Posts Tagged ‘Financing’
Searching For Jumbo Mortgage Loan Financing? Beware!
Borrowers considering homes that require mortgages above the Fannie/Freddie maximum of 7,000 should be aware of the many differences that exist in the qualification and underwriting processes. Generally, Jumbo mortgages are harder to qualify for and demand higher base interest rates. Conventional loans are available up to 7,000 in most areas at interest rates currently averaging below 5% for terms of up to and including 40 years. Jumbo mortgages (above 7,000) are offered by a diminishing number of lenders with rates generally at or above 6% with maximum terms of 30 years.
Another obvious disparity is the minimum required credit rating. Borrowers with FICO scores above 660 meet the minimum score qualification for conventional loans originated by most mortgage lenders. Jumbo loan applicants must apply with credit scores equating to 720 minimum.
Additionally, conventional underwriting will allow at least one 30 day mortgage or rental payment delinquency in the prior 12 months (some lenders even allow for one in the past 6 months). Jumbo applicants can have no 30 day late notices over the same period.
Other financial factors that reveal notable differences are in the areas of reserves, maximum loan to value, and debt to income ratios. Jumbo loans require that liquid assets equaling 12 months reserves reside in the borrowers financial portfolio. Conventional borrowers are normally required to prove only 2 months of liquid reserves. As to loan to value ratios; Conventional loans can be written for up to 95% of the value of the home whereas Jumbo loans max out at 75%. Finally the maximum housing ratio (debt to income) allowed for a conventional loans is 43% whereas a Jumbo loan applicant must demonstrate a maximum of 40% total combined mortgage, installment and revolving debt.
Business Financing
As a business owner, you need to find out that picking the wrong type of funding may lead to undesired situations just like feuds between you and your financier, a shift of control that is out of your hands and total waste of time and money, as well as other unwanted consequences. The thing is that you have to look for and go for the most beneficial business finance option which best fits your small business. As a way to aid you to find the ideal financing alternative, we’ve outlined various financing options which you may find appropriate for your business.
Before proceeding, it is important to emphasize that small business finance options are often more complicated than anticipated by many business borrowers. We are definitely not attempting to characterize business loans and working capital financing as either straightforward or simple. In fact, quite the opposite is the case. The unfortunate reality that most business financing processes have always been excessively complicated and that meaningful improvements are not on the way is one of our ongoing observations. We nevertheless feel that it is critical for each small business owner to have an absolute and total understanding of the entire commercial finance process in the face of the prevailing commercial lending complexity. To help in providing more understandable insights about commercial loans and business banking problems, this particular report is one of several thorough efforts on our part.
Easy Bad Credit Auto Financing With Lower Interest Rates
Bad credit auto financing is a mystery to many people. It’s very frustrating to people that don’t understand how it works and how to get a better deal than what the dealer is offering you. People walk out of dealerships everyday thinking that they can’t get approved or that they have to pay a really high interest rate.
That’s simply not the case.
If you understand bad credit auto financing, you understand that you can in fact get an auto loan on most any vehicle. You can also get that loan for a much lower interest rate and lower payments than the dealer convinces you of.
You see, auto dealerships make money not just on the price of the car, but on the interest rate that you agree to. Yes. Dealers make money by raising your interest rate above and beyond what the loan company approves you to have to pay. If the loan company approves you at 9%, the dealer will mark up your interest rate by up to 5 or 6 percentage points.
How much would you save if you could get that loan at the 9% vs 15%? A lot of money.
You don’t have to use the dealership finance department and in fact, if you’ve got bad credit you should avoid it altogether. Car dealers know that if you’ve got credit problems, you’ll likely feel more desperate to get approved and will sign anything.
What Is Tier 1 Credit In Auto Financing? 5 FAQs
One of those things everyone learns as an adult is about the deep relationship between credit scores and auto financing. If you have ever had to take out an auto loan, mortgage, or personal loan of any type, you know that your credit score plays a huge role in the interest rate you are offered. While of course it is true that different lenders could offer different interest rates to the same person, there is no mistaking that your credit score is pivotal.
Of course, not all credit scores are created equal. Some people have poor credit, while others have good or excellent credit. The pinnacle of all credit considerations is what is known as tier 1 credit. People with tier 1 (tier one) credit scores have certain advantages over others when it comes to auto financing.
If you have ever wondered, “What is tier 1 credit in auto financing?”, here are some answers to 5 frequently asked questions (FAQ) about tier one credit:
1. What is tier 1 credit?
A: This term universally refers to that tiny percentage of all consumers who have excellent credit scores. Only a small percentage – about 5% – of U.S. consumers have a credit score in this range.
2. Is the definition the same across all financial companies & lenders?
A: The generally-accepted threshold for an excellent credit score is 770, and well-respected institutions such as Freddie Mac, SmartMoney.com and PBS all classify it as being above 770. However, Fair Isaac considers anything about 700 as being in this illustrious credit category.
Financing Your New Home
As you dream of owning a brand new home, you are also probably thinking of how you are going to finance for it. Right after you decide on the kind of neighbourhood that you want to live in and the type of property that you want own, you must also decide on the budget that you can allocate for your home. In fact it is a good idea to pre-qualify for your loan and finalize the financing options before you even start looking for homes. There is nothing more frustrating than having to let go of a property that you have your heart set on, only because you find out too late that it is way out of your financial league.
Pre-Qualifying for Financing
The best thing about pre-qualifying for a home loan is that you get to establish your budget, which can save you a great deal of time and frustration. If you know what you can spend, you will look only for property within that limit.
Remember that taxes, closing costs, utilities and insurance can also affect your budget.
Whatever your budget is, financing solutions are available. There are 15 and 30 year fixed mortgages, Adjustable Rate Mortgages and even government programs like Fannie Mae (Federal National Mortgage Association) to help you.
Obtain the Best Mortgage