Archive for May, 2008

Lately the word on the street is that if you have slightly bad credit you will be unable to qualify for financing. Whether you’re doing a purchase of a new home or refinancing your existing loan, if your picture is less than perfect you’re out of luck. Well, now you have a solution!

Up until about 6 – 8 months ago I may have agreed with you, to some extent, that the market was gone or is going away for “sub prime” borrowers. But now in today’s new lending environment the government, of all organizations, has stepped in to offer a solution.

FHA, also know as the Federal Housing Administration, is now the official reigning champion over the sub prime lending industry. They offer lending solutions for borrowers with less than perfect credit. However, the highlight of using FHA for financing is the range of service that they now offer.

Let’s say your not quite sub prime but you’ve had a few blemishes in the past, FHA just might be the solution. Now, with an FHA loan you can have access to the same competitive pricing that “Prime” conforming borrowers have but without being concerned about fitting in a borrower qualification box.

FHA loans are a true manual underwriting process, which means that if the loan makes sense to the underwriter, they will approve you. There actually are very limited guidelines and it’s more on a case by case basis. It would be very difficult for me to write out each thing to look for with an FHA loan, so if you have questions about utilizing this loan for you, feel free to give me a call and we can discuss your options.

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There’s an innovative loan option that has become available on the market place today. I would bet that most of you have never heard of this loan but it has already swept Australia with over 60% of homes using this method to date. Now it has begun to take our country by storm.

Introduced in the bay area of California by a company called CMG it has been titled the “Home Ownership Accelerator”, which is exactly what it does. The home ownership accelerator is a new type of loan that gives the homeowner the ability to pay off there home in 15 years or less (average). This loan is not a 15 year fixed…that would be too obvious. And you don’t have to make any changes in your spending habits, which means that you don’t have to put additional money down on your loan.

With the Home Ownership Accelerator, you deposit your entire paycheck into this innovative line of credit, instead of your checking account. This dramatically reduces your principal balance each month and since your interest is computed on your daily balance, you start saving interest immediately!

You may be thinking, “Well how do I pay my bills”? Your mortgage comes with the ability to pay all of your bills just like a checking account. It even gives you a debit card and a set of checks! Best of all, until you need the money, it stays in your account, keeping your loan balance lower, saving 5 to 6% in interest costs, versus earning 1 to 2% in your old checking account.

Now these loans are not for everyone but for the right borrowers they can be EXTREMELY POWERFUL! To get a better idea of how this loan works you can visit our informational website at www.AcceleratorNW.com. On here you will find more information as well as multiple videos that will help answer any questions you have.

Also if you would like to see how this would apply to your individual scenario, just give me a call at 206-423-2552. We have access to a patent pending scenario software that can take all of your current info (balance, assets, income…etc) and see how quickly you could pay off your home. It’s amazing to watch!

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ARM loans are gone…there I said it. It feels good to get it off my chest. Basically ARM loans are no longer available…but not completely gone. Lenders are still offering them but fixed rate loans are the same price. It doesn’t really make sense to get a 5 year fixed for the same price as a 30 year fixed, does it?

So, most of you can probably guess why ARM’s are not very popular anymore and if you can’t guess, just turn on the news. But the reality of it is that ARM’s served there purpose and if used correctly saved many borrowers a great deal of money. Each borrower that has taken advantage of todays fixed rate loans are loving the decision they made.

Right now if you are on an ARM and would like to get it converted over to a fixed rate loan, now is a perfect time. With 30 and 15 year fixed rates at all time lows it’s a great time to join the increasing numbers of homeowners who are taking advantage of the switch.

Take a look at this, its not just sub prime borrowers who are affected.

Now a growing number of borrowers with good credit have also failed to keep pace with their ARMs. According to the Mortgage Bankers Association, 1.06 percent of prime borrowers with ARMs entered the foreclosure process in recent months, compared with 0.41 percent in late 2006.

Copyright © Seattle Times, 04/19/2008, Bob Tedeschi, http://www.seattletimes.com

Even good borrowers are falling trap to their ARM’s adjusting. So if you have an ARM and are curious about what your rate could look like with a fixed loan, give me a call and I would be more than happy to answer your questions.

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