fbpx
Average Rates: 3.6% - 30yr|3.25% - 15yr
for a free quote!

Homestead Financial Mortgage

Let Homestead Financial Mortgage provide you with a stress-free home mortgage or refinance experience! Ask us anything at anytime because it's always #zerotofindout.

Why a Renovation Mortgage Could be Perfect for Your Purchase

Why a Renovation Mortgage Could be Perfect for Your Purchase

Numbers you should remember: $110k, $50k and $220k

In this 2017, inventory challenged market, a renovation mortgage is becoming more and more of an option for you to turn an ordinary house into the home of your dreams.

What is a Renovation Mortgage?

Simply (as possible) put, a renovation mortgage is a transaction where you finance in the improvements. However, in order for the lender to take on the risk, the funds are held in escrow and disbursed in progress payments as the work is completed, phase by phase.

The name of the products are either a 203k (FHA) or Homestyle (Conventional)

 

So, how does a Renovation Mortgage work?

In the case of a purchase, you can buy a beaten down home, usually a foreclosure or a home that is dated or otherwise in some state of disrepair.

Purchase Price $110,000

You can get a bid from a contractor for say $50,000 to improve the home to your specifications.

This means you’re financing $160,000.

After the home is complete, the home then becomes worth say $220,000.

Why might this be the perfect option for you in today’s housing market?

In every corner of the real estate market, all we are hearing is “inventory shortage, inventory shortage”! This option can help you turn the house that no one wants, into the home you love!

 

I Didn’t get the Cash Out I Wanted on My Mortgage Refinance, What can I do?

I Didn’t get the Cash Out I Wanted on My Mortgage RefinanceSo those borrowers who would like to refinance and pull “Cash Out” of your home but were turned down or told the home didn’t appraise for enough, there are some options which you can do fairly quickly to change your outcome.

1. Increase your credit score.

Often, lenders have a limitation on how much cash they can lend, many times, it may be due to credit score. For example, you may be able to borrower up 70% of your home’s value at a 640 score on a conventional loan, but if you have above a 700+ score, you may be able to go up to 85%

2. Apply for a renovation loan.

Many borrowers just want the cash for home improvement, unaware that a renovation loan is what they need. In some cases a renovation loan appraisal can yield a much higher value because it can value the home, “subject to” the improvements being done which is rare. Due to the their technical nature, a renovation loan isn’t common. However, they can be well worth it, with the right circumstances.

3. Apply for a HELOC

A HELOC is a Home Equity Line Of Credit. This is technically a 2nd mortgage but has a lot more flexibility to pull cash out and repay. They also can go to a higher Loan-To-Value than most other products.

So, what do you do if this is you? Like anything when you are dealing with professional services…get a second opinion and ask them about any of the above options.

How to Prequalify for a Mortgage

Buying a home is the all-American dream. It starts with an idea, then saving for the down payment, and finally shopping for the perfect place to call home.

When you prequalify for a mortgage, your house shopping will run smoother, giving you—the future homeowner—some guidelines in regard to how much you can spend. There’s no point in falling in love with a house that you can’t afford. Prequalifying will keep your shopping in the reality zone and eliminate getting in over your head. Continue reading “How to Prequalify for a Mortgage”

Is Paying Off Your Mortgage Early a Good Idea?

It’s a question that weighs on many homeowners’ minds these days. Is it wise to pay off your mortgage early? The answer depends on your financial situation and there are good arguments that can be made either way. Here are several reasons why you should and shouldn’t pay off your mortgage early. Continue reading “Is Paying Off Your Mortgage Early a Good Idea?”

Credit Qualifying for a Mortgage after Divorce: 3 Tips

Very frequently, we get borrowers who have gone through a divorce and due to lack of awareness of the items still on their credit report, are unable to qualify for the refinance or purchase mortgage they were hoping to obtain. You can still get a mortgage after divorce. Here are some tips to make sure this isolated event doesn’t affect your credit score, causing you to miss out.
Continue reading “Credit Qualifying for a Mortgage after Divorce: 3 Tips”

The Basics of Mortgage Underwriting

Underwriting a mortgage loan is as much an art as it is a science. Whether you’re in the market for a mortgage on a new home or refinancing, it helps to know what mortgage underwriters look for so you can meet the lender’s parameters for loan approval. Here are some things to keep in mind.

