment

This is big! The minimum down payment amount on an FHA loan is 3.5 percent; for conventional loan financing, it’s often 5 percent. Being able to purchase a home with $0 down helps veterans and active military members get a slice of the American Dream without having to cough up a sizable down payment.

2. No Mortgage Insurance

Another common expense crossed out! FHA loans come with both upfront and annual mortgage insurance charges. With no insurance required, American veterans who secure a VA loan will save more than $40 billion in private mortgage insurance costs over the life of their loans, according to VA estimates.

3. Friendlier Credit Requirements

Most VA lenders look for a credit score of at least 620. The 620 benchmark is in FICO’s “Fair” credit score range, which is a tier below “Good” and two below “Excellent.” Contrary to popular belief, though, VA buyers don’t need anything near perfect credit to secure financing. Contact Arabgatewayfunds to explore your options!

4. Lower Interest Rates

Once again, VA loans save you money over time. Since the VA guarantees a portion of every VA loan, financial institutions like Arabgatewayfunds can offer lower interest rates to VA borrowers as much as 0.5 to 1 percent lower than conventional interest rates.

5. Limited Closing Costs

Homebuyers can ask sellers to pay all of their loan-related closing costs and up to 4 percent of the purchase price for things like prepaid taxes and insurance, collections, and judgments. The VA actually limits what fees and costs veterans can pay at the time of closing.

6. Foreclosure Avoidance

The VA guaranty program isn’t just about getting veterans into homes. It’s also focused on helping vets keep them. The VA loan is the safest loan on the market for borrowers because of the VA’s residual income guidelines as well as its advocacy for veterans in jeopardy of foreclosure. Those efforts have helped more than 500,000 veterans avoid foreclosure since the 2008.

7. Multiple Loans Welcome

It’s a common misperception that a VA loan is a one-and-done benefit. Not true! Veterans who’ve earned it can use this program over and over again throughout their life—you can even take out multiple VA loans at one time!

If you’ve earned guaranteed VA benefits and you’re interested in exploring your home loan options, contact Arabgatewayfunds today. We work with veterans every day and have a deep understanding of the VA loan process. We’ll help you find the best loan for your needs and get you living in a home you can be proud of!

The post 7 Tactical Advantages of Choosing a VA Loan from Arabgatewayfunds appeared first on Arab Gateway Funds .

We believe in educating a customer about all of their choices. That means the positive and possible negative aspects of each loan. The reason we are in this business is to help people achieve their dreams of owning a home. We think you should ask as many questions as you want and we encourage you to request all the information we offer as a service to our customers. If you contact a real estate agent or mortgage loan officer who is unwilling to answer your questions, continue to look for the person who will help you.

Did You Know That You Could Buy A $100,000 Home for The Equivalent Of Spending $350 A Month On Rent?

Yes, this is possible. Homeownership has tremendous tax advantages and your home will most likely go up in value. So, a home you purchase today for $100,000 and sell for $120,000 in 5 years may cost you as little as $350.00 per month.

You will have the ability to write off the mortgage interest and the property taxes on your annual income tax. Also, because the house increases in value, you will earn money simply by being a homeowner. Over the years, we have heard many buyers say their accountant suggested they buy a house. After owning a home for a year or two they realize why. Owning a home provides you with one of the best tax advantages available.

Before we tell you the many ways we can help you buy a home with little or no money down, it has been our experience that many banks, mortgage companies, credit unions, real estate agents, and builders will avoid the topics below.

Our goal is to educate you as much as possible. We originate mortgages by educating the buyer and allowing them to make an educated decision on what loan fits their needs.

