Guidelines in a Mortgage Loan Process

In the past few years, the mortgage loan process and procedural policies have been much more rigid, which is clearly brought about by the foreclosure crisis. A borrower’s financial records are thoroughly inspected to make sure the borrower is qualified in terms of credit score and that the procedures for various loan products are followed.

For products such as FHA and VA, the loan approval process involves sourcing the borrower’s funds. This means accounting for the borrower’s cash on hand and where it came from, including money for deposit requirements. For instance, FHA loans ask for at least 3.5 percent of the overall purchase price as a deposit.

While there are a few FHA loan products that do not have this requirement (i.e. purchasing a HUD-owned home), the majority of FHA loan products require at least 3.5 percent down payment.

The down payment can be in terms of “gift funds” from a friend or family member. In either case, affidavits must be signed by the borrower and the benefactor. The affidavits must state that the funds are not a loan, but indeed a gift.

In conjunction with the affidavit, a proof of funds or “gift letter” is also required by the lender from the benefactor. This is typically a bank statement that shows the money was from the benefactor’s account before making the gift and ensures it was not lent by another source. Moreover, the borrower’s bank statement must show a deposit entry for the same amount of the gift.

The borrower must always be aware of the requirements of the loan product that is appropriate for the purchase. Ask the lender to give comprehensive details about every guideline, and make sure to ask questions if there is anything you are not able to understand. More importantly, properly validate the source of your funds so that your transaction will be closed.

Increase in Mortgage Applications

Based on the information from Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, there was an increase in the mortgage application by 0.2 percent last week.

The Market Composite Index, which is a gauge of the number of mortgage loan applications, was up by 0.2 percent to its peak level since June 8 this year on a seasonally adjusted basis. Similarly, it was up by 0.2 percent from last week on an unadjusted basis.

The Refinance Index was up by 0.8 percent from last week to its peak level since April 17 of this year. However, the slight increase in refinancing was only subdued by a 6 percent decrease in government refinance applications, although conventional refinance activity was up nearly 2 percent.

The Purchase Index decrease almost 2 percent on a seasonally adjusted basis from the previous week. In the same way, the unadjusted Purchase Index decreased from the previous week.

There was an increase in the refinance share of mortgage activity to 81 percent of all the applications from one week earlier to its peak level since January 20 of this year. In contrast, there was a drop in the adjustable-rate mortgage share of activity to 4.1 percent of all the applications from one week earlier.

For a 30-year fixed rate mortgage with conforming balances, the average contract interest rate was up from 3.74 percent to 3.75 percent, along with points increasing from 0.43 to 0.51 for 80 percent loan-to-value (LTV) ratio.

For a 30-year fixed rate mortgage with jumbo loan balances, the average contract interest rate was up from 3.99 percent to 4.01 percent, along with points increasing from 0.28 to 0.32 for 80 percent LTV loans.

For a 30-year fixed rate mortgage backed by FHA, the average contract interest rate was still the same at 3.52 percent from one week earlier, along with points increasing from 0.52 to 0.55 for 80 percent LTV loans.

How to Get a Car Loan Despite Bad Credit

If you were wondering how you can repair your credit at the same time complete a subprime auto loan then you just tuned in to the right place because this article is going to show you how.

Before anything else, you should first be very familiar with what your credit report and your score says. A FICO score above 660 is what you need to get a car loan with a financial institution like a bank or a credit union. If your FICO score falls below 660, then it just means you need to find a subprime lender to get the loan you need to purchase a car. Conventional loans and high-risk (subprime) loans are very different from each other, however for both cases, knowing where your credit score stands is very significant to get your loan approved.

Next you should know your car budget. Aside from the amount you will be paying for the car, you should also anticipate the other fees you will be paying for once you get a car like your gas and car insurance. Check if your income can accommodate these fees and if you think you need help in budgeting then you can log in to autocreditexpress.com for assistance.

Next, you should maximize your options and research about the kinds of cars you can buy given your current budget. If you want to look online visit consumerreports.org; this website is very helpful in illustrating the models that are fit for your lifestyle and money.

Before you go to a dealer you should first come to friends and your other relatives and most especially the Better Business Bureau for advice. Buyers with bad credit may find it hard to look for car dealers that will be very willing to help them in owning a new car that is why you should solicit advice and check the website of consumer protection agencies first.

Is Applying for Payday Loan Online Safe?

If you need cash to pay off a small amount of debt then the easiest loan to apply for is a payday loan. Luckily, getting a payday loan online is not only easy but quick as well. If you need to pay an abrupt expense then you can log in a site and apply for a payday loan. However, security is a big question in applying for these instant cash loans in the internet.

Getting payday loans online can be safe, but it still ultimately depends on what company you are applying from. Many of companies would be very vigilant in keeping their data secured and would spend a lot of money to ensure that their business’ files are well kept and secured. But every borrower should be careful of a lending company that does not take security very seriously. If you want to know if the financial company you are applying for a payday loan is safe just be wary of the following things:

First, always look at the company’s Privacy Policy for their site. This would tell an applicant what information the company needs to collect, and if these information could be seen or viewed by other people.

Second, ask questions to a customer service representative about their site. Ask about the security measures they are taking and ask who has the overall authority in viewing the database and ask what happens to your information once you close your account with the company.

Third, check the applications of the site if it also safe. There should be a letter “s” after the “http” of the website address to determine if the site is secure. The website name should also have a yellow padlock symbol at the bottom right of the title page of your browser. These are indications that the site is encrypted and that it is has a secured system in transporting information to and fro.

Finally, if you are still not sure about the security of the site you have to investigate the company yourself. Search their company name in Google and check it with the Better Business Bureau. If the company does not have any customer complaints then probably they are worth a shot.

Oklahoma’s Payday Loan Laws are Tolerant Says Survey

According to the recent national survey the small-loan laws in Oklahoma are charging the highest interest rates in the history of payday loaning in the United States today.

A research conducted by the Pew Charitable Trusts entitled “Payday Lending in America: Who Borrows, Where They Borrow and Why” has found that 13 percent of the population of Oklahoma are the highest in the payday loan customers in the market today across 32 states.

Out of 49,684 of the residents, 5.5 percent are using payday loans to pay their debts in the last five years. Payday loans are short-term loans consisting of small amounts which have the tendency to get very expensive. People who apply for these loans are usually those who do not have the qualifications to get a credit loan.

In Oklahoma, borrowers are only allowed to have only one payday loan and the state caps the lenders at $500 with a maximum fee of $65. But the District of Columbia along with 14 other states does not have any payday loan stores.

According to the State Sen. Rick Brinkley who also holds the position of chief operating officer in the Better Business Bureau of the eastern part of the state the Pew study’s classification of their payday loan laws is indeed lenient, for even if the law allows the lending there have been few customer complaints about the lenders.

Experts say that payday loans usually carry out a chain reaction for debt because the borrowers tend to renew their loans again and again until the service cost increases and becomes even more expensive.

Studies show that the minute people start to turn to payday loans it would not be very easy to get out and it would take years to pay off the whole debt.

The study by Pew has identified living expenses like rent and utilities expense to be the most common reason for people to apply for payday loans.