Taylor-Brown Real Estate Talks

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Has mortgage lending freed up? The answer is a resounding, no.

At the end of 2008, banks, consumers, buyers, and sellers found themselves wondering if they could buy or sell real estate.

I, too, had several clients that could not close their deals due to the credit tighten.  Six months later, there still are only a few resources for individuals with credit issues.  One such company is http://www.advantagehomerates.com/.

The company also has great information that will help you understand:

• what a mortgage is
• what the tax advantages are to owning a home
• what closing cost is and what it covers

To find more articles that will help explain mortgages, visit http://www.advantagehomerates.com/tutorials.php.

It is important, though, for the potential buyer to understand that the credit score that is necessary to get a loan is 620, but when there are extenuating circumstances like medical disaster and job loss.   A buyer can qualify for a loan with a lower score.  To qualify under the extenuating circumstances, you must have a strong income, assets, or job history.  

Advantage Mortgage specializes in the type of loans necessary for an individual who have the above mention extenuating circumstances. 

Another criterion that a potential buyer must satisfy is that of income.  The buyer must have a two year employment history in the same line of work.  If you are self employed, then you must provide your income tax paperwork or W-9.   For more information on how Advantage Mortgage can help you visit http://www.advantagehomerates.com/self.php.

The chances for self employed individuals are how they get paid.  For instance, as a real estate broker, I get paid when the deal closed.  If the deal does not close, I do not get paid.  I still, however, have bills that need to be paid.  Those bills may be paid late as a result of the delay or lack of payment as a result of this lender is reluctant to lend to self employed individuals like myself. 

It does not mean that I or any other self employed person will not get a loan, but what it does mean is that I have to provide evidence of the income.  The self employed person will have to provide two to three years of income information as well as, monthly business expense reports and revenue statements.  The latter is termed as risk.  Risk means that the mortgagor or buyer may not pay the payment on time in accordance with the terms of the mortgage.   As a result, the interested charged on such a loan is higher.

Advantage Mortgage offers two different types of loan options for self employed individuals:

• stated income mortgage loan
• interest only mortgage loan

Be careful with the interest only loan because the interest is adjustable.  An adjustable interest rate has a lower interest rate and an upper interest rate.  For instance, you can get the loan started with a 5.75, but when you are late it can adjust to 8.75.  If you are continual late it can adjust to its max of 15 percent.  There it is important to understand what the payment will be at the lower interest rate as well as the higher interest, so that you can ascertain whether you can afford the loan.  Another important fact about an interest only loan is that the non-amortized.  Non-amortized means that the principal amount of the loan does not decrease as you pay your payment.  The advantage, though, is that you pay a lower amount each month.  However, the interest only loan has a maturity date.  When the maturity date is reached the full principal amount is due. 

The stated income mortgage should be used as a last resort in purchasing a home because of the higher interest rates that can be charged.

If you plan to purchase a home and you are self employed, save twenty percent or more for the down payment and closing cost.   Get your business established to the point that income is coming in on a regular basis and keep good bookkeeping/accounting records.

Another option for financing is FHA/VA financing.  Advantage Mortgage  helps a buyer qualify for the FHA/VA loan visit the following website for more information at http://www.advantagehomerates.com/fha.php .

For the FHA loan, the down payment is less; however, be prepared to pay as high as ten percent down.  The home will have to qualify because it is inspected by an FHA/VA appraiser who is looking for a good roof, electrical, plumbing, etc.  

When thinking of purchasing a home it is important to get the mortgage first, so that you will know how much home you can afford to buy.  Advantage Mortgage offers several options for you to qualify for that loan visit there website to apply at http://www.advantagehomerates.com/application.php.  

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