The Ten Biggest Mistakes You Can Make When Buying A Home

1. Finding the Lowest Interest Rate Is Not Always the Best Deal. Some loans have very attractive interest rates (also known as teaser rates) but you may be hit with higher upfront charges. Points and or origination fees are the most common ways to lower the rate and charge upfront costs. When searching for a mortgage, ask the lender if they are charging points or origination fees. Points and origination fees are calculated as a percentage of the loan amount. See example below.
   $80,000 Mortgage
   1 Point = 1% of the loan amount $800 paid at closing
   2 Points = 2% of the loan amount $1,600 paid at closing
   Often the difference in monthly payment from a slightly higher interest rate takes the equivalent of 10 years to equal these upfront costs. Many people will have refinanced or purchased another home before this occurs.
   Beware of Adjustable Rate Mortgages (ARMs) and Balloon Mortgages. ARM rates will adjust depending on the loan. The ARM rates may adjust as often as every 6 months but in most cases they adjust after 1,2,3, and 5 years. Those rates are far more likely to go up when they adjust. The Balloon Mortgage requires the borrower to pay the loan off when it matures, usually between 2 – 7 years.
   There are many lending tactics to sell the borrower on a low rate and then charge outrageous fees and costs. Don’t fall into the “bait and switch” lending ploy.
2. Getting a Loan From Your Real Estate Agent or the Mortgage Company in Your Real Estate Agent’s Office May Not Save You Any Money. Many real estate companies and individual real estate agents are now offering mortgage loans as well as real estate services. It has been our experience that some Realtors are not educated enough and do not have the experience to originate mortgage loans. This is known throughout the industry. They spread themselves too thin and it ultimately hurts the borrower. Realtors sell Real Estate and Mortgage Companies originate mortgage loans. Also, using a mortgage company that is affiliated with a real estate company may cost you more. It may be slightly more convenient, but it also can be a lot more expensive. Competition drives interest rates and costs down. In the controlled business arrangement with a Realtor or a Realtor owned Mortgage Company, you lose that competition and you lose lower rates and lower costs.
3. Buying a Home from the Listing Agent May Not Be In Your Best Interest. The listing agent is the person who makes an agreement with the seller to sell the home. The seller agrees to pay the listing agent a commission for marketing and selling their home. The listing agent is working for the seller and will consider the sellers needs before the buyers. Having your own agent (selling agent) does not cost you any more money. The seller will pay the same commission for the sale if you do or do not have your own agent. Having your own agent allows there to be someone in your corner. A selling agent can help you find a house, confirm the value, help with inspections and financing, and answer any other questions you may have.
4. Buying FHA, VA, or IRS Repossessed Homes May Be A Mistake. I am not against purchasing a repossessed or discounted property. In many markets, especially those that are having financial trouble, a repossessed home may make good sense. However, many VA, FHA, and IRS repossessed homes are sold with virtually no warranty. Also, the borrower may be limited on how much they can inspect the property prior to purchasing it. Often times these houses are in need of repair and need work. Not being able to thoroughly inspect the property puts the purchaser in a risky position.
   There are some bargain properties but for the most part investors who have the “know how” purchase them. Loans with zero or little down payment typically will have higher property standards.
   Keep in mind that purchasing this type of property requires bidding for it. The people you would be bidding against rehab houses for a living, so you may be at a disadvantage from an experience stand point. In addition, most homes that are for sale under these conditions require a substantial upfront deposit that may not be refundable should your loan not close within a specific period of time. Additionally, once the seller of the home accepts your offer on these properties, the bank who owns the current mortgage generally has to agree to everything as well. This can sometimes be a lengthy process that many homebuyers are not aware of. It is always important to set realistic time expectations for yourself.
5. Bad Credit Stays On your Record for 7 Years or More. This is true, but in most cases, loans are evaluated on the last 12–24 months. They may totally disregard ANY adverse credit issues prior to that 12-24 month window. Most of the loans with zero or no money down cater to those who need leniency in the area of credit. Also, having not re-established credit doesn’t mean you cannot get a loan. There are other means for a lender to establish credit history.
6. Credit Counseling May Harm Your Credit Rating.  In certain instances, consumer credit counseling services may be a wise decision. These services can provide education and help with debt problems. The Credit Counseling Company will set a budget for the client based on their income and how much debt there is to pay off.
   The problem comes when counseling companies do not meet the client’s monthly obligations with their creditors. As a result, they begin to have late payments on their credit report. In other words, they may not meet the creditor’s minimum monthly payment requirements because the budget calls for a lesser payment.
   Overall, credit counseling is an effective tool to reduce debt as long as they meet the client’s due dates and the minimum monthly payment.
7. Getting Your Mortgage Loan from the Internet May Cost You. It could be a costly mistake if you get a loan online from a company in different parts of the country. There are different rules and guidelines for different states, cities, and even counties. It can be risky to obtain a mortgage loan from a company across the country if they are not familiar with the rules that govern the area where the property is located.
   Typically, local companies will be more concerned about their reputation and doing a good job for their customer. We operate from referrals so it is very important that we meet our customer’s expectations. Getting a loan online can also take longer because they will not have service companies (title companies, appraisers and others) to do the job in a timely manner.
   Mortgage loans are complex and may not make sense to purchase online. This is especially true if the borrower is looking for maximum service and care.
8. Working with a Mortgage Lender Who Only Has One Product To Sell May Not Meet Your Specific Needs. For the fifteen percent (15%) or so of a bank’s customers that are “Private Bank Clients” (big bucks, big money for the bank), the bank may have the best deal for you. If you don’t fall into that category, I would suggest that you get a mortgage lender who has the knowledge and loan programs to meet your needs.
   Most lenders only have one source of funds. This type of lender is forced to “fit” the customer into a prefabricated loan program. They only have one or two different ways to handle the many different loan situations that occur.
   It is important that you research your lender and try and get everything in writing. Also, it is easy for the wrong lender to take advantage of the borrower because of the borrower’s vulnerable position. Most first-time homebuyers need to be educated on the process of purchasing a home. We feel an educated borrower has the ability to make their own decision, a decision that is best for them. Often times a lender will try to make a decision for you based on the loan that will put the most money in their pocket.
9. Paying Upfront Costs Before You Know Exactly What Type Of Loan You Are Being Offered. It is common for lenders to collect for the appraisal and credit report before they even look at your request. They do this to keep you loyal to them. Be very careful about what you pay for and when you pay it. Again, get everything from the lender in writing and make sure you are comfortable before you pay them any money.
   We do not charge our customers anything during the initial loan process. Customers pay for the services of the vendors we use throughout the process.
10. Get A Pre-Approval from Your Mortgage Company Before You Start Shopping For A Home. Having a pre-approved loan can be very important. A pre-approval has two major benefits. First, you will have peace of mind before you get serious about buying a home. You will know how much of a house you can afford, what the payments will be, and how much of a down payment is needed. Secondly, having a pre-approval may give you bargaining power when negotiating a price for the home.
    For example, if three buyers are looking at the same house, the seller will probably look closer at the buyer who has been pre-approved. Also, getting pre-approved may allow the you to get a better price for the property.
    Get pre-approved. It could save you a lot of time and money.

