What is a Non-Warrantable Condo? And How Does This affect the Mortgage?

Mortgages lenders look at both borrower and asset before approving a home loan. This means both borrower and collateral (the house) must meet distinct criteria.

The Main 3 Categories:

First, the borrower's prestige scores, income, job history must fit into the mortgage company's guidelines. Most population already know about the importance of prestige scores though.

Secondly, the loan's Ltv. Banks are very sensitive to the number they loan relative to the value (Ltv) of a property. Ltv means "Loan to Value." For example, 100% loans have a 100% Ltv. The borrower is getting a loan for 100% of the property's value. The higher the Ltv the higher the risk. Naturally, banks prefer low Ltvs as these loans normally mean lower risk. Low Ltvs mean lower rates, commonly speaking. The lower the Ltv the less risk of default.

Finally, the asset itself-or the underlining collateral-is the final type bank's recite before approving or declining a mortgage.

For example, a borrower can have excellent credit, be willing to put 50% down (low Ltv) and still get declined because of "substandard collateral." This naturally means the asset itself isn't one the bank wants to lend on.

Examples of substandard collateral:

1) Non-Warrantable Condominiums: This means there are fewer than 50% owner-occupied units within the condo complex. It's busy mostly by renters. For example, if the condo has 100 units and only 20% are owner-occupied is a non-warrantable condo; and therefore more risky in the bank's eyes. Some banks don't lend on non-warrantable condos at all, however most banks will just limit the loan to value (Ltv).

Let's say a borrower qualifies for a 95% loan or an 80/15/5 loan. however with a non-warrantable condo they may only qualify for 85-90%. Bank's typically sacrifice Ltv when there is an inherit risk with either the borrower or the asset itself.

How does one know if the asset is non-warrantable? Just talk to the condo's Hoa population and ask them. Sometimes they won't tell you directly and you'll have to ask the mortgage man to order a condo questionnaire which is the document that states the property's official owner/renter ratio. Some complexes even charge you 0-0 for this document.

2) Properties with Ag Exemptions: Again, banks typically don't lend on a asset with an Ag Exemption. These homes must get financing via farm and ranch lenders.

3) Properties in a declining area: If the mortgage company's estimate shows the asset is declining in value most banks will, again, sacrifice the Ltv-make the borrower bring more money to closing-or not lend at all. Right now there are several "hot spots" in the Us where properties are declining 10-20-30%+. Naturally, these are areas where it's very difficult to get financing because banks don't want to lend on homes that show a declining trend.

Finally, most population think prestige scores are the only issue in obtaining a mortgage or refinance; however banks look at much more.

What is a Non-Warrantable Condo? And How Does This affect the Mortgage?

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Mortgage Loan 101: Your estimation

If you are in the market for a mortgage, studying the basics will help you avoid manufacture common mistakes that can cost you thousands of dollars. Here is what you need to know about appraisals and your mortgage.

Your home's evaluation is an evaluation of the home's value ready by a licensed appraiser. The appraised value of the home is based on up-to-date sales in your neighborhood and the sale of similar homes in your area. The appraiser will also evaluate the physical condition of your home by considering the home inside and out.

The mortgage lender will use this appraised value to rule your loan-to-value ratio. The loan-to-value ratio of your home is naturally a comparison of the value of your home to the amount of mortgage loan you are requesting. Most lenders prefer loan-to-value ratios less than 80 percent. To speculate your loan-to-value ratio naturally divide the amount of the mortgage loan you are requesting by the appraised value of your home and multiply by 100.

Before you have your home appraised you might want to ask for recommendations for appraisers in your area. Your Realtor should be able to recommend a good appraiser or you can experience the licensing branch of your State government for a list of licensed appraisers in your area. To learn more about recovery money on your mortgage loan, register for a free mortgage guidebook using the links below.

Mortgage Loan 101: Your estimation

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What is an power efficient Mortgage?

An energy effective Mortgage (Eem) is a mortgage that credits a home's energy efficiency in the mortgage itself. Eems give borrowers the opening to finance cost-effective, energy-saving measures as part of a singular mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan number and a better, more energy-efficient home.

