Posts Tagged home buyer

Pre Qualify A Buyer

How To Pre-Qualify A Buyer When You Sell Your Home ‘By Owner’

Being able to pre-qualify a buyer prior to the sale of the home is very important for individuals that are selling their home by themselves. When you sell your home ‘by owner’, you lose the advantage of having someone with years of experience in your corner, handling all of many details of selling the home for you. It is important for the home owner to review all of the available information on how to sell your home in order to ensure that everything remains legal and above-board during the process so that none of the parties will have any reason to complain about the transaction.

The task to pre-qualify a buyer when you sell your home ‘by owner’ can be difficult if you do not understand the process and cannot perform the tasks required to find the information that is needed. It is easier for the seller to qualify a prior homeowner than a first time homeowner because most of the information that the seller will need has already been compiled and the existing home’s value may be used in determining whether or not the purchaser can afford to own the property in question. Once the information has been compiled, it will take the seller a short period of time to review the information and determine whether the individual is qualified to purchase the home.

Some potential buyers take the initiative and become pre-qualified for a mortgage prior to shopping for a new home. This may be done for a variety of reasons, including ensuring that they will be able to obtain a mortgage and determining the price range that they should be looking in while conducting their search for a new home. These types of purchasers are the best for the people who decide to sell their home on their own, as the individual already knows that the potential purchaser has the means to purchase the home if they choose to do so.

If the seller will need to pre-qualify a buyer that is interested in the home, there are a number of different pieces of information that are needed. By asking certain questions of the purchaser, you can easily determine whether or not they may have the ability to purchase the property and that prediction can easily be confirmed with a lender in the several days after the initial meeting. In many cases, the individuals that are not serious about buying the property will break off communication and attempt to leave as soon as the seller begins to ask the pre-qualifying questions.

The things that the seller will need to know about the potential buyer in order to pre-qualify the individual is their credit score, whether or not they already own a home, if they will need to sell their home in order to purchase another home, and if the buyer has already spoken with a lender about obtaining financing for purchasing a new home. Being able to sell you home ‘by owner’ can be difficult because of the vast amount of information that the seller must have to sell their home legally and pre-qualify a buyer for the purchase of the home.

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Fixed Mortgage Rates Rise Slightly in Latest Survey

Freddie Mac today released the results of its Primary Mortgage Market Survey. This week the current fixed rates rose very slightly, but despite that, Freddie believes that continued low rates are helping boost the housing market. July sales rose for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007.
The 30-year fixed mortgage rates rose slightly from last week, with an average of 5.14 percent and 0.7 points for the week ending Aug. 27th. Last week the same mortgage was at 5.12 percent with 0.7 points. Last year at this time, the 30-year fixed rate mortgage averaged 6.40 percent, with 0.6 points.

The 15-year fixed mortgage rates averaged 4.58 percent with an average 0.7 point. This is down from last week when the same mortgage rate averaged 4.56 percent with 0.7 points. A year ago at this time, the 15-year fixed rate mortgage averaged 5.93 percent, with 0.6 points.

Five-year adjustable-rate mortgages (ARMs) currently average 4.67 percent and 0.6 points. Last week the same mortgage rates were at 4.57 percent and 0.6 points. A year ago, the 5-year ARM averaged 6.03 percent, with 0.6 points.

One-year Treasury-indexed ARMs averaged 4.69 percent this week with 0.6 points. This is unchanged from last week, but last week rates carried only 0.5 points. At this time last year, the 1-year ARM averaged 5.33 percent, with 0.7 points.

For those not aware, points are pre-paid interest which is paid at the time the mortgage is taken out. At that time the home buyer is locked in that mortgage rate if approved and the later fluctuations don’t effect your rate after you are locked in.

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Mortgage Lending-A Few Facts To Start Down The Path To Home Ownership

From a loan standpoint there are, in general, three types of loans, a fixed rate mortgage, an adjustable rate mortgage (ARM) or an interest-only loan. With an interest only loan, you are just paying the interest piece of your loan. In an adjustable rate mortgage, the interest rate is usually fixed for a specific length of time, after which it will periodically (for example, annually or monthly) adjust up or down to some market index. In a fixed rate mortgage, the interest rate, and subsequent periodic payment, stay unchanged for the life (or term) of the loan. For a fixed rate mortgage, payments for principal and interest should not change over the life of the loan, while ancillary costs (such as property taxes and insurance) can and do change. Your monthly cash flow, length of time you hope to living in the house and your general credit history will all factor in to the type and length of loan you should select.

In coming up with a home buyer?s loan amount, interest rate and cash required, lenders will consider many factors. These factors, in turn, help lenders to calculate their apparent risk of the mortgage loan, that is, the likelihood that the financing will be repaid. None of us will totally comprehend the inner workings of a mortgage lender but plain and simple is the fact that mortgage loans are accessible for all types of homebuyers with all types of credit.

The term mortgage loan is the generic word for a loan secured by a mortgage on real property; the ?mortgage? refers to the legal security, but the terms are often used interchangeably to refer to the mortgage loan. When making a mortgage loan for purchase of a property, lenders ordinarily require the borrower make a down payment, that is, contribute a percentage of the price of the house. In the past, the necessary amount, or percentage, of a down payment has been directly related to a person?s credit history. However, 100% or more lending choices can be found in the mortgage lending space, even for those with a bad credit history.

Statistically, just about 25% of the people in the United States are part of the subprime category and while there is no formal credit profile that describes a subprime borrower, most in the United States have a credit score that is not more than 620. Subprime lending, also called near-prime, or second chance lending, is a broad term that refers to the practice of creating loans to borrowers who do not meet the requirements for the top market interest rates because of their poor credit history. The term ?subprime? is in reference to the credit status of the borrower, not the interest rate on the loan itself. This lending is risky for both lenders and borrowers due to the blend of above average rates, inadequate credit history, and potentially suspect financial conditions often related with subprime applicants.

For borrowers who have exceptional credit and adequate debt positions, there may be next to no documentation of income or assets required at all. In approving mortgage loans, lenders in many markets rely on credit reports and credit scores derived from them. The bigger the number, the less of a financial risk the borrower is assumed to be. Life will tell you that everything in life has its price and mortgage lending is no different. Pretty much anyone can approve for a mortgage with the price tradeoff usually being a higher interest rate. Lenders are looking to lend as much money as possible, but are always looking to accept as little risk as possible.

Finding the money for your home is a necessary evil but taking that step to buying a new home should get you excited, not scare you. Mortgage loan rates are still at a level that offers you some very good options, making it a good time to buy a home. There is a web presence of highly regarded lenders who are looking to help you obtain a mortgage loan. Do a little research, get a few ideas from these lenders as to what you can qualify for, and then go out and buy your dream house.

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