You Might Have Some Questions. Here are some of the most common questions asked by first time homebuyers.

How Do I Qualify? The first thing you do is fill out the short loan application. The more information you give us in the beginning, the more accurate our response will be. Without question, the first step is to get pre-qualified.

How Long Does It Take? We can have your qualification completed in 24 hours. In most cases we will know where you stand and what it will take to get you where you want to be. The biggest delay in most cases is usually the applicant: procrastination, failing to get the necessary documentation together…these are the biggest delays in the process.

How Much Does It Cost? Zero. The pre-qualification is a free service we offer to anyone interested in purchasing or refinancing a home.

What are the Interest Rates? Interest rates change on a daily basis. Our goal is to get you the cheapest mortgage loan possible, a loan that will save you monthly as well as having low costs to close.

Once you become a homeowner, we can help you lower your rate in the future if interest rates drop. In many cases, we are able to get lower rates for those borrowers who can barely qualify. In ALL cases, we will work to get you the absolute best possible program that comfortably fits YOUR needs.

Once we have the facts surrounding your situation, we’ll know the costs and so will you. There are never any surprises!!! We guarantee it.

The post The Ten Biggest Mistakes You Can Make when Buying a Home appeared first on Arab Gateway Funds .

]]> https://arabgatewayfunds.com/how-to-stop-paying-rent-and-own-your-own-home/ Sun, 08 Sep 2019 10:35:56 +0000 http://arabgatewayfunds.com/?p=902 Don’t Pay Another Cent In Rent To Your Landlord….. It’s a dream we all have-to own our own home and stop paying rent. But if you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours. How could it when you’re not even permitted to bang […]

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]]> Don’t Pay Another Cent In Rent To Your Landlord…..

It’s a dream we all have-to own our own home and stop paying rent. But if you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours. How could it when you’re not even permitted to bang a nail or two without a hassle. You feel like you’re stuck in the renter’s rut with no way of rising up out of it and owning your own home.