Mortgage underwriting is the analysis process an underwriter performs when trying to determine whether to approve or decline a mortgage loan. Mortgage lenders create mortgage programs with guidelines for acceptable risk factors to underwriters. When your loan reaches underwriting, an underwriter is ensuring your loan meets the mortgage lender’s parameters. Every financial situation is different which makes every loan unique. Continue reading “The Basics of Mortgage Underwriting”

4 Tips for Using Child Support to Qualify for a Mortgage

Quite often we see mortgage applicants, generally single mothers applying for financing that have income from a job and child support.  Sometimes, the child support is the make or break item that is the difference in qualifying the applicant for a home loan.

However, due to the inconsistent nature inherent in some child support relationships, there are a number of rules that apply to getting the child support payments to qualify as income for a mortgage applicant.

Below are 4 tips to use in advance of your mortgage application to make sure child support income can be included by your mortgage lender.

1. 6 Months Backwards

In order for child support income to be considered, we must ba able to document a 6 month history of receipt. This is due to so many parents not making the required child support payments. Proving receipt for 6 months can be problematic though. In some cases where child support is administered by the state government, for example, state of MO Child Support Enforcement has a link to document payment history of their cases, which is available at https://dssapp.dss.mo.gov/payments/WbMdi3OrdersByCaseListSvr.ASP Each recipient is required t to obtain an 8 digit key code to access their account.

2. 3 Years Forwards

Also, like most income that is not directly derived from work, the rule of thumb to qualify for a mortgage is to show that the income stream will continue for at least 3 more years. Effectively, this means the children for which the borrower receives financial support can’t be any older than 15 at the time of application.

3. Check Please! 

If not paying via some online vehicle, try to be paid by check. It helps if there is a copy of the check which can be verified with the deposit receipt on the bank statements.

 

4. Deposit the check quickly, by itself and wholeSingle Dad Mortgage

The child support check should be deposited as quickly as you receive it, and should be deposited by itself and do not take any cash out of the deposit. So in other words, don’t hold on to the check to deposit with a payroll check and don’t take cash from the deposit.

So, for example, Sally, who lives in Warrenton, collects child support of $1,100 per month is paid by check for 2 children ages 12 and 10. She regularly copies the front of the check and deposits the check by itself and whole. A mortgage company will be able to use this as income towards qualifying for her mortgage by producing 6 months of bank statements and copies of the checks showing a check for $1,100 and deposits for $1,100.

To conclude, it is possible to include child support as income toward qualifying for a mortgage application. It does take some planning and documentation.

 

If you have anymore questions or want to discuss this further, please feel free to reach out to Jayson Hardie at 636-256-5712, it costs ZERO to find out!

What to Avoid When Shopping for a Mortgage

Everyone wants the best rate possible, we all do, we want the best for us and for our family to free up as much money for the important things in life. Yet, when you are shopping for a mortgage, before application, make sure to keep these things in mind that are some of the mistake we’ve seen many borrowers make. Continue reading “What to Avoid When Shopping for a Mortgage”

Should I Pay Down My Mortgage with Extra Money or Invest?

So you have some extra dollars and want to know what to do with it? For the purposes of this article, lets assume “spending it” isn’t an option. What are the benefits if I pay down my mortgage vs investing the extra money? When you evaluate the numbers, it boils down to emotion vs logic. Continue reading “Should I Pay Down My Mortgage with Extra Money or Invest?”

Bank vs Mortgage Lender: What’s the Difference?

The Bank vs Mortgage Lender Difference

Homeowners seeking financing often ask what the difference between a bank and a mortgage lender is when it comes to doing a home loan. Whether it is a refinance home loan or a purchase home loan, there are distinct differences. A bank, as most people are very familiar with, primarily service checking accounts, savings accounts, CD’s, car loans, and sometimes “Home Equity Line of Credit” second mortgage loans. Some may even do first mortgage position loans, though not all. A Home Equity Line of Credit, also known as a HELOC is a secured home loan that is in second lien position to the primary first mortgage loan. This is referred to as a 2nd mortgage. A HELOC is usually a variable rate loan based on “Prime Rate”, which is an index based loan. Continue reading “Bank vs Mortgage Lender: What’s the Difference?”

