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The Waterbury Symphony Orchestra led by Music Director and Conductor by Leif Bjaland
May 10/ 8:00 PM, NVCC Fine Arts Center, Waterbury, CT
Experience the birth of a masterpiece.
The first half of the concert will be a multi-media extravaganza that details the life and times of composer Hector Berlioz.
How this magnificent work came to be written involves the collision between a combustible, red-haired romantic and an icy, aloof Shakespearean actress against the backdrop of a Paris filled with dark scheming and political intrigue.
Order tickets now at waterburysymphony.org or call the box office at 203.574.4283
Rejoice in all the things that renews your strength,
Soothes your soul, and brightens the world around you
I don’t have a lot of savings! My credit scores aren’t great! Can I still get a mortgage? The answer is YES! Let’s talk about your situation.
If you think having financial problems will stop you from buying a home, think again! Believe it or not, it may not be as difficult as one may think to purchase a home with less than perfect credit. Here are some common financial problems – and some smart solutions that may help you purchase your new home this spring!
General Tip – Work With a Professional Mortgage Broker
Getting a mortgage is an expensive proposition. – and without guidance from a qualified professional you could pay substantially more than necessary. If you’ve got financial issues, going to a regular bank might not be the right solution for you. You may be a square peg that doesn’t “fit” into their square boxes of credit guidelines. Instead, you should work with a Mortgage Broker who has established direct relationships with numerous lenders who offer a a wide range of mortgage options.
Why? Well, if you work with them directly, mortgage brokers might be able to direct you to a lender who will make exceptions to the standard underwriting guidelines. For example, I’m working with lenders who consider a borrower with a DTI higher than 43%; and a lender who will accept applications from borrowers with a 580 credit score.
Problem #1 – High Debt-To-Income Ratio (DTI)
If you’ve looked into getting a mortgage, you may have heard the term “DTI.” Just what is DTI and how does it impact your ability to get a loan?
DTI is your debt-to-income ratio – a percentage calculated by dividing all your current debt payments plus what the new mortgage will cost you every month by your gross monthly income. The new “ability to repay” rules mandated by the CFPB in January 2014 limit the borrowers to a maximum 43% DTI. The higher the DTI, the higher the risk of non-payment and the harder it is to qualify for a mortgage. If it exceeds 43%, traditional banks will probably decline the request.
Solution: You have to reduce your monthly payments.A good place to start is your car. I’m working with borrowers now who pay $600 per month in car payments. What’s done is done, but instead of financing those fancy new car a few years back, they might have considered buying a good used with substantially lower monthly payments. The cars are in good shape,have low mileage, so I suggested that they apply at their credit union for a loan to refinance their car loans for 24-36 months to lower their payments. I could argue that it’s best financial decision, and of course they could still make the former payments, but their DTI ratio would improve to a point where they could obtain a mortgage.
Problem #2 – Low Credit Score
A borrower’s credit score is the single most important snapshot of your credit risk by reporting the payment history on all your credit accounts. Lenders perceive a low credit score as a high credit risk and this could negatively impact your odds of being approved for a loan. And if you still qualify for a loan, a low credit score could still cost you. The lower the credit score, the higher the perceived risk and the higher the interest rate to compensate for that risk.
Solution: Get copies of your credit report. Go to www.annualcreditreport.com. the Only Website Authorized By Law to Provide a Free Annual Credit Report. Then discuss your findings with your mortgage broker ask him which areas need improvement. Work with someone you feel is honest, helpful, and has your best interests in mind. In addition to reviewing your overall credit situation, be sure to continue to make all payments on time; pay your credit card balances below your 50 percent of your approved credit line. These steps alone will help show the credit agencies that you’re a better credit risk and help improve your scores. Caution: Do not clear up active collections against you without discussing the ramifications with your mortgage broker.
Problem #3 – Low Down Payment
A major factor deterring home buyers today is saving the cash for the down payment on a home, the closing costs, and still having a few dollars left over in reserves. This is where your mortgage broker and your Realtor, working in tandem, can help.
