All across the United States the housing market has an abundance of distressed homes for sale. A home sold under distress conditions refers to both short sold and foreclosed home sales. Potential home buyers should understand the differences between these types of sales as they impact the buying process in a number of ways.

When interest rates drop you’ll often hear the term “streamline” in mortgage advertisements. For many homeowners there is a real opportunity to take advantage of lower interest rates; so let’s examine closely what streamlining is all about and how it may benefit you.

The Home Affordable Refinance Program (HARP) is now in its second version, 2.0. The question is who may this benefit and why was a second version rolled out?

Let’s answer the latter part of the question first. The original HARP didn’t do much to help folks in states such asArizona,California,Nevada, andFloridawhere home values were hit the hardest. Under the old program, lenders were limited to loaning up to 125% of the value of the property (LTV). This guideline immediately prevented millions from potentially qualifying.

All across the United States the housing market has an abundance of distressed homes for sale. A home sold under distress conditions refers to both short sold and foreclosed home sales. Potential home buyers should understand the differences between these types of sales as they impact the buying process in a number of ways.

*Disclaimer – Loan guidelines change often and may have recently changed; be sure to consult with your lender about current requirements.

Two Ratios – Front End and Back End
Lenders use two types of debt ratios in determining a person’s ability to qualify for a mortgage. The front end ratio is real estate-related debt (mortgage principal and interest, real estate taxes, real estate insurance) divided by gross income. The back end ratio is real estate-related debt plus other liabilities listed on your credit report divided by gross income. Therefore, a person’s front end and back end debt ratios would be the same if there is no additional debt listed on the credit report. However, since most people have additional debt listed on their credit report, most borrowers have a higher back end ratio.

*Disclaimer – Loan guidelines change often and may have changed; be sure to consult with your lender about current requirements.

The two most common mortgage loans, conventional and FHA, both require a minimum down payment along with proper documentation of these monies. If you desire to use one of these programs, here are a few tips on how to meet guideline requirements.

*Disclaimer – Loan guidelines change often and may have changed; be sure to consult with your lender about current requirements.

There are many factors to consider when deciding on the type of loan to use when purchasing a home. Understanding the differences in down payment requirements plays an important role in forming your home buying strategy. These differences are items such as the amount of the down payment required and what source of monies are allowed. Understanding these differences will put you on the right path in deciding the proper loan for you.

Here are a few tips to increase your credit score sooner rather than later. Word of advice — speak to your loan officer or credit advisor PRIOR TO making any changes to your credit to make sure it will have the positive impact you desire.

Anyone serious about increasing their credit scores should first take the time to understand how scores are calculated. By doing so, any effort put forth to increase credit scores is maximized. According to Fair Isaac Corporation (FICO), the percentages of importance in determining credit scores are: