Tuesday, October 29, 2013

"1 tip could save $50,000 on your next mortgage," Says MSN's Money Talk News

From Money Talk News Article

This simple step is essential for getting you the best possible interest rate on your home loan.

This post comes from Marilyn Lewis at partner site Money Talks News.

Ready to apply for a home loan? Here's the one piece of advice that can save you 10s of thousands of dollars on your mortgage, plus six more tips to help you get the best mortgage deal you possibly can.

Before you apply for a mortgage, pull your credit history and get your credit score. Why? Cleaning up your credit history and raising your score can make you eligible for the best interest rates on a mortgage.

You'll want to do this as soon as possible -- giving yourself a year to improve your credit.

Borrowers with scores above 720 get the best mortgage rates. They are welcomed with open arms by lenders. If your score is below 720 you can still get a mortgage. But it's more difficult. And it'll cost you more.

The chart below shows you why. You can use your own numbers at MyFICO's Loan Savings Calculator

Lower credit score? Pay more interest
Credit score* APR** Monthly payment Total interest paid
760-850 4.018 $959 $144,848
700-759 4.242 $985 $154,244
680-699 4.421 $1,007 $161,845
660-679 4.636 $1,032 $171.08
640-659 5.07 $1,085 $190,072
620-639 5.62 $1,154 $214,781
*Source: MyFICO; **Annual percentage rate
In this chart, you'd pay $195 a month less with a 760 credit score than with a 639 credit score. That's a difference of nearly $70,000 over the total life of your mortgage.
We couldn't agree more, and we will work with you to get the best possible rate through our new association with Guaranteed Rate Inc.  

Bill Rayman Home Mortgages - mortgage broker for home loans and mortgage banker
12121 Wilshire Boulevard, Suite 350
Los Angeles, CA 90025
Phone: (424) 354-5325

Monday, October 28, 2013

Are Mortgages Harder to Get if You Are Self Employed?


A Good Mortgage Broker Can Help You Navigate the Approval Process

2013 will long be remembered as the year the federal government slowed up the housing recovery by making mortgages much more difficult to obtain.  Only history will tell us if the stiff medicine was good in the long term.  But if getting a mortgage got harder for those with a pay stub, it certainly also became even more difficult for the self employed.

Assuming that you are filling out a schedule C, your tax return will be the primary method of establishing your income.  Generally, the lender will average the last two years of net income.  However, if the most recent year shows a decline, they may only use the second year. 

If you know well in advance that you are planning to get a mortgage, you may wish to change some of your accounting practices.  We all know that there are many ways to count various aspects of revenues and expenses, and that the normal inclination is to keep net income low, and thus pay lower taxes.  However, you may want to show more income leading up to the mortgage application, even if this results in higher taxes. 

If it is too late to bulk up your earnings, you might consider doing an amended income tax return.  In addition, a skilled mortgage broker may be able to help you with notes to your return that would include adding back certain expenses, such as depreciation or one time charges, without doing an amendment.

Some lenders have more stomach than others for the self employed, and/or a greater understanding of the nature of schedule C income.  Since mortgage brokers have multiple lenders to turn to for your mortgage, they have a better chance of finding a favorable loan environment. 

Stated income loans are another possibility.  While these fell out of favor after the crash, there are times when they can be used in today's mortgage market. 

Our capabilities in all of these matters has increased over the past week, in that we have changed our primary broker and lender relationship to Guaranteed Rates, Inc.  As one of the largest lenders in the US, Guaranteed Rate has the ability to place loans at great rates, and to do so quickly and with the least possible headaches.  Guaranteed Rate has a proven track record of making the process incredibly smooth for borrowers.  Please note my new contact information below. 

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025