Mortgage Questions - Answered by Bancservices.com

What are the requirements for conventional loans?

To determine if you qualify for a conventional mortgage Loan, we will look at:

  • Your income and your monthly expenses. Standard debt-to-income ratios are 28/36 for Conventional Loans. These ratios may be exceeded with compensating factors.
  • Your credit history (this is important, but Conventional credit standards are slightly flexible). A FICO score of 640 or above is very helpful in obtaining an approval.
  • Your overall pattern rather than to individual problems you may have had.

What are the down payments requirements for a conventional Loan?

Conventional loans require the home buyer to invest at least 5% – 20% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $5,000 – $20,000.

Can you tell me what my interest rate will be?

Yes. The interest rate for your home loan will be determined by the type of loan program that you qualify for and your credit score. You might be asking yourself what is the formula to calculate interest rates? Interest rates are driven off of Mortgage Backed Securities (MBS) which are commonly referred to “mortgage bonds”. These value of these bonds determine whether the interest rates rise or fall. Your final rate will determine your payment using the standard calculate mortgage payment formula. Please contact one of our loan officers to see what is todays lending mortgage rate.

What types of property are eligible?

While conventional mortgage guidelines allow you to purchase warrantable condos, planned unit developments, modular homes, manufactured homes, and 1-4 family residences. Conventional loans can be used to finance primary residences, second homes and investment property.

Can I qualify for a conventional loan after bankruptcy?

Criteria for conventional loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for four years or more, you are eligible to apply for an conventional mortgage. If you have had a Chapter 13 bankruptcy, it must be documented that the your credit reputation has been re-established for at least two years to be eligible for a conventional loan application.

What types of products are available for conventional loans?

Fixed rate loans – Most conventional mortgages are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same for the entire loan period. With a fixed rate conventional mortgage, you always know exactly how much your monthly payment will be. Contact us for today’s free conventional mortgage rates.

Adjustable rate loans – With a conventional adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. Conventional loans mainly use the constant Maturity Treasury Index (CMT) or the London Interbank Offered Rate Index (LIBOR) to calculate the changes in interest rates. Conventional ARMS are offered with initial fixed rate periods of 3 years, 5 years, 7 years and 10 years.

Can only first-time buyers qualify for an FHA Loan?

There are some restrictions on FHA Loans but most people can qualify for one. Even if you have had an FHA loan before you can use an FHA loan as many times as you desire. The only guideline is that you cannot have more than one outstanding FHA loan, however, there are exceptions related to relocating for job purposes (Please call for details). You can own rental property and purchase your primary residence using FHA financing.d.

Does FHA have a minimum FICO credit score to qualify for a loan?

Yes. Every loan program including FHA does require a minimum FICO score to qualify for an FHA mortgage. We strongly encourage you to talk to us even if you think you have bad credit.

Can I streamline refinance my FHA loan at any time?

Yes, you can streamline assuming that you are lowering your monthly payments or converting the loan to a fixed rate.

Can I purchase a home with no downpayment or get 100% financing with an FHA loan?

Generally an FHA loan requires a minimum down payment of 3.5%. However, there are grant and Down Payment Assistance Programs available to assist you with your down payment and allow you to purchase a new home with minimal cash out of pocket.

Can I still qualify for an FHA loan even if I have had a bankruptcy?

You may purchase a home using FHA financing two years after the date of discharge for a bankruptcy, assuming that you have maintained excellent credit since the discharge.

How long after a foreclosure can I qualify for an FHA loan?

Two years after the final date of foreclosure you may use FHA financing to buy another home, assuming that your credit since the foreclosure has been re-established.

Can I eliminate FHA Mortgage Insurance after I get my FHA loan?

Yes. FHA requires a borrower to carry MI for a minimum of 5 years, however, you can have MI removed after 5 years if the loan-to-value is at or below 80% and have an FHA appraisal to support the value.