Solution: Depending on your situation, you might be able to find a way to buy a home with a low down payment and still preserve your hard earned savings. There are a number of strategies and loan programs that help you get closer to your home ownership dreams.
• Conventional Loan: If you have a fairly good credit score, you might be able to qualify for a mortgage with a down payment as low as 5 percent. The lower the score the minimum down payment may increase to 10%.
• FHA Loan: The Federal Housing Administration (FHA) loan option might be the right choice if you have a low credit score limited cash. With an FHA loan, the minimum down payment is 3.5% even if you credit score is in the 620 range. Some lenders will work with a borrower with credit scores down to 580 with overlays to compensate for the perceived risk of default. It doesn’t hurt to talk to your mortgage broker about both these options.
• USDA Loan: In my opinion, the USDA Guaranteed Rural Housing Development Loan program is the best deal in town for those with limited savings. It offers 100% financing for eligible properties in USDA approved communities. Closing costs can be rolled into the loan amount when the appraised value exceeds the contract sales price. There is no limit on gift funds or seller concessions
• VA Loan: The Veterans Affairs (VA) loan has similar criteria as the FHA loan. But it’s targeted to serve toward past or present military personnel. Veterans may also be able to purchase a home with no down payment through a VA loan.
• Seller Concessions: In certain negotiations, the property owner may be willing to entice eligible buyers to purchase their home by offering to contribute up to 3-6% of the contract price toward the buyers closing costs. It’s important to talk to your mortgage broker and your real estate agent about this option. It’s also important for the buyer to understand that they “can’t have their cake and eat it too.” Buyers can’t expect to offer less than the listing price and still ask for concessions. You may have to pay full price and then hope the seller will take less for the property.
• Gift Funds: Funds for the down payment and/or closing costs can be gifted to the borrower from a close family member. It is important to discuss this possibility with your mortgage broker as different loan programs have different limitations on how much the borrower must contribute to the transaction and how much can be gifted. Sourcing the receipt of gift funds, especially wedding gifts, has been a problem for 15 years. DO NOT deposit gift funds into any account without talking to your mortgage broker.
• State-Sponsored Down Payment Assistance: Another option for borrowers are down payment assistance programs sponsored by certain states, municipalities, and non-profit organizations. They may be offer to teachers, police and firemen who plan to live in their city and/or earn below a certain income level. These programs may be limited to first-time homebuyers. Check with a broker who specializes in these types of programs.
Summary: Low credit scores and/or lack of funds may be just a bump in the road to owning your own home. Talk to your mortgage broker about what it takes to get Pre-Approved for a Mortgage and how to get over these hurdles.
Still Have Questions or Concerns?
Call Me at 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Mortgage Pre-Approval service. Then you can call your agent to schedule a showing and be ready to make an offer.
With today’s attractive rates, and my direct relationships with trusted lenders who offer a wide range of affordable mortgage programs, you just might be able to move in with a minimal down payment and low closing costs
As you may have seen in the news, the “Heartbleed Bug” has been labeled a critical online security issue. Immediate Action is Required!
The following popular sites have reportedly updated their encryption and will be fully secure to use again by simply changing your passwords:
• Yahoo Mail
Can You Believe It! The CFPB does something right!
For years now, FHA has assessed a “Pre-Payment Penalty” on homeowners who pay-off their FHA Mortgage early. They don’t call it that, but that’s what it is!
Here’s how it works: No matter what date in a month a FHA mortgage is paid off via sale or refinance, FHA charges that homeowner interest until the end of the month. Let’s say the closing takes place on the 2nd of the month. The loan is paid-in-full, yet FHA charges the borrower for “unearned interest” through the last day of that month. That’s a Pre-Payment Penalty in my book!
Not a big deal you say! A delay in closing a FHA mortgage past the 30th of the month means higher closing costs for those wanting to refinance and less proceeds from those selling their home. Why is this allowed to happen? Because FHA said so, that’s why. Just another way to increase their bottom line
Unfortunately, they don’t have to make the change right away.
FHA has until 1/14/15 to halt this usurious practice. In the meantime, it is business as usual.
