iLeads.com Blog: mortgage

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<span style="font-family: Calibri;">Now that lenders have tightened
their underwriting norms, borrowers have to submit a lot of paperwork to
qualify for a mortgage. In fact, the lender now asks the borrower to document
every source of income they claim on the loan application. Getting all that
paperwork ready can take time. </span><br />

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<span style="font-family: Calibri;">The new mortgage rules are designed
to protect the interests of both the borrower and the lender. Before the
housing bust just about anybody could get a mortgage, but now the situation has
changed. Lenders have become choosy. Is this good news for borrowers?</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">The
age of qualified mortgages<o:p></o:p></span></b></div>
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<span style="font-family: Calibri;">New mortgage rules are designed to
protect borrowers from unscrupulous lenders who often encouraged them to get a
bigger loan than they could afford. They also provide eligible borrowers access
to safe and affordable financing. The new rules ask lenders to thoroughly
verify the credit worthiness of the borrower before making the loan.</span></div>
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<span style="font-family: Calibri;">Lenders can offer loans without
verifying the credentials of the borrower; however, in that case they won't get
protection against lawsuits filed by the borrower. The borrower can claim that
the lender had made the loan without verifying their eligibility for the loan. </span></div>
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<span style="font-family: Calibri;">According to the new laws, a lender
has to verify eight things before they can offer a qualified mortgage to a
borrower. They are:</span></div>
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</span></span></span><span style="font-family: Calibri;">The borrower's current income/assets</span></div>
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</span></span></span><span style="font-family: Calibri;">The borrower's credit history</span></div>
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</span></span></span><span style="font-family: Calibri;">The borrower's current employment status</span></div>
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</span></span></span><span style="font-family: Calibri;">The monthly mortgage payment of the borrower</span></div>
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</span></span></span><span style="font-family: Calibri;">The borrower's monthly payments on any other
mortgage loans </span></div>
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</span></span></span><span style="font-family: Calibri;">The borrower's monthly payments for any other
expenses, like property taxes.</span></div>
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</span></span></span><span style="font-family: Calibri;">Other debts the borrower might have.</span></div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">        
</span></span></span><span style="font-family: Calibri;">The debt-to-income ratio of the borrower</span></div>
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<span style="font-family: Calibri;">When lenders carry out so many
verifications, first time borrowers may have a tough time getting a mortgage.
Self employed people, too, may find it difficult to qualify because they are
unlikely to have a steady flow of income.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Cash
buyer vs. Mortgage<o:p></o:p></span></b></div>
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<span style="font-family: Calibri;">The stringent mortgage laws have
given rise to another trend. Many sellers now prefer borrowers who pay cash.
Cash buyers are mostly investors.</span></div>
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<span style="font-family: Calibri;">Sellers prefer cash deals because
they don't have to wait for the borrower to go through a mortgage approval
process that might take several weeks or even months. When they accept cash
deals, they can close quickly. This is not exactly great news for a borrower.
However, borrowers have to come to terms with the fact that the loan approval
process will now take longer. </span></div>
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<span style="font-family: Calibri;">The borrower should have copies of
every document they give to the lender. So, if the lender asks them to send
those documents again, they will have them ready.</span></div>
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<span style="font-family: Calibri;">The borrower must refrain from lying
on the application form. Now that the lender is going to verify a whole lot of
documents, they simply can't get away with lies.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">The
future of the lending market<o:p></o:p></span></b></div>
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<span style="font-family: Calibri;">While the loan approval process may
take longer, the new rules are expected to make the lending market healthier.
It provides ample protection for lenders who stick to the guidelines and give
loans only to eligible borrowers. The borrowers, too, stand to benefit. </span></div>
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<span style="font-family: Calibri;">During this year, the interest rates
may go upwards and the demand for refinance is likely to subside. Home prices,
too, are expected to rise this year.</span></div>
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<span style="font-family: Calibri;"><span class="fblongblurb">Get your
share of the $1.5 trillion in Adjustable Rate Mortgages scheduled to reset this
year! </span>Imagine having up to a 20% funding rate at a low, cost effective
price per lead! With our ARM plus leads, you can. Get in touch with </span><a href="http://www.armsource.com/"><span style="color: blue; font-family: Calibri;">ARM Source</span></a><span style="font-family: Calibri;"> today!</span></div>

What Lenders and Borrowers Should Know About Applying for a Mortgage

Now that lenders have tightened their underwriting norms, borrowers have to submit a lot of paperwork to qualify for a mortgage. In fact, ...

