Sub-6% mortgages fail to spur refinancings Buffalo News, United States - Already, national mortgage application volume more than doubled during the short Thanksgiving week from a week earlier, according to a survey by the ...
Getting Unfiltered Rate Quotes New York Times, United States - Dec 5, 2008 That has advantages beyond saving time, because loan officers must obtain a borrower?s credit score for each application, and that action alone can ...
UK lender C&G trims mortgage rates Reuters - ... its mortgage rates for the third time in three weeks. C&G said from Monday it was cutting the rate on its popular 1-1/2 and two-year fixed rate loans by ...
Introduction - JR Barth, JD Shilling - The Journal of Real Estate Finance and Economics, 1992 - Springer ... The lower mortgage rates benefit recipients of such loans but certainly not
renters and other owners not borrowing at the low rates. ...
The Determinants of Default on Insured Conventional Residential Mortgage Loans - TS Campbell, JK Dietrich - Journal of Finance, 1983 - JSTOR ... income and loan/ value ratios and unemployment rates as well as ... such as age and the
original loan/value ratio. ... In the mortgage markets of the United States the ...
Race, redlining, and residential mortgage loan performance - JA Berkovec, GB Canner, SA Gabriel, TH Hannan - The Journal of Real Estate Finance and Economics, 1994 - Springer ... persistent racial and neigh- borhood disparities in mortgageloan origination activity,
including data showing significant differences in denial rates for home ...
Risk-based capital requirements for mortgage loans - PS Calem, M LaCour-Little - Journal of Banking and Finance, 2004 - Elsevier ... prediction tool for residential mortgage portfolios that ... and prepayment probabilities
at the loan level under ... a market price index) and market interest rates. ...
Default Risk on Home Mortgage Loans: A Test of Competing Hypotheses JR Jackson, DL Kaserman - Journal of Risk and Insurance, 1980 - JSTOR ... regarding future property value fluctuations and individual discount rates on the ...
borrower may default only once on a given mortgageloan, however, Pr[D(t ...
Bankruptcy Exemptions and the Market for Mortgage Loans* - J Berkowitz, R Hynes - The Journal of Law and Economics, 1999 - UChicago Press ... The Home Mortgage Disclosure Act (HMDA) data set and the Federal Housing Finance
Board?s Rates and Terms ... of bankruptcy laws on unsecured loans to future ...
Mortgage default and low downpayment loans: The costs of public subsidy - Y Deng, JM Quigley, R Van Order, F Mac - Regional Science and Urban Economics, 1996 - Elsevier ... Then the estimated empirical hazard rates were mapped to 11,866 mortgage loans that were randomly drawn from the total sample. 1 ...
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Mortgage Lending in Boston: Interpreting HMDA Data - AH Munnell, GMB Tootell, LE Browne, J McEneaney - American Economic Review, 1996 - JSTOR ... The risk due to potential changes in interest rates is affected by the loan
characteristics of the mortgage, along with exogenous macroeconomic variables, but ...
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Source: Google Scholar
Loan and Mortgage Application; APPLYING FOR A LOAN
Once you have negotiated a final purchase offer with the seller, you are ready to finalize the loan application process. Under RESPA (Real Estate Settlement Procedures Act), lenders are legally required to provide you with a good faith estimate within three days after receiving your application.
The information gives you an estimate of your closing costs and monthly payments. This good faith estimate does not require lenders to provide a detailed breakdown of the closing cost items or to identify the persons responsible for the payments. Therefore, it is important for you to work with your real estate agent or attorney to understand all the closing cost fees. This will ensure that there are no significant surprises related to your final closing costs.
Required Paperwork
To apply for a loan, you will have to provide the lender with detailed documentation of your financial history. The lender will request a credit report from a credit agency and will verify the information provided in your loan application.
Be prepared to give your lender:
» Social Security numbers for both you and any co-borrowers
» Copies of checking and savings accounts statements for the past six months
» Evidence of any other assets such as bonds, stocks, or money saved in retirement programs (i.e. 401k or 403b program)
» Recent paycheck stubs
» W-2 withholding forms, or income tax returns for the past two years to verify your income and proof of employment
» A list of all credit card accounts and the approximate amount you pay each month
» A list of account numbers and balances due on outstanding loans, such as car loans
» The name and address of someone who can verify your employment
» Residence history for the past two years
» Sales contract for the purchase of a new home
» Homeowner's association information with contact information if property is a condo or part of a homeowner's association
Criteria For Loan Applications
Lenders consider many things in deciding whether to extend a loan. Not all lenders use the same factors. But there are some common guidelines that lenders use when evaluating loan applications:
Capacity
Lenders will review your employment history to determine if you have the capacity to repay your debt obligations. How long have you been working at your current job? How much do you earn? What is your future earning potential?
Credit
Lenders will review your credit history, consider how much debt you have incurred, and how you manage your debt responsibilities. How much do you owe? Do you pay your monthly bills on time? Are you consistently late in paying bills?
Character
Lenders will look at how you pay your bills. They will also take into consideration any history of lawsuits or bankruptcies.
Collateral
Lenders will evaluate the value of the property, a source of protection for the money they lend. The lenders want a guarantee that they will get back the money they lend. Is the property worth the risk? What are the chances that the property will decrease in value?
Getting Your Loan Approved
Approval means that you have successfully qualified for the loan for which you applied. Having an approved loan application means you can begin the closing process on the house. You will receive a formal letter of approval, commonly called a commitment letter, from the lender that guarantees in writing that they will lend you a specific loan amount. It also details the conditions of the loan.
The letter will address:
» The loan amount
» Loan program and type
» Term of loan (How many years you have to pay back the money)
» Annual interest rate
» Loan origination fee
» Points that may be applicable to the loan
» How long you have to complete the closing-related activities and transactions
» Other costs (neighborhood association dues, special assessments, etc.)
Reasons A Loan May Not Be Approved
There are several common reasons why lenders deny a loan application.
Poor credit report - A negative credit report generally indicates that the homebuyer has not established a good credit history. Your first step should be to verify that the credit information issued to the lender is accurate. Ask to see a copy of your credit report that the lender received, or obtain a copy of your credit report yourself from your local credit bureau. Furthermore, consult with a local HUD Housing counseling agency to determine what steps you can take to build your credit to an acceptable level. Depending on your situation, building your credit to an acceptable level may only delay your home purchase for a short time.
Not enough income - Your ability to pay off a loan is reflected in your current earnings and your future income potential. Lenders may decline a loan if the homebuyer does not meet the income requirements or cannot show proof of stable income. It is to your advantage to establish a consistent and stable income.
Too much debt - If your existing debts (credit cards, car loans, student loans) exceed the debt-to-income ratio for the loan, determine if you can pay off some of your debts before you apply for a mortgage. If you have credit cards you don't use, cancel them. Inactive credit cards are still considered potential debt. For more assistance with debt consolidation or other credit needs, contact a HUD Housing Counseling agency.
Options If Your Loan Is Not Approved
A lender is required by law to explain in writing the reasons why your loan was not approved. An important thing to remember is that if the lender declines your loan application, it does not necessarily mean that the purchase of a home is not in your future.
You still have some options available:
Consider another lender - You may want to research other lenders in your area. Fees and loan options vary by lender. You may be able to find another lender that offers more suitable loan packages or charges lower fees.
Increase your Down Payment - If you can increase your down payment, you will reduce the amount of money you have to borrow. This might help you qualify for the loan.
Contact local HUD Office - Check with your local HUD office about additional programs and resources available to you, or Click here for a list of HUD programs available nationwide.