To get an Eem a borrower typically has to have a home energy rater escort a home energy rating (Hers) before financing is approved. This rating verifies for the lender that the home is energy-efficient.

In the past most Eem's were used to purchase a new home that already had energy effective improvements in place. However, we specialize in the opposite of that, we help show you how to renovate your current home and add energy effective improvements or to purchase an existing home with a Fha 203K renewal loans and add the improvements while the renewal process. So how does it benefit you?

Besides the fact you are allowed higher debt-to-income ratios, Fha Eems allow lenders to add 100 percent of the further cost of cost-effective energy efficiency improvements to an already popular ,favorite mortgage loan (as long as the further costs do not exceed 00 or 5 percent of the value of the home, up to a maximum of 00, whichever is greater). You will also end up with a far more marketable home if and when you select to sell. We encourage you to take benefit of these money rescue improvements while, at the same time, using environmentally cordial construction materials and techniques to a truly generate a home that has a minimal impact on the environment. Feeling good about your offering to rescue the planet along with rescue yourself some serious coin on your monthly energy bills is a solid combination.

What is an power efficient Mortgage?

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Applying For A Mortgage Loan In Canada

Lenders look at six key factors when evaluating an application - your identity, your income, debts, employment history, credit history, and the value of the property.

Your Identity - In order to protect against mortgage fraud, the lender or their lawyer will need photograph identification to ensure you are the private you relate yourself to be. In addition, you may be asked questions regarding your credit history to verify facts on record at the credit bureaus.

Your revenue - The lender will part your revenue level against the whole of the mortgage payments, property taxes and condo feeds, to decree either you can favorably afford a home. Your lender will assess your current housing expenses to the expense you'll have if you buy a home. The smaller the increase, the stronger your application looks. normally a guideline of 30% of your pre-tax revenue is used to decree your maximum cost level.

Your Debts - The lender will look at your debts, including your foreseen, house payment, as well as all loans, credit cards, child maintain and any other payments that you make each month. The ratio of the payments on these debts to your gross monthly revenue results in a total debt assistance ratio. The ordinarily acceptable total 'debt assistance ratio' for all housing and other obligations is 40% of your pre-tax income.

Your Employment History - Mortgage lenders are more likely to lend money facilely to people who have a history of steady employment. You will need to contribute a letter or pay stub from your manager and the lender may further verify your employment by contacting your employer. If you're self-employed or have been at your job less than two years, they may ask for other documentation, such as firm financial statements or federal revenue tax returns.

Your credit History - Good credit is very foremost in qualifying for a loan. A mortgage lender will look at your credit record to see how well you've paid your loans and other debts in the past. If you've never had a loan or a credit card, you can still demonstrate a good record by showing timely cost of utility bills and rent. It's a smart idea to recap your own credit record and score before applying for a loan. For a small fee, a credit bureau will contribute an instantaneous, perfect online credit record and credit score that details your current debts and cost history. They also detail what your score level means, how you assess to others, and contribute tips to heighten your score. You also may receive your credit record (without the credit score) by mail for free by contacting the credit bureau.

The Property's Value - When purchasing a property, you should be comfortable the price you are paying is inexpensive and will be acceptable to the lender. You can normally confirm the value is inexpensive by obtaining an assessment from an accredited assessment expert or from the realtor who is representing you in the purchase. Some purchasers may also regain a property inspection to confirm the property's health and identify any items that may need repairs.

Lenders also tend to evaluate your application against the following guidelines:

o A housing expense ratio no greater than 32% (the lower the ratio, the better)

o A debt-to-income ratio for all debts no greater than 40% (the lower the ratio, the better)

o The home buyer has steady revenue - ideally, the same job for two years or longer

o The home buyer has good credit (bills have been paid on time)

o The house is worth the price the buyer is paying

Applying For A Mortgage Loan In Canada

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commercial Mortgage Calculator - Debt Coverage

In terms of commercial mortgage calculations, debt coverage ratio is one of the most important underwriting tools to figuring out if a potential commercial mortgage is fundable or not. This ratio essentially tells you what the level of cash flow will be for the owner. It's basically answers what the level of cash flow will be after all expenses have been paid along with the mortgage for the owner.

