Author Archives: Shawn Molem

Getting A Guarantee Residential Loan

A part of the thrust of the United States Government is to provide housing to its constituents and improve the quality of life of the people. With this thrust of the government, there is a number of government guaranteed loans being offered to Americans to help them achieve their dreams. Some of the government guaranteed loans being offered in the market nowadays are student loans, the residential housing loan, the veteran’s loan, and the loans for entrepreneurs and farmers. Government guaranteed loans are usually favorable to both the lender and the borrower, since the guarantee given by the government over the loan would mean more flexibility in the terms and conditions of such loans.

In the case of guaranteed residential loans, the guaranteed type of loan can greatly help people who want to own a residential home, even if they do not have the collateral to secure their loan. According to guidelines issued regarding guaranteed residential loans, this program will allow the use of private sector funds for housing loans with no down payment and no mortgage insurance. This is for certain groups of people or families, such as those who are living in rural areas with low to moderate income.

How does it work? Government guaranteed loans are usually extended to target beneficiaries through banks and lending institutions who are affiliated with the loan program. These banks and lending institutions will issue the loan while the government will pledge help in the event of the borrower defaulting in the payment of the loan. The government, through its designated agency, will purchase the unpaid portion of the loan, thereby saving the bank or lending institutions form losses.

Things To Look For When Applying For Residential Loan

Residential loan is the only realistic means through which employed people are always able to realize their dreams of owning a home. This is a very good product as it allows you the opportunity to own something that will increase in value thus increasing your financial stability. However, not every application put forward for a home credit will go through. Some will be turned down by the lender for various reasons. To reduce the chances of your application being disapproved, there are steps that you as a borrower may take. When applying for residential loan people should always consider the following factors.

The first important factor is your credit score. Most lenders will always turn down your application if they realize that your credit history is not all that impressive. Those who will approve your application may charge you very high interest rates that are associated with you. Because of this, you need to dispute any errors that may be damaging your credit score.

Some lenders will always demand that you deposit a percentage of the total value of the house before your credit request can be processed. However, this is not always a must with most of the lenders. Whichever the case, paying deposit will reduce the amount you have to borrow and consequently will lower interest rates.

You should also know how much credit you qualify for. This is always dependent on your net income. So if you want to borrow more, you should settle all other outstanding debts that may be appearing on your pay slip.

Different lenders will always charge varying rates on similar loans depending on different factors. Because of this, you can save huge sums of money by simply comparing and choosing the most affordable loan. This should not however be translated to mean that the cheapest interest rate is always the best. You need to look at all the aspects and terms of the credit.

When applying for home credit for the first time, you will need to identify yourself to your lender of choice. This means that you should arm yourself with identification documents like your national identity card, driving license and passport. Apart from the identification documents, there are also other documents that will be required for loan processing. You need to avail all these for quick approval.

Before signing above the dotted lines, you must also ensure that you understand every detail of the credit that may affect you in future. Some of the credit terms are always very complex. This means you may need an expert to explain for you. In such a case, you should never fail to hire one.

By simply observing the above guidelines prior to applying for residential loan citizens should always be able to get the best loans. There are occasions when your first application will be turned down. This should not deter you from trying again so long as you have addressed the reason why your first application was rejected.

Facts About Residential Real Estate Appraisals

Appraisals are an Important Part of Your Home Buying Transaction. A real estate appraisal helps to establish a property’s market value–the likely sales price it would bring if offered in an open and competitive real estate market.

Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending.

Don’t confuse a comparative market analysis, or CMA, with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMAS, but an appraiser’s report is much more detailed–and is the only valuation report a bank will consider when deciding whether or not to lend the money.

About Appraisers and Appraisals:

• Appraisers are licensed by individual states after completing coursework and internship hours that familiarize them with their real estate markets.
• The lender might use an appraiser on its staff, or contract with an independent appraiser. If you are allowed to choose the appraiser, and it isn’t someone the lender is familiar with, the results might be subject to review before they are accepted.
• The appraiser should be an objective third party, someone who has no financial or other connection to any person involved in the transaction.
• The property being appraised is called the subject property.
• You will probably pay for the appraisal when you apply for your loan.

What You’ll See on a Residential Appraisal Report

Appraisals are very detailed reports, but here are a few things they include:

• Details about the subject property, along with side-by-side comparisons of three similar properties.
• An evaluation of the overall real estate market in the area.
• Statements about issues the appraiser feels are harmful to the property’s value, such as poor access to the property.
• Notations about seriously flawed characteristics, such as a crumbling foundation.
• An estimate of the average sales time for the property.
• What type of area the home is in (a development, stand alone acreage, etc.).