Can I still qualify for an FHA loan if I have collections on my credit?

It depends on the type of collection. We can discuss this one-on-one to determine what must be paid off or not. In most cases, judgements should be paid off before applying for a FHA mortgage. You should get pre-qualified by one of our mortgage professionals before paying any items off.

Can I qualify for an FHA loan if I have tax liens?

You may qualify for a FHA loan even with a Federal tax lien, as long as it has been in a repayment schedule for at least 6 months and all payments have been made on time.

Does a co-signer have to live in the property I am purchasing or refinancing?

Yes, you may have a co-signer that is not living in the home help you qualify for a mortgage but their rent, mortgage payment, or monthly bills will be used in qualifying.

What is a VA Loan?

The VA Loan is for people who have served in the military. The program began in 1944 through the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

What are the benefits of a VA home loan?

There are many benefits of a VA Home loan:

  • Equal opportunity.
  • No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
  • Buyer informed of reasonable value.
  • Negotiable interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
  • Closing costs are comparable with other financing types (and may be lower).
  • No mortgage insurance premiums.
  • Right to prepay without penalty.
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.

Where can I learn more about VA Loans?

Give us a call today! Or send us a message and we can answer all of your questions and help you through the VA loan process. We make getting a VA loan as simple as possible so feel free to contact us and let us help you get started today.

What can a VA loan not do?

Guarantee that a home is free of defects. VA guarantees only the loan. It is your responsibility to assure that you are satisfied with the property being purchased. The VA appraisal is not intended to be an “inspection” of the property. You should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.

If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program.

VA cannot guarantee that you are making a good investment. VA cannot provide you with legal services.

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Can I still qualify for a VA loan with a prior foreclosure?

Yes. It is possible to still get a VA Loan with a prior foreclosure even if it was a VA, FHA, or conventional loan. Please talk to one of our mortgage professionals for guidance in obtaining a new loan.

Can a surviving spouse of a deceased veteran be eligible for a VA loan?

Yes. The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit.

I want to buy a house using a VA loan. Does it need to be my primary residence?

The law requires that you certify that you intend to occupy the property as your home. This requirement is considered satisfied if you actually intend to occupy the property as your home and in fact so occupy it when the loan is closed or within a reasonable time afterward.

Can I get a VA loan if I have had a bankruptcy in the past few years?

The fact you and/or your spouse have been adjudicated bankrupt does not in itself disqualify you for a VA home loan. The following rules apply: If the bankruptcy was discharged more than 2 years ago, it may be disregarded if the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you and/or your spouse are a satisfactory credit risk unless both of the following requirements are met: you and/or your spouse have reestablished satisfactory credit, and the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.) If the bankruptcy was discharged within the past 12 months, it will not generally be possible to determine that you and/or your spouse are satisfactory credit risks.

Does Banc Services Group handle loans in other areas of Tennessee?

Yes. We are licensed to handle your loan whether it’s for a purchase or to refinance in the entire state of Tennessee. Contact us today to find out how we can save you money.

I have bad credit so should I wait until I fix my credit?

No. You may be surprised how much we can help you. We are professionals and experts in advising clients how to resolve any credit issues so you can purchase or refinance your home. You may qualify for a loan now and not even realize it. Contact us today to find out how we can help you.

I want to purchase a home but I do not know where to begin?

We can help you. We have a network of realtors throughout Tennessee who can help you find your dream home.

I want to refinance but I'm not sure if it is the right time. How can you help?

We can help you by determining whether or not you should refinance your home and recommend the best loan that will save you a lot of money. In countless cases we have saved clients tens of thousands of dollars.

How long does it take to purchase a home or refinance?

The length of time it takes to purchase a home or refinance one varies depending on the situation. Generally we can close a loan in as little as two weeks to thirty days if there are no issues that could delay the closing.

Still have questions? We are here to serve you! Feel free to send us a message with any questions you may have or simply give us a call!

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