5 Tax Return Pointers to Help You Qualify for a Mortgage

For any of us interested in qualifying for a mortgage in the near future you should also pay attention to how we are required to file our tax returns. With April 15th fast approaching, here a some tax return pointers to make sure your return doesn’t keep you from qualifying for a mortgage. Continue reading “5 Tax Return Pointers to Help You Qualify for a Mortgage”

5 Tips to Qualify for a Mortgage After Bankruptcy

Young Couple and BankrupstcyAfter the Great Recession, many have been trying to pick up the pieces and move on with their lives, or just get back to where they were. Today we’ll talk about how to qualify for a mortgage after bankruptcy. How to manage your credit afterward, how to manage your finances, and when you can expect to be able to qualify for a mortgage.

Qualifying for a mortgage after bankruptcy isn’t a forever wait. In fact, you can qualify for a mortgage as soon as 2 years after a bankruptcy.

If you’re one of the unfortunate many who have filed for bankruptcy(bk), the road back to credit health starts with which type of bankruptcy you filed. A Chapter 13 bk is easier to work with in that the payback plans helps re-establish credit history, but the 3-5 year payback plan takes your timeline out longer. A chapter 7 is over faster, but it can be more problematic especially if the borrower didn’t reaffirm on any trade lines(or keep any accounts open) after their filing

What do I need to do?Bankruptcy - Recovery

  1. Re-Establish credit. Get your credit score above 640
  2. Do not miss any payments
  3. Pay your rent and other bills by check
  4. Check your score before your 2 year window opens.
  5. Clean up any outstanding inaccuracies

Re-Establish Credit

This can be easier said than done. Getting a secured credit card will help. A secured credit card is when you put a deposit down on a credit card to secure the amount of your credit limit. Capital One has a secured credit card program. Other department stores have on the spot approvals with low credit score requirements that can get you started. Their interest rates may be higher, but so long as you pay off your balance at month end, you should be safe. The goal is to have 3 trade lines, plus the payments for where you live reporting for at least 12 months before you apply.

 

Get your score above 640

FHA will approve most borrowers 2 years after a BK, but participating banks have established a market where the minimum credit score to qualify is 640.

Do not miss any payments

In order to qualify for a mortgage 2 years and 1 day after your BK, you must have re-established credit and can not have missed any payments since the discharge. So, from the time of your discharge, you must be squeaky clean!

Pay your rent and other bills by check

Do you best to pay any monthly obligations by check and not by cash. For borrower’s who are borderline, being able to produce cancelled checks to show payment history can be the deciding factor for approval or denial of your mortgage application. If you’ve always paid by cash, there is no objective proof the payments were actually made.

Check your credit score before your 2 year window opens.

If you want to qualify for a mortgage as soon as you can after a bankruptcy, then the time to pull your credit is not at 2 years. You should pull your credit 6 months after your bankruptcy to make sure all of the trade lines that were discharged in BK report that way and not as collections and any new trade lines you have re-established are now reporting correctly in your favor.

Clean up any outstanding inaccuracies

In many cases after a BK, accounts that were supposed to be reporting as discharged, don’t report correctly, many times they report as collections or write offs. If you pull your credit early enough, you have plenty of time to correct them. The longer you wait to correct in-accuracies, the harder it is due to lack of documentation and support for the new action.

To conclude, it is possible to qualify for a mortgage as soon as 2 years after a bankruptcy will a good amount of discipline, planning and effort.

Take a look at when you can get a mortgage again after bankruptcy,

Qualifying for a Mortgage with 1 Person of a 2 Income Household

A common question home loan applicants have regarding income qualification of a purchase or refinance home loan is, “Do we make enough income to qualify for a purchase or refinance home loan using just one of our household incomes?”
Using just one of the household incomes can come into play in many scenarios when getting approved for a home loan. For example, Jim, in Arnold, MO is a painter but it is difficult to verify his income or, Mike, in Kansas City, is in transition between jobs but is married and his wife has stable employment. For underwriting purposes, using just one of the household incomes that can be verified may be the best route to get approved for a new home loan, while still maintaining both parties ownership rights to the home. Especially, if it is difficult to document one of the household incomes. Continue reading “Qualifying for a Mortgage with 1 Person of a 2 Income Household”

What Does a No Cost Mortgage Refinance Mean?

You hear it all over the radio and see it all over the internet. “Refinance with No Cost”, which sounds a little…errr, maybe a lot too good to be true. Today we will talk about what is a no cost mortgage refinance, how does it work, and if it is right for you. Continue reading “What Does a No Cost Mortgage Refinance Mean?”