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<span style="font-family: Calibri;">The reductions in the number of homes with underwater
mortgages have been encouraging, with reductions in negative equity, each of
the last seven quarters. However, effective negative equity has remained high. While
underwater mortgages have dropped to below 20%, as of the fourth quarter of
2013, according to Zillow research, the effective negative equity remains at
37.6%.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">What is Effective
Negative Equity?</span></b></div>
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<span style="font-family: Calibri;">Effective negative equity includes all homes where the
mortgages are higher than 80% of the value of the home. This has been deemed
effective negative equity because, while the homeowner does not owe more than
the home is worth, they are effectively still underwater. They do not have
enough equity to pay for the costs associated with selling a home and still
have a down payment for the next home. </span></div>
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<span style="font-family: Calibri;">The impact of effective negative equity is significant in
the slow recovery of the real estate markets because consumers are not able to
sell their homes and remain homeowners with the purchase of another home. This
reduces inventory and impacts homeowners who sell they homes and then must become
renters.</span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">The Impact of
Effective Negative Equity</span></b></div>
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<span style="font-family: Calibri;">In the years leading up to the real estate market crash in
2008, millions of homeowners were purchasing homes with minimal or no down payments.
Today lenders are not as anxious to lend, and have stricter guidelines for
lending. This is partly due to additional regulation and oversight along with
the high level of losses incurred by banks and lenders. The result is that homeowners
are now required to come up with larger down payments. Gone are the days of
buying a home with no money down. <span style="mso-spacerun: yes;"> </span>This
makes the effective negative equity numbers more problematic. </span></div>
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<span style="font-family: Calibri;">With millions of Americans finding themselves or someone
they know in these circumstances, the impact has also created an image problem
with regard to home ownership as a whole. There was a time when families would
scrape together a down payment at any cost, because it was understood that the
home would appreciate and the home would build wealth.</span></div>
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<span style="font-family: Calibri;">When consumers are confident that a home is an investment,
home buyers are plentiful. Today that level of confidence has been degraded
through several years of declining values and watching friends and neighbors
lose their homes to foreclosure, short sales and the inability to sell, due to
negative equity.</span></div>
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<span style="font-family: Calibri;">Increasing home values are helping the real estate market
along, but progress is slow. Lower down payments, as with FHA loans, are providing
opportunities for buyers to purchase homes with a minimum of 3.5% down instead
of 20%. Lenders loosening up requirements will provide opportunities for more
buyers to have access to home ownership. As the market improves, buyer
confidence will also create more demand.</span></div>
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<span style="font-family: Calibri;">Some of the hardest hit states like Florida, California and
Arizona have seen sharp spikes in values because the effective negative equity
has created a housing shortage. It is anticipated, according to Zillow
forecasting models, that it will be several more years before the real estate
market will fall within normal statistical ranges. Until that time, working
with homeowners to meet their buying and selling needs will continue to
challenge real estate professionals nationwide.</span></div>
<span style="font-family: Calibri;"><span class="fblongblurb">Get your share of the $1.5 trillion
in Adjustable Rate Mortgages scheduled to reset this year! </span>Imagine
having up to a 20% funding rate at a low, cost effective price per lead! With
our ARM plus leads, you can. Get in touch with </span><a href="http://www.armsource.com/"><span style="color: blue; font-family: Calibri;">ARM Source</span></a><span style="font-family: Calibri;"> today!</span><br />

Effective Negative Equity and its Impact on the Real Estate Market

The reductions in the number of homes with underwater mortgages have been encouraging, with reductions in negative equity, each of the l...

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What Lenders and Borrowers Should Know About Applying for a Mortgage

Effective Negative Equity and its Impact on the Real Estate Market

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