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Sarah Mann's Blog - Allied Mortgage Group, Inc.

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1695885_MMany people believe that after they have had a home foreclosed on, they will never be able to buy a house again. This is untrue.

As you may have guessed, it is much more difficult to get a mortgage after a foreclosure hits your credit report, but it is not impossible. With time and good financial decisions, you can put yourself back in position to get an FHA loan.

FHA Loans After a Foreclosure

FHA loans are some of the easiest to receive. The Federal Housing Administration (FHA) backs them, and the goal is to help people who wouldn’t otherwise be able to get a mortgage from a bank or other financial institution. While FHA loans are offered by big banks, those institutions usually require applicants to have high credit scores. A better option can be to apply for an FHA loan at a smaller bank or institution.

Keep in mind that a foreclosure needs to be at least three years old. There may be rare exceptions, but the typical waiting period is three years, so you can prove you are able to manage your finances responsibly.

Credit scores are an important consideration with FHA loans and also affect down payments. If your credit score is 580 or higher, you can expect to pay around 3.5 percent of the home’s purchase price as a down payment. If your credit score is lower than 580, you can expect to pay closer to 10 percent.

Debt-to-income ratio matters as well. Debt-to-income ratio means how much debt you have in relation to the amount of income you receive. For a lower down payment, you must have at least 43 percent of a debt-to-income ratio with your 580+ credit score.

What Else You Need for an FHA Loan Approval After Foreclosure

Besides waiting three years after a foreclosure and being financially responsible, there are a few other qualifications you should meet to increase your chances of FHA loan approval.

  • Documentation the foreclosure was due to financial hardship that wasn’t in your control.
  • Completed HUD-approved housing counseling.

Once you have these two, you can start working with a lender for FHA loan approval.

Work towards buying a new home now. The past is the past and the future is yours to do whatever you want. Make it a success.


Mortgage tips for smart home buyers

Jul 17
5:23
AM
Category | General

103991043_MYou’re interested in buying a home. Congratulations! This is a big step in life, so it’s one that you should research thoroughly. The good news is we have some helpful information as you begin the process of getting and using a mortgage.

#1: Check Your Credit Report

Before you look for a mortgage, check your credit report to ensure there are no errors. Most people who have errors didn’t even know they were there — until their application was rejected. Save yourself a lot of anguish and time by checking your credit report first.

#2: Collect Required Documents

The bank will ask you for documents to assess whether you qualify. Some of the documents the bank may request are:

  • W2s
  • Paycheck stubs
  • Bank statements
  • Tax returns
  • List of debts
  • List of assets

Every lender is different, so you may have to furnish other types of documents, but this list will get you started.

#3: Consider the Down Payment

Unless you are a veteran, you will have to pay a down payment. An FHA loan is best for those who do not have a lot of money for a down payment or who have some credit issues. One of the best things you can do is plan ahead and put money back for a down payment. You’ll just be that far ahead on your home equity!

#4: Find the Right Mortgage Lender

You want a mortgage lender with whom you feel comfortable. Getting a mortgage can be stressful. Find a lender who helps you feel less stressed about the process, not more stressed. A good mortgage lender will be open, honest and helpful.

#5: Don’t Use All of the Approved Amount

Sometimes people end up being approved for more than they actually planned to spend and perhaps even more than they can really afford monthly in mortgage payments. Talk to your lender about what the monthly payment will be for a certain amount and then choose a house with that budget. Also, as you are thinking about how much you can afford, don’t forget to allow room for repairs and upkeep in your monthly budget.

#6: Take It Slow

Buying a home is exciting, but don’t get in too much of a hurry. Take your time, talk to your lender and then find a house you can afford. It’s all about being a smart home buyer.


36714141_MYou want to sell you home quickly and for the highest possible price. But professional home staging can cost hundreds or thousands of dollars. The good news? There are plenty of things you can do to stage your home yourself for much less.

De-clutter. Start your home-staging journey by getting rid of the clutter. Don’t neglect the areas behind closed doors! Go through your closets and shelves. Home buyers look in there! Give away what you can, and store knick knacks and even extraneous furniture while your house is on the market. Too much furniture can make a room appear smaller.

Clean. After you’ve de-cluttered, give your property a deep cleaning. Dirt is a huge turnoff for home buyers. Don’t just do a basic cleaning. Clean your baseboards, your walls, (magic eraser products can do wonders for crayon and scuff marks!) the inside of your refrigerator and especially your bathrooms. Steam clean the carpets.

Assess curb appeal. Consider giving your front door a fresh coat of paint. At the very least, clean it! Put out some potted plants and make sure any hedges are trimmed straight. Keep the lawn neat and edged.

Get a second opinion. Invite an honest friend or relative to give your home a walk-through. Take notes on things you may have been overlooking. Ask them if they smell anything offensive anywhere in the house. You may be used to the smell of the room with the litter box and pet food but buyers won’t be! Remember, buyers want to visualize their own family in your house. That means you’ll want to remove any trace of anything that’s too personal, such as a huge family portrait collection or your husband’s collection of animals heads on the wall from all of this hunting trips.

Let the sun in. Get as much light in your home as possible. Clean the windows inside and out. And even when the curtains and blinds are all open, keep the lights on in your home while it’s being shown.

Questions? Your listing agent can be an invaluable resource with many more tips that can help you get your home ready for buyers!


54016312 - housewife from cleaning service cleans carpet with vacuum cleanerYou want to sell your home, but you don’t have a lot of money to invest in repairs and upgrades before it hits the market. You’re in luck! There’s a lot you can do to make your home more inviting to potential buyers that doesn’t cost a fortune. Here are some fairly inexpensive steps you can take before you list your home:

Clean the carpets. Investing in a professional carpet cleaning can be a great move, especially if you have small children and pets. Stained carpets aren’t exactly aesthetically appealing, and carpets can harbor all kinds of odors.

Make small repairs. Little things that aren’t right can make home buyers wonder what larger things may be wrong with your home. That’s why it’s always a good idea to fix things such as a leaky faucet, a missing roof shingle or a broken door handle before your home hits the market.

De-clutter. Reducing the amount of furniture and other items in your home can make your rooms look bigger. When trying to decide which items should go, consider giving anything that’s stained or broken the boot.

Clean walls. Handprints and dirty walls are a definite turnoff. Clean your walls, using a Mr. Clean Magic Eraser (or the same type of product) to get rid of scuffs and crayon marks. If your walls are really in bad shape or you went crazy with colors a few years ago, consider adding a fresh coat of paint.

Clean, clean and clean some more. Aside from the cost of cleaning supplies, elbow grease is free! A home that’s clean is more inviting to buyers, period.


32498400 - mortgage concept. isolated on white background 3dThink you need a huge down payment in order to buy a home? Then you’re in for some good news.

The “need” for big down payments is a myth in today’s lending environment. Truth is, programs offered by three federal agencies are helping borrowers buy a home with little or no down payment.

Wondering where to look for a program like that? Maybe this will help:

Federal Housing Administration: FHA-insured loans are the low-down option that’s available to the most borrowers.

Department of Agriculture. The biggest myth about the department’s Rural Development mortgage guarantee program is that it’s designed only for people who are buying farm land. But it’s simply not true. To qualify for a low-downpayment home loan backed by the Agriculture Department, you must purchase a home in a “rural” area, but you may be surprised at the number of areas that fit the definition. (Many do.)

Veterans Affairs. Formerly the Veterans Administration, this agency guarantees no-down payment mortgages for qualified veterans, active duty personnel, reservists/National Guard members and some surviving spouses.

For more details about these programs, give us a call.


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