Advantage Lending Corp BLOG

You’ve found the perfect house, you’ve spoken with your lender, you’ve even gotten a pre qualification letter, but are you really approved?

Contacting a lender and getting pre qualified for a mortgage usually consists of not much more than a five minute conversation and a review of the borrowers credit report by the loan officer.  What does this mean to you as a borrower?  It means your application for a mortgage has not been reviewed by an underwriter, checked against the lenders guidelines, or verified any of your income, assets, or employment that you verbally disclosed during your time of your application with the lender. 

Getting pre approved by a lender involves providing your lender or loan officer with a combination of some of the following documents that pertain to your specific loan scenario: signed loan application and disclosures, pay stubs, tax returns, W2’s, bank statements, drivers license, divorce decree, child support verification, etc.  Basically until the underwriter can verify the information you art attempting to state in your application, you are NOT APPROVED. 

Getting from a pre qualification to a pre approval is very quickly and easily achievable.  Simply staying in touch with your loan officer and providing them with the documentation they are requesting to process your loan application is all it takes.  Then they can perform their job of continuing to get you the borrower the mortgage you need to buy your home. 

So before you start shopping for a new home, make sure you have an understanding of whether you have a real approval or just a pre qualification. 

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More and more  borrowers are in need of credit repair, and with credit guidelines tightening, a good credit score is more important now than it ever has been.  Most loans require a 620 or higher middle credit score in order to qualify.  Even though some loans do not require a score this high, the criteria is that the borrower must have had a clean past 12 month history. 

The problem is with many borrowers they have paid off haunting collections or past due balances, but the credit bureaus haven’t updated their records because the company who got paid off doesn’t reflect that they have been paid off.  This is where it really helps to hire a credit repair company. 

Credit repair companies like Trinity Enterprises LLC can help.  They work with your past creditiors to make sure your information is accurate.  If it is not, they have a team of lawyers and staff to work with the three main bureaus to have the derogatory information removed.  Once your record is cleaned up, your score can go up significantly. 

For more information on repairing your credit score, please contact us. 

Advantage Lending Corp / 248-693-9300 / WWW.AdvantageLendingCorp.com

Earlier in the week, the Personal Consumption Expenditure data indicated that inflation climbed 0.8% overall in June, which is the highest inflation jump in 27 years. In addition, the report indicated that inflation now sits at 2.3%–above the Fed’s desired range of 1-2%.

Although the Fed ultimately left interest rates unchanged, inflation obviously remains a concern and the recent rise may lead to an interest rate hike by the Fed in the near future.

What Does This Mean to You?
Many experts believe the housing market is nearing the bottom and may even be set to bounce back up. For now, home prices remain low, personal incomes are high, and interest rates are still very attractive.

If you’ve been weighing your options and waiting to see how things shake out, this is the ideal time to act–especially when you consider the new Housing and Economic Recovery Act benefits for home buyers:

Tax credits. First-time home buyers who purchase their primary residence between April 9, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, as long as they haven’t owned a home in the last three years. The credit is actually a generous interest-free loan, so we’ll have to talk about some income parameters and payback terms. But if you’re a new home buyer – or know someone who is renting or in the market to buy – this is a huge benefit that we should discuss.

Lower rates for larger loans. In the past, mortgages of $417,000 or more have been considered “jumbo” loans that were more expensive to finance. Thanks to recent provisions, however, those jumbo loans were able to qualify for better financing rates in some parts of the country. Although those provisions were set to expire, they are being extended–with a minor change to the maximum amount eligible. This is great news that may save you a ton of cash, so call me to find out how this impacts our area, and if it could help you.

There are some lenders out there trying to offer FHA as a Zero Down program.  Recently President Bush passed a bill that will no longer allow for the required 3% down payment to come from the seller of the house.  By October 1st this year there will only be one zero down loan program, the Rural Housing Loan.  This loan requires Zero Down, has no PMI, all of your costs can be paid by a seller credit, and if the home is in need of repair, you can finance the costs.  Rural Housing is committed to no money down loan programs and is here to stay.