How do you hypothesize this commercial mortgage ratio? You divide the net operating revenue by the proposed mortgage payment. So, first frame out the proposed mortgage payment. Say you where quoted 6.5% on a 25 year amortization schedule, with a ,000,000 loan amount. Your monthly cost would be ,752 the each year payments would be ,024.

Calculating the Net Operating Income

Calculating the net operating revenue is the same view on both venture properties or owner occupants but it's normally a lot easier to frame out on investments. Basically there just aren't as many tax shelters on venture deals and the lenders normally focus more on the property itself. Whereas on owner occupied loans lender normally look at personal, business and real estate entity tax returns to frame out what the net operating revenue is.

Going back to the venture example, say you're considering buying a 5 unit office construction at ,333,000 with a loan estimate of ,000,000 (75% loan to value). All 5 leases are gross, meaning the owner is responsible for paying all of the expenses on the property. Tasteless expenses consist of real estate tax, insurance, administration fee, professional fees (Cpa, Lawyer), utilities, maintenance/repairs, etc. So subtract all of these expenses from the gross revenue and you'll have your net operating income.

For example, say the gross revenue is 0,000 and that the total operating expenses are ,700. Your Noi is therefore 1,300. Now divide the 1,300 by the each year mortgage cost we discussed above at ,024 and you should have a debt coverage ratio of 1.37. This, by the way is right along the accepted that most banks/lenders control under. Roughly all of these institutions want to see a minimum 1.2. If you want more info on calculating the Noi on owner occ deals check out our ebook available on our website.

commercial Mortgage Calculator - Debt Coverage

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Features of Citibank Mortgage Modifications

Citibank mortgage modification was nearly impossible to receive up until a combine of months ago. Homeowners with their mortgage under Citibank were left with puny to no option and their only option was foreclosure. But now thanks to the new incentives given to the lenders who cooperate with mortgage modifications by the government, they have ultimately opened its doors to their borrowers who need help staying in their homes.

Citibank's new loan modification criteria are trying to reach out to almost 500,000 homeowners. Unlike most bank's criteria, they are reaching out to not only borrowers who are close to foreclosure, but also those who have either experienced a drastic drop in their credit score or those who are visibly going straight through times of financial hardship.

Besides the more broad spectrum of homeowners they are looking to assist, there are also hot lines and ways to get in perceive with the Citibank mortgage modification department directly to make the process more simple. So no being bounced colse to the phone lines like with a large ration of lenders who are unwilling to work with the homeowners.

A Citibank mortgage modification entails reduced interest rates, longer mortgage terms (up to 30 years), and a deference of the principal. The modification almost guarantees a deference of the principal, which is great for those homeowners who have experienced a drop in the value of their property.

Like with any lender, a homeowner should explore exactly what Citibank's requirements for loan modification are. While they are becoming one of the more lenient lenders with mortgage modification, they still have accurate guidelines to follow. A straightforward phone call to their loan modification department or even searching online should yield results.

Citibank is going to look at credit, bankruptcy, asset value, debt to revenue ratio, and late mortgage payments to rule either a borrower qualifies or not. However, they are lenient on late mortgage payments. Homeowners do not need to make late payments in order to qualify, though in some cases it does help. They also do not need excellent credit, as Citibank is targeting homeowners who have a plummeting credit score as well.

Any homeowner applying for mortgage modification under Citibank needs to fill out the application and write a hardship letter attesting to their reasons for needing a loan modification. Both of those aspects of the loan modification process go hand in hand and they are both vital parts of the application process. Citibank loan modification requirements may be less accurate than some other lenders, but any homeowner still needs to go straight through the general rounds to be approved.

Features of Citibank Mortgage Modifications

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private commercial Mortgage Lenders - Filling The Funding Gap - Investors Turn To Hard Money Lenders

Getting a commercial Mortgage is Tougher Today

We are, indeed, in the midst of a necessary and severe credit crunch. Accepted lenders, such as banks, Wall road investment houses and assurance fellowships have greatly curtailed their lending activity. Even the very best investors and developers are finding it hard to get projects funded.