Don’t Feel Trapped Anymore

It doesn’t matter how long you’ve been renting, or how insurmountable your financial situation may seem. The truth is, there are some little-known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information you will begin to see how you really can:

• Save for a downpayment
• Stop lining your landlord’s pockets, and
• Stop wasting thousands of dollars on rent.

6 Little Known Facts That Can Help You Buy Your First Home

The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down-payment on something more permanent.

But saving for this lump sum doesn’t have to be as difficult as you might think. Consider the following 6 important points:

1. You can buy a home with much less down than you think.
   There are some local or federal government programs (such as first-time buyer programs) to help people get into the housing market. There are several programs that allow for no down payment, or will match a homebuyer dollar for dollar. Finding a qualified mortgage professional that is aware of such programs will give you a good idea of how much money you will need to have.
2. You may be able to get your lender to help you with your closing costs.
   If you have the money for a down payment, but not closing costs, your lender may be able to give you a credit to help cover these fees. If you have good credit and income, but seem to be a bit short on cash, this is a viable option.
3. You may be able to find a seller to help you buy and finance your home.
   Some sellers may be willing to hold a second mortgage for you as a “seller take-back”. In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments. In addition, a seller can contribute to your closing costs through the proceeds they receive from the sale of their home. Having your own expert Real Estate agent negotiate this for you is very wise, and could mean the difference between a sale or not.
4. You may be able to create a cash down payment without actually going into debt.
   By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down-payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end. Many companies’ 401K accounts will allow their employees to borrow money solely for the purpose of purchasing a home with no penalties. Check with your company’s HR Representative to see if your company offers such a program.
5. You can buy a home even if you have problems with your credit rating.
   If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation. In recent years, several products have opened up to allow credit challenged home buyers the opportunity to purchase a home and re-establish their credit. Finding a qualified mortgage professional that is aware of such programs is of great benefit.
6. You can, and should, get preapproved for a home loan before you go looking for a home.
   Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically, there is no cost or obligation to inquire.

There are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning.

This conversation costs you nothing. And, of course, you shouldn’t have to feel obligated to buy a home at the time you review this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you’ll be when you are ready to make this important step.

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]]> https://arabgatewayfunds.com/whats-new-with-va-loans/ Sun, 08 Sep 2019 10:10:30 +0000 http://arabgatewayfunds.com/?p=896 Veterans Administration (VA) loans are a great way for military veterans and active service members to realize the American dream of owning their own home, but they come with some special requirements. As Veteran’s Day approaches, review the benefits and qualification criteria of this type of financing so you can help your eligible buyers make […]

The post What’s New with VA Loans? appeared first on Arab Gateway Funds .

]]> Veterans Administration (VA) loans are a great way for military veterans and active service members to realize the American dream of owning their own home, but they come with some special requirements. As Veteran’s Day approaches, review the benefits and qualification criteria of this type of financing so you can help your eligible buyers make the right choice.

VA loans are backed by the U.S. Department of Veterans Affairs and offer many potential benefits to vets, active service members, and select military spouses who qualify when compared to conventional mortgages. Here are their main benefits:

No down payment. With VA loans, clients don’t have to make a down payment when buying a home. This means they can finance 100 percent of a home’s purchase price. Many home buyers and mortgage experts consider this to be the biggest benefit of VA loans because it enables qualifying borrowers to buy a home much sooner than if they had to save enough money for a sizeable down payment.

In comparison, conventional mortgages typically require a down payment of at least 5 percent, and FHA mortgages typically require a down payment of at least 3.5 percent. On a $250,000 mortgage, this translates into a $12,500 down payment on a conventional mortgage and an $8,750 down payment on an FHA mortgage.

The average VA borrower only has about $9,000 in total assets, so the no-down-payment feature of VA loans is clearly a big benefit for borrowers who qualify.

No mortgage insurance. Another major benefit is that unlike conventional and FHA mortgages, VA Loans don’t require borrowers to purchase mortgage insurance. With conventional loans, this insurance is referred to as private mortgage insurance (PMI) and with FHA loans, it’s referred to as a mortgage insurance premium (MIP). Veterans taking out VA loans save more than $40 billion a year in mortgage insurance costs.

If conventional borrowers make a down payment of less than 20 percent, they will usually have to pay for PMI until they’ve built 20 percent equity in the home. This payment, which often exceeds $100 a month, is added to the monthly mortgage payment. Over time, conventional borrowers can end up paying tens of thousands of dollars in PMI.

FHA borrowers, meanwhile, must pay MIP regardless of how much money they put down on a home. The FHA charges both an upfront mortgage insurance premium of 1.75 percent (which is folded into the loan financing) and a monthly mortgage insurance premium of up to .85 percent of the loan amount, which is added to the monthly mortgage payment. The monthly insurance premium alone can add around $170 a month to a mortgage payment depending on the loan size.

The monthly FHA premium can be cancelled after 11 years if the borrower makes a down payment of at least 10 percent or the mortgage’s term is 15 years or less. Otherwise, it remains for the life of the loan — again, potentially adding up to tens of thousands of dollars in additional expense.

Note that there is a mandatory funding fee with VA loans that helps provide long-term funding for the program. However, the fee can be folded into the loan financing — it doesn’t have to be paid at closing. If your client has a service-related disability and receives VA disability compensation, or if your client is the unmarried surviving spouse of a veteran who died in service, he or she will be exempt from paying this fee.

Flexible approval guidelines. Due to the VA loan guaranty, lenders often apply less stringent credit requirements to VA borrowers than they do to those applying for some other types of home financing. This means that military veterans and active service members who perhaps haven’t been able to maintain a high credit score may still qualify for a home mortgage.

The minimum credit score needed to qualify for a VA mortgage is 620. Lenders often want to see a higher credit score than this for borrowers applying for a conventional mortgage, especially if borrowers want to receive the lowest interest rate. With FHA loans, however, lenders may approve borrowers with credit scores as low as 580.

Additionally, lenders usually allow VA borrowers to possess higher debt-to-income (DTI) ratios. This ratio compares a borrower’s existing debt to his or her income to help lenders determine their ability to repay the mortgage loan. The maximum DTI needed to qualify for a conventional mortgage is now 50 percent. Even so, lenders may allow DTIs as high as 55 percent for VA loans, depending on the borrower’s credit score and other factors.

Also, your clients may be able to secure a VA loan sooner than other types of mortgages after experiencing serious financial difficulties. In certain situation, borrowers may be approved for a VA loan within two years of a home foreclosure or short sale and within one year of filing for Chapter 13 bankruptcy.

More Benefits

Here are a few more potential benefits of VA loans for military veterans, active service members, and select military spouses who qualify:

1. Limitations on buyer closing costs — The VA places limits on what borrowers can be charged in fees and closing costs. Borrowers can ask the seller to pay all loan-related closing costs as well as up to four percent of the home’s purchase price in concessions for such items as prepaid taxes and insurance.
2. Lower average interest rates — The VA guaranty lowers banks’ risk when making VA loans, which enables banks to charge lower interest rates. The interest rate on a VA loan is typically 0.5 to 1.0 percentage points lower than the rate on a conventional mortgage.
3. No loan prepayment penalties — Some mortgages assess penalties if borrowers want to pay off a mortgage early in order to save on interest charges. VA loans do not charge any prepayment penalties.
4. Mortgages are assumable — This is an especially valuable benefit when interest rates are rising like they are now. When borrowers decide to sell their home, the buyer may be able to assume their current VA mortgage instead of applying for their own loan if they are VA-eligible. This, in turn, could make it easier to sell a home if interest rates are higher in the future than they are today.
5. Flexible refinancing options — Borrowers can refinance an existing VA loan into another VA loan using the VA’s Interest Rate Reduction Refinancing Loan program (IRRRL). They can also refinance into a non-VA loan if they choose.
6. Foreclosure avoidance advocacy — VA staff members are devoted to working on behalf of homeowners experiencing financial difficulties, helping them find alternatives to home foreclosure. These efforts have helped more than half-a-million veterans stay in their homes and avoid foreclosure since the housing and financial crisis.

Also, borrowers can apply for additional VA loans as many times as they want throughout their lifetime — it’s not a one-time benefit. They don’t have to pay back one VA loan before applying for another one, which means borrowers can have more than one VA loan at a time.

https://www.builderonline.com/money/mortgage-finance/whats-new-with-va-loans_o

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