I’m blown away! The Consumer Finance Protection Bureau (CFPB ) is making FHA stop this rip off that has been going on for years
Saw a recent article filled with a lot of statistics about the number of homes on the market that were not affordable to the average American. After reading a few paragraphs of statistics, I found myself asking:
• If so many homes are not affordable, how many are affordable and affordable to whom?
• For those homes that are not affordable, why aren’t’ they?
• And since when does the price range of all the homes on the market have to be affordable to all buyers?
Now, today’s page of the Business Section today that foreclosure filings have increased this year, not only in CT, but across the country as well. These homes will go on the market because they are not affordable any more. And if they aren’t affordable, who can afford them?
Most First Home Buyers come to me for Mortgage Pre-Approval with big dreams, high hopes and a lot of questions. Too often folks want to buy a home in a price range they cannot afford. Usually it’s because their situation does not merit the interest rates they see in the newspaper; they haven’t considered real estate taxes and home insurance; and the cost of mortgage insurance may not be in their calculations.
It is my job to help home buyers set realistic expectations and help them see how big a house they can afford and how large a mortgage they qualify for. Getting prospective home buyers Pre-Approved for mortgage is an exercise to insure that “families live comfortably and financially secure in their own home.”
Home buyers and sellers may sometimes feel that real estate agents or brokers don’t answer their perfectly reasonable questions and concerns. They’re totally justified for feeling this way because, frankly, it’s true.
It may appear that your Real Estate Agent Won’t Answer Your Questions. It’s not that they don’t know the answer or are giving you the run-around. The fact of the matter is agents MUST be very careful about what they say because there are many Fair Housing Laws that protect the rights of all interested parties.
It’s no secret … real estate agents can’t be forthcoming with some information sought by consumers, even when this information might be critical to their decision process because it’s the law.
Here Are 10 Topics Your Real Estate Agent Won’t Discuss With You:
1. I won’t answer your questions about other people. Not the race, color, national origin, religion, familiar status, disability, age, or sexual orientation of neighbors or other principals in the transaction. This would violate federal, state, and local fair housing laws.
2. I won’t discuss my clients with you. Not their motivation, urgency for buying or selling, financial situation, or willingness to negotiate. I am required by law and my Code of Ethics to “maintain the confidentiality of clients.”
3. I won’t disclose my client’s opinion of your home because it may violate my obligation regarding confidentiality. If you or your agent request feedback, however, I will seek permission from my clients to share their opinion of your property with your listing agent, and follow the instructions of my client.
4. I won’t offer my opinion on legal, tax, or structural matters because I’m licensed real estate agent. I’m NOT an attorney, accountant, or property inspector. If requested, I will provide you with contact information for licensed attorneys, accountants, or home inspectors that have earned rave reviews from my past clients.
5. I won’t answer your questions about real estate in another state because I’m licensed only in this state. I will, however, refer you to an agent in that state who can help you.
6. I won’t discuss your property or its value if I have a present or contemplated interest in the property, unless this interest is specifically disclosed to all affected parties.
7. I won’t disclose details about the property condition of my listing unless there are any “material defects,” that I and and the seller are required by law to disclose. That’s what a home inspection is for.
8. I won’t answer your questions about neighborhood safety because my response may be interpreted as “steering” you toward or away from a neighborhood, which violates Fair Housing Laws. I can refer you to online resources for information on this topic.
9. I won’t discuss local schools with you for two reasons: 1) Anything I say may inadvertently violate Fair Housing Laws and 2) Information about school boundaries, policies, or programs may change without notice. I can direct you to various websites that do contain factual information about local schools including public, private, and parochial schools, daycare centers, and nearby colleges and universities.
10. I won’t tell you the contract price for a listing that is “under contract,” but not yet settled. In addition to my obligation to maintain the seller’s confidentiality, there is another very practical reason: If the contract fails to close, public knowledge of the previous contract terms could negatively impact my client in future negotiations.
If you feel that your agent is giving you a runaround, don’t be too quick to judge. Tell the agent how you feel and ask WHY he or she won’t tell you what you want to know.