The collateralized debt shop has dried up. Few bond buyers are interested in mortgaged backed paper today. Big institutional lenders are finding it impossible to turn the mortgages they create into cash. Put in straightforward terms; no mortgage buyers, no mortgage loans.

Property owners, investors and developers are left frustrated and without financing.

Good Deals on the Sidelines

The dollar volume of pent-up commercial mortgage loan examine now measures in the hundreds of billions of dollars. Deals that, just a year ago, would have enjoyed quick funding are being rejected by banks out-of-hand. Not because they don't have merit, but because the banks and their counterparts are caught up in the liquidity crises.

With millions in profit inherent at stake, commercial asset investors are seeking out non-traditional sources of mortgage funds.

Private commercial Mortgage Loans; Funding Deals When Banks Won't

Privately funded commercial mortgage loans are becoming increasingly favorite while this mortgage meltdown. Hidden lenders, many funded by wealthy individuals, hedge funds or other large pools of capital, often lend their own money for their own portfolios. These unique lenders have not been crippled by the breakdown of the collateralized mortgage bond market. They can still create loans at will without worrying about who may or may-not want to buy them.

Further, Hidden loans (sometimes called "hard money" loans) can close in just days, as-opposed to Accepted loans which, if you get one at all, can take 3 months or more to fund.
There are ordinarily no loan committees, stacks of paperwork or complicated ratios to deal with. If they like your deal and you demonstrate that you can pay them back, they can and will close your loan no-matter-what Wall road is doing.

What Hidden commercial Mortgage Lenders Look for

Private lenders are equity based lenders; loan decisions are not driven by the credit of the borrower. It is necessary that the collateral asset have titanic equity in it. Most hard money commercial lenders won't lend more than 70% of the purchase price or, in the case of a refinance, the value of the commercial property. So be ready for large down-payment requests or a good sized 2nd mortgage. Also, borrowers will need to have some cash, typically 10% or more, in any given deal. There is no-such-thing-as 100% financing today. Documentation requirements will be much less than Accepted lenders would want but be ready to back up any claims you make with some proof.
Income producing buildings are favored by hard money lenders but most are willing to consider all asset types.

Hard Money commercial Loans Have come to be Indispensable

With the large Accepted lending institutions freezing like a deer in the headlights, private, hard money commercial lenders have come to be necessary to the commercial sector. They stand ready and willing to lend against capability buildings or well thought-out amelioration projects. Investors should not give up on finding financing for their best deals until they have looked into a confidentially funded mortgage.

private commercial Mortgage Lenders - Filling The Funding Gap - Investors Turn To Hard Money Lenders

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Maximum Mortgage Loan To Value Ratio

A key part of a mortgage lender's loan guidelines is how much they are willing to lend in different scenarios.

Lender base their loan analysis of a mortgage application on many factors, including:

What Is Loan To Value Ratio

income

assets

property type

down payment

property equity

loan type requested

bankruptcy

credit

One of the most critical areas lenders look at is the equity in a loan.

If a person is putting down a large down payment in a purchase loan then a lender is willing to look on this loan more favorably than a similar lender with no down payment or a smaller down payment.

In a refinance mortgage the lender will look at how much equity there is in a property. It will compare the total of:

current first loan

current second loan

loan closing costs

additional cash taken from the property

This will be the total size of the new proposed loan. The lender will compare loan size to the current appraised value of the property. This is the "loan to value" ratio.

Lenders usually offer a wide number of different loans, such as 30 year fixed loans, 15 year fixed loans, interest only loans, etc.

For each of these types of loans a lender may have a maximum loan to value (LTV) for different credit scenarios. For people with a credit score of over 720 and who can document all of their income the maximum loan to value ratio may be 100%.

The maximum loan to value ratio offered by the lender may decrease as the credit and other factors decrease. A borrower with an identical property, income, and assets but with a credit mid score of 550 may be eligible for a maximum loan to value ratio of only 70%.

Maximum Mortgage Loan To Value Ratio