Making a Licensed Mortgage Loan Officer

When inquiring into mortgage rates or dealing with a mortgage application, you will deal with a licensed Mortgage Loan Officer. On any email or business card, there will be 6 digits behind a Loan Officers name, which is their NMLS ID number. Today we will discuss what it means to be an NMLS licensed loan officer, the history of how licensing came to be, the benefits to the consumer of Loan Officer Accountability, and what goes into getting a Mortgage Originator’s License. Continue reading “Making a Licensed Mortgage Loan Officer”

What Does it Mean When a Mortgage Company Advertises “No Appraisal Required”

In trying to makes sense of advertising of mortgage company ads, one will hear many things. Today we will discuss what it actually means when someone says they can refinance your home without an appraisal.

Is a No Appraisal Refinance Possible?

Yes, it absolutely is. Currently, approximately 10% of our mortgage refinance transactions are done without an appraisal. In addition to saving the $350-$500 cost of the appraisal, the transaction can move faster due to many appraisers being backlogged, Currently, the refinance transactions that are done without an appraisal comes down to either conventional HARP loan or an FHA streamlines. Continue reading “What Does it Mean When a Mortgage Company Advertises “No Appraisal Required””

How Much Income Do I Need to Make to Qualify for a Mortgage?

Of the 3 major criteria needed to qualify for a mortgage to buy a home, Credit, Capacity, Collateral, today, we will focus on Capacity. In other words, we’ll talk about how income is calculated, your DTI (debt to income ratio) and how that ratio is used to underwrite your mortgage.
Continue reading “How Much Income Do I Need to Make to Qualify for a Mortgage?”

Can I Refinance My Home if I Owe More than its Worth?

You heard it all over the news through the course of the mortgage meltdown, “Home Values Down 10%…20%”. “Homeowners owe more that their homes are now worth.”

While cities in the Midwest like St. Louis, Kansas City and Indianapolis didn’t get hit as hard as other larger cities, everyone knew someone who lost a home or is struggling to manage bills, in any city.

Enter then, a market that has once in a generation interest rates that should be helping everyone with a mortgage recover financially, but for those who are upside down on their mortgage, they have been left on the outside, looking in leaving them unable to refinance on the basis that they owe more than their home is worth; in other words, they are, “upside down” on their mortgage. Continue reading “Can I Refinance My Home if I Owe More than its Worth?”

5 Tips for a Faster Mortgage Refi

With rates that come around once in a generation, everyone is in a rush to try to refinance their mortgage. However, with government regulations burying home owners and mortgage originators with mountains of disclosures, the process can seem daunting. However, here are some tips for you to be ready to make your next refinance as painless as possible.

1.       Have All of Your Documentation Ready….Yes All That Documentation.

File your taxes, get your w2’s, checkstubs and have bank statements ready.  Also in some cases, bankruptcy papers, divorce decrees. Continue reading “5 Tips for a Faster Mortgage Refi”

New FHA Streamline Rules Help Make Refinancing Easier

Effective June 11th 2012, new rules regarding FHA Streamlines will help some borrower refinance into lower rates.

While everyone is well aware of mortgage rates being at all time lows, access to those low mortgage rates remains tight, with credit score minimums,  increasing mortgage insurance premiums and falling home property values.

In the Midwest, St. Louis, Kansas City, and Indianapolis, home values have not been hit as hard, but still, many customers who make their mortgage payments on time have missed out on the benefits of these low rates because of inability to qualify.

Specifically, for those who have a HUD backed mortgage, increasing mortgage insurance premiums have become the largest obstacle to helping borrowers take advantage of lower rates, having gone through numerous premium increases as rates have fallen in recent years.

However, effective June 11th, 2012 some who have paid their FHA mortgage on time will have the opportunity to cheaply save money by lowering their rate, and mortgage insurance premiums(both upfront and monthly)

In order for a borrower to qualify, the following will be needed:

  1. Must have an existing FHA mortgage endorsed prior to May 31st, ,2009.(Endorsed, not closed)
  2.  Mortgage must be paid on time.
  3. May be done without an appraisal.

Upfront Mortgage Insurance Premiums (UFMIP) will be reduced from 1.75% currently being charges to .01%(yes. 01%)

Monthly premiums will be reduced from 1.25% on 30 year mortgages over 95% LTV to .55% on most loans.

So What does that translate to?

About $100 on a $175,000 30 year fixed rate refinance compared to today’s FHA mortgage insurance tables.